Document:

Exhibit 10.2

 

SEVERANCE AGREEMENT

 

THIS SEVERANCE AGREEMENT
(the “Agreement”) is effective as of the 9th day of September, 2019, by and between Lumber Liquidators Holdings,
Inc., a Delaware corporation (the “Company”), and Nancy Walsh (the “Employee”).

 

WITNESSETH:

 

WHEREAS, the
Employee is a senior executive of the Company and has made and is expected to continue to make major contributions to the short-term
and long-term profitability, growth and financial strength of the Company and its subsidiaries; and

 

WHEREAS, in
consideration of the Employee’s continued employment with the Company and its subsidiaries, the Company desires to provide
the Employee with certain compensation and benefits set forth in this Agreement in order to ameliorate the financial and career
impact on the Employee if the Employee’s employment with the Company and its subsidiaries is terminated under certain circumstances;
and

 

WHEREAS, the
Board of Directors of the Company (the “Board”) also recognizes that, as is the case with any company, the possibility
of a Change in Control (as hereinafter defined) exists and that such possibility, and the uncertainty and questions which it may
raise among management, may result in the departure or distraction of key management personnel to the detriment of the Company
and its subsidiaries; and

 

WHEREAS, the
Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of,
and the continued rendering of services by, members of the Company’s key management personnel, including the Employee, in
connection with their assigned duties without distraction, and without the Company’s loss of needed key management personnel,
arising from the possibility of a Change in Control; and

 

WHEREAS, in
consideration of the Employee’s continued employment with the Company and its subsidiaries, the Company also desires to provide
the Employee with certain additional compensation and benefits set forth in this Agreement if the Employee’s employment with
the Company and its subsidiaries is terminated for a reason related to a Change in Control.

 

NOW, THEREFORE,
in consideration of the terms contained herein, including the compensation and benefits the Company agrees to pay to the Employee
upon certain events, the Employee’s continued employment with the Company and its subsidiaries, the Employee’s covenants
contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and the Employee hereby agree as follows:

 

		1.	TERMINATION OF EMPLOYMENT

 

		1.1	For purposes of this Agreement, the following terms
shall have the meanings indicated:

 

		(a)	Annual Base Salary. Annual Base Salary shall mean the annualized base cash compensation
payable by the Company and its subsidiaries to the Employee, excluding bonuses, commissions, severance payments, company contributions,
qualified plan contributions or benefits, expense reimbursements, fringe benefits and all other payments; prior to reduction for
any deferrals under any employee benefit plan of the Company or any of its subsidiaries; and disregarding any reduction that would
give the Employee “Good Reason” to terminate the Employee’s employment under Section 1.1(f)(iii); as of (i) the
termination of the Employee’s employment if the Employee’s employment is not terminated during a Change in Control
Period or (ii)(A) the termination of the Employee’s employment or (B) immediately before the Change in Control Period, whichever
is higher, if the Employee’s employment is terminated during a Change in Control Period.

 

     

     

    

 

		(b)	Change in Control. Change in Control shall mean any of the following events:

 

		(i)	any person, including a “group” as defined below, acquires ownership of the Common
Stock that, together with the Common Stock already held by such person or group, represents more than fifty percent (50%) of the
total fair market value or total voting power of the then outstanding Common Stock;

 

		(ii)	a majority of the members of the Board is replaced during a twelve (12)-month period by directors
who do not qualify as Incumbent Board Members; or

 

		(iii)	any person, including a “group” as defined below, acquires (or has acquired during
the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) all or substantially
all of the assets of the Company.

 

The term “group”
shall have the same meaning as in Section 13(d)(3) of the Securities Act of 1933, modified as may be necessary to comply with the
requirements of Treasury Regulations Section 1.409A-3(i)(5)(v). This definition of “Change of Control” is intended
to satisfy the requirements of Treasury Regulations Section 1.409A-3(i)(5), the terms of which are incorporated herein by reference.

 

		(c)	Change in Control Period. Change in Control Period shall mean (i) any period in which the
Company or any of its subsidiaries has initiated a transaction process or is engaged in discussions with a third party about a
specific transaction that, if consummated, would result in a Change in Control and before the complete abandonment of such process
or discussions without the transaction being consummated, (ii) any period during which the Company or any of its subsidiaries has
become a party to a definitive agreement to consummate a transaction that would result in a Change in Control and before the termination
of such agreement without the transaction being consummated, and (iii) any period commencing upon the effective date of the Change
in Control and ending on the twelve (12)-month anniversary of the effective date of such Change in Control; provided, however,
notwithstanding the foregoing, in no event will the Change in Control Period be deemed to have commenced earlier than six (6) months
prior to the Change in Control.

 

		(d)	Cause. “Cause” shall mean any one of the following: (A) the Employee’s
gross neglect of duty to the Company or any of its subsidiaries or gross negligence or intentional misconduct in the course of
Employee’s employment; (B) the Employee’s having been indicted for, or entered a plea of guilty or nolo contendere
to, a crime that constitutes a felony or the Employee’s commission of any other act or omission involving fraud with respect
to the Company or any of its subsidiaries or any of their customers or suppliers; (C) the Employee’s breach of any fiduciary
duty owed to the Company or any of its subsidiaries; (D) the Employee being prohibited from serving as an officer of a reporting
company subject to Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended, by applicable law, as the result of
any order of a court or governmental agency or other judicial or administrative proceeding or as the result of any contractual
arrangements to which the Employee is bound; (E) the Employee’s willful and intentional non-performance of Employee’s
duties and responsibilities with the Company or any subsidiary or willful disregard of any legal directives of the Board or the
Employee’s direct report and failure, in either case, to cure such breach, if capable of being cured, within ten (10) days
of receipt of written notice from the Company; and/or (F) the breach by the Employee of any confidentiality, non-competition, non-solicitation
or other restrictive covenants to which the Employee is bound as related to the Company or any of its subsidiaries that results
in a material adverse effect on the business or reputation of the Company or any of its subsidiaries and the failure to cure such
breach, if capable of being cured, within ten (10) days of receipt of written notice from the Company.

 

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		(e)	Common Stock. Common Stock means the common stock, par value $0.001 per share, of the Company.

 

		(f)	Good Reason. “Good Reason” shall mean the termination by the Employee of the
Employee’s employment on account of the following events occurring without the Employee’s written consent: (i) the
failure by the Company or any subsidiary to pay the Employee any material amounts of base salary, bonus or other amounts due the
Employee or the failure to provide the Employee with any material amounts of any vested accrued benefits to which the Employee
is entitled under the terms of any employee benefit plan of the Company or any subsidiary; (ii) a material reduction in the Employee’s
authority, duties or responsibilities as previously in effect, provided, however, that any change in the title of the Employee
or the person or group to whom the Employee reports shall not constitute a material reduction in the Employee’s authority,
duties or responsibilities as previously in effect unless the Employee reports directly to the Board, in which case any requirement
that the Employee report to any person or group other than the Board will constitute a material reduction in the Employee’s
authority, duties and responsibilities; (iii) a material reduction in the rate of the Employee’s annualized base salary previously
in effect, or a material decrease in the Employee’s annual bonus opportunity previously in effect; or (iv) the Company requiring
the Employee’s primary services to be rendered at a place other than (i) Toano, Virginia, (ii) Richmond, Virginia or (iii)
within a seventy-five (75)-mile radius of either, except for reasonable travel. The Employee must give the Company written notice
of any event or condition that would constitute Good Reason within thirty (30) days of the event or condition which would constitute
Good Reason, and upon receipt of such notice the Company shall have thirty (30) days to remedy such event or condition. If such
event or condition is not remedied within such thirty (30)-day period, any termination of the Employee’s employment by the
Employee for Good Reason must occur within thirty (30) days after the period for the Company to remedy the event or condition has
expired. Notwithstanding any other provision of this Agreement, the Company’s failure to renew the Term of this Agreement
as set forth in Section 1.2 shall not constitute “Good Reason” for purposes of this Agreement.

 

		(g)	Incumbent Board Member. Incumbent Board Member means any individual who either is (i) a
member of the Board as of the effective date of this Agreement or (ii) a member who becomes a member of the Board after the effective
date of this Agreement whose election, or nomination for election by the Company’s shareholders, was approved by a vote of
at least sixty percent (60%) of the then Incumbent Board Members (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as nominee for director, without objection to such nomination), but excluding, for
this purpose, any individual whose initial assumption of office occurs as the result of an actual or threatened election contest
(within the meaning of Rule 14a-11 of the Securities Exchange Act of 1934, as amended) with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board.

 

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		(h)	Pre-Existing Agreement. Pre-Existing Agreement means any employment, termination, change
in control or other agreement, plan, policy or arrangement or offer letter or similar writing, other than this Agreement, in effect
as of the date hereof, under which the Employee is entitled to receive (i) severance, salary continuation or other compensation,
(ii) continued coverage under any benefit plan, policy or arrangement, and/or (iii) accelerated vesting of equity or equity-based
awards, if the employment of the Employee is terminated (x) by the Company other than for Cause or (y) by the Employee for Good
Reason.

 

1.2         This
Agreement is effective as of the date set forth above and will continue through December 31, 2021, unless terminated or extended
as hereinafter provided. This Agreement will be extended for successive one-year periods following the original term (and through
each subsequent anniversary thereof) unless either party notifies the other in writing at least nine (9) months prior to the end
of the original term, or the end of any additional one-year renewal term, that the Agreement shall not be extended beyond its then
current term. The term of this Agreement, including any renewal term, is referred to herein as the “Term.” Notwithstanding
the foregoing, the Term shall be extended automatically so that the Term will continue in full force and effect, and will not expire,
during any Change in Control Period. In the event the Term otherwise would have expired during any Change in Control Period absent
the foregoing sentence, the Term shall continue in full force and effect until the expiration of the Change in Control Period.

 

1.3         If
the Employee’s employment is terminated during the Term (a) by the Company other than for Cause or (b) by the Employee
for Good Reason, then, subject to Section 3.8 below and the Company’s receipt from the Employee of the Confidential Waiver
and Release Agreement described in Section 1.8 below, (i) an amount equal to the Employee’s Annual Base Salary, less applicable
withholdings, shall be paid by the Company to the Employee in the form of salary continuation in accordance with the Company’s
normal payroll practices (no less frequently than monthly) for the twelve (12) months beginning on the date of termination of the
Employee’s employment; (ii) any accrued and unpaid bonus under the Company’s bonus plan in which Employee participated
for any prior completed fiscal year will be paid by the Company to the Employee in a single lump sum, less applicable withholdings,
on the date such annual bonus would have been paid to the Employee had the Employee continued employment with the Company; (iii)
the greater of the target bonus or the actual bonus for the year the Employee terminates employment (in either case pro-rated based
on the number of days the Employee remained employed with the Company during the year of termination) under the Company’s
bonus plan in which the Employee participated for such fiscal year will be paid by the Company to the Employee in a single lump
sum, less applicable withholdings, on the date such annual bonus would have been paid to the Employee had the Employee continued
employment with the Company, and (iv) any and all other amounts that the Employee is entitled to receive upon termination of the
Employee’s employment under any Company policy, plan or other arrangement (including, without limitation, the Company’s
vacation policy) shall be paid by the Company to the Employee pursuant to the terms of such Company policy, plan or other arrangement.

 

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Subject to Section
3.8 below and the receipt of the Confidential Waiver and Release Agreement as described in Section 1.8 below, upon termination
of the Employee’s employment entitling the Employee to the payments set forth in this Section 1.3 above, the Company also
shall maintain in full force and effect for twelve (12) months after the Employee terminates employment, for the continued benefit
of the Employee, medical insurance (including coverage for the Employee’s dependents to the extent dependent coverage is
provided by the Company for its employees generally) under such medical insurance plans and programs in which the Employee (and
her dependents) participated immediately prior to the date of such termination of employment, and, during such period, the Company
will pay each month the portion, if any, of such medical insurance premiums that the Company pays for its active Employees, and
the Employee shall pay any remaining amounts.

 

Notwithstanding the
foregoing, however, (a) in the event the Employee’s participation in any such medical insurance is not permitted for any
reason at the time the Company is required to maintain such coverage, then the Company shall have the option to (i) arrange to
provide the Employee with such benefits on the same relative basis for such period substantially similar to those which the Employee
would otherwise have been entitled to receive under such plans and programs from which her continued participation is not permitted
or (ii) pay to the Employee cash, in lieu of such continued coverage, in an amount equal to the same relative percentage of the
medical insurance premiums for such continuing comparable coverage, with any such cash payments to be made in accordance with the
ordinary payroll practice of the Company (not less frequently than monthly) as of the last day of each month for which such cash
payments are to be made. Notwithstanding the foregoing, the Employee’s termination of employment shall constitute a “qualifying
event” under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), so that the Employee
shall be entitled to full rights to continued medical insurance coverage as provided under COBRA, if so eligible, immediately upon
the termination of the Employee’s employment. Notwithstanding the foregoing, the coverage or reimbursements for coverage
provided under this Section 1.3 shall cease if the Employee and/or the Employee’s dependents become covered under an employee
welfare benefit plan of another employer of the Employee that provides the same or similar type of benefits for comparable cost
or the Company terminates the medical insurance entirely for all similar participants.

 

1.4         If
the Employee’s employment is terminated during the Term and during any Change in Control Period (a) by the Company other
than for Cause or (b) by the Employee for Good Reason, then, subject to Section 3.8 below and the Company’s receipt from
the Employee of the Confidential Waiver and Release Agreement described in Section 1.8 below, and provided the relevant Change
in Control occurs, in addition to the amounts set forth in Section 1.3 above, an amount equal to the product of one and one-half
(1.5) times the Employee’s Annual Base Salary, less the aggregate amount of salary continuation payable to the Employee
under Section 1.3 above at the time of termination of the Employee’s employment, less applicable withholdings, shall be paid
by the Company to the Employee in the form of salary continuation in accordance with the Company’s normal payroll practices
(no less frequently than monthly) for the six (6) months beginning twelve (12) months after the date of termination
of the Employee’s employment.

 

Subject to Section
3.8 below and the receipt of the Confidential Waiver and Release Agreement as described in Section 1.8 below, upon termination
of the Employee’s employment entitling the Employee to the payments set forth in Section 1.4 above, the Company also shall
maintain in full force and effect for no less than the six (6) months beginning twelve (12) months after the date
of termination of the Employee’s employment, for the continued benefit of the Employee, medical insurance (including coverage
for the Employee’s dependents to the extent dependent coverage is provided by the Company for its employees generally) under
such medical insurance plans and programs in which the Employee (and her dependents) participated immediately prior to the date
of such termination of employment, and, during such period, the Company will pay each month the portion, if any, of such medical
insurance premiums that the Company pays for its active Employees, and the Employee shall pay any remaining amounts.

 

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Notwithstanding the
foregoing, however, (a) in the event the Employee’s participation in any such medical insurance is not permitted for any
reason at the time the Company is required to maintain such coverage, then the Company shall have the option to (i) arrange to
provide the Employee with such benefits on the same relative basis for such period substantially similar to those which the Employee
would otherwise have been entitled to receive under such plans and programs from which her continued participation is not permitted
or (ii) pay to the Employee cash, in lieu of such continued coverage, in an amount equal to the same relative percentage of the
medical insurance premiums for such continuing comparable coverage, with any such cash payments to be made in accordance with the
ordinary payroll practice of the Company (not less frequently than monthly) as of the last day of each month for which such cash
payments are to be made. Notwithstanding the foregoing, the Employee’s termination of employment shall constitute a “qualifying
event” under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), so that the Employee
shall be entitled to full rights to continued medical insurance coverage as provided under COBRA, if so eligible, immediately upon
the termination of the Employee’s employment. Notwithstanding the foregoing, the coverage or reimbursements for coverage
provided under this Section 1.4 shall cease if the Employee and/or the Employee’s dependents become covered under an employee
welfare benefit plan of another employer of the Employee that provides the same or similar type of benefits for comparable cost
or the Company terminates the medical insurance entirely for all similar participants.

 

Upon termination of
the Employee’s employment entitling the Employee to the payments set forth in Section 1.4 above, the Employee will become
vested in any and all unvested stock options, stock appreciation rights, restricted stock, restricted stock units and other equity
awards previously granted to the Employee by the Company or any of its subsidiaries (at target to the extent vesting but for this
provision would be based on the achievement of performance conditions other than continued employment or service), as of the later
of (a) the date of the Change in Control or (b) the date the Confidential Waiver and Release Agreement as described in Section
1.8 below becomes effective and irrevocable. The Employee may exercise such equity awards only at the times and in the methods
described in such equity awards, except that the Employee’s stock options and stock appreciation rights, if any, shall remain
outstanding and may be exercised, to the extent vested, until the earlier of (i) the original expiration date of such options or
stock appreciation rights (disregarding any earlier termination provided in the award agreement or otherwise based on the termination
of the Employee’s employment) or (ii) the one-year anniversary of the later of (A) the date the Employee terminates employment
or (B) the date the option or stock appreciation right becomes vested and exercisable. Notwithstanding the foregoing, this portion
of Section 1.4 shall not apply to any of the Employee’s stock options, stock appreciation rights, restricted stock, restricted
stock units or other equity awards if the terms of the particular plan or agreement under which such award is granted specifically
provides that this provision shall not apply to such award.

 

1.5         Notwithstanding
the foregoing, the Employee shall not be entitled to receive, and the Company will not be obligated to pay or provide, the compensation
set forth in Sections 1.3 and 1.4 hereof, the continued coverage at active employee rates set forth in Sections 1.3 and 1.4 hereof
or the accelerated vesting or other benefits set forth in Section 1.4 hereof, if the Employee’s employment (i) terminates
upon the Employee’s death or Disability, (ii) is terminated by the Company for Cause or by the Employee without Good Reason,
(iii) in case of Section 1.4, terminates outside of the Change in Control Period or (iv) terminates but the Employee continues,
or has agreed to continue, employment with the successor (whether direct or indirect, by purchase, merger, consolidation, share
exchange or otherwise) to the business and/or assets of the Company after the Change in Control. “Disability” shall
mean a physical or mental infirmity that prevents the performance on a full-time basis of all or substantially all of the Employee’s
employment-related duties, with or without accommodation, lasting either for a period of ninety (90) consecutive days or for a
period of more than ninety (90) days in any rolling one hundred eighty (180)-day period. Additionally, notwithstanding any other
provision hereof, nothing herein shall require the Company to maintain any particular benefit or benefit plan, and to the extent
the Company amends or terminates any such benefit plan with respect to participants generally, Employee shall be subject to the
same extent and the Company shall not be required to provide to Employee any such benefit or any substitute consideration therefore.

 

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1.6         If
any payment or benefit by the Company or any subsidiary to or for the benefit of the Employee, whether paid or payable or provided
or to be provided pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right or equity
award, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”)
or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes,
together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then
the payments and benefits to be provided under this Agreement (or the other Payments as described above) shall be reduced (but
not in excess of the amount of the payments or benefits to be provided under this Agreement or the other Payments as described
above) if, and only to the extent that, such reduction will allow the Employee to receive a greater Net After Tax Amount than such
Employee would receive absent such reduction.

 

If the Company and
the Employee cannot agree on the calculations necessary to execute the terms set forth in this Section 1.6, then such calculations
will be made by an Accounting Firm (as defined below). In such event, the Accounting Firm will first determine the amount of any
Parachute Payments (as defined below) that are payable to the Employee. The Accounting Firm also will determine the Net After Tax
Amount attributable to the Employee’s total Parachute Payments. The Accounting Firm will next determine the largest amount
of payments that may be made to the Employee without subjecting the Employee to the Excise Tax (the “Capped Payments”).
Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments. The Employee then
will receive the total Parachute Payments or the total Capped Payments, whichever provides the Employee with the higher Net After
Tax Amount; however, if the reductions imposed under this Section 1.6 are in excess of the amount of payments or benefits to be
provided, then the total Parachute Payments will be adjusted by first reducing, on a pro rata basis, the amount of any noncash
benefits under this Agreement, then any noncash benefits under any other plan, agreement or arrangement, then any cash payments
under this Agreement and finally any cash payments under any other plan, agreement or arrangement. The Accounting Firm will notify
the Employee and the Company if it determines that the Parachute Payments must be reduced and will send the Employee and the Company
a copy of its detailed calculations supporting that determination.

 

As a result of the
uncertainty in the application of Code Sections 280G and 4999 at the time that determinations under this Section 1.6 are made,
it is possible that the Employee will have received Parachute Payments or Capped Payments in excess of the amount that should have
been paid or provided (“Overpayments”), or that additional Parachute Payments or Capped Payments should be paid or
provided to the Employee (“Underpayments”). If the parties agree on an Overpayment or, in the absence of such agreement,
the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company
or the Employee, which assertion the parties or the Accounting Firm, as the case may be, believes has a high probability of success,
or controlling precedent or substantial authority, that an Overpayment has been made, that Overpayment will be treated for all
purposes as a loan ab initio that the Employee must repay to the Company immediately together with interest at the applicable Federal
rate under Code Section 7872; provided, however, that no loan will be deemed to have been made and no amount will be payable
by the Employee to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount
on which the Employee is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999
and the Employee will receive a greater Net After Tax Amount than such Employee would otherwise receive. If the parties agree on
an Underpayment or, in the absence of such agreement, the Accounting Firm determines, based upon controlling precedent or substantial
authority, that an Underpayment has occurred, upon which event the Accounting Firm will notify the Employee and the Company of
that determination, the amount of that Underpayment will be paid to the Employee by the Company promptly after such determination.

 

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For purposes of this
Section 1.6, the following terms shall have their respective meanings:

 

		(a)	“Accounting Firm” means the independent accounting firm currently engaged by the Company,
or a mutually agreed upon independent accounting firm if requested by the Employee; and

 

		(b)	“Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments,
as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable
to the Employee on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined
effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as
applicable, in effect on the date of payment.

 

		(c)	“Parachute Payment” means a payment that is described in Code Section 280G(b)(2),
determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.

 

The fees and expenses
of the Accounting Firm for its services in connection with the determinations and calculations contemplated by the preceding subsections
shall be borne by the Company. The Company and the Employee shall each provide the Accounting Firm access to and copies of any
books, records and documents in the possession of the Company or the Employee, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations
and calculations contemplated by the preceding subsections. Any determination by the Accounting Firm shall be binding upon the
Company and the Employee.

 

1.7         The
parties hereby consent and agree that (i) all disputes between the parties, including those relating to the existence and validity
of this Agreement and any dispute as to the arbitrability of a matter under this provision, shall be submitted to full and binding
arbitration in the Commonwealth of Virginia, before a panel of three arbitrators and administered by the American Arbitration Association
(“AAA”) under its Employment Arbitration Rules and Mediation Procedures, provided, however, that this provision
shall not require arbitration of any claim which, by law, cannot be the subject of a compulsory arbitration agreement, (ii) notwithstanding
the foregoing, each party irrevocably submits to the jurisdiction of any Commonwealth of Virginia State or Federal court in any
action or proceeding provided for under this Section 1.7 to enforce the provisions of this Agreement or with respect to enforcement
of any judgment upon the award rendered by the arbitrators, and hereby waives the defense of inconvenient forum to the maintenance
of any such action or proceeding, (iii) either party may elect to invoke the Optional Rules for Emergency Measures of Protection
provided under the AAA’s Employment Arbitration Rules and Mediation Procedures, (iv) judgment upon the award rendered by
the arbitrators may be entered by any court having jurisdiction thereof, (v) except as otherwise required by applicable law to
render this Section 1.7 fully enforceable, each party shall be responsible for its own costs and expenses (including attorneys’
fees) of any arbitration pursuant to this Section 1.7; provided, that if the Employee prevails on any dispute covered by this provision,
then the Company shall reimburse the Employee for the Employee’s reasonable attorneys’ fees and legal expenses no later
than thirty (30) days following any final resolution of such dispute, and (vi) each party has knowingly and voluntarily agreed
to enter into this arbitration clause and hereby waives any rights that might otherwise exist with respect to resolution of disputes
between them, including with respect to the right to request a jury trial or other court proceeding.

 

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1.8         As
a condition to the receipt of any compensation and other benefits pursuant to this Agreement, the Employee must submit a signed
Confidential Waiver and Release Agreement, in a form reasonably satisfactory to the Company and at a minimum substantially in the
form attached as Appendix A, within forty-five (45) days of the termination of the Employee’s employment and not revoke
same within the seven (7) days immediately following the Employee’s execution of same. Notwithstanding any other provision
of this Agreement to the contrary, (i) any payments to be made, or benefits to be provided, under Sections 1.3 and 1.4
of this Agreement (other than the payments required to be made by the Company pursuant to Section 1.3(iv) above), within the sixty
(60) days after the date the Employee’s employment terminates, shall be accumulated and paid in a lump sum, or as to benefits
continued at Employee’s expense subject to reimbursement to be made, on the first pay period occurring more than sixty (60)
days after the date the Employee terminates employment (and no later than ninety (90) days after the date the Employee terminates
employment), and (ii) the accelerated vesting of equity awards as set forth in Section 1.4 above shall not be effective any
earlier than the date the Confidential Waiver and Release Agreement is effective and irrevocable, provided in each case Executive
delivers the signed Confidential Waiver and Release Agreement to Company and the revocation period thereunder expires without Executive
having elected to revoke the Confidential Waiver and Release Agreement.

 

		2.	COVENANTS

 

2.1         The
Employee agrees and acknowledges that Lumber Liquidators, Inc., a wholly-owned subsidiary of the Company (“Lumber Liquidators”),
and the Employee, contemporaneously with the execution of this Agreement, have entered into the Confidentiality, Non-Solicitation
and Non-Competition Agreement, dated August 9, 2019 (the “Non-Compete Agreement”), a copy of which is attached
hereto as Appendix B, pursuant to which the Employee has agreed to comply with certain confidentiality, non-solicitation,
non-competition and other restrictive covenants as set forth therein. The Employee agrees that the Employee would not be entitled
to receive the payments and benefits of this Agreement had the Employee not become a party to the Non-Compete Agreement. Additionally,
the Employee agrees, acknowledges and affirms that the Non-Compete Agreement remains in full force and effect and is not merged,
superseded or otherwise affected by this Agreement in any way that would be adverse to the rights of the Company and/or Lumber
Liquidators. The Employee also agrees that the covenants, prohibitions and restrictions contained in the Non-Compete Agreement
are in addition to, and not in lieu of, any rights or remedies that the Company may have under this Agreement or the laws of any
applicable jurisdiction, or at common law or equity, and the enforcement or non-enforcement by the Company of its rights and remedies
pursuant to this Agreement shall not be construed as a waiver of any rights or other remedies that Lumber Liquidators may possess
under the Non-Compete Agreement. The Employee also agrees that, if the Employee is entitled to receive salary continuation payments
under Sections 1.3 and/or 1.4 above, the Non-Compete Agreement will be amended and supplemented prior to the termination of the
Employee’s employment, as is reasonably satisfactory to the Company and at a minimum substantially as described in the Confidential
Waiver and Release Agreement.

 

2.2        The
Employee acknowledges and agrees that the Company, Lumber Liquidators and their subsidiaries and affiliates have a legitimate business
interest in preventing Employee from engaging in the activities described in the Non-Compete Agreement and that any breach of the
Non-Compete Agreement would constitute a material breach of this Agreement.

 

    	 	Page 9 of 19

     

    

 

2.3         The
Employee further agrees and promises that the Employee will not engage in, or induce other persons or entities to engage in, any
harassing or disparaging conduct or negative or derogatory statements directed at or about the Company or its subsidiaries, the
activities of the Company and/or its subsidiaries or any of the persons or entities covered under the Confidential Waiver and Release
Agreement described above, at any time (whether during the Term or thereafter). Notwithstanding the foregoing, this Section 2.3
may not be used to penalize the Employee for providing truthful testimony under oath in a judicial or administrative proceeding
or complying with an order of a court or government agency of competent jurisdiction.

 

2.4         Notwithstanding
any other provision of this Agreement, the Company and the Employee acknowledge and agree that nothing in this Agreement or the
Non-Compete Agreement shall prohibit the Employee from reporting possible violations of Federal, State or other law or regulations
to, or filing a charge or other complaint with, any governmental agency or entity, including but not limited to the Department
of Justice, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health
Administration, the Securities and Exchange Commission, Congress, and any Inspector General, or making any other disclosures that
are protected under any whistleblower provisions of Federal, State or other law or regulation or assisting in any such investigation
or proceeding. The Employee further acknowledges that nothing herein or in the Non-Compete Agreement limits the Employee’s
ability to communicate with any such governmental agency or entity or otherwise participate in any such investigation or proceeding
that may be conducted by any such governmental agency or entity, including providing documents or other information, without notice
to the Company. The Employee does not need the prior authorization of the Company or Lumber Liquidators to make any such reports
or disclosures, and the Employee is not required to notify the Company or Lumber Liquidators that the Employee made any such reports
or disclosures or is assisting in any such investigation. Additionally, the Employee (i) does not waive any rights to any individual
monetary recovery or other awards in connection with reporting any such information to any such governmental agency or entity,
(ii) does not breach any confidentiality or other provision hereunder in connection with any such reporting or disclosures, and
(ii) will not be prohibited from receiving any amounts hereunder as the result of making any such reports or disclosures or assisting
with any such investigation or proceeding.

 

2.5         In
the event the Employee breaches any of the covenants set forth in this Section 2 or in the Non-Compete Agreement (as amended by
the Confidential Waiver and Release Agreement), the Employee waives and forfeits any and all rights to any further payments or
benefits under Sections 1.3 and/or 1.4 above and under any outstanding awards with respect to which the accelerated vesting or
other benefits under Section 1.4 applied, and the Employee agrees to repay to the Company (a) an amount that equals the gross amount
(before taxes) of any payments previously paid to, or on behalf of, the Employee under Sections 1.3 and/or 1.4 above and (b) any
shares of Common Stock the Employee then owns as the result of the accelerated vesting under Section 1.4 and all gross amounts
realized as the result of the sale of any shares of Common Stock the Employee previously owned as the result of the accelerated
vesting under Section 1.4.

 

2.6         Notwithstanding
any other provision of this Agreement, all payments and benefits that may be provided to the Employee under this Agreement shall
be subject to (i) applicable laws regarding recoupment of compensation and (ii) the terms of any recoupment policy of the Company
currently in effect or as subsequently established or amended by the Board of Directors of the Company and/or the Compensation
Committee of the Board of Directors of the Company, including without limitation any such policy intended to implement Section
304 of the Sarbanes-Oxley Act of 2002, as amended, or Section 10D of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 10 of 19

     

    

 

		3.	MISCELLANEOUS

 

3.1         The
Employee shall have no right to receive any payment hereunder except as determined pursuant to Sections 1.3 or 1.4 hereof. Nothing
contained in this Agreement shall confer upon the Employee any right to continued employment by the Company or shall interfere
in any way with the right of the Company to terminate her employment at any time for any/or no reason. The provisions of this Agreement
shall not affect in any way the right or power of the Company to change its business structure or to effect a merger, consolidation,
share exchange or similar transaction, or to dissolve or liquidate, or sell or transfer all or part of its business or assets.

 

3.2         The
Employee understands that her obligations under this Agreement and the Non-Compete Agreement will continue whether or not her employment
with the Company is terminated voluntarily or involuntarily, or with or without cause. To the extent necessary to give effect to
such provisions, the provisions of this Agreement, and the provisions of the Non-Compete Agreement, which are incorporated herein
by this reference, shall survive the termination hereof, whether such termination shall be by termination of the Employee’s
employment by the Company or by the Employee, voluntary or involuntary, with or without Cause and whether or not on account of
Disability.

 

3.3         This
Agreement may not be amended other than by a written agreement signed by the Employee and a Company officer.

 

3.4         The
Employee agrees that the Company’s waiver of any default by the Employer shall not constitute a waiver of its rights under
this Agreement with respect to any subsequent default by the Employee. No waiver of any provision of this Agreement shall be valid
unless in writing and signed by all parties.

 

3.5         This
Agreement shall be binding upon, and inure to the benefit of, the Employee and the Company and their respective permitted successors
and assigns. Neither this Agreement nor any right or interest hereunder shall be assignable by the Employee, her beneficiaries,
or legal representatives without the Company’s prior written consent.

 

3.6         Where
appropriate as used in this Plan, the masculine shall include the feminine.

 

3.7         This
Agreement has been executed and delivered in the Commonwealth of Virginia, and the laws of the Commonwealth of Virginia shall govern
its validity, interpretation, performance and enforcement.

 

3.8         It
is intended that any payment or benefit which is provided pursuant to this Agreement and which is considered to be deferred compensation
subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) shall be paid and provided in
a manner, and at such time, as complies with the applicable requirements of Section 409A of the Code to avoid the unfavorable tax
consequences provided therein for noncompliance. Neither the Company nor the Employee shall take any action to accelerate or delay
the payment of any monies and/or provision of any benefits under this Agreement in any manner that would not be in compliance with
Section 409A of the Code. For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as rights
to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code. For purposes of
determining the time of (but not entitlement to) payment or provision of deferred compensation under this Agreement under Section
409A of the Code in connection with a termination of employment, termination of employment will be read to mean a “separation
from service” within the meaning of Section 409A of the Code. If the Employee is a key employee (as defined in Section 416(i)
of the Code without regard to paragraph (5) thereof) and any of the Company’s Stock is publicly traded on an established
securities market or otherwise, then payment of any amount or provision of any benefit under this Agreement which is considered
deferred compensation subject to Section 409A of the Code shall be deferred for six (6) months after termination of the Employee’s
employment or, if earlier, the Employee’s death, as required by Section 409A(a)(2)(B)(i) of the Code (the “409A Deferral
Period”). In the event such payments are otherwise due to be made in installments or periodically during the 409A Deferral
Period, the payments which would otherwise have been made in the 409A Deferral Period shall be accumulated and paid in a lump sum
as soon as the 409A Deferral Period ends, and the balance of the payments shall be made as otherwise scheduled. In the event benefits
are required to be deferred, any such benefit may be provided during the 409A Deferral Period at the Employee’s expense,
with the Employee having a right to reimbursement from the Company once the 409A Deferral Period ends, and the balance of the benefits
shall be provided as otherwise scheduled. Notwithstanding any other provision of this Agreement, the Company shall not be liable
to the Employee if any payment or benefit which is provided pursuant to this Agreement and which is considered to be deferred compensation
and subject to Section 409A of the Code otherwise fails to comply with, or be exempt from, the requirements of Section 409A of
the Code.

 

    	 	Page 11 of 19

     

    

 

3.9        This
Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

 

3.10       Any
payments provided for herein shall be reduced by any amounts required to be withheld by the Company under applicable federal, state
or local income or employment tax laws or similar statutes to other provisions of law then effect. The Employee agrees and acknowledges
that the determination of the Employee’s tax liability with respect to compensation and benefits under this Agreement is
between the Employee and the relevant taxing authority, and the Company shall not have any liability or responsibility for the
payment of any such taxes owed by the Employee, including without limitation any related interest and/or penalties.

 

3.11       Any
notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally, by courier
service, or by registered mail, return receipt requested and shall be effective upon actual receipt by the party to which such
notice shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter
designate in accordance with the terms hereof):

 

If to the Company:

 

Lumber Liquidators Holdings, Inc.

3000 John Deere Road

Toano, Virginia 23168

Attn: Chief Legal Officer

Telephone: __________

 

If to Employee:

 

Nancy A. Walsh

__________

__________

Telephone: __________

 

    	 	Page 12 of 19

     

    

 

3.12       This
Agreement contains the entire agreement between the Company and the Employee with respect to the subject matter hereof and, from
and after the date hereof, this Agreement shall supersede any other agreement, written or oral, between the parties relating to
the subject matter of this Agreement, including but not limited to any Pre-Existing Agreement, any plan, policy or other arrangement
of the Company or any subsidiary that provides for the payment of severance, salary continuation or similar benefits, and any prior
discussions, understanding or agreements between the Company and the Employee, written or oral, at any time. The Company and the
Employee agree that the Pre-Existing Agreement and all such other plans, policies and arrangements providing for severance, salary
continuation or similar benefits are null and void and superseded by this Agreement, and neither party has any further rights or
obligations under any Pre-Existing Agreement or any such other plans, policies and arrangements providing for severance, salary
continuation or similar benefits.

 

[SIGNATURES CONTINUED
NEXT PAGE]

 

    	 	Page 13 of 19

     

    

 

IN WITNESS WHEREOF,
this Agreement has been executed by the parties hereto effective as of the day and year first above stated.

 

	 	LUMBER LIQUIDATORS HOLDINGS, INC.
	 	 	 
	 	By:	/s/ David Levin
	 	 	 
	 	Name:     	David Levin
	 	Title:	Chairman of the Compensation Committee
	 	 
	 	EMPLOYEE:
	 	 
	 	/s/ Nancy Walsh
	 	Nancy Walsh

 

    	 	Page 14 of 19

     

    

 

Appendix A

Severance Agreement

Confidential Waiver and Release Agreement

 

CONFIDENTIAL WAIVER AND RELEASE AGREEMENT

 

RELEASE AGREEMENT
(this “Release Agreement”), dated as of [DATE], between Lumber Liquidators Holdings, Inc. (the
“Company”), and Nancy Walsh (the “Employee”).

 

1.       Termination
of Employment. The Employee acknowledges that her employment with the Company and its subsidiaries and affiliated entities
terminated effective as of _____________ __, 20__ (the “Termination Date”) and her role and responsibilities as Chief
Financial Officer (CFO) terminated as of the Termination Date. Subject to the terms of this Release Agreement, the Employee shall
be paid, offered, and provided compensation and benefits at the Employee’s current rates and amounts through the Termination
Date.

 

2.       Release.

 

a.       In
consideration of the payments and benefits set forth in Section 1 of the Severance Agreement between the Company and the Employee
dated as of _________ __, 2019 (the “Severance Agreement”), the Employee, on behalf of herself and her heirs,
executors, successors and assigns, knowingly and voluntarily releases, remises, and forever discharges the Company and its parents,
subsidiaries and affiliates, together with each of their current and former principals, officers, directors, shareholders, agents,
representatives and employees, and each of their heirs, executors, successors and assigns (collectively, the “Releasees”),
from any and all debts, demands, actions, causes of actions, accounts, covenants, contracts, agreements, claims, damages, omissions,
promises, and any and all claims and liabilities whatsoever, of every name and nature, known or unknown, suspected or unsuspected,
both in law and equity (“Claims”), which the Employee ever had, now has, or may hereafter claim to have against
the Releasees by reason of any matter, cause or thing whatsoever arising from the beginning of time to the time she signs this
Release Agreement (the “General Release”). This General Release of Claims shall apply to any Claim of any type,
including, without limitation, any and all Claims of any type that the Employee may have arising under the common law, under Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Older
Workers Benefit Protection Act, the Americans With Disabilities Act of 1967, the Family and Medical Leave Act of 1993, the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Sarbanes-Oxley Act of 2002, each as amended,
and any other federal, state or local statutes, regulations, ordinances or common law, or under any policy, agreement, contract,
understanding or promise, written or oral, formal or informal, between any of the Releasees and the Employee, including but not
limited to the Severance Agreement, and shall further apply, without limitation, to any and all Claims in connection with, related
to or arising out of the Employee’s employment relationship, or the termination of her employment, with the Company.

 

b.       Except
as provided in Sections 1.3 and 1.4 of the Severance Agreement, the Employee acknowledges and agrees that the Company has fully
satisfied any and all obligations owed to her arising out of her employment with the Company, and no further sums are owed to her
by the Company or by any of the other Releasees at any time.

 

c.       The
Employee represents and warrants to the Company that she has fully disclosed any and all matters of interest to the Company’s
___________, including, but not limited to, those which (A) could reasonably likely have an adverse effect on the Company’s
reputation, financial condition, operations, or liquidity and (B) should be disclosed under the Company’s Code of Business
Conduct and Ethics. The Employee also hereby confirms that all prior acknowledgements, certifications or other representations
made by the Employee prior to the Termination Date remain true, complete and accurate as of the Termination Date and covenants
and agrees to immediately notify the Company’s ___________ of any circumstance or situation which may give rise to a change
in those statements.

 

    	 	Page 15 of 19

     

    

 

d.       Nothing
in this Paragraph 1 shall be deemed to release (i) the Employee’s right to enforce the terms of this Release Agreement, (ii)
the Employee’s rights, if any, to any vested accrued benefits as of the Employee’s last day of employment with the
Company under any plans of the Company which are subject to ERISA and in which the Employee participated, (iii) any claim that
cannot be waived under applicable law, including any rights to workers’ compensation or unemployment insurance or (iv) the
Employee’s rights, if any, for indemnification under any agreement or governing document of the Company with respect to the
Employee’s service as an officer or director of any of the Releasees.

 

e.       To
the fullest extent allowed by law, the Employee promises never to file a lawsuit asserting any claims that are released in this
Section 2. In the event Employee breaches this Section 2(e), the Employee shall pay to the Company all of its expenses incurred
as a result of such breach, including but not limited to, reasonable attorneys’ fees and expenses. Notwithstanding the foregoing,
the parties acknowledge and agree that this Section 2(e) shall not be construed to prohibit the exercise of any rights by the Employee
that the Employee may not waive or forego as a matter of law.

 

3.       Consultation
with Attorney; Voluntary Agreement. The Company advises the Employee to consult with an attorney of her choosing prior to signing
this Release Agreement. The Employee understands and agrees that she has the right and has been given the opportunity to review
this Release Agreement and, specifically, the General Release in Paragraph 2 above, with an attorney. The Employee also understands
and agrees that she is under no obligation to consent to the General Release set forth in Paragraph 2 above. The Employee acknowledges
and agrees that the payments and benefits set forth in Section 1.3 and 1.4 of the Severance Agreement are sufficient consideration
to require her to abide with her obligations under this Release Agreement, including but not limited to the General Release set
forth in Paragraph 2. The Employee represents that she has read this Release Agreement, including the General Release set forth
in Paragraph 2 and understands its terms and that she enters into this Release Agreement freely, voluntarily, and without coercion.

 

4.       Effective
Date; Revocation. The Employee acknowledges and represents that she has been given at least forty-five (45) days during which
to review and consider the provisions of this Release Agreement and, specifically, the General Release set forth in Paragraph 2
above, although she may sign and return it sooner if she so desires. The Employee further acknowledges and represents that she
has been advised by the Company that she has the right to revoke this Release Agreement for a period of seven (7) days after signing
it. The Employee acknowledges and agrees that, if she wishes to revoke this Release Agreement, she must do so in a writing, signed
by her and received by the Company no later than 5:00 p.m. Eastern Time on the seventh (7th) day of the revocation period. If no
such revocation occurs, the General Release and this Release Agreement shall become effective on the eighth (8th) day following
her execution of this Release Agreement (the “Release Effective Date”). The Employee further acknowledges and
agrees that, in the event that she revokes this Release Agreement, it shall have no force or effect, and she shall have no right
to receive any of the payments or benefits pursuant to Sections 1.2 or 1.3 of the Severance Agreement.

 

5.       Severability.
In the event that any one or more of the provisions of this Release Agreement shall be held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remainder of the Release Agreement shall not in any way be affected or impaired
thereby.

 

6.       Waiver.
No waiver by either party of any breach by the other party of any condition or provision of this Release Agreement to be performed
by such other party shall be deemed a waiver of any other provision or condition at the time or at any prior or subsequent time.
This Release Agreement and the provisions contained in it shall not be construed or interpreted for or against either party because
that party drafted or caused that party’s legal representative to draft any of its provisions.

 

    	 	Page 16 of 19

     

    

 

7.       Governing
Law. This Release Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth
of Virginia, without reference to its choice of law rules.

 

8.       Disputes.
The parties hereby consent and agree that (i) all disputes between the parties, including those relating to the existence and validity
of this Release Agreement and any dispute as to the arbitrability of a matter under this provision, shall be submitted to full
and binding arbitration in the Commonwealth of Virginia, before a panel of three arbitrators and administered by the American Arbitration
Association (“AAA”) under its Employment Arbitration Rules and Mediation Procedures, provided, however, that
this provision shall not require arbitration of any claim which, by law, cannot be the subject of a compulsory arbitration agreement,
(ii) notwithstanding the foregoing, each party irrevocably submits to the jurisdiction of any Commonwealth of Virginia State or
Federal court in any action or proceeding provided for under Section 1.7 of the Severance Agreement or with respect to enforcement
of any judgment upon the award rendered by the arbitrators, and hereby waives the defense of inconvenient forum to the maintenance
of any such action or proceeding, (iii) either party may elect to invoke the Optional Rules for Emergency Measures of Protection
provided under the AAA’s Employment Arbitration Rules and Mediation Procedures, (iv) judgment upon the award rendered by
the arbitrators may be entered by any court having jurisdiction thereof, (v) except as otherwise required by applicable law to
render this Section 7 fully enforceable, each party shall be responsible for its own costs and expenses (including attorneys’
fees)of any arbitration pursuant to this Section 7; provided, however, that if the Employee prevails on any dispute covered
by this provision, then the Company shall reimburse the Employee for the Employee’s reasonable attorneys’ fees and
legal expenses, no later than thirty (30) days following any final resolution of such dispute, and (vi) each party has knowingly
and voluntarily agreed to enter into this arbitration clause and, except as provided in Section 1.7 of the Severance Agreement,
hereby waives any rights that might otherwise exist with respect to resolution of disputes between them, including with respect
to the right to request a jury trial or other court proceeding.

 

9.       Non-Disparagement.

 

a.       The
Employee agrees not to do or say anything, directly or indirectly, that reasonably may be expected to have the effect of criticizing
or disparaging the Company, any director of Company, any of Company’s employees, officers or agents, or diminishing or impairing
the goodwill and reputation of the Company or the products and services it provides. The Employee further agrees not to assert
that any current or former employee, agent, director or officer of the Company has acted improperly or unlawfully with respect
to the Employee or any other person regarding employment. The Company agrees not to do or say anything, directly or indirectly,
that reasonably would have the effect of criticizing or disparaging the Employee.

 

b.       Notwithstanding
the foregoing provisions of this Section 9, the parties agree that nothing in this Agreement shall be construed to prohibit the
exercise of any rights by either party that such party may not waive as a matter of law nor does this Agreement prohibit the Employee,
the Company or the Company's officers, employees and/or directors from testifying truthfully in response to a subpoena, inquiry
or order by a court or governmental body with appropriate jurisdiction or as otherwise required by law.

 

10.       Return
of Company Property. On or before the Termination Date, as determined by the Company, the Employee will promptly deliver to
the Company all Company property, including but not limited to, all computers, phones, correspondence, manuals, letters, notes,
notebooks, reports, flow charts, programs, proposals, passwords, third party equipment that the Company is authorized to represent,
and any documents concerning the Company’s customers, operations, products or processes (actual or prospective) or concerning
any other aspect of the Company’s business (actual or prospective) and, without limiting the foregoing, will promptly deliver
to the Company any and all other documents or materials containing or constituting Confidential Information as defined in the Non-Compete
Agreement, except that the Employee may retain personal papers relating to Employee’s employment, compensation and benefits.

 

    	 	Page 17 of 19

     

    

 

11.       Cooperation.
The Employee agrees that for a period of ten (10) years following the Termination Date, the Employee shall have a continuing duty
to fully and promptly reasonably cooperate with the Company and its legal counsel by providing any and all requested information
and assistance concerning any legal or business matters that in any way relate to the Employee’s actions or responsibilities
as an employee of the Company, or to the period during the Employee’s employment with the Company. Such reasonable cooperation
shall include but not be limited to truthfully and in a timely manner participating and consulting concerning facts, responding
to questions, providing pertinent information, providing affidavits and statements, preparing for and attending depositions, and
preparing for and attending trials, hearings and other proceedings. Such reasonable cooperation shall include meeting with representatives
of the Company upon reasonable notice at reasonable times and locations. The Company shall use its reasonable efforts to coordinate
with the Employee the time and place at which the Employee's reasonable cooperation shall be provided with the goal of minimizing
the impact of such reasonable cooperation on any other material pre-scheduled business or professional commitments that the Employee
may have. The coordination and communication from the Company to the Employee regarding the Employee’s cooperation shall
come through the Company’s Chief Legal Officer. The Company shall reimburse the Employee for reasonable out-of-pocket expenses
incurred by Employee in compliance with this Section, including any reasonable travel expenses incurred by Employee in providing
such assistance, within thirty (30) days after Employee incurs the expense. As part of the consideration provided to the Employee
under this Agreement, the Employee shall provide cooperation to the Company at no additional cost to the Company. At no time subsequent
to the Termination Date shall the Employee be deemed to be a contractor or employee of the Company.

 

12.       Disclaimer
of Liability. This Agreement and the payments and performances hereunder are made solely to assist the Employee in making the
transition from employment with Company, and are not and shall not be construed to be an admission of liability, an admission of
the truth of any fact, or a declaration against interest on the part of the Company.

 

13.       Entire
Agreement. This Release Agreement constitutes the entire agreement and understanding of the parties with respect to the subject
matter herein and supersedes all prior agreements, arrangements and understandings, written or oral, between the parties; provided,
however, that Section 2 of the Severance Agreement, and the terms of the Non-Compete Agreement incorporated therein, shall
remain in full force and effect. The Employee agrees and acknowledges that the covenants and restrictions set forth in Section
2 of the Severance Agreement and the Non-Compete Agreement are reasonable and necessary for the protection of the Company and to
protect its business and Confidential Information, and the Employee further expressly agrees that: (i) Section 2 of the Severance
Agreement and the terms of the Non-Compete Agreement are material terms of this Release Agreement and (ii) notwithstanding the
express provisions of the Non-Compete Agreement, the Employee agrees, and the parties hereby amend the Non-Compete Agreement to
so provide, that the period during which the Employee is bound by the covenants set forth in Sections 2, 3, 4 and 5 of the Non-Compete
Agreement shall remain in effect after the twelve (12)-month periods described therein for so long as the Employee is eligible
to receive, and continues to receive, salary continuation payments pursuant to Section 1.3 and/or 1.4 of the Severance Agreement.
The Employee acknowledges and agrees that she is not relying on any representations or promises by any representative of the Company
concerning the meaning of any aspect of this Release Agreement. This Release Agreement may not be altered or modified other than
in a writing signed by the Employee and an authorized representative of the Company.

 

    	 	Page 18 of 19

     

    

 

14.       Headings.
All descriptive headings in this Release Agreement are inserted for convenience only and shall be disregarded in construing or
applying any provision of this Release Agreement.

 

15.       Claim
for Reinstatement. Employee agrees to waive and abandon any claim to reinstatement with Company. Employee further agrees not
to apply for any position of employment with Company and agrees that this Agreement shall be sufficient justification for rejecting
any such application.

 

16.       Counterparts.
This Release Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

 

IN WITNESS WHEREOF,
the Company and the Employee have executed this Release Agreement, on the date and year set forth below.

 

	 	LUMBER LIQUIDATORS HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	 	 
	 	Its:	 
	 	 	 
	 	EMPLOYEE:
	 	 	 
	 	 	 
	 	 	 
	 	Date:	 

 

    	 	Page 19 of 19hobpasagreement

                    AGREEMENT OF PURCHASE AND SALE          THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) is made and   entered  into  as  of August 2,  2019  (the  “Effective  Date”),  by  and  among HOUSTON   PORTFOLIO, LLC, a Delaware limited liability company (“Seller”), and HARTMAN vREIT  XXI OPERATING PARTNERSHIP L.P. a Texas Limited Partnership or its assignee,   (“Buyer”).                                    R E C I T A L S          Seller desires to sell, and Buyer desires to buy, the “Property” (as hereinafter defined) on  the terms and conditions hereinafter set forth.         NOW, THEREFORE, in consideration of the mutual undertakings of the parties hereto, it   is hereby agreed as follows:          1.    Certain Defined Terms.  As used herein:              1.1   “Appurtenances” shall mean, as to the “Land” (as hereinafter defined), all  easements and licenses benefitting the Land; all streets, alleys and rights of way, open or proposed,   in front of or adjoining or servicing all or any part of the Land; all strips and gores in front of or   adjoining all or any part of the Land; all development rights, air rights, wind rights, water, water   rights, riparian rights, and water stock relating to the Land; and all other rights, benefits, licenses,   interests, privileges, easements, tenements and hereditaments appurtenant to the Land or used in   connection with the beneficial use and enjoyment of the Land or the Improvements in anywise   appertaining to the Land or the Improvements.                1.2   “Closing Date” shall mean the date on which the “Closing” (as hereinafter   defined) occurs hereunder, which date shall be on September 23, 2019, unless extended as   hereinafter provided or otherwise agreed in writing by the parties.  Buyer shall have the right and   option to extend the Closing Date for a period no greater than thirty (30) days, upon notice to Seller   of such extension and payment to the Escrow Agent of One Hundred Thousand and No/100ths   Dollars ($100,000.00) (the “Extension Deposit”), such notice to be given and Extension Deposit   to be received at least two (2) Business Days before the then effective Closing Date.  The Extension   Deposit shall be a part of, and administered in the same way as, the Deposit.                1.3   “Closing Document” shall mean any certificate, instrument or other   document to be executed by a party or an affiliate of a party and delivered at or in connection with   the Closing pursuant to this Agreement.                1.4   “Deposit” shall mean Four Hundred Twenty Five Thousand and No/100ths   Dollars ($425,000), together with all interest thereon, and, if applicable, the Extension Deposit.                1.5   “Due Diligence Materials” shall mean all documents, materials, data,  analyses, reports, studies and other information pertaining to or concerning Seller, the Property or  the purchase of the Property as set out on Exhibit C attached hereto and incorporated herein by   this reference and any documents that, have been delivered to or made available for review by                                           1 

 

 Buyer or any of its agents, employees or representatives, including (a) all documents, materials,  data, analyses, reports, studies and other information made available to Buyer or any of its agents,  employees or representatives for review through an on-line data website, and (b) all information   disclosed in the real estate records of the applicable jurisdiction in which the Property are located,   but in all cases excluding the “Excluded Materials” (as defined below) except to the extent any   Excluded Materials are actually delivered or made available to Buyer or any of its agents,   employees or representatives.                1.6   “Due Diligence Period” shall mean the period commencing on the later of  (i) July 8, 2019 or (ii) the date of mutual execution of an Access Agreement between Seller and  Buyer, and expiring at 5:00 P.M. Central Time on August 22, 2019.               1.7   “Environmental Laws” shall mean, each and every federal, state, county   and municipal statute, ordinance, rule, regulation, code, order, requirement, directive, binding   written interpretation and binding written policy pertaining to Hazardous Materials issued by any   authorities and in effect as of the Effective Date with respect to or which otherwise pertains to or   affects the Property, or any portion thereof, the use, ownership, occupancy or operation of the   Property, or any portion thereof, or Buyer, and as the same have been amended, modified or   supplemented from time to time prior to the effective date, including the Comprehensive   Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.), the   Hazardous Substances Transportation Act (49 U.S.C. § 1802 et seq.), the Resource Conservation   and Recovery Act (42 U.S.C. § 6901 et seq.), as amended by the Hazardous and Solid Wastes   Amendments of 1984, the Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Safe   Drinking Water Act (42 U.S.C. § 300f et seq.), the Clean Water Act (33 U.S.C. § 1321 et seq.),   the Clean Air Act (42 U.S.C. § 7401 et seq.), the Solid Waste Disposal Act (42 U.S.C. § 6901 et   seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Emergency Planning and   Community Right-to-Know Act of 1986 (42 U.S.C. § 11001 et seq.), the Radon Gas and Indoor   Air Quality Research Act of 1986 (42 U.S.C. § 7401 et seq.), the National Environmental Policy   Act (42 U.S.C. § 4321 et seq.), the Superfund Amendment Reauthorization Act of 1986 (42 U.S.C.   § 9601 et seq.), the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), and any and all  rules and regulations which have become effective prior to the Effective Date under such statutes.               1.8   “Escrow Period” shall mean the period from (and including) the Effective   Date until the earlier of the Closing or termination of this Agreement.                1.9   “Excluded Materials” shall mean of the following to the extent not   otherwise included in Exhibit C:  (i) any appraisals, analyses or other economic evaluations of, or   projections with respect to, all or any portion of the Property (whether prepared internally or by   consultants), including, without limitation, budgets, prepared by or on behalf of a Seller or any   affiliate of a Seller or any other party, (ii) any documents, materials or information which are   subject to attorney and accountant work product or attorney/client or similar privilege, which   constitute attorney communications with respect to the sale of the Property by Seller, (iii) any   information which a Seller, in good faith, considers proprietary, including, without limitation any   documents or information concerning a Seller itself and its constituent members, (iv) any property   conditional reports or assessments, (v) any environmental reports, and (vi) any information which   is subject to any confidentiality obligations.                                           2 

 

            1.10  “Existing Lease” means a Lease (as hereinafter defined) in existence as of  the Effective Date.               1.11  “Governmental Entity” shall mean any federal, state, provincial,  municipal or local government or other political subdivision, governmental, quasi-governmental,  regulatory or administrative authority, agency, instrumentality or commission or any court,  tribunal, or judicial body.               1.12  “Hazardous Materials” shall mean (a) asbestos, radon gas and urea  formaldehyde foam insulation, (b) any solid, liquid, gaseous or thermal contaminant, including  smoke vapor, soot, fumes, acids, alkalis, chemicals, petroleum products or byproducts,  polychlorinated biphenyls, phosphates, lead or other heavy metals and chlorine, (c) any solid or  liquid waste (including hazardous waste), hazardous air pollutant, hazardous substance, hazardous  chemical substance and mixture, toxic substance, pollutant, pollution, regulated substance and (d)  any other chemical, material or substance, the use or presence of which, or exposure to the use or  presence of which, is prohibited, limited or regulated by any Environmental Laws.               1.13  “Improvements” shall mean the improvements, buildings, structures,  parking areas and fixtures located upon the Land.               1.14  “Intangible Property” shall mean, as to the Land, the Improvements and  the Personal Property, all Leases of any portion of the Property, and to the extent the following  items are assignable and relate solely to the Land, the Improvements and the Personal Property,  all Service Agreements (as hereinafter defined) that are to be assumed by Buyer at the Closing as  provided in this Agreement, and all Licenses and Permits (as hereinafter defined).               1.15  “Internal Revenue Code” shall mean the Internal Revenue Code of 1986,  as amended from time to time, and any corresponding provisions of succeeding law and any  regulations, rulings and guidance issued by the Internal Revenue Service.               1.16  “Land” shall mean the land described on Exhibit “A” attached hereto and  incorporated herein by this reference.               1.17  “Laws” shall mean any binding domestic or foreign laws, statutes,  ordinances, rules, resolutions, regulations, codes or executive orders enacted, issued, adopted,  promulgated, applied, or hereinafter imposed by any Governmental Entity, including building,  zoning and Environmental Laws, as to the use, occupancy, rental, management, ownership,  subdivision, development, conversion or redevelopment of the Property.               1.18  “Lease” shall mean collectively, (x) the leases, amendments and  modifications listed on Exhibit “H” (the “Lease Exhibit”), and (y) the New Leases (as hereinafter  defined), including amendments.               1.19  “Leasing Costs” shall mean, with respect to a particular Lease, all capital  costs, expenses incurred for capital improvements, equipment, painting, decorating, partitioning  and other items to satisfy the initial construction obligations of the landlord under such Lease  (including any expenses incurred for legal, architectural or engineering services in respect of the  foregoing), “tenant allowances” in lieu of or as reimbursements for the foregoing items, payments                                          3 

 

 made for purposes of satisfying or terminating the obligations of the tenant under such Lease to   the landlord under another lease (i.e., lease buyout costs), costs of base building work, free rent   and other similar inducements, relocation costs, temporary leasing costs, leasing commissions,   brokerage commissions, legal, design and other professional fees and costs, in each case, to the   extent the landlord under such Lease is responsible for the payment of such cost or expense.                1.20  “Licenses and Permits” shall mean all of Seller’s right, title and interest,   to the extent assignable, in and to licenses, permits, certificates of occupancy, approvals,   dedications, subdivision maps and entitlements now or hereafter issued, approved or granted by   any Governmental Entity having jurisdiction over the Property, or any portion thereof, exclusively   in connection with the Property, together with all renewals and modifications thereof.                1.21  “Liens” shall mean any liens, mortgages, deeds of trust, pledges, security   interests or other encumbrances securing any debt or obligation.                1.22  “National Service Contract” shall mean any contract to which Seller or its   affiliate is a party that provides for services to the Property.                 1.23  “New Leases” shall mean, collectively, any Leases entered into with respect   to any portion of the Property on or after the Effective Date in accordance with the terms of this   Agreement.                1.24  “Personal Property” shall mean, as to the Land and Improvements,   tangible personal property owned by Seller and located on, and used exclusively in connection   with, the Land and Improvements including all building materials, supplies, hardware, carpeting   and other inventory located on or in the Land or Improvements and maintained in connection with   the ownership and operation thereof, but excluding computer software; all furniture, furnishings,   fixtures, equipment, vehicles, tools and tangible personal property of every kind and description   owned or leased (other than from Seller or its managing agent) by any of the Tenants (as hereinafter   defined); any other personal property listed on Exhibit “B”; and the Reserved Company Assets (as   hereinafter defined).                1.25  “Property” shall mean the land described on Exhibit “A”.  The Property   includes all of Seller’s right, title and interest in the (a) Appurtenances, (b) the Improvements, (c)   the Personal Property and (d) the Intangible Property, inclusive.                1.26   “Reserved Company Assets” shall mean the following assets of Seller as   of the Closing Date:  all cash, cash equivalents (including certificates of deposit), reserves, deposits   held by third parties (e.g., utility companies), accounts receivable and any right to a refund or other   payment relating to a period prior to the Closing, including any real estate tax refund (subject to   the prorations hereinafter set forth), bank accounts, claims or other rights against any present or  prior partner, member, employee, agent, manager, officer or director of Seller or its direct or  indirect partners, members, shareholders or affiliates, any refund in connection with termination  of Seller’s existing insurance policies, all contracts between Seller and any law firm, accounting  firm, property manager, leasing agent, broker, environmental consultants and other consultants  and appraisers entered into prior to the Closing, any proprietary, privileged or confidential  materials (including any materials relating to the background or financial condition of a present or                                           4 

 

prior direct or indirect partner or member of Seller), the internal books and records of Seller  relating, for example, to contributions and distributions prior to the Closing, any software, and any  trademarks, trade names, brand marks, brand names, domain names, social media sites (such as  Facebook or Twitter), trade dress or logos relating thereto, any development bonds, letters of credit  or other collateral held by or posted with any Governmental Entity or other third party with respect  to any improvement, subdivision or development obligations concerning the Property or any other  real property, and any other intangible property that is not used exclusively in connection with the  Property.               1.27  “Security Deposits” shall mean, subject to the terms of the respective  applicable Leases, all security deposits paid to a Seller, as landlord, and not applied, to the extent  attributable to the Property or a portion thereof (together with any interest which has accrued  thereon, but only to the extent such interest has accrued for the account of the Tenant).               1.28  “Tenant” shall mean a tenant of the Property having the right to use or  occupancy at the Property pursuant to a Lease or a Non-Space Lease.               1.29  “Title Company” shall mean First American Title Insurance Company.         2.    Purchase and Sale.  Upon the terms and conditions hereinafter set forth, Seller shall  sell to Buyer, and Buyer shall purchase from Seller, the Property. The transaction described in this  Agreement is a portfolio sale involving the sale of all, or less than all, of the Property to Buyer.         3.    Purchase Price.  The purchase price (the “Purchase Price”) for the Property shall  be Twenty Million Seven Hundred Seventy-Five Thousand and No/100ths Dollars ($20,775,000).   The Purchase Price shall be paid to Seller by Buyer as follows:               3.1   Deposit.  (a)  Within three (3) Business Days after the mutual execution and  exchange of this Agreement, Buyer shall deliver, by Federal Reserve wire transfer of immediately  available funds, the Deposit to First American Title Insurance Company (the “Escrow Agent”),  at its offices at 666 Third Avenue, New York, New York 10017, Attention:  Jennifer D. Panciera  (Telephone:  (212) 850-0653; E-mail:  JPanciera@firstam.com).                     (b)   The Escrow Agent shall hold the Deposit in escrow in an interest- bearing account in accordance with Section 10.21 hereof.  Except as otherwise specifically  provided herein, the Deposit shall be non-refundable to Buyer.               3.2   Closing Payment.  The Purchase Price, as adjusted by the application of the  Deposit and by the prorations and credits specified herein, shall be paid by wire transfer of  immediately available federal funds (through the escrow described in Section 5) as and when  provided in Section 5.2.2 and in the “Escrow Instructions” (as hereinafter defined).  The amount  to be paid under this Section 3.2 is referred to herein as the “Closing Payment”.               3.3   Assumption of Obligations.  As additional consideration for the purchase  and sale of the Property, at closing Buyer shall assume and perform all obligations under all (i)  Leases (including all covenants and obligations relating to the Security Deposits), (ii) Service  Agreements to the extent accepted by Buyer and (iii) Licenses and Permits.  The provisions of this  Section 3.3 shall survive the Closing.                                          5 

 

             3.4   No Finance Contingency.  Buyer expressly agrees and acknowledges that   Buyer's obligations hereunder are not in any way conditioned upon or qualified by Buyer's ability   to obtain financing of any type or nature whatsoever (i.e., whether by way of debt financing or   equity investment, or otherwise) to consummate the transaction contemplated hereby however,   Buyer is permitted to obtain financing and Seller will cooperate with Buyer and Buyer's lender   with respect to same but such cooperation shall not constitute a waiver of Buyers rights as set forth   herein nor deemed a modification thereof.          4.    Conditions Precedent.  The obligation of Buyer to acquire the Property as   contemplated by this Agreement is subject to satisfaction (or waiver by Buyer) of all of the   conditions precedent for the benefit of Buyer set forth in Sections 4.1, 4.2, and 4.5.3 herein or   expressly provided elsewhere in this Agreement, any of which may be waived prior to the Closing   only in writing by Buyer.  The obligation of Seller to transfer the Property as contemplated by this   Agreement is subject to satisfaction (or waiver by Seller) of all of the conditions precedent for the   benefit of Seller set forth in Sections 4.3 and 4.4 herein or expressly provided elsewhere in this   Agreement, any of which may be waived prior to the Closing only in writing by Seller.  If any of   such conditions is not fulfilled (or waived in writing) pursuant to the terms of this Agreement, then   the party in whose favor such condition exists may terminate this Agreement and, in connection   with any such termination made in accordance with this Section 4, Seller and Buyer shall be   released from further obligation or liability hereunder (except for those obligations and liabilities   that expressly survive such termination), and the Deposit shall be disposed of in accordance with   Section 9.  However, the Closing shall constitute a waiver of all conditions precedent.                4.1   Performance by Seller.  The performance and observance, in all material   respects, by Seller of all covenants and agreements of this Agreement to be performed or observed   by Seller prior to or on the Closing Date and the delivery of all documents as set out in subsection   5.2.1 shall be a condition precedent to Buyer’s obligation to purchase the Property.                4.2   Seller’s Representations and Warranties.  The obligation of Buyer to close   the transactions contemplated by this Agreement is subject to the truth, in all material respects, of   the representations and warranties of Seller set forth in this Agreement, as of the Closing Date, as   though made on and as of the Closing Date (except for representations and warranties made as of   a specified date, the accuracy of which shall be determined as of that specified date), excluding,   however, any matter or change that does not, in Buyer’s reasonable discretion, materially and   adversely affect the Property or Seller’s ability to consummate the transactions contemplated   herein and is (1) expressly permitted or contemplated by the terms of this Agreement or (2) known   to Buyer prior to the expiration of the Due Diligence Period.                4.3   Performance by Buyer.  The performance and observance, in all material  respects, by Buyer of all covenants and agreements of this Agreement to be performed or observed  by it prior to or on the Closing Date shall be a condition precedent to Seller’s obligation to sell the  Property, including, without limitation:  (a) Seller shall have received all of the documents required  to be delivered by Buyer under Section 5.2.2; (b) Seller shall have received the Purchase Price in   accordance with Section 2.2 and all other amounts due to Seller hereunder; (c) no order or   injunction of any court or administrative agency of competent jurisdiction nor any statute, rule,   regulation or executive order promulgated by any Governmental Entity shall be in effect as of the   Closing which restrains or prohibits the transfer of the Property or the consummation of any other                                           6 

 

 transaction contemplated hereby; (d) no action, suit or other proceeding shall be pending which  shall have been brought by a person that is not a Seller or an affiliate of Seller to restrain, prohibit  or change in any material respect the transactions contemplated under this Agreement.               4.4   Representations and Warranties of Buyer.  The obligation of Seller to close  the transactions contemplated by this Agreement is subject to the truth, in all material respects, of  the representations and warranties of Buyer set forth in this Agreement, as of the Closing Date, as  though made on and as of the Closing Date (except for representations and warranties made as of  a specified date, the accuracy of which shall be determined as of that specified date).               4.5   Title Matters.                     4.5.1 Title Report; Survey.  Buyer hereby acknowledges that Seller has  delivered or will make available to Buyer:  (i) a copy of a preliminary title report or commitment  for title insurance from Title Company covering the Property (collectively, the “Preliminary Title  Report”), and (ii) a copy of the most recent existing survey in Seller’s possession relating to the  Property (collectively, the “Survey”).  Except as expressly set forth in this Agreement, all title  exceptions and matters set forth in the Preliminary Title Report and on the Survey shall be deemed  Permitted Exceptions and are hereby approved by Buyer.  Buyer is solely responsible for obtaining  any updated title commitments, surveys, or any other title related matters Buyer desires with  respect to the Property. Buyer acknowledges that Seller has advised Buyer that it should either  obtain an abstract covering the Property examined by an attorney of Buyer’s selection, or Buyer  should be furnished with or obtain a title policy in connection with its purchase of the Property.                      4.5.2 Seller’s Liens.  Notwithstanding the foregoing provisions of this  Section 4.5, Seller shall be obligated to take (and hereby covenants to take) such actions as may   be reasonably required by Title Company so that Title Company is willing to issue title insurance   to Buyer without exception for (i) any Liens securing any existing mortgage or deed of trust   financing obtained or assumed by Seller or its affiliate that encumbers all or any portion of the   Property as of the Effective Date, (ii) any Liens securing any other mortgage or deed of trust   financing voluntarily obtained by Seller after the Effective Date and prior to the Closing, and (iii)   any other mechanics’ liens or materialmens’ liens arising from any work or improvements at the   Property ordered or authorized by Seller that encumber the Property on the Closing Date (other   than liens or claims arising from Buyer’s due diligence reviews or inspections hereunder).                      4.5.3 Permitted Exceptions to Title.  Buyer’s obligation to purchase the   Property is subject to the condition precedent that, at the Closing, the Title Company shall have   irrevocably committed to issue the standard promulgated form T-1 Owner’s Title Insurance Policy   (in promulgated form) (the “Owners’ Policy”) upon the Closing.  Buyer shall be obligated to   accept title to the Property, subject to the following exceptions to title (the “Permitted   Exceptions”):                      (a)   Real estate taxes and assessments not yet delinquent;                      (b)   The T-1 standard printed exceptions, exclusions and conditions if   any, which appear in a standard promulgated form T-1 Owners Title Insurance Policy issued by   Title Company in the state in which a Property is located;                                           7 

 

                  (c)   The Leases;                     (d)   Such other exceptions as the Title Company shall commit to omit or  insure over, whether such insurance is made available in consideration of payment, bonding,  indemnity of Seller or otherwise (subject to the terms of this Agreement);                     (e)   Subject to the adjustments provided for herein, any service,  installation, connection or maintenance charge due after Closing and charges for sewer, water,  electricity, telephone, cable television,  gas or other utility;                     (f)   Easements and laws, regulations, resolutions or ordinances,  including, without limitation, building, zoning and environmental protection, as to the use,  occupancy, subdivision, development, conversion or redevelopment of the Property currently or  hereafter imposed by any Governmental Entity;                     (g)   Mechanic’s liens and notices of commencement as a result of work  contracted for by Seller which is ongoing, the cost of which is adjusted for as set forth herein;                     (h)   the rights of the holders, if any, of any mineral rights;                    (i)   the rights of tenants in possession, as tenants only;                    (j)   matters affecting the condition of title to the Property created by or  with the written consent of Buyer; and                      (k)   Such other exceptions to title or survey exceptions as may be  approved or deemed approved by Buyer pursuant to the above provisions of this Section 4.5, or as  otherwise expressly permitted under this Agreement, or any exceptions resulting from the acts of  Buyer or its consultants, employees, agents or representatives.   Conclusive evidence of the availability of such Owner’s Policy shall be the irrevocable  commitment of Title Company to issue to Buyer on the Closing Date a standard form T-1  Owner’s Title Insurance Policy issued by Title Company in the State of Texas, (in the face  amount of the Purchase Price, which policy shall show (i) title to the Land and Improvements to  be vested of record in Buyer, and (ii) the Permitted Exceptions to be the only exceptions to title.  Notwithstanding any provision to the contrary contained in this Agreement or any of the Closing  Documents, any or all of the Permitted Exceptions may be omitted by Seller in its “Deed” (as  defined below) without giving rise to any liability of Seller, irrespective of any covenant or  warranty of Seller that may be contained or implied in the applicable Deeds (which provisions  shall survive the Closing and not be merged therein).                     4.5.4 Endorsements to Owner’s Policy.  It is understood that Buyer may  request a number of endorsements to the Owner’s Policy and the issuance of such endorsements  shall not be a condition to Closing.                                          8 

 

                   4.5.5  Buyer shall have 10 business days after receipt of the Title  Commitment (the “Buyer’s Title Review Period”) within which to examine the Title  Commitment and to notify Seller in writing of objections to specific matters identified on  Schedules A or B thereof.  If Buyer fails to so notify Seller of objections to the matters described  in Schedules A, B or C of the Title Commitment, the contents of such schedules shall be deemed  accepted.  If Buyer timely notifies Seller of objections to specific title matters within the Buyer’s  Title Review Period, Seller shall have 10 business days after receipt of Buyer’s notification (the  “Title Objection Response Period”) to notify Buyer that Seller shall cause the objections to title  to be removed, corrected, remedied or insured over by procuring appropriate endorsements to the  Title Policy on or before the Closing Date; however, Seller shall have no obligation to incur costs  to cure, correct or remedy any title objections.  If Seller does not give Buyer notice of its election to  remedy any such title objections within the Title Objection Response Period, Seller shall be deemed  to have elected not to remedy, correct, remove or provide endorsement to Buyer.  If Seller does not  elect to remedy, correct, remove or provide endorsement covering Buyer’s objections to title, Buyer  shall have 5 business days after the earlier of receipt of notice from Seller to such effect or the end of  the Title Objection Response Period (the “Title Election Period”) to elect either of the following as  its sole remedy:             1.    proceed with the purchase and acquire the Property subject to the exceptions                  to which Buyer objected without reduction in the Purchase Price; or             2.    cancel the Escrow and this Agreement by written notice to Seller and Escrow                  Holder, in which case the remaining refundable portion of the Earnest Money                  Deposit and any interest accrued thereon shall be returned to Buyer; any                  escrow cancellation costs shall be equally borne by Seller and Buyer.           If Buyer does give Seller notice of its election during the Title Election period, Buyer  shall be deemed to have elected to proceed with the purchase of the Property subject to the terms  and conditions hereof without reduction in the Purchase Price.               4.6   Due Diligence Reviews.  Subject to the terms of this Section 4.6 and the   rights of Tenants under the Leases, during the Due Diligence Period, Buyer shall have the right, at   Buyer’s sole cost, risk, and expense, to perform and complete during normal business hours on a   Business Day all of Buyer’s due diligence examinations, reviews and inspections of all matters   pertaining to the purchase of the Property, including all Due Diligence Materials (“Due   Diligence”).  If Buyer delivers a written notice to Seller and Escrow Agent within the Due   Diligence Period disapproving Buyer’s Due Diligence in Buyer’s sole and absolute discretion, this   Agreement shall thereupon be automatically terminated, Buyer shall not be entitled to purchase   the Property, Seller shall not be obligated to sell the Property to Buyer and the Parties shall be   relieved of any further obligation to each other with respect to the Property.  Notwithstanding   anything to the contrary in this Agreement, Buyer’s failure to provide such notice of disapproval   within the Due Diligence Period shall conclusively be deemed Buyer’s waiver of its right to   terminate this Agreement pursuant to this Section 4.6 and election to proceed with the transaction   set forth herein.  Upon termination, Escrow Agent shall return all documents and funds, including   the Deposit, to the Party who deposited same and no further duties shall be required of Escrow                                           9 

 

 Agent.  If Buyer timely elects (or is deemed to have elected) to terminate its obligations hereunder   as described above, then Buyer shall provide to Seller originals of all third party reports, studies   and appraisals relating to the Property in its possession, without representation or warranty upon   payment by Seller of the charges of any third party supplying the reports, studies or appraisals   requested by Seller, if any.  The foregoing obligation shall survive any termination of this   Agreement.  If prior to expiration of the Due Diligence Period, Buyer delivers written notice to   Seller and Escrow Agent approving Buyer’s Due Diligence or Buyer fails to deliver written notice   to Seller and Escrow Agent disapproving Buyer’s Due Diligence, then this Agreement shall remain   in full force and effect.  Subject to Section 4.6.1 and provided this Agreement has not been   terminated prior to the Closing, Seller shall provide Buyer and its actual and potential investors,   lenders and assignees, and their respective representatives, attorneys, accountants, consultants,   surveyors, title companies, agents, employees, contractors, appraisers, architects and engineers   (collectively, the “Licensee Parties”), with reasonable access during normal business hours on a   Business Day to the Property (subject to the rights of tenants under the Leases) upon reasonable   advance written notice (which shall in any event be at least 24 hours in advance).  Reference is   made to Section 8.1.3 herein and nothing contained in this Agreement shall be construed as a   representation as to the content of any Due Diligence Materials that are provided to Buyer.                      4.6.1 Review Standards.  Buyer shall at all times conduct its due diligence   reviews, inspections and examinations in a manner so as to not cause liability, damage, lien, loss,   cost or expense (other than normal and customary costs or expenses incurred by Seller in   facilitating Buyer’s due diligence investigations in accordance with the terms of this Agreement)   to Seller or the Property and so as to not unreasonably interfere with or disturb any Tenant or   Seller’s operation of the Property.  Without limitation on the foregoing, in no event shall Buyer or   any Licensee Parties:  (a) conduct any intrusive or destructive physical testing (environmental,   structural or otherwise) at the Property (such as soil borings, water samplings or the like) or take   physical samples from the Property without Seller’s express written consent, which consent, as to   such intrusive or destructive physical testing or sampling, may be given or withheld in Seller’s   sole discretion (and Buyer shall in all events promptly return the Property to their prior condition   and repair thereafter); (b) contact any consultant or other professional engaged by Seller, or contact  any Tenant of the Property (or its representatives), in each case without Seller’s express written  consent (which shall not be unreasonably withheld); or (c) contact any Governmental Entity  having jurisdiction over the Property without Seller’s express written consent (which shall not be  unreasonably withheld) other than ordinary contact normally associated with routine due diligence  examinations that does not involve any discussions with governmental officials (except to the  extent necessary to request records); or (d) contact any member or partner of Seller, in each case,  without the prior written approval of Seller.  Consents under clause (b), (c) or (d) above may be  given by e-mail by Stephen Shaw (Telephone:  (212) 906-3470; E-mail:   sshaw@highbrookinvestors.com), or by such other individuals designated in a written notice or e- mail notice given by Seller to Buyer.  Seller shall have the right, at Seller’s option, to cause a  representative of Seller to be present at all inspections, reviews and examinations conducted  hereunder.  Buyer shall schedule any entry (by it or its Licensee Parties) onto the Property in  writing and in advance with Seller, which shall be at least one (1) Business Day in advance and all  such entries shall be during normal business hours on a Business Day.  In the event of any  termination hereunder, Buyer shall return all Due Diligence Materials furnished by Seller  hereunder, and at Seller’s written request, if requested by Seller, Buyer shall, upon payment by  Seller of the cost of any reports requested by Seller, promptly deliver to Seller true, accurate and                                           10 

 

 complete copies of any written reports relating to the Property prepared for or on behalf of Buyer   its Licensee Parties.  In connection with any permitted testing, sampling or other work performed   hereunder, Buyer shall promptly dispose of (or cause to be disposed of), at its sole cost in   accordance with all applicable Laws, any waste, samples or other materials generated or removed   by Buyer or by its Licensee Parties arising from or in connection with the investigations, samplings   or testing hereunder.  Notwithstanding the provisions of this Section 4.6.1, Buyer shall keep the   results of environmental testing confidential and shall not release the results of such testing to  Seller without the prior written consent of Seller, or unless and until Buyer is legally compelled to  make such disclosure under applicable laws or until Buyer consummates its purchase of the   Property under this Agreement. To the fullest extent permitted by applicable law, all studies, data,   reports, analyses, writings and communications, including, without limitation, any environmental   reports, shall be generated by any consultant for the use by the attorneys of Buyer and Seller, shall   be the work product of the respective attorneys of Buyer and Seller and shall constitute confidential   attorney/client communications, and each party shall use its best efforts to ensure that such   confidence and privilege is maintained.  This Section 4.6.1 shall survive any termination of this   Agreement.                      4.6.2 Insurance Requirements.  As a condition precedent to any entry onto   the Property by Buyer or any of its Licensee Parties prior to the Closing, Buyer and all of its   Licensee Parties shall carry (a) general liability insurance covering including premises/operations   liability, broad form contractual liability, blanket owner’s and contractor’s liability and   products/completed operations liability with no exclusion for environmental claims and the   explosion, collapse and underground exclusions eliminated; with a combined limit of $5,000,000   for bodily injury and property damage and $2,000,000 per occurrence for contractual coverage,   (d) automobile liability insurance in an amount not less than $1,000,000.00 covering all   automobile and equipment owners and/or operated by Buyer and any of its agents and (e) where   Buyer’s Licensee Party is acting as an environmental consultant or otherwise performing   professional environmental services, a policy of environmental professional liability insurance,   having minimum limits of $1,000,000 per occurrence with a $5,000,000 annual aggregate with no   exclusion for pollution and/or environmental claims.    All such insurance shall:  (i) be primary so   that no insurance of a Seller or any of the additional insureds shall be called upon to contribute to   any loss; (ii) not be cancelled or materially modified without first giving Seller thirty (30) days’   advance written notice of cancellation or material modification; (iii) be issued by insurance   companies reasonably acceptable to Seller; (iv) except where prohibited by law, contain provisions   that the issuing insurance companies waive the rights of recovery or subrogation against Seller;   and (v) in the case of the environmental professional liability policy references in clause (e) above,   be maintained for at least two (2) years after the earlier of the Closing or the earlier termination of   this Agreement if such policy is written on a claims-made basis.  Before entering the Property   pursuant to this Section 4.6.2, Buyer shall deliver copies of the policies or certificates of insurance   issued by the insurance carrier(s) to Seller demonstrating compliance with the terms of this   Section.  In the event Buyer or any of its agents fails to procure or maintain the insurance   requirements as set forth in this Section or such insurance is materially modified such that it does   not meet or exceed the requirements herein, Seller shall have the right upon twenty-four (24) hours’   notice to immediately terminate this Agreement by written notice to Buyer, whereupon Buyer shall   immediately cease all operations on the Property and promptly remove all Licensee Parties from   the Property unless the subject insurance requirements are satisfied and evidence thereof delivered   to Seller before the expiration of said twenty-four (24) hour notice.                                           11 

 

                  4.6.3 Restoration/No Liens.  Buyer shall promptly pay when due the costs  of all entry and inspections and examinations done with regard to the Property and repair and/or  restore the Property to the condition in which the same were found before any such entry upon the  Property and inspection or examination was undertaken.  Buyer shall not permit any mechanics’  or other liens to be filed against the Property as a result of labor or materials furnished in  connection with its due diligence.  If any such lien is filed against the Property as a result of the  activities of Buyer or any of its Licensee Parties, then within ten (10) days after receipt of written  demand from a Seller or any other notice of such lien, Buyer shall either cause the same to be  discharged of record by payment of the claim or posting of a bond, or will take such other action  as may be reasonably acceptable to protect Seller and the Property from all claims, actions, causes  of action, suits, proceedings, costs, expenses (including, without limitation, reasonable attorneys’  fees), liabilities and damages, whether known or unknown, direct or indirect, absolute or  contingent (collectively, “Losses”) arising from such lien.  In the event Buyer fails to release any  lien by payment, bond or otherwise as set forth herein, Seller may pay such amounts necessary to  cause the release of the lien and Buyer shall promptly reimburse Seller one hundred ten percent  (110%) of the amount so paid, in addition to Seller’s other costs (including, but not limited to  attorneys’ fees) necessary to discharge the lien(s)).  The provisions of this Section shall survive  the Closing or, if the purchase and sale is not consummated, any termination of this Agreement.                     4.6.4 Due Diligence Indemnity.  To the greatest extent permitted by law,  Buyer shall defend, indemnify, and hold harmless Seller and the Tenants from and against all  Losses (whether arising out of injury or death to persons, damage to the Property the disclosure of  confidential information, or otherwise) including, but not limited to, costs of remediation,  restoration and other similar activities, mechanic’s and materialmen’s liens and attorneys’ fees,  arising out of or in connection with Buyer’s due diligence, Buyer’s breach of its obligations under  Section 4.6.5 or Buyer’s or any of its Licensee Parties’ entry upon the Property; provided, however,  that Buyer shall not be liable for any damages incurred by Seller resulting from the mere discovery  by Buyer of a pre-existing condition at or with regard to the Property; provided, however, that if  Buyer proceeds with the acquisition of the Property after the expiration of the Due Diligence  Period, then Buyer shall accept the Property with any such pre-existing conditions and assume all  liabilities associated therewith.  The provisions of this Section shall survive the Closing or, if the  purchase and sale is not consummated, any termination of this Agreement.                     4.6.5 Confidentiality.  Buyer agrees that all Due Diligence Materials  obtained by Buyer or any of its Licensee Parties in the conduct of its due diligence, including  without limitation any Excluded Materials that Seller may have provided, shall be treated as  confidential pursuant to Section 10.17 hereof and shall be used only to evaluate the acquisition of  the Property from Seller.               4.7   Tenant Estoppel Certificates.  Following the Effective Date, Seller shall  prepare and deliver to all Tenants at the Property an estoppel certificate or other statement in the  form required under Section 4.7.1 (“Tenant Estoppel Certificates”), and request each such tenant  to execute and deliver the Tenant Estoppel Certificate to Seller, provided, however, that Seller  need not send Tenant Estoppel Certificates to Tenants whose leased space consists entirely of areas  subject to or covered by billboard, rooftop, telecommunications, or antenna lease or license  (collectively, “Non-Space Leases”).  Seller shall use commercially reasonable efforts to provide  a Tenant Estoppel Certificate from those Tenants occupying 10,000 square feet or more of rentable                                          12 

 

 space and seventy percent (70%) of the remaining aggregate square footage actually leased in the   Property (excluding the Non-Space Tenants) (the “Required Estoppel Threshold”).   To the   extent Seller is unable to satisfy the Required Estoppel Threshold, despite its commercially   reasonable good faith efforts, Closing shall be delayed until such time as the Required Estoppel   Threshold has been achieved, but not later than 60 days from the Closing Date.                       4.7.1 Each Tenant Estoppel Certificate shall be substantially (i) in the   form attached as Exhibit “J”; subject to the applicable Tenant’s reasonable changes, including   changes to comply with the estoppel requirements in the applicable Lease (it being acknowledged   and agreed that if a Lease provides for an estoppel certificate containing certain specified items   and such other items as a party may “reasonably require”, then the delivery by the tenant under   such Lease without any items other than the specified items shall be deemed to be the delivery of   an estoppel certificate in compliance with the terms of such Lease), (ii) in the form prescribed by   the terms of the applicable Lease, or (iii) if the Tenant is a regional or national Tenant, the form   may also be the standard form generally used by such Tenant.  In addition, any provisions of the   applicable estoppel certificates respecting defaults, defenses, disputes, environmental matters,   claims, offsets, credits, abatements, concessions and recaptures against rent and other charges may   be limited to the actual knowledge of the applicable Tenant.  Buyer’s failure to object to any Tenant   Estoppel Certificate (or any information or provision therein) by written notice to Seller given   within five (5) Business Days after Buyer’s receipt thereof (but not later than the Closing Date)   shall be deemed to constitute Buyer’s acceptance and approval thereof.                      4.7.2 Seller shall utilize commercially reasonable efforts to obtain Tenant   Estoppel Certificates from the Tenant under each Lease (other than Non-Space Leases) at the   Property (without the obligation to incur any material cost or liability in connection with such   efforts or making any payments or granting any concessions under the Leases and without the   obligation to declare any tenants in default under the Leases or to initiate any proceeding   thereunder).  As used in this Agreement, “commercially reasonable efforts” shall not include any   obligation to institute or threaten legal proceedings, to declare or threaten to declare any person in   default, to expend any monies or to cause any other person to do any of the same.          5.    Closing Procedure.  The closing (the “Closing”) of the sale and purchase herein   provided shall occur on the Closing Date.                5.1   Escrow.  The Closing shall be accomplished pursuant to escrow instructions   (the “Escrow Instructions”) by and among Buyer, Seller and the Escrow Agent in the form of   Exhibit “C”, which Buyer and Seller shall execute concurrently herewith.  In addition, either party   may provide additional or supplemental escrow instructions in connection with the Closing, as   long as the same are not inconsistent with the Escrow Instructions or this Agreement.                5.2   Closing Deliveries.  The parties shall deliver to the Escrow Agent the  following:                     5.2.1 Seller Deliveries.  At least one (1) Business Day prior to the Closing  Date, Seller shall deliver (or cause to be delivered) to the Escrow Agent the following:                                           13 

 

                   (a)   A duly executed and acknowledged original special warranty deed   (the “Deed”) in the form of Exhibit “D”;                      (b)   Two (2) counterparts of a duly executed original bill of sale,   assignment and assumption agreement (a “Bill of Sale, Assignment and Assumption”) in the  form of Exhibit “E”;                      (c)   An original federal certificate of “non-foreign” status in the form  required by Section 1445 of the Internal Revenue Code duly executed by Seller (or its affiliate, if  applicable);                      (d)   Unless Buyer and Seller mutually elect to deliver the same outside   of escrow, duly executed notices to each of the Tenants under the Leases with respect to the   Property (“Tenant Notices”), in the form of Exhibit “F”, which notices Buyer shall, at Buyer’s   sole cost and expense, mail or deliver to each such tenant;                      (e)   Unless Buyer and Seller mutually elect to deliver the same outside   of escrow, duly executed notices to each of the vendors under any Service Agreement to be   assumed by Buyer at Closing as provided in this Agreement (“Vendor Notices”), such Vendor   Notices to be in such form(s) as are reasonably required by Seller, which notices Seller shall, at   Seller’s sole cost and expense, mail to each such vendor by certified mail, return receipt requested;                      (f)   A Seller Closing Certificate duly executed by Seller;                      (g)   Evidence reasonably satisfactory to the Escrow Agent respecting the   due organization of Seller and the due authorization and execution by Seller of this Agreement and   the documents required to be delivered hereunder by Seller;                      (h)   If required by Title Company, a title certificate in the form of Exhibit   “G” to facilitate the issuance of any title insurance sought by Buyer in connection with the   transactions contemplated hereby, but in no event shall Seller be obligated to provide any   additional certificate, affidavit or indemnity in connection with such title insurance; and                      (i)   Such additional documents as may be reasonably required by Buyer   or the Escrow Agent in order to consummate the transactions hereunder (provided the same do not   increase in any material respect the costs to, or liability or obligations of, Seller in a manner not   otherwise provided for herein including, without limitation, any jurisdiction-specific document   necessary to convey the Property to Buyer in accordance with the terms of this Agreement).    In addition to the foregoing, to the extent they do not constitute Reserved Company Assets and are   then in the possession of Seller (or its agents or employees) and have not theretofore been delivered   to Buyer, Seller shall deliver to Buyer at or promptly after the Closing:  (i) any plans and   specifications for the Improvements for the Property including any CAD files in Seller’s   possession; (ii) all unexpired warranties and guarantees that Seller has received in connection with   any work or services performed with respect to, or equipment installed in, the Property; (iii) all   keys and other access control devices for the Property; (iv) originals of all Leases for the Property;   and (v) originals of all Service Agreements for the Property that will remain in effect after the                                           14 

 

Closing and all Tenant leasing information, leasing files and other material documents relating to  the operation or maintenance of the Property in Seller’s possession.  All items described in this  paragraph may be either delivered at Closing or left at the Property.                     5.2.2 Buyer Deliveries.  At least one (1) Business Day prior to the Closing  Date (except as to the Closing Payment, which shall be delivered no later than 2:00 p.m. Central  time on the Closing Date), Buyer shall deliver to the Escrow Agent the following:                     (a)   The Closing Payment by wire transfer of immediately available  federal funds;                     (b)   Two (2) counterparts of a duly executed original Bill of Sale,  Assignment and Assumption;                     (c)   Unless Buyer and Seller mutually elect to deliver the same outside  of escrow, duly executed Tenant Notices;                     (d)   Unless Buyer and Seller mutually elect to deliver the same outside  of escrow, duly executed Vendor Notices;                     (e)   The Buyer Closing Certificate duly executed by Buyer;                     (f)   Evidence reasonably satisfactory to the Escrow Agent respecting the  due organization of Buyer and the due authorization and execution by Buyer of this Agreement  and the documents required to be delivered hereunder; and                     (g)   Such additional documents as may be reasonably required by Seller  or the Escrow Agent in order to consummate the transactions hereunder (provided the same do not  increase in any material respect the costs to, or liability or obligations of, Buyer in a manner not  otherwise provided for herein including, without limitation, any jurisdiction-specific document  necessary to convey the Property to Buyer in accordance with the terms of this Agreement).                     5.2.3 Mutual Deliveries.  At least one (1) Business Day prior to the  Closing Date, Buyer and Seller shall mutually execute and deliver (or cause to be executed and  delivered) to the Escrow Agent, the following:                     (a)   A closing statement (the “Closing Statement”) reflecting the  Purchase Price, and the adjustments and prorations required hereunder and the allocation of  income and expenses required hereby; and                     (b)   Such transfer tax forms, if any, as are required by state and local  authorities.               5.3   Closing Costs.  Seller shall pay or cause to be paid (1) one-half (1/2) of all  escrow charges and (2) the premium required for the base Owner’s Policy to be issued.  Buyer  shall pay (1) one-half (1/2) of all escrow charges, (2) the premium required for any and all  endorsements to the Owner’s Policy, (3) Buyer’s cost to obtain a new survey or to update the  Survey and (4) all fees, costs or expenses in connection with Buyer’s due diligence reviews and                                          15 

 

analyses hereunder to the extent that the fees, costs or expenses are not otherwise paid outside  Closing.  Any other closing costs shall be allocated in accordance with local custom.  Seller and  Buyer shall pay their respective shares of prorations as hereinafter provided.  Except as otherwise  expressly provided in this Agreement, each party shall pay the fees of its own attorneys,  accountants and other professionals.               5.4   Prorations.                     5.4.1 Items to be Prorated.  The initial prorations and payments provided  for in this Section 5.4 shall be made at Closing on the basis of the Closing Statement, which shall  be prepared by Seller and submitted to Buyer for its review and approval at least two (2) Business  Days prior to the Closing.  The following shall be prorated among Seller and Buyer as of the  Closing Date (on the basis of the actual number of days elapsed over the applicable period), with  Buyer being deemed to be the owner of the Property during the entire day on the Closing Date and  being entitled to receive all operating income of the Property, and being obligated to pay all  operating expenses of the Property, with respect to the Closing Date:                     (a)   All non-delinquent real estate and personal property taxes and  assessments on the Property for the current year.  Seller shall be responsible for the payment of  any real estate and personal property taxes that are delinquent before Closing.  In no event shall  Seller be charged with or be responsible for any increase in the taxes on the Property resulting  from the sale of the Property contemplated by this Agreement, any change in use of the Property  on or after the Closing Date, or from any improvements made or leases entered into on or after the  Closing Date.  If any assessments on the Property are payable in installments, then the installment  allocable to the current period shall be prorated (with Buyer being allocated the obligation to pay  any installments due on or after the Closing Date).                     (b)   All fixed and additional rentals under the Leases, Security Deposits  (except as hereinafter provided) and other Tenant charges.  Seller shall deliver or provide a credit  in an amount equal to all prepaid rentals for periods after the Closing Date and all refundable cash  Security Deposits (to the extent the foregoing were made by Tenants under the Leases and are not  applied or forfeited prior to the Closing) to Buyer on the Closing Date.  Seller shall also transfer  to Buyer any Security Deposits that are held in the form of letters of credit (the “SD Letters of  Credit”) if the same are transferable, at Seller’s cost (including Seller’s payment of any third party  transfer fees and expenses); if any of the SD Letters of Credit is not transferable, Seller shall  request the tenants obligated under such SD Letters of Credit to cause new letters of credit to be  issued in favor of Buyer in replacement thereof and in the event such a new letter of credit is not  issued in favor of Buyer by Closing, Buyer shall diligently pursue such replacement after Closing  and Seller shall take all reasonable action, as directed by Buyer and at Seller’s expense, in  connection with the presentment of such SD Letters of Credit for payment as permitted under the  terms of the applicable Lease, and in consideration of Seller’s agreement as aforesaid, Buyer shall  indemnify, defend and hold Seller harmless from any liability, damage, loss, cost or expense  resulting from an alleged wrongful drawing upon any of the SD Letters of Credit after the Closing.   A list of the unapplied Security Deposits under the Leases as of the Effective Date is set forth on  Exhibit “K”.  Rents that are delinquent (or payable but unpaid) as of the Closing Date shall not be  prorated on the Closing Date.  Rather, Buyer shall cause any such delinquent rent (or payable but  unpaid rent) for the period prior to Closing to be remitted to Seller if, as and when collected.  At                                          16 

 

 Closing, Seller shall deliver to Buyer a schedule of all such delinquent or payable but unpaid rent.   Additionally, there shall be no proration of any rent that a tenant under a Lease delivers to either  Buyer or Seller and that such Tenant has identified, at the time of such delivery, as constituting  payment or rent due for a month or other period prior to the month in which the Closing occurs  (“Identified Pre-Closing Rent”).  If Buyer receives any such Identified Pre-Closing Rent, Buyer  shall cause such Identified Pre-Closing Rent to be remitted to Seller if, as, and when collected.   Until the date that is three (3) months after the Closing, Buyer shall include such delinquencies (or  unpaid amounts) in its normal billing and shall pursue the collection thereof in good faith after the  Closing Date (but Buyer shall not be required to litigate or declare a default under any Lease or  pursue any other action or remedy in connection with the recovery from tenants of such  delinquencies or other unpaid amounts).  To the extent Buyer receives payment of rents (or income  in connection with other tenant charges) on or after the Closing Date other than Identified Pre- Closing Rent, such payments shall be applied first toward the rent (or other tenant charge) for the  month in which the Closing occurs then to the rent (or other tenant charge) owed to Buyer in  connection with the applicable Lease or other document for which such payments are received,  and then to any delinquent rents (or other tenant charges) owed to a Seller, with Seller’s share  thereof being promptly delivered to Seller; provided, however, that any year-end or similar  reconciliation payment shall be allocated as hereinafter provided.  Buyer may not waive any  delinquent (or unpaid) rents or modify a Lease so as to reduce or otherwise affect amounts owed  thereunder for any period in which a Seller is entitled to receive a share of charges or amounts  without first obtaining Seller’s written consent.  Seller hereby reserves the right to pursue any  remedy for damages against any Tenant owing delinquent rents and any other amounts to Seller  (but shall not be entitled to terminate any Lease or any tenant’s right to possession), provided that,  Seller shall not exercise any such remedy for a period of three (3) months after the Closing except  in connection with the recovery from tenants of taxes or assessments relating to any period prior  to the Closing Date (the “Pre-Closing Tax Collection Remedies”).  Buyer shall reasonably  cooperate with Seller, at no material out-of-pocket cost to Buyer, in any collection efforts  hereunder, including Seller’s Pre-Closing Tax Collection Remedies, but shall not be required to  litigate or declare a default under any Lease.  With respect to delinquent or other uncollected rents  and any other amounts or other rights of any kind respecting Tenants who are no longer Tenants  of the Property as of the Closing Date, the applicable Seller shall retain all of the rights relating  thereto.                      (c)   Payments required to be paid by Tenants under Leases for such   tenants’ shares of property taxes and assessments, insurance, common area maintenance and other   expenses of the Property are collectively referred to herein as “Reimbursable Tenant Expenses”.    Reimbursable Tenant Expenses shall be determined in accordance with the Leases, including   without limitation any Lease provisions that provide for the adjustment of Reimbursable Tenant   Expenses based on occupancy changes (i.e., “gross-up” provisions).  In addition, to the extent that  a Lease provides for base year amounts for operating expenses or taxes, such base year amounts  shall be prorated in determining Reimbursable Tenant Expenses with respect to such Lease.   Seller’s “share” of Reimbursable Tenant Expenses for the calendar year in which Closing occurs  (the “Closing Year”) shall be determined in accordance with Section 5.4.2(a) hereof.    Notwithstanding the foregoing, there shall be no proration of any such Reimbursable Tenant   Expenses that are delinquent as of Closing.  Rather, until the date that is three (3) months after the   Closing, Buyer shall include such delinquencies (or unpaid amounts) in its normal billing and shall   pursue the collection thereof in good faith after the Closing Date (but Buyer shall not be required                                           17 

 

 to litigate or declare a default under any Lease or pursue any other action or remedy in connection   with the recovery from tenants of Reimbursable Tenant Expenses relating to any period prior to   the Closing Date).                      (d)   All operating expenses, including all charges under the Contracts   which are assumed by Buyer, shall be prorated, and as to each service provider, operating expenses   payable or paid to such service provider in respect to the billing period of such service provider in   which the Closing occurs (the “Current Billing Period”), shall be prorated on a per diem basis  based upon the number of days in the Current Billing Period prior to the Closing and the number  of days in the Current Billing Period on and after the Closing, and assuming that all charges are  incurred uniformly during the Current Billing Period; however, there will be no prorations for debt  service or insurance premiums if Buyer is not acquiring or assuming Seller’s financing or  insurance.                     (e)   Buyer shall transfer all utilities at the Property to its name as of the  Closing Date, and where necessary, post deposits with the utility companies.  Seller shall use  commercially reasonable efforts to cause all utility meters to be read as of the Closing Date.  Seller  shall be entitled to recover any and all deposits held by any utility company as of the Closing Date.   All charges for utilities shall be prorated outside of the escrow contemplated herein within sixty  (60) days after the Closing Date.                      (f)   With the exception of the Leasing Costs identified on Schedule 1   (which shall be Buyer’s responsibility), Seller shall be responsible for all of its respective Leasing   Costs that are payable by reason of (i) the execution of an Existing Lease prior to the Effective   Date, (ii) the renewal, extension, expansion of, or the exercise of any other option under, an   Existing Lease, prior to the Effective Date, and (iii) amendments of an Existing Lease entered into   prior to the Effective Date.  If the Closing occurs, Buyer shall be responsible for the payment (or,   in the case of any amounts payable prior to Closing, the reimbursement to Seller) of all other   Leasing Costs, including (A) all Leasing Costs that become due and payable (whether before or   after Closing) as a result of (1) any New Leases, (2) amendments entered into during the Escrow   Period in accordance with this Agreement to renew, extend, expand or otherwise amend Existing   Leases or New Leases, or (3) any renewals, extensions or expansions of, or the exercise of any   other option under, Existing Leases or New Leases exercised by tenants during the Escrow Period;   and (B) all Leasing Costs as a result of renewals, extensions, expansions, or the exercise of any   other option, occurring on or after the Closing Date of Existing Leases or New Leases.  In addition,   Buyer shall take the Leases subject to any “free rent” pertaining to the period from and after the   Closing (subject to Buyer’s receipt of a credit at Closing for free rent, if any, applicable to the   period from and after the Closing under the Existing Leases to the extent any such free rent is   described on Schedule 5(A) attached hereto).  If, as of the Closing Date, Seller shall have paid any   Leasing Costs for which Buyer is responsible pursuant to the foregoing provisions, Buyer shall   reimburse Seller therefor at Closing.  Seller shall pay (or cause to be paid), prior to Closing or   credit Buyer at Closing (to the extent unpaid) all Leasing Costs for which Seller is responsible   pursuant to the foregoing provisions and, subject to the reimbursement obligations set forth above,   Seller shall pay (or cause to be paid) when due all Leasing Costs payable after the Effective Date   and prior to Closing.  Without limitation on the foregoing, the parties agree that Seller shall pay or   provide Buyer a credit at Closing for the outstanding free rent and other unpaid Leasing Costs   shown, respectively, on Schedule 5(A) and Schedule 5(B) attached hereto (exclusive of any such                                           18 

 

 amounts also shown or described on Schedule 1 hereto), to the extent the same are still unpaid or   outstanding as of the Closing Date.                      (g)   Capital projects in progress at the Property as of the Effective Date   are set forth in Schedule 5(C) attached hereto.  Seller anticipates that the capital projects at the   Property will be completed prior to the Closing Date, but completion thereof shall not be a   condition to Closing.  Notwithstanding the foregoing, for each foregoing capital project at the   Property that is not completed prior to the Closing Date (each such contract being referred to herein   as an “Uncompleted Capex Contract”), (i) the applicable Seller shall assign to Buyer at Closing  any Uncompleted Capex Contract; (ii) Buyer shall assume at Closing that Uncompleted Capex   Contract and full responsibility for the obligations under that Uncompleted Capex Contract   including, without limitation, responsibility for performing and completing the work set forth   therein; and (iii) the applicable Seller shall pay or provide Buyer a credit at Closing equal to the   contract amount of the Uncompleted Capex Contract assumed by Buyer less amounts paid by   Seller pursuant to the Uncompleted Capex Contract prior to the Closing Date.  The provisions of   this Section 5.4.1(g) shall survive the Closing.                      (h)    Any Rent collected or received by Seller after the Closing   representing rent for periods after Closing shall be immediately remitted to Buyer.  This provision   shall survive the Closing.                      5.4.2 Proration of Reimbursable Tenant Expenses and Percentage Rent.                      (a)   For the Closing Year.  In order to enable Buyer to make any year-  end reconciliations of tenant reimbursements of Reimbursable Tenant Expenses for the Closing   Year after the end thereof, Seller shall determine in accordance with Section 5.4.1(c) hereof the  Reimbursable Tenant Expenses actually paid or incurred by Seller for the portion of the Closing  Year during which Seller owned the Property (“Seller’s Actual Reimbursable Tenant  Expenses”) and the tenant reimbursements for such Reimbursable Tenant Expenses actually paid  to Seller by tenants for the portion of the Closing Year during which Seller owned the Property  (“Seller’s Actual Tenant Reimbursements”).  On or before the date that is one hundred twenty  (120) days after the end of the Closing Year, Seller shall deliver to Buyer a reconciliation statement  (“Seller’s Reconciliation Statement”) setting forth (i) Seller’s Actual Reimbursable Tenant  Expenses, (ii) Seller’s Actual Tenant Reimbursements, and (iii) a calculation of the difference, if  any, between the two (i.e., establishing that Seller’s Actual Reimbursable Tenant Expenses were  either more or less than or equal to Seller’s Actual Tenant Reimbursements). Any amount due to  Seller pursuant to the foregoing calculation (in the event Seller’s Actual Tenant Reimbursements  are less than Seller’s Actual Reimbursable Tenant Expenses) or Buyer (in the event Seller’s Actual  Tenant Reimbursements are more than Seller’s Actual Reimbursable Tenant Expenses), as the case  may be, shall be paid by Buyer to Seller or by Seller to Buyer, as the case may be, within thirty (30)  days after delivery of the Seller’s Reconciliation Statement to Buyer. If Buyer is paid any such  amount by Seller, Buyer thereafter shall be obligated to promptly remit the applicable portion to  the particular tenants entitled thereto.  Buyer shall indemnify, defend, and hold Seller and the other  “Seller Related Parties” (as hereinafter defined) harmless from and against any losses, costs,  claims, damages, and liabilities, including, without limitation, reasonable attorneys’ fees and  expenses incurred in connection therewith, arising out of or resulting from Buyer’s failure to remit  any amounts actually received from Seller to tenants in accordance with the provisions hereof.  If                                           19 

 

Buyer has transferred its interest in the Property to a successor-in-interest or assignee prior to such  date, then, on or before the transfer of its interest in the Property, Buyer shall (i) in writing  expressly obligate such successor-in-interest or assignee to be bound by the provisions of this  Section, and (ii) deliver written notice of such transfer to Seller, and thereafter Seller shall make  the deliveries specified above to Buyer’s successor-in-interest or assignee.  Seller’s Reconciliation  Statement shall be final and binding for purposes of this Agreement.                     (b)   For Prior Calendar Years.  Seller shall be responsible for the  reconciliation with Tenants of Reimbursable Tenant Expenses and Tenant reimbursements thereof  for any calendar year prior to the Closing Year.  If the amount of Tenant reimbursements collected  by Seller for such prior years is less than the amount of Reimbursable Tenant Expenses paid by  Seller for such period (or less than the amount that Seller is entitled to recover under the terms of  the Leases), then Seller shall be entitled to bill such tenants directly and retain any such amounts  due from tenants.  If the amount of Tenant reimbursements collected by Seller for such prior  calendar year exceeds the amount of Reimbursable Tenant Expenses paid by Seller with respect  to such period (or the amount that Seller is entitled to recover under the terms of the Leases), then,  to the extent required under the terms of the Leases, Seller shall remit such excess amounts to the  applicable tenants.  In connection with the foregoing, Seller shall be permitted to make and retain  copies of all Leases and all billings concerning Tenant reimbursements for such prior years, and  Buyer covenants and agrees to provide Seller with reasonable access to the books and records  pertaining to such tenant reimbursements, and to otherwise cooperate with Seller (at no material  out-of-pocket cost to Buyer) for the purpose of enabling Seller to adequately respond to any claim  by Tenants for reimbursement of Tenant reimbursements previously paid by such Tenants.  The  provisions of this Section 5.4.2(b) shall survive the Closing.                     (c)   Percentage Rent.  If any tenant is obligated to pay percentage rent  based upon the calendar year or lease year in which the date of Closing occurs (the “Percentage  Rent Year”), Buyer shall, within thirty (30) days after receipt of such payment with respect to the  Percentage Rent Year, remit to Seller that portion which is equal to the number of days which  elapsed between the commencement date of the Percentage Rent Year for each such tenant, and  the Closing Date, and the total number of days in such Percentage Rent Year.  If Seller has received  payments of percentage rent based on any Percentage Rent Year in which the date of Closing  occurs, in excess of Seller’s share as calculated as set forth above in this Section 5.4.2(c), it shall  promptly pay such excess to Buyer.                     5.4.3 General Provisions.                     (a)   In the event any prorations or apportionments made under this  Section 5.4 shall prove to be incorrect for any reason, then any party shall be entitled to an  adjustment to correct the same.  Any item that cannot be finally prorated because of the  unavailability of information shall be tentatively prorated on the basis of the best data then  available and reprorated when the information is available.                     (b)   Notwithstanding anything to the contrary set forth herein, all  reprorations contemplated by this Agreement shall be completed within one (1) year after Closing,                                          20 

 

                   (c)   The obligations of Seller and Buyer under this Section 5.4 shall   survive the Closing for one (1) year.                      (d)   Notwithstanding anything to the contrary set forth herein, Seller   shall cooperate with Buyer in Buyer’s performance of any audit required by accounting or   regulatory requirements.          6.    Condemnation or Destruction of Property.  In the event that, after the Effective Date   but prior to the Closing Date, either (i) any portion of the Property is taken pursuant to eminent   domain proceedings or (ii) any of the Improvements are damaged or destroyed by any casualty,   Seller shall be required to give Buyer prompt written notice of the same after Seller’s actual   discovery of the same, but shall have no obligation to cause any direct or indirect member, partner   or owner of Seller to contribute capital to Seller or any other entity, or to repair or replace (or cause   to be repaired or replaced) any such damage, destruction or taken property.  Seller shall, upon   consummation of the transaction herein provided, assign to Buyer (except to the extent any   condemnation proceeds or insurance proceeds are attributable to lost rents or other items applicable   to any period prior to the Closing) all claims of Seller respecting any condemnation or casualty   insurance coverage, as applicable, and all condemnation proceeds or proceeds from any such   casualty insurance received by Seller on account of any casualty at the Property (except to the   extent required for collection costs or repairs by Seller prior to the Closing Date), as applicable.    In connection with any assignment of insurance proceeds hereunder, Seller shall credit Buyer with   an amount equal to the applicable deductible amount under Seller’s insurance (but not more than   the amount by which (x) the cost as of the Closing Date to repair the damage is greater than (y) the   insurance proceeds and coverage to be assigned to Buyer).  In the event (A) the condemnation   award or the cost of repair of damage to the Property on account of a casualty, as applicable, shall   exceed ten percent (10%) of the Purchase Price, (B) a casualty is uninsured or underinsured and   Seller do not elect to credit Buyer at Closing with an amount equal to the cost to repair such   uninsured or underinsured casualty (Seller having the right, but not the obligation, to do so), or (C)   the condemnation or damage to the Property (i) materially and adversely affects access to or   parking at the Property, or (ii) results in the Property violating any Laws or failing to comply with   zoning or any recorded covenants, conditions or restrictions affecting the Property, then Buyer   may, at its option, terminate this Agreement by notice to Seller, given on or before the Closing   Date, whereupon Buyer shall receive a refund of the Deposit (and no party hereto shall have any   further obligation in connection herewith except under those provisions that expressly survive a   termination of this Agreement).          7.    Representations, Warranties and Covenants.                7.1   Representations and Warranties of Seller.  The following constitute the sole   representations and warranties of the Seller.  Seller hereby represents and warrants to Buyer that,   except as disclosed in the Due Diligence Materials:                      7.1.1 Leases.  (i) There are no leases of space in the Property or other  agreements to occupy all or any material portion of the Property that will be in force after the  Closing and under which Seller is the landlord (whether by entering into the leases or acquiring  the Property subject to such leases or agreements) other than the Leases; (ii) to Seller’s knowledge,  all of the Leases are in full force and effect and none of the Leases has been materially amended                                           21 

 

 except as set forth in the Lease Exhibit; and (iii) to Seller’s knowledge, neither Seller nor any   tenant is in monetary default or has given written notice of any existing material non-monetary   default under any of the Leases, except as set forth on Exhibit “I”.  To Seller’s knowledge, all of   the Leases made available to Buyer as part of the Due Diligence Materials are true and correct   copies.                      7.1.2 Litigation.  Other than litigation disclosed in Schedule 2(A) hereto,   to Seller’s knowledge, there is no pending and served (nor has Seller received any written notice   of any threatened) action, litigation, condemnation or other legal proceeding against the Property   or against Seller with respect to the Property which, if determined adversely to Seller or against   the Property (as applicable), would adversely affect the Property or the ability of Seller to perform   its obligations hereunder.                      7.1.3 Compliance.  Except as disclosed in Schedule 2(A) hereto, to   Seller’s knowledge, it has not received any written notice from any Governmental Entity having   jurisdiction over the Property of any material violations which have not been cured or dismissed.    For purposes of this provision, a “violation” means any violation of applicable law, including any   open building permits and any fines or penalties associated with the foregoing.                      7.1.4 Service Agreements.  Seller has not entered into any service or   equipment leasing contracts that will be binding on Buyer or the Property after the Closing, except   for the Service Agreements disclosed in Schedule 3 hereto (subject to any restrictions on   assignment contained therein).  To Seller’s knowledge, Seller is not in monetary default and no   party thereto has given written notice of any existing material non-monetary default under the   Service Agreements.  As used herein, the “Service Agreements” shall mean, collectively, all   service or equipment leasing contracts relating to the Property (other than the “Excluded   Contracts”, as defined below) that are (i) described in Schedule 3, or (ii) hereafter entered into in   accordance with this Agreement.  As used herein, “Excluded Contracts” shall mean contracts to   which Seller or its affiliate is a party (i) for insurance; (ii) for existing property management;   (iii) for the engagement of attorneys, accountants, brokers, surveyors, title companies,   environmental consultants, engineers, architects or appraisers; (iv) for the National Service   Contracts; (v) that are entered into after the Effective Date that Seller shall cause to be terminated   at or prior to the Closing, or  (vi) that either are terminable on 30 days’ or less notice without cost   or penalty or require the payment of not more than $20,000 in any calendar year.  The Excluded   Contracts are not being assigned to or assumed by Buyer hereunder, except that Buyer is assuming   the obligation to pay the Leasing Costs for which it is responsible under Section 5.4.1(f).                      7.1.5 Due Authority.  This Agreement and all agreements, instruments  and documents herein provided to be executed or to be caused to be executed by Seller are and on  the Closing Date will be duly authorized, executed and delivered by and are binding upon Seller.   Seller is duly organized and validly existing and in good standing under the Laws of the state of  Seller’s formation, and is duly authorized and qualified to do all things required of it under this   Agreement. Seller has the capacity and authority to enter into this Agreement and consummate the   transactions herein provided without the consent or joinder of any other party (except as otherwise   may be set forth in this Agreement).                                           22 

 

                   7.1.6 No Conflict.  To Seller’s knowledge, except as otherwise set forth   in this Agreement, neither this Agreement nor any agreement, document or instrument executed   or to be executed in connection with the same, nor anything provided in or contemplated by this   Agreement or any such other agreement, document or instrument, does now or shall hereafter   materially breach, violate, invalidate, cancel, make inoperative or interfere with, or result in the   acceleration or maturity of, any agreement, document, instrument, right or interest, or applicable   Law affecting or relating to Seller or the Property except, in each case, for any conflict or violation   which will not materially adversely affect Seller’s ability to consummate the transactions   contemplated by this Agreement.                      7.1.7 Bankruptcy.  No Seller has (i) commenced a voluntary case, or, to   Seller’s Knowledge, had entered against it a petition, for relief under any federal bankruptcy act   or any similar petition, order or decree under any federal or state law or statute relative to   bankruptcy, insolvency or other relief for debtors, (ii) caused, consented to, or, to Seller’s   Knowledge, suffered, the appointment of a receiver, trustee, administrator, conservator, liquidator   or similar official in any federal, state or foreign judicial or non-judicial proceedings, to hold,  administer and/or liquidate all or substantially all of the Property, or (iii) made an assignment for  the benefit of creditors.                     7.1.8 Non-Foreign Entity.  No Seller is a “foreign person” or “foreign  corporation” as those terms are defined in the Internal Revenue Code.                     7.1.9 Due Diligence Materials.  To the actual knowledge of Seller, all  Due Diligence Materials delivered to Buyer are the materials used by Seller in the ordinary  course of business in connection with the operation of the Property.               7.2   Representations and Warranties of Buyer.  Buyer hereby represents and  warrants to Seller that:                     7.2.1 Due Authority.  This Agreement and all agreements, instruments  and documents herein provided to be executed or to be caused to be executed by Buyer are and on  the Closing Date will be duly authorized, executed and delivered by and are binding upon Buyer;  Buyer is a Limited Partnership, duly organized and validly existing and in good standing under the  Laws of the State of Texas, and is duly authorized and qualified to do all things required of it under  this Agreement; and Buyer has the capacity and authority to enter into this Agreement and  consummate the transactions herein provided without the consent or joinder of any other party  (except as otherwise may be set forth in this Agreement).                     7.2.2 No Conflict.  To Buyer’s knowledge, neither this Agreement nor any  agreement, document or instrument executed or to be executed in connection with the same, nor  anything provided in or contemplated by this Agreement or any such other agreement, document  or instrument, does now or shall hereafter breach, violate, invalidate, cancel, make inoperative or  interfere with, or result in the acceleration or maturity of, any agreement, document, instrument,  right or interest, or applicable Law affecting or relating to Buyer.                                           23 

 

                  7.2.3 Insolvency.  Buyer is not a debtor under any bankruptcy  proceedings, voluntary or involuntary, and has not made an assignment for the benefit of its  creditors.                     7.2.4 Litigation.  Other than litigation disclosed in Schedule 2(B) hereto,  to Buyer’s knowledge, there is no pending and served (nor has Buyer received any written notice  of any threatened) action, litigation, condemnation or other legal proceeding against Buyer which,  if determined adversely to Buyer, would adversely affect the ability of Buyer to perform its  obligations hereunder.                     7.2.5 ERISA.                     (a)   Buyer’s acquisition of the Property will not constitute or result in a  prohibited transaction under Section 406 of Employee Retirement Income Security Act of 1974  (“ERISA”) or Section 4975 of the Code.                     (b)   Buyer is not an entity whose assets are deemed to be “plan assets”  under ERISA, and the funds being used by Buyer to acquire the Property do not constitute in full  or in part “plan assets” subject to ERISA (as defined in 29 C.F.R. § 2510.3-101, as modified by  ERISA section 3(42)).                     7.2.6 Prohibited Persons and Transactions.  Neither Buyer nor any of its  affiliates, nor any of their respective partners, members, shareholders or other equity owners, and  none of their respective employees, officers, directors, representatives or agents is, nor will they  become, a person or entity with whom U.S. persons or entities are restricted from doing business  under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the  Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or  under any statute, executive order (including the September 24, 2001, Executive Order Blocking  Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support  Terrorism), or other governmental action and is not and will not engage in any dealings or  transactions or be otherwise associated with such persons or entities.                     7.2.7 Sophisticated Buyer.  Buyer is an experienced Buyer, owner and  operator of office property and is familiar with the kinds of legal, economic and other issues that  typically impact one’s ability to own and operate such property.                     7.2.8 Buyer’s Independent Investigation.  Buyer acknowledges and agrees  that Buyer has been given, or will be given before the end of the Due Diligence Period, a full  opportunity to inspect and investigate each and every aspect of the Property, either independently  or through agents of Buyer’s choosing, including, without limitation:                     (a)   All matters relating to title, together with all governmental and other  legal requirements such as taxes, assessments, zoning, use permit requirements, and building  codes;                     (b)   The physical condition and aspects of the Property, including,  without limitation, the interior, the exterior, the square footage within the Property and within each  Tenant space therein, the structure, the paving, the utilities, and all other physical and functional                                          24 

 

 aspects of the Property, including, without limitation, the proximity to any body of water and risk   of flooding, any seismic retrofit requirements and an examination for the presence or absence of   Hazardous Materials and mold, which shall be performed or arranged by Buyer at Buyer’s sole   expense;                      (c)   Any easements and/or access rights affecting the Property;                      (d)   The Leases and all matters in connection therewith, including,   without limitation, the ability of each Tenant to pay its Lease obligations;                      (e)   The Service Agreements, the Licenses and Permits and any other   documents or agreements of significance affecting the Property; and                      (f)   All other matters of material significance affecting the Property or   delivered to Buyer by Seller in accordance with this Agreement.                7.3   Survival.  The representations, warranties and covenants and all other   obligations, provisions and liabilities under this Agreement or any of the Closing Documents   (including any cause of action by reason of a breach thereof) shall survive the Closing for a period   of 180 days after the Closing Date unless otherwise expressly provided in this Agreement;   provided, however, that, all of Section 8 and Section 10 and any other Section of this Agreement   that is expressly stated to survive the Closing for a different period of time or indefinitely (and   only such Sections) shall survive the Closing for such different period of time or indefinitely (as   applicable).  Notwithstanding anything to the contrary in this Agreement,  Seller shall have no   liability, and Buyer shall make no claim against Seller, for (and Buyer shall be deemed to have   waived any failure of a condition hereunder by reason of) a failure of any condition or a breach of   any representation or warranty, covenant or other obligation of Seller under this Agreement or any   Closing Document executed by Seller (including for this purpose any matter that would have   constituted a breach of Seller’s representations and warranties had they been made on the Closing   Date) if (a) the failure or breach in question constitutes or results from a condition, state of facts   or other matter that was known to Buyer prior to Closing and Buyer proceeds with the Closing, or   (b) to the extent, in the case of a representation and warranty of Seller or as to any certification,   the same is confirmed by any Tenant Estoppel Certificate from a tenant with respect to its Lease.                7.4   Knowledge.                      7.4.1 Definition.  When a statement is made under this Agreement to the   “knowledge” or “actual knowledge” of a party (or other similar phrase), it shall mean that none  of the Designated Representatives of such party has any current and actual knowledge (without  further investigation) of any facts indicating that such statement is not true.  Each Designated  Representative shall be deemed to have current and actual knowledge of any matter received by  such Designated Representative in writing.  None of the Designated Representatives shall have  any personal liability under this Agreement or liability whatsoever with respect to matters set forth   in this Agreement, or any representations or warranties herein which become untrue, inaccurate or   incomplete.                      7.4.2 Designated Representatives. The “Designated Representatives” are   limited to the following individuals:                                           25 

 

                  (a)   for Seller:  Stephen Shaw and Chris Wren                     (b)   for Buyer:  Patrick Windley and David Wheeler.               7.5   Operating Covenants.                     7.5.1 Interim Covenants of Seller.  From the Effective Date until the  Closing Date or the sooner termination of this Agreement, Seller hereby agrees as follows:                     (a)   continue to operate, manage and maintain the Improvements in the  ordinary course of Seller’s business and substantially in accordance with Seller’s present practice,  subject to ordinary wear and tear and further subject to Section 6 of this Agreement;                     (b)   notify Buyer of any new Service Agreements or amendments to  existing Service Contracts and provide copies thereof to Buyer;                     (c)   promptly deliver to Buyer copies of written default notices, notices  of lawsuits and notices of violations affecting the Property to the extent actually received by Seller;  and                     (d)   with respect to Leases, prior to the expiration of the Due Diligence  Period, enter into any new Leases or modifications of existing Leases at its sole option, exercisable  in Seller’s sole and absolute discretion; provided, that 5 days prior to and after the expiration of  the Due Diligence Period, if Buyer has not terminated this Agreement, Seller shall not enter into  any New Leases or material modifications of existing Leases (including application of any security  deposits to past-due amounts) without the Buyer’s prior written consent, which consent shall not  be unreasonably conditioned or withheld.  Notwithstanding the foregoing or anything to the  contrary set forth in this Agreement, (a) Buyer’s failure to approve or disapprove any request for  consent by a Seller under this Section 7.5.1.(d) within three (3) Business Days following Seller’s  request therefor accompanied by the form of Lease or modification shall be deemed to constitute  Buyer’s approval, and (b) Buyer shall bear all Buyer Leasing Costs in connection with the  foregoing and shall provide Seller with a credit for any of the same paid by Seller in accordance  with this Agreement.  As used herein, the term “Buyer Leasing Costs” shall mean all reasonable  and customary out of pocket brokerage and leasing commissions, tenant improvement costs and  other costs and expenses including attorney’s fees for any new Leases entered into from and after  the date hereof and any extension, renewal or expansion of any existing Lease exercised or entered  into from and after the date hereof, provided in all such instances, the term of such Lease,  extension, or expansion or the regularly scheduled payment of rent commences from and after the  Effective Date, but only to the extent such costs and expenses have been expressly disclosed by a  Seller to Buyer in a request for approval thereof hereunder.                     7.5.2 Continued Occupancy.  Notwithstanding anything to the contrary  contained in this Agreement:  (a) Seller makes no representations and assumes no responsibility  with respect to the continued occupancy of the Property or any part thereof by any Tenant, (b) the  removal of a Tenant whether by summary proceedings or otherwise prior to the Closing Date shall  not give rise to any claim on the part of Buyer and (c) Buyer agrees that it shall not be grounds for  Buyer's refusal to close this transaction that any Tenant is a holdover Tenant or in default under  its Lease on the Closing Date (unless such default constitutes a material breach of Seller's                                          26 

 

 representations and warranties hereunder) and Buyer shall accept title subject to such holding over   or default without an abatement in or credit against the Purchase Price.                7.6   SNDAs.  Upon the written request of Buyer, Seller agrees to forward, at no   cost to Seller and solely as an accommodation to Buyer, Buyer’s lender’s form of Subordination,   Non-Disturbance and Attornment Agreement (if any) to each tenant.  However, it is expressly   understood and agreed that the receipt of one or more Subordination, Non-Disturbance and   Attornment Agreements in any form executed by tenants shall not be a condition to Buyer’s   obligation to proceed with the Closing under this Agreement.          8.    DISCLAIMER; RELEASE.  AS AN ESSENTIAL INDUCEMENT TO   SELLER TO ENTER INTO THIS AGREEMENT, AND AS PART OF THE   DETERMINATION OF THE PURCHASE PRICE, BUYER ACKNOWLEDGES AND   AGREES, THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS   AGREEMENT AND THE DOCUMENTS EXECUTED BY SELLER IN CONNECTION   HEREWITH:                8.1   DISCLAIMER.                      8.1.1 AS-IS; WHERE-IS.  THE TRANSACTION CONTEMPLATED   BY THIS AGREEMENT HAS BEEN NEGOTIATED BETWEEN SELLER AND BUYER.    THIS AGREEMENT REFLECTS THE MUTUAL AGREEMENT OF SELLER AND   BUYER, AND BUYER HAS THE RIGHT TO CONDUCT ITS OWN INDEPENDENT   EXAMINATION OF THE PROPERTY.  OTHER THAN THE MATTERS   SPECIFICALLY REPRESENTED IN SECTION 7.1, BY WHICH ALL OF THE   FOLLOWING PROVISIONS OF THIS SECTION ARE LIMITED, BUYER HAS NOT   RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY,   ANY REPRESENTATION OR WARRANTY OF SELLER OR ANY SELLER PARTIES,   AND BUYER HEREBY ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS OR   WARRANTIES HAVE BEEN MADE.          EXCEPT AS MAY BE PROVIDED IN THE CLOSING DOCUMENTS, SELLER   SPECIFICALLY DISCLAIMS, AND NEITHER SELLER NOR ANY SELLER PARTIES   NOR ANY OTHER PERSON IS MAKING, ANY REPRESENTATION, WARRANTY OR   ASSURANCE WHATSOEVER TO BUYER, AND NO WARRANTIES OR   REPRESENTATIONS OF ANY KIND OR CHARACTER, EITHER EXPRESS OR   IMPLIED, ARE MADE BY SELLER OR RELIED UPON BY BUYER WITH RESPECT   TO THE STATUS OF TITLE TO OR THE MAINTENANCE, REPAIR, CONDITION,   DESIGN OR MARKETABILITY OF THE PROPERTY, OR ANY PORTION THEREOF,   INCLUDING (i) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY,   (ii) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR   PURPOSE, (iii) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO   MODELS OR SAMPLES OF MATERIALS, (iv) ANY RIGHTS OF BUYER UNDER   APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, (v) ANY   CLAIM BY BUYER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN  OR UNKNOWN, WITH RESPECT TO THE IMPROVEMENTS OR THE PERSONAL                                           27 

 

PROPERTY, (vi) THE FINANCIAL CONDITION OR PROSPECTS OF THE  PROPERTY AND (vii) THE COMPLIANCE OR LACK THEREOF OF THE PROPERTY  WITH GOVERNMENTAL REGULATIONS, INCLUDING ENVIRONMENTAL LAWS,  NOW EXISTING OR HEREAFTER ENACTED OR PROMULGATED, IT BEING THE  EXPRESS INTENTION OF SELLER AND BUYER THAT, EXCEPT AS EXPRESSLY  SET FORTH HEREIN, THE PROPERTY WILL BE CONVEYED AND TRANSFERRED  TO BUYER IN ITS PRESENT CONDITION AND STATE OF REPAIR, “AS IS,  WHERE IS,” WITH ALL FAULTS (LATENT AND APPARENT).                     8.1.2 SOPHISTICATION OF BUYER.  BUYER IS A  SOPHISTICATED BUYER WHO IS FAMILIAR WITH THE OWNERSHIP AND  OPERATION OF REAL ESTATE PROJECTS SIMILAR TO THE PROPERTY, AND  BUYER HAS HAD ADEQUATE OPPORTUNITY PRIOR TO CLOSING TO COMPLETE  ALL PHYSICAL AND FINANCIAL EXAMINATIONS RELATING TO THE  ACQUISITION OF THE PROPERTY HEREUNDER IT DEEMS NECESSARY, AND  WILL ACQUIRE THE SAME SOLELY ON THE BASIS OF AND IN RELIANCE UPON  SUCH EXAMINATIONS AND THE TITLE INSURANCE PROTECTION AFFORDED  BY BUYER’S TITLE INSURANCE POLICY AND NOT ON ANY INFORMATION  PROVIDED OR TO BE PROVIDED BY SELLER.                     8.1.3 DUE DILIGENCE MATERIALS.  ANY INFORMATION  PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY IS SOLELY  FOR BUYER’S CONVENIENCE AND WAS OR WILL BE OBTAINED FROM A  VARIETY OF SOURCES.  SELLER HAS NOT MADE ANY INDEPENDENT  INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND, EXCEPT AS  OTHERWISE EXPRESSLY PROVIDED IN SECTION 7.1.9          OF THIS AGREEMENT,  MAKES NO (AND EXPRESSLY DISCLAIMS ALL) REPRESENTATIONS AS TO THE  ACCURACY OR COMPLETENESS OF SUCH INFORMATION.  SELLER SHALL NOT  BE LIABLE FOR ANY MISTAKES, OMISSIONS, MISREPRESENTATION OR ANY  FAILURE TO INVESTIGATE THE PROPERTY NOR SHALL SELLER BE BOUND IN  ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS,  REPRESENTATIONS, APPRAISALS, ENVIRONMENTAL ASSESSMENT REPORTS,  OR OTHER INFORMATION PERTAINING TO THE PROPERTY OR THE  OPERATION THEREOF, FURNISHED BY SELLER OR BY ANY MANAGER,  MEMBER OR PARTNER OF SELLER, OR BY ANY REAL ESTATE BROKERS,  MEMBERS, PARTNERS, AGENTS, REPRESENTATIVES, TRUSTEES, AFFILIATES,  DIRECTORS, OFFICERS, SHAREHOLDERS, EMPLOYEES, SERVANTS OR  AGENTS  OF ANY OF THE FOREGOING, OR OTHER PERSONS OR ENTITIES ACTING ON  BEHALF OF SELLER OR AT SELLER’S REQUEST (COLLECTIVELY, “SELLER  RELATED PARTIES”).                     8.1.4 BUYER’S WAIVER OF OBJECTIONS.  BUYER REPRESENTS  THAT IT IS A KNOWLEDGEABLE AND SOPHISTICATED BUYER OF REAL  ESTATE, AND THAT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF  BUYER’S CONSULTANTS IN PURCHASING THE PROPERTY.  BUYER  ACKNOWLEDGES THAT IT HAS OR WILL HAVE INSPECTED THE PROPERTY,                                          28 

 

OBSERVED ITS PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS AND  HAD, OR WILL HAVE, THE OPPORTUNITY TO CONDUCT SUCH INVESTIGATION  AND STUDY ON AND OF SAID PROPERTY AND ADJACENT AREAS AS IT DEEMED  NECESSARY, AND SUBJECT TO SELLER’S RESPONSIBILITY FOR ANY BREACH  OF THE WARRANTIES AND REPRESENTATIONS CONTAINED IN SECTION 7.1,  HEREBY WAIVES ANY AND ALL OBJECTIONS TO, CLAIMS, CAUSES OF ACTION  OR COMPLAINTS (INCLUDING, BUT NOT LIMITED TO, ACTIONS BASED ON  LAWS AND ANY PRIVATE RIGHT OF ACTION UNDER ENVIRONMENTAL LAWS  OR ANY OTHER STATE AND FEDERAL LAW TO WHICH THE PROPERTY IS OR  MAY BE SUBJECT) REGARDING PHYSICAL CHARACTERISTICS AND EXISTING  CONDITIONS, INCLUDING, WITHOUT LIMITATION, 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.  BUYER FURTHER  HEREBY ASSUMES THE RISK OF CHANGES IN APPLICABLE LAWS, WITHOUT  LIMITATION, THOSE 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 BE REVEALED BY ITS INVESTIGATION.               8.2   RELEASE.  EFFECTIVE AS OF THE CLOSING, BUYER HEREBY  RELEASES SELLER AND ALL SELLER RELATED PARTIES FROM ALL CLAIMS  THAT BUYER OR ANY PARTY CLAIMING BY, THROUGH OR UNDER BUYER (A  “BUYER RELATED PARTY”) HAS OR MAY HAVE AS OF CLOSING ARISING FROM  OR RELATED TO ANY MATTER OR THING RELATED TO OR IN CONNECTION  WITH THE PROPERTY, INCLUDING THE PROPERTY INFORMATION, THE  LEASES AND THE TENANTS THEREUNDER, ANY CONSTRUCTION DEFECTS,  ERRORS OR OMISSIONS IN THE DESIGN OR CONSTRUCTION                  AND ANY  ENVIRONMENTAL CONDITIONS, AND BUYER SHALL NOT LOOK TO ANY  SELLER RELATED PARTIES IN CONNECTION WITH THE FOREGOING FOR ANY  REDRESS OR RELIEF.  THIS RELEASE SHALL BE GIVEN FULL FORCE AND  EFFECT ACCORDING TO EACH OF ITS EXPRESSED TERMS AND PROVISIONS,  INCLUDING THOSE RELATING TO UNKNOWN AND UNSUSPECTED CLAIMS,  DAMAGES AND CAUSES OF ACTION.               8.3   SURVIVAL.  THIS SECTION 8          SHALL SURVIVE ANY  TERMINATION OF THIS AGREEMENT OR THE CLOSING, WHICHEVER IS  APPLICABLE AND WILL NOT MERGE WITH THE PROVISIONS OF ANY CLOSING  DOCUMENTS AND IS HEREBY DEEMED INCORPORATED INTO THE DEED AS  FULLY AS IF SET FORTH THEREIN.               8.4   Scope of Release.  Notwithstanding any provision hereof to the contrary,  the provisions of this Section 8 shall not release Seller from liability for:  (a) any damages, claims,  liabilities or obligations arising out of or in connection with a breach of (or failure to comply with)  any covenant, representation or warranty of Seller set forth in this Agreement  to the extent the                                          29 

 

 

 

 

 

 reason of this Agreement and Seller’s Broker is not an intended third-party beneficiary of this  Agreement.                      10.1.3 The provisions of this Section 10.1 shall survive the Closing or any   termination of this Agreement.                10.2  Limitation of Liability.                      10.2.1 Notwithstanding anything to the contrary contained herein, the   direct and indirect shareholders, partners, members, trustees, officers, directors, employees, agents   and security holders of the parties are not assuming any, and shall have no, personal liability for   any obligations of the parties hereto under this Agreement.  In no event shall any party be liable   under this Agreement for any consequential, exemplary, special or punitive damages.                      10.2.2 Notwithstanding anything to the contrary contained herein (but   subject to the provisions of Section 10.2.1), if the Closing of the transactions hereunder shall have   occurred, Seller shall have no liability to Buyer (and Buyer shall make no claim against Seller) for   a breach of any representation or warranty or any other covenant, agreement or obligation of Seller   that survives Closing, or for indemnification, under this Agreement or any Closing Document   executed by Seller in connection with this Agreement, unless the valid claims for all such breaches   and indemnifications collectively aggregate to more than Seventy-Five Thousand and No/100ths   Dollars ($75,000.00) (the “Basket Limitation”), in which case Buyer shall be entitled to recover  the amounts that exceed the Basket Limitation.  Notwithstanding the preceding sentence, the  liability of Seller under this Agreement and such documents shall not exceed, in the aggregate, an  amount equal to One Million and No/100ths Dollars ($1,000,000.00) of the Purchase Price (the  “Cap Limitation”).  In connection with any action alleging a breach of any warranty of title in the  Deed, Buyer agrees that it shall in good faith pursue the Title Company under its title policy(ies)   with respect to any claim relating to the warranty of title under the Deed prior to bringing an action   against Seller.                      10.2.3 Notwithstanding anything to the contrary contained herein (but   subject to the provisions of Section 10.2.1), if the Closing of the transactions hereunder shall have   occurred, Buyer shall have no liability to Seller (and Seller shall make no claim against Buyer) for   a breach of any representation or warranty or any other covenant, agreement or obligation of Buyer   that survives Closing, or for indemnification, under this Agreement or any Closing Document   executed by Buyer in connection with this Agreement, unless the valid claims for all such breaches   and indemnifications collectively aggregate to more than the “Basket Limitation”, in which case   Seller shall be entitled to recover the amounts that exceed the Basket Limitation.  Notwithstanding   the preceding sentence, the liability of Buyer under this Agreement and such documents shall not   exceed the Cap Limitation.                      10.2.4 The limitations of liability contained in this Section 10.2 are in   addition to, and not in limitation of, any limitation on liability provided elsewhere in this   Agreement or by Law or by any other contract, agreement or instrument.                10.3  Schedules and Exhibits; Entire Agreement; Modification.  All schedules   and exhibits attached and referred to in this Agreement are hereby incorporated herein as if fully                                           32 

 

set forth in (and shall be deemed to be a part of) this Agreement.  This Agreement contains the  entire agreement between the parties respecting the matters herein set forth and supersedes all prior  agreements between the parties hereto respecting such matters.  This Agreement may not be  modified or amended except by written agreement signed by both parties.               10.4  Time of the Essence.  Time is of the essence of this Agreement.  However,  whenever action must be taken (including the giving of notice or the delivery of documents) under  this Agreement during a certain period of time (or by a particular date) that ends (or occurs) on a  non-business day, then such period (or date) shall be extended until the immediately following  business day.  As used herein, “Business Day” shall mean any day other than a Saturday, Sunday  or a day on which the Federal Reserve Bank in New York is closed for business.  Unless expressly  indicated otherwise, (a) all references to time in this Agreement shall be deemed to refer to Central  time, and (b) all time periods provided for under this Agreement shall expire at 5:00 p.m. Central  time.               10.5  Interpretation.  Section headings shall not be used in construing this  Agreement.  Each party acknowledges that such party and its counsel, after negotiation and  consultation, have reviewed and revised this Agreement.  As such, the terms of this Agreement  shall be fairly construed and the usual rule of construction, to the effect that any ambiguities herein  should be resolved against the drafting party, shall not be employed in the interpretation of this  Agreement or any amendments, modifications or exhibits hereto or thereto.  The words “herein”,  “hereof”, “hereunder”, “hereby”, “this Agreement” and other similar references shall be construed  to mean and include this Agreement and all amendments and supplements hereto unless the context  shall clearly indicate or require otherwise.  Whenever the words “including”, “include” or  “includes” are used in this Agreement, they shall be interpreted in a non-exclusive manner.  Except  as otherwise indicated, all Schedule, Exhibit and Section references in this Agreement shall be  deemed to refer to the Schedules, Exhibits and Sections in this Agreement.  Except as otherwise  expressly provided herein, any approval or consent provided to be given by a party hereunder must  be in writing to be effective and may be given or withheld in the sole and absolute discretion of  such party.               10.6  Governing Law.  This Agreement shall be governed by and construed in  accordance with the Laws of the State of Texas applicable to a contract executed and performed  in the State of Texas, without giving effect to the conflicts of law principles thereof.  Any action  arising out of this agreement must be commenced by Buyer or Seller in the state courts of the State  of Texas or in United States District Court for the Southern District of Texas and each party hereby  consents to the jurisdiction of such courts in any such action and to the laying of venue therein.   Any process in any action will be duly served if sent by registered mail, postage prepaid, to the  applicable party at its respective address set forth in Section 10.8.               10.7  Successors and Assigns.  Buyer may not assign or transfer any of its rights  or obligations under this Agreement either directly or indirectly (whether by outright transfer,  transfer of ownership interests or otherwise) without the prior written consent of Seller; provided,  however, Buyer may assign all of its interest in this Agreement on or before the Closing Date to  an entity (a “Buyer Assignee”) in which Buyer, or an affiliate of Buyer, directly or indirectly,  through one or more subsidiaries or affiliates, has control and has more than a 50% ownership  interest so long as (i) Buyer gives Seller five (5) Business Days’ advance written notice thereof                                          33 

 

 (including the name, vesting and signature block of the transferee), and (ii) Buyer and Buyer   Assignee execute and deliver an assignment and assumption agreement in form reasonably   satisfactory to Seller.  In the event of a transfer to a Buyer Assignee, such Buyer Assignee shall   assume in writing all of the transferor’s obligations and liabilities hereunder (whenever arising,   whether before or after such assumption), but such transferor shall not be released from its   obligations hereunder.  No consent given by Seller to any transfer or assignment of Buyer’s rights   or obligations hereunder shall be construed as a consent to any other transfer or assignment of  Buyer’s rights or obligations hereunder.  No transfer or assignment in violation of the provisions  hereof shall be valid or enforceable.  Subject to the foregoing, this Agreement and the terms and  provisions hereof shall inure to the benefit of and be binding upon the successors and assigns of  the parties.               10.8  Notices.  All notices, demands and communications permitted or required  to be given hereunder shall be in writing, and shall be delivered (a) personally, (b) by United States  registered or certified mail, postage prepaid, (c) by Federal Express or other reputable courier  service regularly providing evidence of delivery (with charges paid by the party sending the  notice), or (d) by a PDF or similar attachment to an email, provided that such email attachment   shall be followed within one (1) Business Day by delivery of such notice pursuant to clause (a),   (b) or (c) above.  Any such notice to a party shall be addressed at the address set forth below   (subject to the right of a party to designate a different address for itself by notice similarly given):                To Seller:              Houston Portfolio, LLC                                       c/o HighBrook Investors                                       680 Fifth Avenue, 20th Floor                                       New York, New York 10019                                       Attention:    Stephen Shaw                                       Telephone:  (212) 906-3470                                       Email:      sshaw@highbrookinvestors.com                And with copy to:       HighBrook Investors                                       680 Fifth Avenue, 20th Floor                                       New York, New York 10019                                           34 

 

                                    Attention:  Alexander Gardiner, Chief Financial                                                  Officer                                      E-mail:     agardiner@highbrookinvestors.com                          And with copy to:        Duane Morris LLP                                       1540 Broadway                                      New York, New York 10036                                      Attention:      Marc Palladino, Esq.                                      Telephone:    (212) 692-1048                                      E-mail:           MAPalladino@duanemorris.com                             To Buyer:               Hartman vREIT XXI Operating Partnership L.P.                                      2909 Hillcroft, s Suite 420                                      Houston TX, 77057                                      Attn: Allen R. Hartman                                       Telephone:  (713) 467-2222                                      Email:  ahartman@hi-reit.com               With copy to:           Office of General Counsel                                      Hartman vREIT XXI, Inc.                                      2909 Hillcroft, Suite 420                                      Houston TX 77057                                                    Attention:  Mark T. Torok, General Counsel                                      Telephone:  (713) 586-2612                                      Email:  mtorok@hi-reit.com   Service of any such notice or other communications so made shall be deemed effective on the day  of actual delivery (whether accepted or refused), provided that if any notice or other  communication to be delivered by email attachment as provided above cannot be transmitted  because of a problem affecting the receiving party’s computer, the deadline for receiving such  notice or other communication shall be extended through the next Business Day, as shown by the  addressee’s return receipt if by certified mail, and as confirmed by the courier service if by courier;  provided, however, that if such actual delivery occurs after 5:00 p.m. local time where received or  on a non Business Day, then such notice or communication so made shall be deemed effective on  the first Business Bay after the day of actual delivery.  Except as expressly provided above with  respect to certain email attachments and in Section 10.18 below, no communications via electronic  mail shall be effective to give any notice, request, direction, demand, consent, waiver, approval or  other communications hereunder.  The attorneys for any party hereto shall be entitled to provide  any notice that a party desires to provide or is required to provide hereunder.               10.9  Third Parties.  Nothing in this Agreement, whether expressed or implied, is  intended to confer any rights or remedies under or by reason of this Agreement on any person other  than the parties hereto and their respective successors and assigns, and nothing in this Agreement  is intended to relieve or discharge the obligation or liability of any third persons to any party to                                          35 

 

 this Agreement, and no provision shall give any third parties any right of subrogation or action   over or against any party to this Agreement.                10.10 Legal Costs.  The parties hereto agree that they shall pay directly any and  all legal costs which they have incurred or shall incur on their own behalf in the preparation of this  Agreement, all deeds and other agreements pertaining to this transaction and that such legal costs  shall not be part of the closing costs.  In addition, if either Buyer or Seller brings any suit or other  proceeding, including an arbitration proceeding, with respect to the subject matter or the  enforcement of this Agreement, the prevailing party (as determined by the court, agency, arbitrator  or other authority before which such suit or proceeding is commenced), in addition to such other  relief as may be awarded, shall be entitled to recover reasonable attorneys’ fees, expenses and   costs of investigation actually incurred.  The foregoing includes attorneys’ fees, expenses and costs   of investigation (including those incurred in appellate proceedings), costs incurred in establishing   the right to indemnification, or in any action or participation in, or in connection with, any case or   proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code (11 United States Code Sections 101   et seq.), or any successor statutes.  The provisions of this Section 10.10 shall survive the Closing   or any termination of this Agreement.                10.11 Further Assurances.  Each party shall, whenever and as often as it shall be   requested so to do by the other, cause to be executed, acknowledged or delivered any and all such   further instruments and documents as may be necessary or proper, in the reasonable opinion of the   requesting party, in order to carry out the intent and purpose of this Agreement (provided the same   do not increase in any material respect the costs to, or liabilities or obligations of, such party in a   manner not otherwise provided for herein).                10.12 Severability.  If any term or provision of this Agreement or the application   thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the   remainder of this Agreement, or the application of such term or provision to persons or   circumstances other than those as to which it is held invalid or unenforceable, shall not be affected   thereby, and each such term and provision of this Agreement shall be valid and be enforced to the   fullest extent permitted by Law.                10.13 Press Releases.  Except as otherwise expressly permitted under   Section 10.17 below, no press release or other public disclosure regarding the terms of this   Agreement or the transaction contemplated hereby shall be made without the prior written consent   of Buyer and Seller.  Except as otherwise expressly permitted under Section 10.17 below, without   limitation on the foregoing, Buyer and Seller shall use diligent efforts not to make any public   disclosure of the Purchase Price.  However, either party shall have the right to make public   disclosures required by (1) Law (but only if such party gives the other party reasonable notice and   an opportunity to obtain a restraining order or take other similar protective actions) or (2) the rules   and regulations of a securities exchange.                10.14 Anti-Terrorism Law.  Each party shall take any actions that may be required   to comply with the terms of the USA Patriot Act of 2001, as amended, any regulations promulgated   under the foregoing law, Executive Order No. 13224 on Terrorist Financing, any sanctions   program administrated by the U.S. Department of Treasury’s Office of Foreign Asset Control or   Financial Crimes Enforcement Network) (the “Executive Order”) (collectively, the “Anti-Money                                           36 

 

 Laundering and Anti-Terrorism Laws”), or any other Laws, regulations or executive orders   designed to combat terrorism or money laundering, if applicable, to this Agreement.  Each party   represents and warrants to the other party that it is not an entity named on the List of Specially   Designated Nationals and Blocked Persons maintained by the U.S. Department of Treasury (the   “Government List”), as last updated prior to the Effective Date.                10.15 Tax Appeal Proceedings.                      10.15.1 Prosecution and Settlement of Proceedings.  If any tax reduction   proceedings in respect of the Property, relating to any fiscal years ending prior to the fiscal year in   which the Closing occurs, are pending at the time of the Closing, Seller reserves and shall have   the right to continue to prosecute and/or settle the same.  If any tax reduction proceedings in respect   of the Property, relating to the fiscal year in which the Closing occurs, are pending at the time of   Closing, then Seller reserves and shall have the right to continue to prosecute and settle the same;   provided, however, that Seller shall not settle any such proceeding without Buyer’s prior written   consent, which consent shall not be unreasonably withheld or delayed.  Buyer shall reasonably   cooperate with Seller in connection with the prosecution of any such tax reduction proceedings.                      10.15.2 Application of Refunds or Savings.  Any refunds or savings in the   payment of taxes resulting from such tax reduction proceedings applicable to taxes payable during   the period prior to the date of the Closing shall belong to and be the property of the applicable   Seller, and any refunds or savings in the payment of taxes applicable to taxes payable from and   after the date of the Closing shall belong to and be the property of Buyer; provided, however, that   if any such refund creates an obligation to reimburse any tenants under any Lease for any rents or   additional rents paid or to be paid, that portion of such refund equal to the amount of such required   reimbursement (after deduction of allocable expenses as may be provided in such Lease to such   tenant) shall, at Seller’s election, either (a) be paid to Buyer and Buyer shall disburse the same to   such tenants or (b) be paid by Seller directly to the tenants entitled thereto.  All attorneys’ fees and   other expenses incurred in obtaining such refunds or savings shall be apportioned between the   applicable Seller and Buyer in proportion to the gross amount of such refunds or savings payable   to Seller and Buyer, respectively (without regard to any amounts reimbursable to tenants);   provided, however, that neither the applicable Seller nor Buyer shall have any liability for any   such fees or expenses in excess of the refund or savings paid to such party unless such party   initiated such proceeding.                      10.15.3 Survival.  The provisions of this Section 10.15 shall survive the   Closing.                10.16 Acceptance of Deeds.  The acceptance of the Deed by Buyer shall be   deemed full compliance by Seller of all of Seller’s obligations under this Agreement except for   those obligations of Seller which are specifically stated to survive the Closing hereunder.                10.17 Confidentiality.  The terms of the transaction contemplated in this  Agreement, including, without limitation, the Purchase Price and all other financial terms, shall  remain confidential and shall not be disclosed by any party hereto without the written consent of  the other except (a) to such party’s directors, officers, partners, employees, legal counsel,  accountants, lenders, engineers, architects, brokers, financial advisors and similar professionals                                           37 

 

and consultants, to the extent such party deems it necessary or appropriate in connection with the  transaction contemplated hereunder (and such party shall inform each of the foregoing parties of  such party’s obligations under this Section and shall secure the agreement of such parties to be  bound by the terms hereof), or (b) as otherwise required by Law or regulation (including the rules  and regulations of a securities exchange).  Unless and until the transaction contemplated by this  Agreement shall close, Buyer shall also keep confidential all documents, reports and information  concerning the Property obtained from Seller or through the due diligence investigation of the  Property by Buyer or its agents, except to the extent permitted by clauses (a) or (b) above.  The  provisions of this Section 10.17 shall survive any termination of this Agreement or the Closing (as  applicable).               10.18 Counterparts; Delivery.  This Agreement may be executed in one or more  counterparts, each of which shall be deemed an original, but all of which shall constitute one and  the same document.  The delivery of an executed counterpart of this Agreement by facsimile or as  a PDF or similar attachment to an e-mail shall constitute effective delivery of such counterpart for  all purposes with the same force and effect as the delivery of an original, executed counterpart.               10.19 Effectiveness.  In no event shall any draft of this Agreement create any  obligation or liability, it being understood that this Agreement shall be effective and binding only  when a counterpart hereof has been executed and delivered by each party hereto.               10.20 No Recording.  The parties hereto agree that neither this Agreement nor any  affidavit or memorandum concerning it will be recorded and any recording of this Agreement or  any such affidavit or memorandum by Buyer will be deemed a default by Buyer hereunder.  Buyer  understands and agrees that Seller shall have the right to continue to market the Property and/or to  negotiate with other potential Buyers of the Property until the expiration of the Due Diligence  Period and the satisfaction or waiver in writing of all conditions to the obligations of Buyer under  this Agreement.               10.21 Escrow Instructions.                     10.21.1     Deposit.  Escrow Agent will hold the Deposit in escrow in  an interest-bearing account of the type generally used by Escrow Agent for the holding of escrow  funds until the earlier of the (i) Closing or (ii) termination of this Agreement in accordance with  the terms of this Agreement.  Except as otherwise specifically provided herein, the Deposit shall  be non-refundable to Buyer but shall be credited against the Purchase Price at the Closing.  All  interest earned on the Deposit shall be paid to the party entitled to the Deposit.  If the Closing  occurs, the Deposit and all interest accrued thereon will be released to Seller, and Buyer shall  receive a credit against the Purchase Price in the amount of the Earnest Money Deposit.  If the  Closing does not occur by the Closing Date or this Agreement otherwise terminated, the Deposit  shall be immediately released to Seller; provided, however, that if the Agreement specifically  provides that the Deposit shall be released to Buyer in connection with such termination, Escrow  Agent shall not release the Deposit to Buyer until Escrow Agent has given Seller three (3) Business  Days to dispute, or consent to, the release of the Deposit.  Buyer represents that its tax identification  number, for purposes of reporting the interest earnings, is 82-4464262.  The Deposit shall be  deposited by Escrow Agent in an interest bearing money market account at First American Trust.  A Form W-9 must be completed and executed by either Seller or Buyer, as the case may be,                                          38 

 

 concurrently with the execution of this Agreement. The failure to submit to Escrow Agent an   executed, completed Form W-9 shall stay Escrow Agent’s obligation to deposit the escrow in an   interest bearing account until such time that said form has been provided to Escrow Agent.  The  party providing the Form W-9 shall receive a 1099 for the interest on the Deposit regardless of  which party actually receives the interest on the Deposit.   Seller and Buyer agree that the Escrow Agent shall not be responsible for any penalties, loss of  principal or interest, or the consequences of a delay in withdrawal of the Deposit and interest  accrued thereon, if any, which may be imposed as a result of the making or the redeeming of the  above investment, as the case may be, pursuant to this Agreement. Seller and Buyer also agree that  Escrow Agent shall not be liable for any loss or impairment of the Escrow which results from the  failure, insolvency or suspension of the financial institution in which the Deposit is deposited.                     10.21.2     Release of Escrow Agent.  Escrow Agent shall not be liable  to any party for any act or omission, except for bad faith, gross negligence or willful misconduct,  and the parties agree to indemnify Escrow Agent and hold Escrow Agent harmless from any and  all claims, damages, losses or expenses arising in connection herewith.  The parties acknowledge  that Escrow Agent is acting solely as stakeholder for their mutual convenience.  If Escrow Agent  receives written notice of a dispute between the parties with respect to the Deposit and the interest  earned thereon (“Escrowed Funds”), Escrow Agent shall not be bound to release and deliver the  Escrowed Funds to either party but may either (i) continue to hold the Escrowed Funds until  otherwise directed in a writing signed by all parties hereto or (ii) deposit the Escrowed Funds with  the clerk of any court of competent jurisdiction.  Upon such deposit, Escrow Agent will be released  from all duties and responsibilities hereunder.  Escrow Agent shall have the right to consult with   separate counsel of its own choosing (if it deems such consultation advisable) and shall not be   liable for any action taken, suffered or omitted by it in accordance with the advice of such counsel.    Escrow Agent shall not be required to defend any legal proceeding which may be instituted against   it with respect to the Escrowed Funds, the Property or the subject matter of this Agreement unless   requested to do so by Buyer or Seller and is reasonably indemnified against the cost and expense   of such defense.  Escrow Agent shall not be required to institute legal proceedings of any kind and   shall have no responsibility for the genuineness or validity of any document or other item deposited   with it or the collectability of any check delivered in connection with this Agreement.  Escrow   Agent shall be fully protected in acting in accordance with any written instructions given to it   hereunder and believed by it to have been signed by the proper parties.  Escrow Agent may resign   at any time on giving five (5) business days prior written notice to that effect to Seller and Buyer.    In such event, a successor Escrow Agent shall be selected by Seller and approved by Buyer, such   approval not to be unreasonably withheld or delayed.  It being agreed that if such successor Escrow   Agent shall fail to be selected or approved by the expiration of such five (5) business day period,   then Escrow Agent shall deliver the Deposit and interest thereon, if any, with a court of competent   jurisdiction in the state in which the Property is located.  Upon making delivery of the Deposit and   interest thereon in the manner herein provided, Escrow Agent shall be relieved and discharged of   all further obligations and responsibilities hereunder.                10.22 Section 1031 Exchange.  Seller and Buyer acknowledge that the other party   may now or hereafter desire to enter into a nontaxable exchange involving the Property under   Section 1031 of the Code and the Treasury Regulations promulgated thereunder.  Seller and Buyer   shall reasonably cooperate with each other to effect such exchange, provided that the party desiring                                           39 

 

to effect such exchange will promptly reimburse the other party for reasonable attorneys’ fees  incurred by such party to review any documentation related to the exchange.  Except for the  reimbursement obligation described in the preceding sentence, neither party shall be required to  incur any liability or costs in connection with the other party’s exchange, and the Scheduled  Closing Date will not be extended to accommodate any exchange.                          [Signatures appear on following page.]                                         40 

 

 

 

 

 

                     ACCEPTANCE OF ESCROW AGENT   Escrow Agent hereby acknowledges and agrees to be governed by Section 10.21 of this  Agreement.     Escrow Agent shall complete the Effective Date on the first page of this Agreement with the     same date as set forth below.                                      First American Title Insurance Company                                       By:                                      Name:                                      Title:                                       Effective Date:   

 

                     LIST OF EXHIBITS AND SCHEDULES   SCHEDULES   1     -  Leasing Costs under Existing Leases to Be Borne by Buyer 2(A)  -  Litigation and Non-Compliance Against Seller 2(B)  -  Litigation and Non-Compliance Against Buyer 3     -  Service Agreements 5(A)  -  Free Rent Credit 5(B)  -  Leasing Costs (Including Free Rent) under Existing Leases 5(C)  -  Capital Projects   EXHIBITS   “A”   -  Legal Description “B”   -  List of Excluded Personal Property “C”   -  List of Due Diligence Items “D”   -  Form of Deed “E”   -  Form of Bill of Sale, Assignment and Assumption “F”   -  Form of Notice to Tenants “G”   -  Form of Seller Title Certificate “H”   -  Lease Exhibit “I”   -  Lease Defaults “J”   -  Form of Tenant Estoppel Certificate “K”   -  List of Tenant Security Deposits 

 

                                                                    SCHEDULE 1                                                  LEASING COSTS UNDER EXISTING LEASES                                                             TO BE BORNE BY BUYER    HOB Leasing Costs Borne By Buyer  Schedule 1  Tenant                                               Abatement Start Date Abatement End Date                                    Amount Borne By Buyer Lawrence E. Boyd, Jr. Tenant Improvements                       8/1/2019         10/31/2019                                                12,539.19  Lawrence E. Boyd, Jr. Leasing Commissions                                                                                                    3,162.24 Lawrence E. Boyd, Jr. Free Rent                                                                                                              6,313.50 Total Free Rent Obligations                                                                                                                22,014.93  

 

                    SCHEDULE 2(A)   LITIGATION AND NON-COMPLIANCE AGAINST SELLER                             None. 

 

                   SCHEDULE 2(B)   LITIGATION AND NON-COMPLIANCE AGAINST BUYER                            None. 

 

                                                                               SCHEDULE 3                                                                         SERVICE AGREEMENTS   Park Ten - Service  Agreements  Vendor Name               Vendor Type                        Contract Sign Date  Contract Start Date   Contract Term  Termination of Contract                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be                                                                                                                        terminated with 30 day written notice in event of sale, change in  ThyssenKrupp Elevator     Vertical Transportation                12/22/2015            1/1/2016           3 Year(s)                                                                                                                       management or ownership, default by parties, modernization                                                                                                                        where contractor is not successful bidder or other reasons.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Merit Service Solutions   Exterior Landscaping                    6/24/2019            6/1/2019           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Fire Safe Protection Services,                            Fire Alarm Test & Inspections                                5/16/2019          1 Year(s)   terminated immediately upon written notice in event of sale or at  LP                                                                                                                       any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Air Performance Service if                            HVAC Inspection and PM                  4/8/2016             5/1/2016           1 Year(s)   terminated immediately upon written notice in event of sale or at  Houston, LLC                                                                                                                       any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Always in Season, Inc     Interior Landscaping                    6/1/2019             6/1/2019           2 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Environmental Coalition                            Pest Control                                                 8/1/2015           2 Year(s)   terminated with 30 day written notice in event of sale, default by  Incorporated                                                                                                                       parties  or other reasons.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Renaissance Metals, Inc DBA                            Metal Maintenance                       4/16/2016            6/1/2016           1 Year(s)   terminated immediately upon written notice in event of sale or at  Mid America Metal                                                                                                                       any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Renaissance Metals, Inc DBA                            Stone Maintenance                       4/26/2018            5/1/2018           1 Year(s)   terminated immediately upon written notice in event of sale or at  Mid America Metal                                                                                                                       any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Fikes of Houston, Inc.    Restroom Deodorizers                    2/16/2017            3/1/2017           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Royal Services Company, LLC Parking Lot Sweeping                  9/21/2017            1/1/2018           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Mcliff Coffee + Vending   Vending Machines                        1/9/2018             1/1/2018           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Promise Total Services, Inc. Janitorial                           8/10/2016            9/1/2016           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice. 

 

Willowbrook - Service  Agreements   Vendor Name               Vendor Type                        Contract Sign Date  Contract Start Date   Contract Term  Termination of Contract                                                                                                                        Continuing on MTM basis unless otherwise terminated. May be                                                                                                                        terminated immediately upon written notice in event of sale,  Waste Management          Trash Maintenance                       6/26/2015            7/1/2015           1 Year(s)                                                                                                                       default by contractor or at any time by giving 60 day written notice                                                                                                                        for any other reason.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be                                                                                                                        terminated with 30 day written notice in event of sale, change in  ThyssenKrupp Elevator     Vertical Transportation                12/22/2015            1/1/2016           3 Year(s)                                                                                                                       management or ownership, default by parties, modernization                                                                                                                        where contractor is not successful bidder or other reasons.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Air Performance Service if                            HVAC Inspection and PM                  5/20/2016            6/1/2016           1 Year(s)   terminated immediately upon written notice in event of sale or at  Houston, LLC                                                                                                                       any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Silversand Services       Interior Landscaping                                         6/1/2019           2 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Merit Service Solutions   Exterior Landscaping                    6/24/2019            6/1/2019           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Renaissance Metals, Inc DBA                            Metal Maintenance                       4/14/2016            6/1/2016           1 Year(s)   terminated immediately upon written notice in event of sale or at  Mid America Metal                                                                                                                       any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Fikes of Houston, Inc.    Restroom Deodorizers                    2/16/2017            3/1/2017           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Royal Services Company, LLC Parking Lot Sweeping                  9/21/2017            1/1/2018           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Triple D Uniform Rental, Inc. Uniform Rental                      6/9/2016             6/22/2016          1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Mcliff Coffee + Vending   Vending Machines                        1/9/2018             1/1/2018           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice.                                                                                                                       Continuing on MTM basis unless otherwise terminated. May be  Promise Total Services, Inc. Janitorial                           8/10/2016            9/1/2016           1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                        any time by giving 30 day written notice. 

 

Broadfield - Service  Agreements   Vendor Name              Vendor Type                       Contract Sign Date  Contract Start Date  Contract Term  Termination of Contract                                                                                                                     Continuing on MTM basis unless otherwise terminated. May be                                                                                                                     terminated with 30 day written notice in event of sale, change in  ThyssenKrupp Elevator    Vertical Transportation               12/22/2015            1/1/2016          3 Year(s)                                                                                                                    management or ownership, default by parties, modernization                                                                                                                     where contractor is not successful bidder or other reasons.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Merit Service Solutions  Exterior Landscaping                   6/24/2019            6/1/2019          1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                     any time by giving 30 day written notice.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Air Performance Service if                           HVAC Inspection and PM                 6/13/2019            6/1/2016          1 Year(s)   terminated immediately upon written notice in event of sale or at  Houston, LLC                                                                                                                    any time by giving 30 day written notice.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Always in Season, Inc    Interior Landscaping                   6/1/2019             6/1/2019          2 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                     any time by giving 30 day written notice.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Promise Total Services, Inc. Janitorial                         8/10/2016            9/1/2016          1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                     any time by giving 30 day written notice.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Renaissance Metals, Inc DBA                           Metal Maintenance                      4/14/2016            6/1/2016          1 Year(s)   terminated immediately upon written notice in event of sale or at  Mid America Metal                                                                                                                    any time by giving 30 day written notice.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Environmental Coalition                           Pest Control                                                8/1/2015          2 Year(s)   terminated with 30 day written notice in event of sale, default by  Incorporated                                                                                                                    parties  or other reasons.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Fikes of Houston, Inc.   Restroom Deodorizers                   2/16/2017            3/1/2017          1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                     any time by giving 30 day written notice.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Kastle Systems of Texas, LLC Security Cameras                   10/2/2018           9/18/2019          1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                     any time by giving 30 day written notice.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Renaissance Metals, Inc DBA                           Stone Maintenance                      5/7/2018             5/1/2018          1 Year(s)   terminated immediately upon written notice in event of sale or at  Mid America Metal                                                                                                                    any time by giving 30 day written notice.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Royal Services Company, LLC Parking Lot Sweeping                9/21/2017            1/1/2018          1 Year(s)   terminated immediately upon written notice in event of sale or at                                                                                                                     any time by giving 30 day written notice.                                                                                                                    Continuing on MTM basis unless otherwise terminated. May be  Nalco Company            Water Treatment                         4/9/2015            4/1/2015          1 Year(s)   terminated with 30 day written notice in event of sale, default by                                                                                                                     parties  or other reasons. 

 

                                                                  SCHEDULE 5(A)                                                                  FREE RENT CREDIT   Free Rent Obligations                                                                                                                                   Amount Outstanding Tenant                                               Abatement Start Date Abatement End Date                                           As of 8/31/2019 Suchma & Portele, P.C.                                         12/1/2019          2/28/2020                                                  8,418.87 Liberty Lift                                                  11/26/2019          1/25/2020                                                41,010.00  Banahan & Martinez                                              6/1/2019          6/30/2022   1 mo free rent June each year of lease         8,838.38 Nova Pension Consulting                                         6/1/2019          9/30/2019                                                  2,482.19 Strategy Engineering                                            8/1/2019         10/31/2019                                                  7,697.33 Total Free Rent Obligations                                                                                                                68,446.77  

 

                                                                  SCHEDULE 5(B)                                                  LEASING COSTS (INCLUDING FREE RENT)                                                             UNDER EXISTING LEASES    Free Rent Obligations                                                                                                                                   Amount Outstanding Tenant                                               Abatement Start Date Abatement End Date                                           As of 8/31/2019 Suchma & Portele, P.C.                                         12/1/2019          2/28/2020                                                  8,418.87 Liberty Lift                                                  11/26/2019          1/25/2020                                                41,010.00  Banahan & Martinez                                              6/1/2019          6/30/2022   1 mo free rent June each year of lease         8,838.38 Nova Pension Consulting                                         6/1/2019          9/30/2019                                                  2,482.19 Strategy Engineering                                            8/1/2019         10/31/2019                                                  7,697.33 Total Free Rent Obligations                                                                                                                68,446.77   Tenant Improvements                                                                                                                                   Amount Outstanding Tenant                                                                  Contractor Name       Total Amount ($) Spent-to-Date ($)          As of 8/2/19 Suchma & Portele Renewal                                                                                    14,330.00     -                14,330.00  The Accurate Group of Tx                                                                                    56,600.00                53,589.44  3,010.56 Strategy Engineering Expansion (Suite 420)                              Cannon Enterprises                  46,440.00     -                46,440.00  Strategy Engineering (Suite 410/500)                                    Cannon Enterprises                  38,811.61     -                38,811.61  Banahan & Martinez (Suite 105)                                          Comm'l Tenant Const                 58,299.15                48,006.34 10,292.81  Total Tenant Improvements                                                                                 214,480.76              101,595.78  112,884.98  Leasing Commissions                                                                                                                                   Amount Outstanding Tenant                                                                                        Total Amount ($) Spent-to-Date ($)          As of 8/2/19 Advanced IT                                                                                                 10,328.00     -                10,328.00  Mona Mossad                                                                                            573.12             -                   573.12  Dagley Insurance Renewal (Suite 200)                                                                          1,236.27    -                  1,236.27 Strategy Engineering Expansion (Suite 405)                                                                  16,399.00                   4,337.28 12,061.72  Banahan & Martinez (Suite 105)                                                                                7,116.40                   3,558.20  3,558.20 Total Leasing Commissions                                                                                   35,652.79                   7,895.48 27,757.31  

 

                                                                  SCHEDULE 5(C)                                                       CAPITAL PROJECTS (IN PROGRESS)    Capital Projects                                                                                                                                   Amount Outstanding Project Name                                                            Contractor Name       Total Amount ($) Spent-to-Date ($)          As of 8/2/19 Monument Sign Upgrade                                                                                       16,670.00     -                16,670.00  3rd Floor Corridor                                                                                            4,137.42  877.10               3,260.32 Total Capital Projects                                                                                      20,807.42  877.10              19,930.32  

 

                                     EXHIBIT “A”                                   LEGAL DESCRIPTION         TRACT I:         PARCEL A:         BEING 2.7017 ACRES OF LAND, MORE OR LESS, IN THE DAVID MIDDLETON SURVEY,  ABSTRACT NO. 535, HARRIS COUNTY, TEXAS AND BEING A PORTION OF RESTRICTED  RESERVE "B" OF PARK 10, SECTION SIX AS SHOWN ON PLAT RECORDED IN VOLUME 297,  PAGE 91, OF THE HARRIS COUNTY MAP RECORDS, SAID 2.7017 ACRE TRACT IS MORE  PARTICULARLY DESCRIBED AS FOLLOWS:         BEGINNING AT A 5/8 INCH IRON ROD FOUND IN THE EAST LINE OF BROADFIELD  BOULEVARD, 100.00 FEET WIDE, AND AT THE SOUTHWEST CORNER OF SAID RESERVE "B"  AND AT THE SOUTHWEST CORNER OF THE HEREIN DESCRIBED TRACT;         THENCE 148.69 FEET IN A NORTHWESTERLY DIRECTION, ALONG THE EASTERLY  LINE OF BROADFIELD BOULEVARD AND ALONG THE WESTERLY LINE OF SAID RESERVE  "B" FOLLOWING THE ARC OF A CURVE TO THE LEFT HAVING A RADIUS OF 1350.00 FEET, A  CENTRAL ANGLE OF 06° 18' 38", AND A CHORD WHICH BEARS NORTH 18° 30' 18" WEST,  148.61 FEET TO A 5/8 INCH IRON ROD FOUND AT A POINT OF TANGENCY OF SAID CURVE;         THENCE NORTH 21° 39' 37" WEST, 139.47 FEET CONTINUING ALONG THE EASTERLY  LINE OF BROADFIELD BOULEVARD AND THE WESTERLY LINE OF SAID RESERVE "B" TO A  5/8 INCH IRON ROD FOUND FOR THE NORTHWEST CORNER OF THE HEREIN DESCRIBED  TRACT;         THENCE NORTH 88° 35' 29" EAST, 260.60 FEET TO A 5/8 INCH IRON ROD FOUND FOR  CORNER; THENCE SOUTH 01° 24' 31" EAST, 6.70 FEET TO A 5/8 INCH IRON ROD FOUND FOR  CORNER;         THENCE NORTH 88° 35' 29" EAST, 225.00 FEET TO A 5/8 INCH IRON ROD FOUND FOR  THE NORTHEAST CORNER OF THE HEREIN DESCRIBED TRACT;         THENCE SOUTH 01° 24' 31" EAST, 266.19 FEET TO A 5/8 INCH IRON ROD FOUND IN  THE SOUTH LINE OF SAID RESERVE "B" AT THE SOUTHEAST CORNER OF THE HEREIN  DESCRIBED TRACT;         THENCE SOUTH 88° 35' 29" WEST, 393.64 FEET ALONG THE SOUTH LINE OF SAID  RESERVE "B" TO THE PLACE OF BEGINNING AND CONTAINING 117,688 SQUARE FEET OR  2.7017 ACRES OF LAND, MORE OR LESS.  

 

      PARCEL B:         ALL THAT CERTAIN 2.613 ACRES OF LAND, MORE OR LESS, OUT OF THE 3.60000  ACRE TRACT DESCRIBED IN THE SUBSTITUTE TRUSTEE'S DEED TO COLLECTING BANK,  N.A., RECORDED UNDER FILE NO. L648494, IN THE OFFICIAL PUBLIC RECORDS OF REAL PROPERTY OF HARRIS COUNTY, TEXAS, OUT OF RESTRICTED RESERVE "B", PARK 10, SECTION 6, ACCORDING TO THE PLAT THEREOF RECORDED UNDER VOLUME 297, PAGE 91, IN THE MAP RECORDS OF HARRIS COUNTY, TEXAS, IN THE DAVID MIDDLETON SURVEY, A-535, HARRIS COUNTY, TEXAS, AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS: (ALL BEARINGS BASED ON THE TEXAS STATE PLANE COORDINATE SYSTEM, SOUTH CENTRAL ZONE)        BEGINNING AT A 5/8 INCH IRON ROD FOUND FOR THE SOUTH CORNER OF THE  SOUTHEAST RIGHT-OF-WAY CUTBACK LINE AT THE INTERSECTION OF PARK ROW (100  FOOT R.O.W.) AND BROADFIELD BOULEVARD (100 FOOT R.O.W.), COMMON TO THE MOST  WESTERLY NORTHWEST CORNER OF THE HEREIN DESCRIBED TRACT;         THENCE N 23° 22' 36" EAST - 14.13 FEET ALONG SAID SOUTHEAST RIGHT OF WAY  CUTBACK LINE TO A 5/8 INCH IRON ROD FOUND FOR THE NORTH CORNER OF SAID  CUTBACK IN THE SOUTH RIGHT-OF-WAY LINE OF SAID PARK ROW, COMMON TO A POINT  ON A CURVE TO THE RIGHT, HAVING A CENTRAL ANGLE OF 19° 59' 49", A RADIUS OF  765.00 FEET AND FROM WHICH POINT THE CENTER OF THE CIRCLE OF SAID CURVE BEARS  SOUTH 21° 17' 37" EAST;         THENCE ALONG SAID CURVE TO THE RIGHT, ALONG SAID SOUTH RIGHT-OF-WAY  LINE, IN AN EASTERLY DIRECTION, AN ARC DISTANCE OF 267.00 FEET TO A 5/8 INCH IRON  ROD FOUND FOR THE END OF CURVE;         THENCE NORTH 88° 42' 26" EAST - 278.54 FEET, CONTINUING ALONG SAID SOUTH  RIGHT-OF-WAY LINE, TO A 5/8 INCH IRON ROD SET FOR THE NORTHEAST CORNER OF THE  HEREIN DESCRIBED TRACT;         THENCE SOUTH 1° 24' 31" EAST - 228.72 FEET TO A 5/8 INCH IRON ROD FOUND FOR  THE NORTHEAST CORNER OF THE 2.7017 ACRE TRACT OF LAND DESCRIBED IN THE  SUBSTITUTE TRUSTEE'S DEED TO NEW ENGLAND LIFE INSURANCE COMPANY,  RECORDED UNDER COUNTY CLERK'S FILE NO. L648278, IN THE OFFICIAL PUBLIC  RECORDS OF REAL PROPERTY OF HARRIS COUNTY, TEXAS, COMMON TO THE  SOUTHEAST CORNER OF THE HEREIN DESCRIBED TRACT;         THENCE SOUTH 88° 35' 29" WEST - 225.00 FEET, ALONG THE NORTH LINE OF SAID  2.7017 ACRES, TO A 5/8 INCH ROD FOUND FOR AN ANGLE CORNER OF THE HEREIN  DESCRIBED TRACT;         THENCE NORTH 1° 24' 31" WEST - 6.70 FEET TO A 5/8 INCH IRON ROD FOUND FOR AN  ANGLE CORNER OF THE HEREIN DESCRIBED TRACT;  

 

      THENCE SOUTH 88° 35' 29" WEST - 260.60 FEET, CONTINUING ALONG THE NORTH  LINE OF SAID 2.7017 ACRES, TO A 5/8 INCH IRON ROD FOUND FOR THE SOUTHWEST  CORNER OF THE HEREIN DESCRIBED TRACT, IN THE EAST RIGHT-OF-WAY LINE OF  AFORESAID BROADFIELD BOULEVARD;         THENCE NORTH 21° 39' 37" WEST - 174.96 FEET ALONG SAID EAST RIGHT-OF-WAY  LINE TO THE POINT OF BEGINNING OF THE HEREIN DESCRIBED TRACT AND CONTAINING  2.613 ACRES OF LAND, MORE OR LESS. 

 

       PARCEL I:          ALL OF THAT CERTAIN 4.014 ACRES OF LAND SITUATED IN THE G.W.   CHILDRESS SURVEY, ABSTRACT NO. 217, HARRIS COUNTY, CITY OF HOUSTON,   TEXAS, BEING A PART OF AND OUT OF RESERVE "A", BLOCK 1, OF   WILLOWBROOK MALL, A SUBDIVISION OF RECORD UNDER VOLUME 321, PAGE 17   OF THE HARRIS COUNTY MAP RECORDS AND BEING ALL OF THAT CERTAIN   CALLED 3.021 ACRE TRACT OF LAND AS CONVEYED TO STATE MUTUAL LIFE   ASSURANCE COMPANY OF AMERICA, AS DESCRIBED UNDER HARRIS COUNTY   CLERK'S FILE NUMBER K900611, DATED DECEMBER 31, 1986 AND BEING PART OF   THAT CERTAIN CALLED 1.000 ACRE TRACT OF LAND AS CONVEYED TO   WILLOWBROOK NATIONAL BANK, AS DESCRIBED UNDER HARRIS COUNTY   CLERK'S FILE NUMBER H090180 DATED AUGUST 7, 1982. SAID 4.014 ACRE TRACT   OF LAND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS   FOLLOWS:          COMMENCING AT THE INTERSECTION OF THE SOUTHERLY RIGHT OF WAY   LINE OF F.M.1960 (BASED ON 100 FOOT WIDTH) WITH THE WESTERLY LINE OF   ROCK ISLAND R.R. CO. RIGHT OF WAY (BASED ON 100 FOOT WIDTH);          THENCE, SOUTH 63 DEGREES 44 MINUTES 23 SECONDS WEST, WITH THE   SOUTHERLY RIGHT OF WAY LINE OF SAID F.M. 1960, A DISTANCE OF 385.10 FEET   TO A "X" SET IN CONCRETE FOUND IN THE FACE OF CURB AND FOR THE TRUE   POINT OF BEGINNING, SAID "X" IN CONCRETE ALSO BEING IN A CURVE TO THE   RIGHT FROM WHICH THE CENTER OF CURVATURE BEARS SOUTH 04 DEGREES 44   MINUTES 33 SECONDS WEST, 49.00 FEET;         THENCE, IN A SOUTHEASTERLY DIRECTION, CURVING TO THE RIGHT,  HAVING A CENTRAL ANGLE OF 58 DEGREES 59 MINUTES 50 SECONDS, A RADIUS  OF 49.00 FEET, AN ARC LENGTH OF 50.48 FEET TO A ONE INCH GALVANIZED IRON  PIPE FOUND FOR THE POINT OF TANGENCY;         THENCE, SOUTH 26 DEGREES 15 MINUTES 37 SECONDS EAST, A DISTANCE  OF 168.67 FEET TO A PK NAIL SET FOR THE POINT OF CURVATURE;         THENCE, IN A SOUTHWESTERLY DIRECTION ALONG A CURVE TO THE  RIGHT, HAVING A CENTRAL ANGLE OF 33 DEGREES 44 MINUTES 50 SECONDS, A  RADIUS OF 371.50 FEET, AN ARC LENGTH OF 218.81 FEET TO A 3⁄4 INCH IRON PIPE  FOUND FOR THE POINT OF TANGENCY;         THENCE, SOUTH 07 DEGREES 29 MINUTES 13 SECONDS WEST, A DISTANCE  OF 35.31 FEET TO A 3⁄4 INCH IRON PIPE FOUND FOR THE POINT OF CURVATURE;  

 

       THENCE, IN A SOUTHWESTERLY DIRECTION ALONG A CURVE TO THE   RIGHTS, HAVING A CENTRAL ANGLE OF 83 DEGREES 56 MINUTES 44 SECONDS, A   RADIUS OF 39.00 FEET, AN ARC LENGTH OF 57.14 FEET TO A 3⁄4 INCH IRON PIPE   FOUND FOR THE POINT OF REVERSE CURVE FROM WHICH THE CENTER OF   CURVATURE BEARS SOUTH, 01 DEGREES 25 MINUTES 56 SECONDS WEST, 601.00   FEET;         THENCE, IN A SOUTHWESTERLY DIRECTION ALONG SAID CURVE TO THE  LEFT, HAVING A CENTRAL ANGLE OF 08 DEGREES 56 MINUTES 31 SECONDS, A  RADIUS OF 601.00 FEET, AN ARC LENGTH OF 93.80 FEET TO AN "X" FOUND IN  CONCRETE FOR A POINT FOR CORNER;          THENCE, SOUTH 82 DEGREES 29 MINUTES 27 SECONDS WEST, FOR A   DISTANCE OF 160.00 FEET TO A 3⁄4 INCH IRON PIPE FOUND FOR A POINT OF   CURVATURE;          THENCE, IN A SOUTHWESTERLY DIRECTION ALONG SAID CURVE TO THE   LEFT, HAVING A CENTRAL ANGLE OF 04 DEGREES 49 MINUTES 05 SECONDS, A   RADIUS OF 801.00 FEET, AN ARC LENGTH OF 67.36 FEET TO A 3⁄4 INCH IRON PIPE   FOUND TO A POINT FOR CORNER;         THENCE, NORTH 26 DEGREES 15 MINUTES 37 SECONDS WEST, A DISTANCE  OF 351.95 FEET TO A 3⁄4 INCH IRON PIPE FOUND FOR CORNER IN THE SOUTHERLY  RIGHT OF WAY LINE OF SAID F.M. 1960;         THENCE, NORTH 63 DEGREES 44 MINUTES 23 SECONDS EAST, WITH THE  SOUTHERLY LINE OF SAID F.M. 1960, A DISTANCE OF 411.24 FEET TO THE POINT  OF BEGINNING AND CONTAINING 4.014 ACRES OF LAND.         PARCEL II:         NON-EXCLUSIVE EASEMENT ESTATE GRANTED UNDER THAT CERTAIN  CONSTRUCTION, OPERATION AND RECIPROCAL EASEMENT AGREEMENT  RECORDED UNDER FILE NO. G671633 IN THE OFFICIAL REAL PROPERTYRECORDS  OF HARRIS COUNTY, TEXAS. 

 

       BEING A TRACT OR PARCEL CONTAINING 3.200 ACRES (139,392 SQUARE   FEET), MORE OR LESS, OF LAND SITUATED IN THE DAVID MIDDLETON SURVEY,   ABSTRACT NUMBER 535, HARRIS COUNTY, TEXAS; BEING OUT OF AND A PART OF   UNRESTRICTED RESERVE "B", PARK TEN PLACE, SECTION 1, A SUBDIVISION OF   RECORD IN VOLUME 284, PAGE 50, HARRIS COUNTY MAP RECORDS AND BEING   THAT SAME 3.200 ACRE TRACT CONVEYED TO PARK TEN NO. 1, LTD., A TEXAS   LIMITED PARTNERSHIP, OF RECORD UNDER HARRIS COUNTY CLERK’S FILE   NUMBER J839227; SAID 3.200 ACRE TRACT BEING MORE PARTICULARLY   DESCRIBED AS FOLLOWS:         BEGINNING AT THE NORTHWEST CORNER OF SAID UNRESTRICTED   RESERVE "B", IN THE EAST LINE OF A CALLED 2.1042 ACRE TRACT, CONVEYED TO   PARK TEN MUNICIPAL UTILITY DISTRICT, OF RECORD UNDER H.C.C.F. NUMBER   E118212 AND BEING THE SOUTHWEST CORNER OF A CALLED 5.1053 ACRE TRACT   CONVEYED TO DRESSER INDUSTRIES, INC., A DELAWARE CORPORATION OF   RECORD UNDER H.C.C.F. NUMBER J907711 AND BEING THE NORTHWEST CORNER   OF THE HEREIN DESCRIBED TRACT, FROM WHICH A 5/8 INCH IRON ROD FOUND   BEARS NORTH 83° 26’ 18" EAST, 0.9 FEET;          THENCE NORTH 88° 50’ 48" EAST, ALONG THE SOUTH LINE OF SAID 5.1053   ACRE TRACT AND THE NORTH LINE OF SAID UNRESTRICTED RESERVE "B", A   DISTANCE OF 390.00 FEET TO A POINT OF MARKING THE NORTHWEST CORNER OF   A CALLED 3.183 ACRE TRACT CONVEYED TO 16360 PARK TEN L.P., A TEXAS   LIMITED PARTNERSHIP OF RECORD UNDER H.C.C.F. NUMBER R222862 AND   MARKING THE NORTHEAST CORNER OF THE HEREIN DESCRIBED TRACT, FROM   WHICH A 5/8 INCH IRON ROD FOUND BEARS NORTH 10° 49’ 46" WEST, 0.65 FEET;          THENCE SOUTH 01° 17’ 48" EAST, ALONG THE WEST LINE OF SAID 3.183   ACRE TRACT, A DISTANCE OF 304.20 FEET TO A 5/8 INCH IRON ROD FOUND IN THE   NORTH R.O.W. LINE OF PARK TEN PLACE AND THE ARC OF A CURVE TO THE   LEFT, MARKING THE SOUTHWEST CORNER OF SAID 3.183 ACRE TRACT AND THE   EASTERLY MOST SOUTHEAST CORNER OF THE HEREIN DESCRIBED TRACT, FROM   WHICH A 5/8 INCH IRON ROD FOUND BEARS SOUTH 15° 20’ 46" WEST, 1.20 FEET   AND ANOTHER 5/8 INCH IRON ROD FOUND BEARS SOUTH 24° 21’ 26" WEST, 1.4   FEET;         THENCE 183.55 FEET ALONG THE ARC OF SAID CURVE TO THE LEFT,  HAVING A RADIUS OF 75.00 FEET A CENTRAL ANGLE OF 140° 13’ 06" AND A   CHORD WHICH BEARS SOUTH 55° 14’ 26" WEST, 141.05 FEET TO A 5/8 INCH IRON   ROD SET MARKING THE NORTHEAST CORNER OF A CALLED 4.297 ACRE TRACT,   CONVEYED TO WELLBROOK INCORPORATED N.V., A NETHERLAND ANTILLES   CORPORATION OF RECORD UNDER H.C.C.F. NUMBER J054931 AND MARKING THE  

 

 MOST SOUTHERLY SOUTHEAST CORNER OF THE HEREIN DESCRIBED TRACT   FROM WHICH A 1⁄2 INCH IRON ROD FOUND BEARS NORTH 14° 22’ 18" WEST, 2.94   FEET;         THENCE SOUTH 88° 50’ 48" WEST, ALONG THE NORTH LINE OF SAID 4.297  ACRE TRACT, A DISTANCE OF 272.24 FEET TO A 5/8 INCH IRON ROD FOUND IN THE   AFOREMENTIONED EAST LINE OF THE 2.1042 ACRE TRACT AND MARKING THE   SOUTHWEST CORNER OF THE HEREIN DESCRIBED TRACT;          THENCE NORTH 01° 18’ 35" WEST, ALONG SAID EAST LINE, A DISTANCE OF   382.27 FEET TO THE POINT OF BEGINNING AND CONTAINING 3.200 ACRE (139,392   SQUARE FEET) OF LAND, MORE OR LESS.  

 

               EXHIBIT “B”   LIST OF EXCLUDED PERSONAL PROPERTY                      None. 

 

                                EXHIBIT “C”                          LIST OF DUE DILIGENCE ITEMS   Seller shall deliver the following to Buyer through a secure website or make available at the  property to the extent such items are in Seller’s possession and control:   1.    Copies of all Leases, including any and all modifications or amendments thereto. 2.    A certified rent roll for the Property for the month in which this Agreement is executed, or       if not yet available, the most recently available month, in the form customarily prepared       for Seller by the current manager of the Property, and copies of monthly rent rolls for the       current year. 3.    Copies of all vendor and service contracts to which Seller is a party that are currently in       effect with respect to the Property, including, but not limited to, all agreements for the       provision of janitorial, maintenance, trash removal, landscaping and security services, to       the extent in Seller’s possession. 4.    Copies of all leasing commission agreements with respect to the Property to which Seller       is a party. 5.    Operating statements for the Property for the previous three (3) years and year-to-date (or       the period of Seller’s ownership of the Property or whatever is in Seller’s possession, if       either less) in the format customarily prepared for Seller by the current manager of the       Property and, to the extent not covered in the Operating Statements, CAM       reconciliations/estimates for the previous three (3) years, and a year-to-date expense       general ledger in the format customarily prepared for Seller by the current manager of the       Property. 6.    An inventory of the Personal Property, if any, to be conveyed to Purchaser at Closing. 7.    Copies of the ad valorem and personal property tax statements covering the Property for       the current tax year (if available) and for the previous two (2) years (or the period of Seller’s       ownership of the Property, if less). 8.    All Governmental licenses and permits issued to Seller with respect to the Property to the       extent in Seller’s possession, including specifically, without limitation, building permits,       certificates of occupancy, and special or conditional use permits in Seller’s possession. 9.    Plans and specifications for the Improvements, to the extent in Seller’s possession,       including working CAD files and current as-builts. 10.   Copies of all guaranties and warranties covering the Property, to the extent in Seller’s       possession. 11.   A schedule of all tenant deposits (security or otherwise), which schedule may be a part of       the rent roll. 

 

12.   Existing land title survey for the real property. 13.   A copy of Seller’s standard lease form in PDF format. 14.   A schedule of all insurance claims over the previous three (3) years that relate to the real       property. 15.   A historical occupancy report by year for the last two (2) years. 16.   A schedule of historical capital expenditures on the real property during the previous three       (3) calendar years, and year-to-date. 17.   An aging report detailing current payment delinquencies of any tenants. 18.   A description of all threatened and pending litigation that affects the real property. 19.   Billing information for tenant expense reimbursements (common area maintenance, taxes,       insurance, etc.) for the previous two (2) years and the current year. 20.   A general ledger for the previous two (2) years and year-to-date. 21.   Copies of all utility accounts which will be transferred to Purchaser at closing. 22.   A copy of the operating expense budget for the year following Closing. 23.   Documentation reflecting expenses incurred in connection repair and maintenance projects       performed in the prior two (2) years where the expenses exceeded $20,000. 24.   Copies of any documents regarding any roof, foundation and pest control (including       termite) work performed on the Improvements and the bonds and for warranties of said       work, if any. 25.   Copies of all orders of any governmental agencies respecting any claimed violation of any       federal, state or local law, ordinance, rule, regulation, requirement or order affecting the       Property, including any notices received regarding the Property. 26.   List of Tenant Improvement allowances owed to tenants and expiration dates. 27.   All REA and CC&R’s that may affect the property. 28.   Zoning Information Report, including all information obtained regarding zoning of the       property, other governmental regulations and all documents relating to the land use permits       and entitlements with respect to the property. In addition to the above documents, on two (2) business days advance notice from Purchaser,  Seller shall, to the extent in Seller’s possession or under the control of Seller, provide access to all  of Seller’s books and records relating exclusively to the Property, including tenant lease  correspondence and files (but excluding any privileged information, appraisals and information  relating to Seller itself), to be inspected by the Purchaser at the offices of the Seller’s property  manager during regular business hours.  

 

                                     Audit                              List of Due Diligence Items    Seller shall deliver the following to Buyer through a secure website or make available at the  property to the extent such items are in Seller’s possession and control:   1.    General Ledger detail in Excel format for the previous year and year-to-date. 2.    Rent Rolls in Excel format for the previous year and current, supporting total rent revenue       during both years. 3.    Income Statement for the previous year and year-to-date. 4.    Previous year invoices: Auditor will choose examples from GL statement provided, and       the invoices will be required. 

 

                                 EXHIBIT “D”                                  [FORM OF DEED]   Notice of Confidentiality Rights:  If you are a natural person, you may remove or strike  any of the following information from this instrument before it is filed for record in the  public records:  Your Social Security Number or your Driver's License Number.                            SPECIAL WARRANTY DEED    STATE OF TEXAS          §                           § KNOW ALL MEN BY THESE PRESENTS:   COUNTY OF __________  §   THAT [______________], a [_______________] ("Grantor"), for and in consideration of   the sum of Ten and No/100 Dollars cash and other good and valuable consideration paid in hand,   the receipt and sufficiency of which is hereby acknowledged, by [____________], a [__________]   (the "Grantee"), whose address is ___________________, HAS GRANTED, BARGAINED,   SOLD and CONVEYED its interest, and by these presents DOES GRANT, BARGAIN, SELL   and CONVEY its interest unto Grantee all of its interest in that certain land situated in   [____________] County, Texas, and described on Exhibit A which is attached hereto and   incorporated herein by reference for all purposes, together with all of Grantor's right, title and   interest in and to all easements, appurtenances thereof or in anywise appertaining thereto, all   development rights, mineral rights, utility capacity, air rights, wind rights, water, water rights,   riparian rights, and water stock relating to the land, and all of Grantor's right, title and interest in   and to all buildings, structures, fixtures and improvements located thereon (said land, real property,   rights, improvements and appurtenances being herein together referred to as the "Property").   This conveyance and the warranties of title herein are expressly made subject to the liens,   encumbrances, easements and other exceptions set forth on Exhibit B attached hereto and   incorporated herein by this reference for all purposes to the extent the same are valid and subsisting   and affect the Property.   GRANTEE ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE   SPECIFICALLY STATED IN THIS CONVEYANCE, GRANTOR SPECIFICALLY   DISCLAIMS ANY REPRESENTATION, WARRANTY (OTHER THAN WARRANTIES OF   TITLE AS EXPRESSLY PROVIDED AND LIMITED HEREIN), PROMISE, AGREEMENT   OR GUARANTY OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS   OR IMPLIED, ORAL OR WRITTEN CONCERNING OR WITH RESPECT TO:  (a) THE   VALUE, QUALITY OR CONDITION OF THE PROPERTY; (b) THE SUITABILITY OF THE   PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH GRANTEE MAY   CONDUCT THEREON; (c) THE COMPLIANCE OF THE PROPERTY WITH ANY   APPLICABLE LAWS OR RESTRICTIVE COVENANTS; (d) THE HABITABILITY,   SUITABILITY, MERCHANTABILITY, MARKETABILITY OR FITNESS FOR   PARTICULAR PURPOSE OF THE PROPERTY; (e) THE MANNER OR QUALITY OF THE  

 

CONSTRUCTION OR MATERIALS INCORPORATED INTO THE PROPERTY; (f) THE  MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; OR  (g) ANY OTHER MATTER OF ANY KIND WITH RESPECT TO THE PROPERTY. GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" AND "WITH ALL FAULTS" CONDITION AND BASIS WITH ALL FAULTS AND DEFECTS.       TO HAVE AND TO HOLD the property unto Grantee, and Grantee's successors and  assigns forever, and Grantor does hereby bind Grantor, and Grantor's successors and assigns, to  WARRANT and FOREVER DEFEND, all and singular the Property unto Grantee and Grantee's  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, but subject, however, as  aforesaid.        Ad valorem taxes have been paid through the year 20____ and have been prorated and  assumed by Grantee.                               (Signatures on next page) 

 

      EXECUTED effective as of this ______ day of __________________, ______.                                           GRANTOR:                                           By:_____________________________                                          Its:_____________________________    STATE OF ____________  §                          §  COUNTY OF __________  §         This instrument was acknowledged before me on the _____ day of_______________,  20__, by __________________________________________________, _________________ of  __________________________, as the act and deed of said [__________________].          { S e a l }                           ________________________________________________                          Notary Public                          State of [__________________]  

 

     EXHIBIT A   (TO FORM OF DEED)     Legal Description      [TO FOLLOW] 

 

     EXHIBIT B   (TO FORM OF DEED)    Permitted Exceptions      [TO FOLLOW]  

 

                                 EXHIBIT “E”                                     [FORM OF]                   BILL OF SALE, ASSIGNMENT AND ASSUMPTION         FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the  undersigned, Houston Portfolio, LLC, a Delaware limited liability company (“Seller”), hereby  sells, transfers, assigns and conveys to Hartman vREIT XXI Operating Partnership LP, a Texas  limited partnership (“Buyer”), with respect to the “Property” (as hereinafter defined), the  following:          1.    Personal Property.  All right, title and interest of Seller in and to the “Personal  Property” (as hereinafter defined).          2.    Leases.  All right, title and interest of Seller in and to the “Leases” (as hereinafter  defined).          3.    Service Agreements.  All right, title and interest of Seller in and to the “Service  Agreements” (as hereinafter defined).          4.    Other Intangible Property.  All right, title and interest of Seller, to the extent  assignable, in and to any other “Intangible Property” (as hereinafter defined).          This Bill of Sale, Assignment and Assumption is given pursuant to that certain agreement   (the “Purchase Agreement”) dated as of _____ ____, 2019, among Seller, Houston Portfolio,  LLC, a Delaware limited liability company, and Hartman vREIT XXI Operating Partnership LP,  a Texas limited partnership, providing for, among other matters, the sale of the Property.  The  covenants, agreements, and limitations (including, but not limited to, the limitations and  disclaimers provided in Sections 7.3, 7.4, 8 and 10.2 of the Purchase Agreement) provided in the  Purchase Agreement with respect to the property conveyed hereunder are hereby incorporated  herein by this reference as if herein set out in full.  Buyer hereby accepts the foregoing assignment  and agrees to assume and discharge, in accordance with the terms thereof, (1) all of the obligations   of Seller under the Leases and Service Agreements, to the extent the same arise on or after the date   hereof, (2) the obligation to pay all unpaid payments that are credited to Buyer under the proration   provisions of the Purchase Agreement (including all prepaid rentals, tenants’ cash security deposits   and any Reimbursable Tenant Expenses relating to any period prior to the Closing Date that are   credited to Buyer), and (3) the Leasing Costs relating to the Property that are Buyer’s responsibility   under the Purchase Agreement.  This Bill of Sale, Assignment and Assumption shall inure to the   benefit of and shall be binding upon Seller and Buyer, and their respective successors and assigns.   Such property is conveyed “as is” without warranty or representation.  As used herein, the   “Closing Date”, “Intangible Property”, “Leases”, “Leasing Costs”, “Personal Property”,  “Property”, “Reimbursable Tenant Expenses”, and “Service Agreements” shall have the  respective meanings set forth for the same in the Purchase Agreement.  

 

       This Bill of Sale, Assignment and Assumption may be executed in one or more   counterparts, each of which shall be deemed an original, but all of which shall constitute one and   the same document.   DATED:  As of __________, 2019   SELLER:   Houston Portfolio, LLC,  a Delaware limited liability company    By:   Name:   Title:     BUYER:    HARTMAN VREIT XXI OPERATING   PARTNERSHIP LP, a Texas limited   partnership   by its general partner, Hartman vREIT   XXI, Inc. a Maryland corporation    By:   Name:   Title:  

 

                                 EXHIBIT “F”                                     [FORM OF]                                NOTICE TO TENANTS                                 ______________, 2019    VIA CERTIFIED MAIL   RETURN RECEIPT REQUESTED    To:   All Tenants         Re:   [______________________], __________________   Ladies and Gentlemen:         Please be advised that, effective as of the date hereof, Houston Portfolio, LLC (“Seller”),   sold its interest in the referenced building and assigned its interest in your lease at such building   (the “Lease”) to ______________________, a __________________ (“Buyer”).  Consequently,   Buyer is now your landlord and the security deposit, if any, under the Lease has been transferred   to and received by Buyer.  Buyer is now responsible to account to you under the Lease and at law   for the security deposit transferred by Seller.  All future notices and other communication to the   landlord under the Lease should be delivered to Buyer at the following address:                _________________________               _________________________               _________________________               _________________________                With a copy to:                _________________________               _________________________               _________________________  

 

 All future rents and payments to be made by you under the Lease are to be made pursuant to   separate rent payment instructions that will be delivered to you under separate cover by Buyer.          Thank you for your cooperation.    Very truly yours,   Houston Portfolio, LLC,  a Delaware limited liability company    By:   Name:   Title:  

 

                                EXHIBIT “G”                                    [FORM OF]                           SELLER TITLE CERTIFICATE                              Title Affidavit & Indemnity                             dated as of _________, 2019    Certifications:   This Certificate as to Title is given with reference to that certain preliminary title report or title  commitment dated as of __________, 20___ under Order No. ________ (such report or  commitment being referred to herein as the “Commitment”), and issued by First American Title  Insurance Company (“Title Insurer”).  The undersigned certifies the following to Title Insurer as  to the above-referenced premises (the “Premises”):   Mechanics Liens:  A.  All labor, services or materials rendered or furnished in connection with the Premises or with the  construction or repair of any building or improvements on the Premises contracted for or  requested by the Owner, within the last [insert statutory lien period] days, have been completed  and paid for in full; and  B.  To the actual knowledge of the undersigned, with duty of inquiry and investigation, all other  labor, services or materials rendered or furnished in connection with the Premises or with the  construction or repair of any building or improvements within the last [insert statutory lien  period] days on the Premises have been completed and paid for in full.   Tenants/Parties in Possession:  Except as shown in the Commitment (with respect to tenancies of record), including matters  disclosed in the underlying exceptions of record  referenced therein, there are no tenants or other  parties who are in possession or have the right to be in possession of said Premises, other than  those tenants identified on the lease chart annexed hereto (and any subtenants thereunder), which  tenants have rights as tenants only and do not have an option to purchase all or part of the  Premises or right of first refusal affecting all or part of the Premises.   Options To Purchase or Rights of First Refusal:  But for the instant transaction, the undersigned has not entered into any unrecorded sale  contracts, deeds, mortgages, or purchase options or rights of first refusal affecting the Premises  or improvements thereon, which are presently in effect and will survive the transfer of the  Premises in connection with the instant transaction, except as set forth in the Commitment.  

 

 Covenants & Restrictions:   To the actual knowledge of the undersigned, (a) the Owner has received no written notice of past   or present violations of any effective covenants, conditions or restrictions set forth in the   Commitment (the “CC&Rs”) which remain uncured, and (b) any charge or assessment provided   for in any of the CC&Rs has been or will be duly paid.    Bankruptcy:   No proceedings in bankruptcy or receivership have been instituted by or against the Owner (or   its constituent entities) which are now pending, nor has the Owner (or its constituent entities)   made any assignment for the benefit of creditors which is in effect as to said Premises.    Exceptions to any of the foregoing:  [List any exceptions] _______________________________    Judgment:    That there is not any action or proceeding now pending in any State or Federal Court in the   United States, to which the Owner is a party; nor is there any State or Federal Court judgment,   State or Federal Tax Lien, or any other State or Federal lien of any kind or nature against the   Owner, which could constitute a lien or charge upon the Premises.     Gap Indemnification:   Between the date hereof and the date of recording of the insured conveyance but in no event later   than ten (10) business days from the date of Title Insurer’s receipt of the insured conveyance in   final form (hereinafter, the “Gap Period”), the Owner has not taken or allowed and will not   voluntarily take or allow any action to encumber the Premises in the Gap Period.  The Owner   agrees to indemnity the Title Insurer from any loss arising from the breach of the representations   or covenants contained in the foregoing sentence.     Further Assurances:   The Owner hereby undertakes and agrees to fully cooperate with Title Insurer in correcting any   errors in the execution and acknowledgment of the insured conveyance.     Counterparts:  This document may be executed in counterparts.  

 

Inducement and Indemnification:  The Owner provides this document to induce Title Insurer to insure title to said Premises well  knowing that it will do so only in complete reliance upon the matters asserted hereinabove and  further, will indemnify and hold Title Insurer harmless against any loss or damage sustained as a  result of any inaccuracy in the matters asserted hereinabove.    Knowledge/Survival:  Any statement “to the actual knowledge of the undersigned” (or similar phrase) shall mean actual  knowledge [excluding constructive or imputed knowledge] of the below individual signer  [“Knowledge Individual”], but such Knowledge Individual shall not have any personal liability  in connection herewith.  Notwithstanding anything to the contrary herein, (1) any cause of action  for a misrepresentation in this document shall survive until twelve (12) months after the date  hereof, at which time the provisions hereof (and any cause of action resulting from any  misrepresentation not then in litigation) shall terminate.                  See annexed Title Affidavit & Indemnity signature pages  

 

                   Signature Page to Title Affidavit & Indemnity   Owner:   Houston Portfolio, LLC,  a Delaware limited liability company   By:  Name:  Title:  

 

Lease Chart    see annexed 

 

                                                                   EXHIBIT “H”                                                                    LEASE EXHIBIT   Willowbrook   TENANT NAME   Mona Mossad                     Leases & Amendments                  Original Lease (12/8/11)                                                                       1st Amendment (10/24/14)                                                                       2nd Amendment (7/13/16)                                                                       3rd Amendment (1/9/18)                                                                       4th Amendment (7/16/19)   On Target Marketing             Leases & Amendments                  Original Lease (Surrender, Assignment & Assumption) (5/31/19)   Advanced IT Concepts            Leases & Amendments                  Original Lease (Surrender, Assignment & Assumption) (5/31/19)                                                                       Direct Lease (7/16/19)   Bryeans & Garcia                Leases & Amendments                  Original Lease (Surrender, Assignment & Assumption) (5/31/19)   CHCA Woman's Hospital           Leases & Amendments                  Original Lease (12/12/87)                                                                       1st Amendment (12/12/87)                                                                       2nd Amendment (9/9/92)                                                                       3rd Amendment (1/8/96)                                                                       4th Amendment (2/14/97)                                                                       5th Amendment (8/4/97)                                                                       6th Amendment (3/31/03)                                                                       7th Amendment (12/12/05)                                                                       8th Amendment (9/9/09)                                                                       9th Amendment (7/13/16)   Aces Global                     Leases & Amendments                  Original Lease (11/22/13)                                                                       1st Amendment (2/20/15)                                                                       2nd Amendment (4/28/15)  

 

Crescent Bank                   Leases & Amendments                  Original Lease (2/5/15)   Mcalister Sweet & Assoc         Leases & Amendments                  Original Lease (5/28/12)                                                                       1st Amendment (12/19/17)   Frederick Williams              Leases & Amendments                  Original Lease (8/12/97)                                                                       1st Amendment (8/27/02)                                                                       2nd Amendment (12/22/06)                                                                       3rd Amendment (1/9/13)                                                                       4th Amendment (12/1/15)   John Nazar                      Leases & Amendments                  Original Lease (11/29/11)                                                                       1st Amendment (9/10/12)                                                                       2nd Amendment (12/14/17)   Decatur                         Leases & Amendments                  Original Lease (9/30/16)  

 

Broadfield   TENANT NAME   St. George's Exploration        Leases & Amendments                  Original Lease (1/31/18)   Banahan & Martinez              Leases & Amendments                  Original Lease (2/27/19)   First Centerpoint               Leases & Amendments                  Assignment, Assumption & Amendment of Sublease (3.11.19)   Whitman Requardt                Leases & Amendments                  Original Lease (1/5/16)                                                                       1st Amendment (11/13/18)   ACS Engineering                 Leases & Amendments                  Original Lease (1/5/16)   Richard Squyres                 Leases & Amendments                  Original Lease (2/5/16)   VIAS                            Leases & Amendments                  Original Lease (2/5/16)   NOVA Pension                    Leases & Amendments                  Original Lease (4/2/19)   Hyundai Heavy Industries        Leases & Amendments                  Original Lease (3/3/17)   Wison Offshore & Marine         Leases & Amendments                  Original Lease (12/3/15)                                                                       1st Amendment (1/27/16)                                                                       2nd Amendment (2/2/18)   Strategy Engineering            Leases & Amendments                  Original Lease (10/9/17)                                                                       1st Amendment (4/2/19)   Regus                           Leases & Amendments                  Original Lease (12/22/06)                                                                       1st Amendment (9/10/07)                                                                       2nd Amendment (6/20/13)  

 

Park Ten   TENANT NAME   Dagley Insurance                Leases & Amendments                  Original Lease (11/8/16)                                                                       1st Amendment (5/31/19)   Lynx                            Leases & Amendments                  Original Lease (11/17/97)                                                                       1st Amendment (10/2/02)                                                                       2nd Amendment (2/28/07)                                                                       3rd Amendment (12/20/12)                                                                       4th Amendment (12/1/15)   DSL Corporation                 Leases & Amendments                  Original Lease (3/1/05)                                                                       1st Amendment (2/3/10)                                                                       2nd Amendment (11/4/14)   New TravelCorp LLC              Leases & Amendments                  Original Lease (1/21/09)                                                                       1st Amendment (1/20/12)                                                                       2nd Amendment (1/27/15)   Sivalls                         Leases & Amendments                  Original Lease (1/4/05)                                                                       1st Amendment (1/25/05)                                                                       2nd Amendment (5/21/08)                                                                       3rd Amendment (6/1/11)                                                                       4th Amendment (4/1/14)                                                                       5th Amendment (5/25/17)   West Africa Management Serv     Leases & Amendments                  Original Lease (2013)                                                                       1st Amendment (6/28/16)                                                                       2nd Amendment (12/20/16)   Crown Financial                 Leases & Amendments                  Original Lease (8/27/04)                                                                       1st Amendment (8/21/08)                                                                       2nd Amendment (6/6/12)  

 

TerraSond                       Leases & Amendments                  Original Lease (9/28/18)   Accurate Group                  Leases & Amendments                  Original Lease (10/10/18)   Liberty Lift Solutions          Leases & Amendments                  Original Lease (8/28/18)   Suchma & Portele                Leases & Amendments                  Original Lease (1/31/18)                                                                       1st Amendment (5/3/19)   Larry Boyd                      Leases & Amendments                  Original Lease (7/9/19)  

 

   EXHIBIT “I”   LEASE DEFAULTS         None. 

 

                                EXHIBIT “J”                                     FORM OF                         TENANT ESTOPPEL CERTIFICATE   Re: ________________________    Ladies and Gentlemen:        The undersigned (“Tenant”) certifies with respect to the lease (the “Lease”) more  particularly described in the attached Schedule “A” which is hereby incorporated (the “Schedule”)  that:         1.    Tenant is the tenant under the Lease;        2.    The summary of the terms of the Lease contained in the Schedule is true and correct;         3.    Tenant has accepted possession of the premises (the “Premises”) under the Lease;        4.    There are no rent abatements or free rent periods now or in the future other than as may be set forth on the Schedule;         5.    The Lease is in full force and effect and, except as may be indicated on the Schedule, has not been assigned, modified, supplemented or amended in any way and Tenant has  no notice of any assignment, pledge or hypothecation by the landlord (“Landlord”) under the  Lease or of the rentals thereunder;         6.    The Lease represents the entire agreement between Tenant and Landlord with respect to the Premises;         7.    All construction and other obligations of a material nature to be performed by Landlord have been satisfied, except as may be indicated on the Schedule;         8.    Any payments by Landlord to Tenant for tenant improvements which are required under the Lease have been made, except as may be indicated on the Schedule;         9.    On this date, there are no existing defenses or offsets which Tenant has against the enforcement of the Lease by Landlord, and Tenant has no knowledge of any event which with the  giving of notice, the passage of time or both would constitute a default by Tenant, or to the best of  Tenant’s knowledge, a default by Landlord, under the Lease;         10.   Tenant is not entitled to any offsets, abatements, deductions or otherwise against the rent payable under the Lease from and after the date hereof, except as may be indicated on the  Schedule;  

 

       11.   No rental (including expense reimbursements), other than for the current month, has been paid in advance, except as may be indicated on the Schedule;         12.    Tenant has not filed on its behalf, nor to Tenant’s knowledge, has any party initiated  against Tenant, proceedings for relief under bankruptcy, insolvency, or other proceedings;          13.   Except as set forth in the Lease, Tenant has no purchase, extension, expansion,  rights of first offer, rights of first refusal, exclusives, right to lease other premises, or rights to have   Landlord perform Tenant’s obligations under leases of other premises; and          14.   Tenant has no right to terminate the Lease except as set forth in the Lease.         The truth and accuracy of the certifications contained herein may be relied upon by   (i) Landlord, (ii) any purchaser of the Property (“Purchaser”), (iii) each lender (“Lender”) of  Landlord or Buyer (or any of their respective direct or indirect owners), and its successors,  participants, assigns and transferees, (iv) any rating agency or trustee involved in a securitization of one or more loans made by a Lender, and (v) any servicer of any such loan (collectively, the “Reliance Parties”), and said certifications shall be binding upon Tenant and its successors and  assigns, and inure to the benefit of the Reliance Parties.                                             Very truly yours,                                              []                                              By:                                             Name:                                             Title:                                              Date:  

 

                                SCHEDULE A   Summary of Lease Terms   1.    Name of Tenant:  2.    Lease Date:  3.    Amendment Dates, Separate Agreements, if any:   4.    Square Footage:  5.    Lease Commencement Date:  ;               Current Lease Expiration:   6.    Current Monthly Base Rent:      $;               paid through:  __________        Current Monthly Expense       Reimbursement:                  $;               paid through:  __________        Other Current Monthly Rent Not       Otherwise Identified Above:     $;               paid through:  __________        Current Total Monthly Rent:     $        Tenant has the following abatement(s) remaining:    7.    Security Deposit:  $  8.    Percentage Rent:  9.    Assignees/Subtenants:  10.   Lease Guarantor(s): 

 

                                                                   EXHIBIT “K”                                                    LIST OF TENANT SECURITY DEPOSITS    Willowbrook - Security Deposit Ledger   TENANT NAME   Mona Mossad                                             Security Deposit        $4,490.00   On Target Marketing                                     Security Deposit        $5,462.00   Advanced IT Concepts                                    Security Deposit        $4,518.50   Bryeans & Garcia                                        Security Deposit        $1,271.00   CHCA Woman's Hospital                                   Security Deposit        $2,577.00   Aces Global                                             Security Deposit        $8,114.58   Crescent Bank                                           Security Deposit        $0.00   Mcalister Sweet & Assoc                                 Security Deposit        $2,425.50   Frederick Williams                                      Security Deposit        $1,430.00   John Nazar                                              Security Deposit        $1,438.50   Decatur                                                 Security Deposit        $3,511.88  

 

Broadfield - Security Deposit Ledger    TENANT NAME   St. George's Exploration                                Security Deposit        $23,188.00   Banahan & Martinez                                      Security Deposit        $0.00   First Centerpoint                                       Security Deposit        $20,000.00   Whitman Requardt                                        Security Deposit        $2,992.00   ACS Engineering (Argent Consulting Services, Inc.)      Security Deposit        $4,998.50   Richard Squyres                                         Security Deposit        $6,049.88   VIAS                                                    Security Deposit        $11,700.00   NOVA Pension                                            Security Deposit        $10,595.25   Hyundai Heavy Industries                                Security Deposit        $0.00   Wison Offshore & Marine                                 Security Deposit        $22,337.50   Strategy Engineering                                    Security Deposit        $40,620.75   Regus                                                   Security Deposit        $52,995.58 Letter of Credit  

 

Park Ten - Security Deposit  Ledger   TENANT NAME   Dagley Insurance                                        Security Deposit        $8,120.00   Lynx                                                    Security Deposit        $0.00   DSL Corporation                                         Security Deposit        $4,456.50   New TravelCorp LLC                                      Security Deposit        $9,473.88   Sivalls                                                 Security Deposit        $982.92   West Africa Management Serv                             Security Deposit        $19,334.92   Crown Financial                                         Security Deposit        $2,889.13   TerraSond                                               Security Deposit        $22,461.26   Accurate Group                                          Security Deposit        $4,716.67   Liberty Lift Solutions                                  Security Deposit        $22,327.67   Lawrence E. Boyd Jr.                                    Security Deposit        $2,287.50   Suchma & Portele                                        Security Deposit        $2,746.58    Total Security Deposit                                                          $304,463.57  

 

                             TABLE OF CONTENTS                                                                             Page   1.    Certain Defined Terms .........................................................................................................1    2.    Purchase and Sale ................................................................................................................5    3.    Purchase Price ......................................................................................................................5          3.1   Deposit .................................................................................................................... 5          3.2   Closing Payment ..................................................................................................... 5          3.3   Assumption of Obligations ..................................................................................... 5    4.    Conditions Precedent ...........................................................................................................6          4.1   Performance by Seller ............................................................................................. 6          4.2   Seller’s Representations and Warranties ................................................................ 6          4.3   Performance by Buyer ............................................................................................ 6          4.4   Representations and Warranties of Buyer ............................................................... 7          4.5   Title Matters ............................................................................................................ 7          4.6   Due Diligence Reviews........................................................................................... 9          4.7   Tenant Estoppel Certificates ................................................................................. 12    5.    Closing Procedure ..............................................................................................................13          5.1   Escrow................................................................................................................... 13          5.2   Closing Deliveries ................................................................................................. 13          5.3   Closing Costs ........................................................................................................ 15          5.4   Prorations .............................................................................................................. 16    6.    Condemnation or Destruction of Property .........................................................................21    7.    Representations, Warranties and Covenants ......................................................................21          7.1   Representations and Warranties of Seller ............................................................. 21  

 

      7.2   Representations and Warranties of Buyer ............................................................. 23         7.3   Survival ................................................................................................................. 25         7.4   Knowledge ............................................................................................................ 25         7.5   Operating Covenants ............................................................................................. 26         7.6   SNDAs .................................................................................................................. 27   8.    DISCLAIMER; RELEASE ...............................................................................................27         8.1   DISCLAIMER ...................................................................................................... 27         8.2   RELEASE ............................................................................................................. 29         8.3   SURVIVAL .......................................................................................................... 29         8.4   Scope of Release ................................................................................................... 29         8.5   Waivers and Releases ........................................................................................... 30         8.6   Buyer Acknowledgments ...................................................................................... 30   9.    Disposition of Deposit .......................................................................................................30         9.1   Default by Seller ................................................................................................... 30         9.2   DEFAULT BY BUYER ....................................................................................... 30         9.3   Closing .................................................................................................................. 31   10.   Miscellaneous ....................................................................................................................31         10.1  Brokers .................................................................................................................. 31         10.2  Limitation of Liability........................................................................................... 32         10.3  Schedules and Exhibits; Entire Agreement; Modification .................................... 32         10.4  Time of the Essence .............................................................................................. 33         10.5  Interpretation ......................................................................................................... 33         10.6  Governing Law ..................................................................................................... 33  

 

10.7  Successors and Assigns......................................................................................... 33   10.8  Notices .................................................................................................................. 34   10.9  Third Parties .......................................................................................................... 35   10.10 Legal Costs............................................................................................................ 36   10.11 Further Assurances................................................................................................ 36   10.12 Severability ........................................................................................................... 36   10.13 Press Releases ....................................................................................................... 36   10.14 Anti-Terrorism Law .............................................................................................. 36   10.15 Tax Appeal Proceedings ....................................................................................... 37   10.16 Acceptance of Deeds............................................................................................. 37   10.17 Confidentiality ...................................................................................................... 37   10.18 Counterparts; Delivery .......................................................................................... 38   10.19 Effectiveness ......................................................................................................... 38   10.20 No Recording ........................................................................................................ 38   10.21 Escrow Instructions ............................................................................................... 38   10.22 Section 1031 Exchange ......................................................................................... 39  

 

                             LIST OF DEFINITIONS    Agreement ....................................................................................................................................... 1   Anti-Money Laundering and Anti-Terrorism Laws ..................................................................... 37   Appurtenances................................................................................................................................. 1   Basket Limitation .......................................................................................................................... 32   Bill of Sale, Assignment and Assumption .................................................................................... 14   Business Day ................................................................................................................................. 33  Buyer ............................................................................................................................................... 1  Buyer Assignee ............................................................................................................................. 34  Buyer Leasing Costs ..................................................................................................................... 27  Cap Limitation .............................................................................................................................. 33  Closing .......................................................................................................................................... 14  Closing Date.................................................................................................................................... 1  Closing Document .......................................................................................................................... 1  Closing Payment ............................................................................................................................. 6  Closing Statement ......................................................................................................................... 16  Closing Year ................................................................................................................................. 18  Deed .............................................................................................................................................. 14  Deposit ............................................................................................................................................ 1  Designated Representatives .......................................................................................................... 26  Due Diligence ............................................................................................................................... 10  Due Diligence Materials ................................................................................................................. 1  Due Diligence Period..................................................................................................................... 2  Effective Date ................................................................................................................................. 1  Environmental Laws ....................................................................................................................... 2  ERISA ........................................................................................................................................... 24  Escrow Agent .................................................................................................................................. 5  Escrow Instructions ....................................................................................................................... 14  Escrow Period ................................................................................................................................. 2  Escrowed Funds ............................................................................................................................ 39  Excluded Contracts ....................................................................................................................... 23  Excluded Materials ......................................................................................................................... 2  Executive Order ............................................................................................................................ 37  Existing Lease ................................................................................................................................. 3  Government List ........................................................................................................................... 37  Governmental Entity ....................................................................................................................... 3  Hazardous Materials ....................................................................................................................... 3  Identified Pre-Closing Rent .......................................................................................................... 17  Improvements ................................................................................................................................. 3  Intangible Property.......................................................................................................................... 3   Internal Revenue Code .................................................................................................................... 3   Land ................................................................................................................................................ 3   Landlord .......................................................................................................................................... 1   Laws ................................................................................................................................................ 3   Lease ........................................................................................................................................... 3, 1  

 

 Lease Exhibit .................................................................................................................................. 3   Leasing Costs .................................................................................................................................. 4   Lender ............................................................................................................................................. 2   Licensee Parties ............................................................................................................................ 10   Licenses and Permits....................................................................................................................... 4   Liens ................................................................................................................................................ 4   Losses ............................................................................................................................................ 12   National Service Contract ............................................................................................................... 4   New Leases ..................................................................................................................................... 4  Non-Space Leases ......................................................................................................................... 13  OFAC ............................................................................................................................................ 24   Percentage Rent Year .................................................................................................................... 21   Permitted Exceptions ...................................................................................................................... 8   Personal Property ............................................................................................................................ 4   Pre-Closing Tax Collection Remedies .......................................................................................... 17   Preliminary Title Report ................................................................................................................. 7   Premises .......................................................................................................................................... 1   Property ........................................................................................................................................... 4   Purchase Agreement ....................................................................................................................... 1   Purchase Price ................................................................................................................................. 5   Purchaser ......................................................................................................................................... 2   Reimbursable Tenant Expenses .................................................................................................... 18   Reliance Parties ............................................................................................................................... 2   Reserved Company Assets .............................................................................................................. 4   Schedule .......................................................................................................................................... 1   SD Letters of Credit ...................................................................................................................... 17   Security Deposits ............................................................................................................................ 5   Seller ............................................................................................................................................... 1   SELLER RELATED PARTIES ................................................................................................... 29   Seller’s Actual Reimbursable Tenant Expenses ........................................................................... 20   Seller’s Actual Tenant Reimbursements ....................................................................................... 20   Seller’s Reconciliation Statement ................................................................................................. 20   Sellers’ Broker .............................................................................................................................. 32   Service Agreements ...................................................................................................................... 22   Tenant ......................................................................................................................................... 5, 1   Tenant Estoppel Certificates ......................................................................................................... 13   Tenant Notices .............................................................................................................................. 14   Title Company ................................................................................................................................ 5   Uncompleted Capex Contract ....................................................................................................... 19   Vendor Notices ............................................................................................................................. 14

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