Form 8-K
8-K — XPEL, Inc.
Accession: 0001767258-26-000043
Filed: 2026-05-20
Period: 2026-05-15
CIK: 0001767258
SIC: 3470 (COATING, ENGRAVING & ALLIED SERVICES)
Item: Entry into a Material Definitive Agreement
Item: Completion of Acquisition or Disposition of Assets
Item: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item: Regulation FD Disclosure
Item: Financial Statements and Exhibits
Documents
8-K — xpel-20260515.htm (Primary)
EX-10.1 (exhibit101.htm)
EX-10.2 (exhibit102.htm)
EX-10.3 (exhibit103.htm)
EX-10.4 (exhibit104.htm)
EX-10.5 (exhibit105.htm)
EX-10.6 (exhibit106.htm)
EX-10.7 (exhibit107.htm)
EX-10.8 (exhibit108.htm)
EX-99.1 (exhibit991.htm)
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8-K
8-K (Primary)
Filename: xpel-20260515.htm · Sequence: 1
xpel-20260515
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
May 15, 2026
Date of Report (date of earliest event reported)
XPEL, INC.
(Exact name of registrant as specified in its charter)
Nevada 001-36456 20-1117381
(State or other jurisdiction of incorporation or organization) (Commission File Number) (I.R.S. Employer Identification No.)
711 Broadway St., Suite 320 78215
San Antonio Texas
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (210) 678-3700
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.001 per share XPEL The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Acquisition of San Antonio Facility
On May 15, 2026, XPEL, Inc. (the “Company”), through Harvest Ventures Holding Company, a Texas corporation and wholly-owned subsidiary of the Company (“Harvest”), completed the acquisition (the “Acquisition”) of the real property and improvements constituting the Company’s current San Antonio, Texas storage, fabrication and warehouse facility and certain adjoining properties located at 3167 North PanAm Expressway, San Antonio, Texas, 3215 North PanAm Expressway, San Antonio, Texas, 3251 North PanAm Expressway, San Antonio, Texas and 3319 North PanAm Expressway, San Antonio, Texas (the “Properties”). The Company had previously assigned its rights under the real estate purchase agreement for the Properties to Harvest. The aggregate purchase price for the Properties was approximately $60,400,000.
Building Loan
In connection with the Acquisition, on May 15, 2026, Harvest entered into a loan agreement (the “Building Loan”) with PNC Bank, National Association (the “Lender”), secured by the Properties. The Building Loan has a principal amount of $44,800,000, bears interest at the sum of (A) the Term SOFR Rate in effect on each Reset Date (each as defined in the Note included as Exhibit 10.2) plus (B) 125 basis points (1.25%), matures on May 15, 2036 (ten years from the closing date), and amortizes over a twenty-five (25) year schedule. The interest rate at closing was 4.7% per annum. The Company has guaranteed the obligations of Harvest under the Building Loan (the “Guaranty”).
The Building Loan is subject to customary representations, warranties, covenants, and events of default. Upon the occurrence of an event of default, the Lender may, among other remedies, accelerate the outstanding principal balance and accrued interest, foreclose on the Properties, and exercise its rights under the Guaranty.
The foregoing description of the Building Loan, the Note and the Guaranty does not purport to be complete and is qualified in its entirety by reference to the full text of the Building Loan Agreement, the Note and the Guaranty, copies of which are filed as Exhibits 10.1, 10.2 and 10.3 hereto and are incorporated herein by reference.
Amendment to Credit Facility
On May 15, 2026, the Company entered into an amendment (the “Credit Facility Amendment”) to its existing credit facility with Wells Fargo Bank, National Association (the “Credit Facility”). The Credit Facility Amendment permits Harvest to incur the Building Loan indebtedness and the Company to (i) guarantee the Building Loan obligations pursuant to the Guaranty, (ii) assign the real estate purchase agreement for the Properties to Harvest, and (iii) make an equity investment of up to $18,000,000 in Harvest and in Harvest Industrial Corporation (a wholly-owned subsidiary of the Company formed to hold an air permit required by the Texas Commission on Environmental Quality) in connection with the Acquisition and certain other expenditures related to the Properties.
The foregoing description of the Credit Facility Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Facility Amendment, a copy of which is filed as Exhibit 10.4 hereto and is incorporated herein by reference.
The real estate purchase agreement (and all amendments thereto), the Building Loan, the Guaranty, and the Credit Facility Amendment contain representations and warranties that XPEL made as of specific dates. Except for their status as contractual documents that establish and govern the legal relations among the parties, the real estate purchase agreement (and all amendments thereto), the Building Loan, the Guaranty, and the Credit Facility Amendment are not intended to be a source of factual, business or operational information about any of the parties thereto. The representations and warranties were made as of specific dates, only for purposes of the proposed transactions, and solely for the benefit of the parties to the real estate purchase agreement (and all amendments thereto), the Building Loan, the Guaranty, and the Credit Facility Amendment. These representations and warranties may be subject to limitations agreed between the parties, including being qualified by disclosures between the parties. The representations and warranties may have been made to allocate risks among the parties, including where the parties do not have complete knowledge of all facts, instead of establishing matters as facts. Furthermore, those representations and warranties may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, investors and security holders should not rely on such
representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of the date of the real estate purchase agreement (and all amendments thereto), the Building Loan, the Guaranty, and the Credit Facility Amendment. Moreover, information concerning the subject matter of such representations and warranties may change after the date of these representations and warranties, which may or may not be fully reflected in the parties’ public disclosures.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information set forth in Item 1.01 of this Current Report on Form 8-K under the heading “Acquisition of San Antonio Facility” is incorporated herein by reference. The Acquisition was funded with proceeds from the Building Loan and an equity contribution of $15,600,000 from the Company to Harvest.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K under the headings “Building Loan” and “Amendment to Credit Facility” is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On May 19, 2026, XPEL issued a press release disclosing the transactions described above as well as its acquisition of a 75% interest in a manufacturing facility located in China.
The information contained in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
Description
10.1*
Loan Agreement, dated May 15, 2026, by and between Harvest Ventures Holding Company and PNC Bank, National Association
10.2
Term Note dated May 15, 2026, by Harvest Ventures Holding Company payable to the Order of PNC Bank, National Association
10.3*
Guaranty Agreement, dated May 15, 2026, by XPEL, Inc. in favor of PNC Bank, National Association
10.4*
Second Amendment to Credit Agreement, dated May 15, 2026, by and among XPEL, Inc., the Lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent
10.5*
Standard Purchase and Sale Agreement, dated effective as of January 29, 2026, by and between SL Industrial, LP and XPEL, Inc.
10.6*
First Amendment to Standard Purchase and Sale Agreement, dated effective as of March 4, 2026, by and between SL Industrial, LP and XPEL, Inc.
10.7
Assignment and Assumption Agreement, dated as of April 9, 2026, by and between XPEL, Inc. and Harvest Ventures Holding Company
10.8
Second Amendment to Standard Purchase and Sale Agreement, dated effective as of April 23, 2026, by and between SL Industrial, LP and Harvest Ventures Holding Company
99.1
Press Release dated May 19, 2026
Exhibit No.
Description
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
*
The exhibits and schedules to these documents have been omitted from this filing pursuant to Item 601(b)(10) of Regulation S-K. The Company will furnish copies of such omitted exhibits and schedules to the Securities and Exchange Commission upon request. Descriptions of such exhibits and schedules are set forth in the documents.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
XPEL, Inc.
Dated: May 20, 2026 By: /s/ Barry R. Wood
Barry R. Wood
Senior Vice President and Chief Financial Officer
EX-10.1
EX-10.1
Filename: exhibit101.htm · Sequence: 2
Document
Exhibit 10.1
Loan Agreement
THIS LOAN AGREEMENT (the “Agreement”) is entered into as of May 15, 2026, between HARVEST VENTURES HOLDING COMPANY, a Texas corporation (the “Borrower”), with an address at 711 Broadway, Suite 320, San Antonio, Texas 78215, and PNC BANK, NATIONAL ASSOCIATION (the “Bank”), with an address at 112 E Pecan Street, Suite 200, San Antonio, Texas 78205.
The Borrower and the Bank, with the intent to be legally bound, agree as follows:
1. Loan. The Bank has made or may make one or more loans (“Loan”) to the Borrower subject to the terms and conditions and in reliance upon the representations and warranties of the Borrower set forth in this Agreement. Each Loan shall be used for business purposes (and not for personal, family or household use) and is or will be evidenced by a promissory note or notes of the Borrower and all renewals, extensions, amendments and restatements thereof (whether one or more, collectively, the “Note”) acceptable to the Bank, which shall set forth the interest rate, repayment and other provisions of the respective Loan, the terms of which are incorporated into this Agreement by reference.
The Loans governed by this Agreement shall include the Loans specifically described below, if any, and any additional lines of credit or term loans that the Bank has made or may, in its sole discretion, make to the Borrower in the future.
1. Term Loan. One of the Loans governed by this Agreement is a term loan in the amount of $44,800,000 (the “Term Loan”). The proceeds of the Term Loan will be used to purchase real property and improvements located at
3167 North PanAm Expressway, San Antonio Texas
3215 North PanAm Expressway, San Antonio Texas
3251 North PanAm Expressway, San Antonio Texas
3319 North PanAm Expressway, San Antonio Texas
2. Security. The security for repayment of the Loan shall include but not be limited to the collateral, guaranties and other documents heretofore, contemporaneously or hereafter executed and delivered to the Bank (the “Security Documents”), which shall secure repayment of the Loan and all other loans, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the Bank described therein (hereinafter referred to collectively as the “Obligations”).
This Agreement, the Note, the Security Documents and all other agreements and documents executed and/or delivered pursuant or subject hereto, as each may be amended, modified, extended or renewed from time to time, are collectively referred to as the “Loan Documents.” Capitalized terms not defined herein shall have the meanings ascribed to them in the Loan Documents.
3. Representations and Warranties. The Borrower hereby makes the following representations and warranties, which shall be continuing in nature and remain in full force and effect until the Obligations are paid in full, and which shall be true and correct in all material respects except as otherwise set forth on the Addendum attached hereto and incorporated herein by reference (the “Addendum”):
Form 7G – Multistate Rev. 1/26
3.1. Existence, Power and Authority. If not a natural person, the Borrower is duly organized, validly existing and in good standing under the laws of the State of its incorporation or organization and has the power and authority to own and operate its assets and to conduct its business as now or proposed to be carried on, and is duly qualified, licensed and in good standing to do business in all jurisdictions where its ownership of property or the nature of its business requires such qualification or licensing. The Borrower is duly authorized to execute and deliver the Loan Documents, all necessary action to authorize the execution and delivery of the Loan Documents has been properly taken, and the Borrower is and will continue to be duly authorized to borrow under this Agreement and to perform all of the other terms and provisions of the Loan Documents.
3.2. Financial Statements. The Borrower has delivered or caused to be delivered to the Bank its most recent Financial Statements (as defined herein). The Financial Statements are true, complete and accurate in all material respects and fairly present the Borrower’s financial condition, assets and liabilities, whether accrued, absolute, contingent or otherwise and the results of the Borrower’s operations for the period specified therein. The Financial Statements have been prepared in accordance with the Applicable Accounting Standards. As used herein, “Applicable Accounting Standards” shall mean generally accepted accounting principles in effect from time to time (“GAAP”) consistently applied from period to period, subject in the case of interim statements to normal year-end adjustments and to any comments and notes acceptable to the Bank in its reasonable discretion; and “Financial Statements” shall mean (i) with respect to an entity that is not a natural person, consolidated and, if required by the Bank in its reasonable discretion, consolidating balance sheets and statements of income and cash flows for the year, month or quarter together with year-to-date figures and comparative figures for the corresponding periods of the prior year, prepared in accordance with the Applicable Accounting Standards, consistently applied from period to period; and (ii) with respect to natural persons, means personal financial statements and federal income tax returns.
3.3. No Material Adverse Change. Since the date of the most recent Financial Statements, the Borrower has not suffered any damage, destruction or loss, and no event or condition has occurred or exists, which has resulted or could reasonably be expected to result in a material adverse change in its business, assets, operations, condition (financial or otherwise) or results of operation.
3.4. Binding Obligations. The Borrower has full power and authority to enter into the transactions provided for in this Agreement and has been duly authorized to do so by appropriate action of its Board of Directors if the Borrower is a corporation, its members and/or managers, as applicable, if the Borrower is a limited liability company, all its general partners if the Borrower is a partnership or otherwise as may be required by law, charter, other organizational documents or agreements; and the Loan Documents, when executed and delivered by the Borrower, will constitute the legal, valid and binding obligations of the Borrower enforceable in accordance with their terms.
3.5. No Defaults or Violations. There does not exist any Default or Event of Default, as hereinafter defined, under this Agreement, or any default or violation by the Borrower of or under any of the terms, conditions or obligations of: (i) its partnership agreement if the Borrower is a partnership, its articles or certificate of incorporation, regulations and bylaws if the Borrower is a corporation, its articles or certificate of organization and operating agreement if the Borrower is a limited liability company, or its other organizational documents as applicable; (ii) any indenture, mortgage, deed of trust, franchise, permit, contract, agreement, or other instrument to which it is a party or by which it is bound; or (iii) any law, ordinance, regulation, ruling, order, injunction, decree, condition or other requirement applicable to or imposed upon it by any law, the action of any court or any governmental authority or agency; and the consummation of this Agreement and the transactions set forth herein will not result in any such Default, Event of Default or violation.
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3.6. Title to Assets. The Borrower has good and indefeasible title to the assets reflected on the most recent Financial Statements, free and clear of all liens and encumbrances, except for (i) liens in favor of the Bank; (ii) current taxes and assessments not yet due and payable; (iii) assets disposed of by the Borrower in the ordinary course of business since the date of the most recent Financial Statements; and (iv) those liens or encumbrances, if any, specified on the Addendum.
3.7. Litigation. There are no actions, suits, proceedings or governmental investigations pending or, to the knowledge of the Borrower, threatened in writing against the Borrower, which could reasonably be expected to result in a material adverse change in its business, assets, operations, condition (financial or otherwise) or results of operations and there is no basis known to the Borrower for any action, suit, proceeding or investigation which could reasonably be expected to result in such a material adverse change. All pending and threatened (in writing) litigation against the Borrower is listed on the Addendum attached hereto.
3.8. Tax Returns. The Borrower has filed all returns and reports that are required to be filed by it in connection with any federal, state or local tax, duty or charge levied, assessed or imposed upon it or its property or withheld by it, including income, unemployment, social security and similar taxes, and all of such taxes have been either paid or adequate reserves or other provision has been made therefor.
3.9. Employee Benefit Plans. Each employee benefit plan as to which the Borrower may have any liability complies in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974 (as amended from time to time, “ERISA”), including minimum funding requirements, and (i) no Prohibited Transaction (as defined under ERISA) has occurred with respect to any such plan; (ii) no Reportable Event (as defined under Section 4043 of ERISA) has occurred with respect to any such plan which would cause the Pension Benefit Guaranty Corporation to institute proceedings under Section 4042 of ERISA; (iii) the Borrower has not withdrawn from any such plan or initiated steps to do so; and (iv) no steps have been taken to terminate any such plan.
3.10. Environmental Matters. The Borrower is in compliance, in all material respects, with all applicable Environmental Laws (as hereinafter defined), including, without limitation, all Environmental Laws in jurisdictions in which the Borrower owns or operates, or has owned or operated, a facility or site, stores collateral, arranges or has arranged for disposal or treatment of hazardous substances, solid waste or other waste, accepts or has accepted for transport any hazardous substances, solid waste or other wastes or holds or has held any interest in real property or otherwise. Except as set forth in that certain Phase I Environmental Site Assessment dated February 5, 2025, prepared by Professional Services Industries, Inc. as Project Number 0435-6943 (the “Environmental Report”), and as otherwise disclosed on the Addendum, no litigation or proceeding arising under, relating to or in connection with any Environmental Law is pending or, to the best of Borrower’s knowledge, threatened in writing against the Borrower, any real property in which the Borrower holds or has held an interest or any past or present operation of the Borrower. Except as disclosed in the Environmental Report, no release, threatened release or disposal of hazardous waste, solid waste or other wastes is occurring, or to the knowledge of the Borrower has occurred, on, under or to any real property in which the Borrower holds or has held any interest or performs or has performed any of its operations, in violation of any Environmental Law. As used in this Section, “litigation or proceeding” means any demand, claim notice, suit, suit in equity, action, administrative action, investigation or inquiry whether brought by a governmental authority or any other person, and “Environmental Laws” shall have the meaning ascribed to such term as set forth in that certain Environmental Indemnity Agreement dated of even date herewith by and among XPEL, Inc., Borrower and Bank.
3.11. Intellectual Property. The Borrower owns or is licensed to use all patents, patent rights, trademarks, trade names, service marks, copyrights, intellectual property, technology, know-how and processes necessary for the conduct of its business as currently conducted that are material to the condition (financial or otherwise), business or operations of the Borrower.
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3.12. Regulatory Matters. No part of the proceeds of any Loan will be used for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time in effect or for any purpose which violates the provisions of the Regulations of such Board of Governors.
3.13. Solvency. As of the date hereof and after giving effect to the transactions contemplated by the Loan Documents, (i) the aggregate value of the Borrower’s assets will exceed its liabilities (including contingent, subordinated, unmatured and unliquidated liabilities); (ii) the Borrower will have sufficient cash flow to enable it to pay its debts as they become due; and (iii) the Borrower will not have unreasonably small capital for the business in which it is engaged.
3.14. Disclosure. None of the Loan Documents contains or will contain any untrue statement of material fact or omits or will omit to state a material fact necessary in order to make the statements contained in this Agreement or the Loan Documents not misleading in any material respect. There is no fact known to the Borrower which materially adversely affects the business, assets, operations, condition (financial or otherwise) or results of operation of the Borrower and which has not otherwise been fully set forth in this Agreement or in the Loan Documents.
3.15. Beneficial Owners. If the Borrower is or was required to execute and deliver to the Bank a Certification of Beneficial Owner(s) (individually and collectively, as updated from time to time, the “Certification of Beneficial Owners”), the information in the Certification of Beneficial Owners, as updated from time to time in accordance with this Agreement, is true, complete and correct as of the date hereof and as of the date any such update is delivered to the Bank. The Borrower acknowledges and agrees that the Certification of Beneficial Owners is a Loan Document.
3.16. Anti-Corruption Laws and International Trade Laws; Anti-Money Laundering Laws; Certain Definitions. No Covered Entity, nor any of its directors, officers, or employees, nor, to the knowledge of the Borrower, any agents or affiliates acting on behalf of such Covered Entity: (i) is a Sanctioned Person; (ii) does business in or with, or derives any of its operating income, directly or indirectly, from any Sanctioned Jurisdiction or Sanctioned Person; or (iii) is in violation of, or is, directly or indirectly, taking any action that could cause any Covered Entity to be in violation of, applicable International Trade Laws, Sanctions, Anti-Money Laundering Laws, or Anti-Corruption Laws.
No Covered Entity nor any of its directors, officers, employees, nor to the knowledge of the Borrower, any agents or affiliates acting on behalf of any Covered Entity: (i) is in receipt of any notice or communication from any Compliance Authority that alleges, or otherwise pertains to, an actual or potential violation of any International Trade Laws, Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws; or (ii) is the target or subject of any investigation, or has received any request for information, involving any allegation relating to a violation of any International Trade Laws, Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws by an Official Body. There is no Blocked Property pledged as Collateral.
Any false, erroneous or misleading representation or warranty made as to Sanctions is automatically deemed material for purposes of determining the occurrence or existence of a default or event of default under any Loan Document. As used herein:
“Anti-Corruption Laws” means (a) the U.S. Foreign Corrupt Practices Act of 1977, as amended; (b) the U.K. Bribery Act 2010, as amended; and (c) any other applicable Law relating to anti-bribery or anti-corruption in any jurisdiction in which any Loan Party is located or doing business.
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“Anti-Money Laundering Laws” means (a) the Bank Secrecy Act and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, each as amended; (b) the U.K. Proceeds of Crime Act 2002, the Money Laundering Regulations 2017, as amended and the Terrorist Asset-Freezing Act 2010, each as amended; and (c) any other applicable Law relating to anti-money laundering and countering the financing of terrorism and related financial record keeping and reporting requirements in any jurisdiction in which any Loan Party is located or doing business.
“Blocked Property” means any property: (a) required to be reported as blocked property under 31 C.F.R. §501.603, as amended; (b) owned, directly or indirectly, by, or due to or from, a Sanctioned Person subject to blocking or comprehensive Sanctions; (c) in which a Sanctioned Person subject to blocking or comprehensive Sanctions otherwise holds any interest; (d) located or originated in, or otherwise subject to restrictions due to its ties to, a Sanctioned Jurisdiction or (e) that otherwise could cause any actual or potential violation by the Bank of any applicable International Trade Law if the Bank were to obtain an encumbrance on, lien on, pledge, or security interest in such property, or provide services in consideration of such property.
“Collateral” means any collateral securing any debt, liabilities, or other obligations of any Loan Party to the Bank.
“Compliance Authority” means (a) any Official Body of the United States (including the U.S. Department of State, the U.S. Department of the Treasury and its Office of Foreign Assets Control) (b) the government of Canada or any agency thereof; (c) the European Union or any agency thereof; (d) the government of the United Kingdom or any agency thereof; (e) the United Nations Security Council; and (f) any other Official Body with jurisdiction to administer Anti-Corruption Laws, Anti-Money Laundering Laws or International Trade Laws with respect to the conduct of a Covered Entity.
“Covered Entity” means (a) the Borrower and each of the Borrower’s subsidiaries; (b) each Guarantor and any pledgor of Collateral under any Loan Document; and (c) each Person that directly or indirectly controls a Person described in clause (a) or (b) above.
“Corporate Credit Agreement” means (a) that Credit Agreement among XPEL, Inc., a Nevada corporation, Wells Fargo Bank National Association, as Administrative Agent, and the other lenders party thereto dated April 6, 2023, as amended by that certain First Amendment to Credit Agreement dated September 11, 2025, and as further amended by that certain Second Amendment to Credit Agreement date on or about the date hereof, and (b) any refinancing of the credit agreement in clause (a) or any refinancing of any such refinancing.
“Guarantor” means (a) XPEL, Inc., a Nevada corporation, and (b) each other Person which executed and delivers an unconditional guaranty agreement in favor of Bank in a form acceptable to Bank.
“International Trade Laws” means all Laws relating to export controls, trade embargoes, customs, and antiboycott measures.
“Law” means any law(s) (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, executive order, injunction, writ, decree, bond, judgment, authorization or approval, lien or award, or any settlement arrangement, by agreement, consent or otherwise, of any Official Body, foreign or domestic.
“Loan Party” means the Borrower and any Guarantors.
“Official Body” means the government of the United States of America or of any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court,
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central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Official Body, or other entity.
“Sanctioned Jurisdiction” means, at any time, any country, area, territory, or jurisdiction that is the subject or target of comprehensive Sanctions.
“Sanctioned Person” means any Person (a) located in, organized under the laws of, or ordinarily resident in a Sanctioned Jurisdiction; (b) identified on any sanctions-related list maintained by any Compliance Authority; or (c) owned 50% or more, in the aggregate, directly or indirectly by, controlled by, or acting for, on behalf of, or at the direction of, one or more Persons described in clauses (a) or (b) above; or (d) otherwise the subject or target of Sanctions.
“Sanctions” means Laws relating to economic or financial sanctions, sectoral sanctions, or secondary sanctions, administered, or enforced from time to time by any Compliance Authority.
4. Affirmative Covenants. The Borrower agrees that from the date of execution of this Agreement until all Obligations have been paid in full and any commitments of the Bank to the Borrower have been terminated, the Borrower will:
4.1. Books and Records. Maintain books and records in accordance with the Applicable Accounting Standards and give representatives of the Bank access thereto at reasonable times during normal business hours upon reasonable prior notice, including permission to examine, copy and make abstracts from any of such books and records and such other information as the Bank may from time to time reasonably request, and the Borrower will make available to the Bank for examination copies of any reports, statements and returns which the Borrower may make to or file with any federal, state or local governmental department, bureau or agency.
4.2. Financial Reporting. Deliver or cause to be delivered to the Bank (i) the Financial Statements, reports and certifications, if any, set forth on the Addendum and (ii) such other information about Borrower’s or Guarantor’s financial condition, properties and operations as and when requested by the Bank, from time to time.
4.3. Payment of Taxes and Other Charges. Pay and discharge prior to delinquency all indebtedness and all taxes, assessments, charges, levies and other liabilities imposed upon the Borrower, its income, profits, property or business, except those which currently are being contested in good faith by appropriate proceedings and for which the Borrower shall have set aside adequate reserves or made other adequate provision with respect thereto acceptable to the Bank in its reasonable credit judgement.
4.4. Maintenance of Existence, Operation and Assets. Do all things necessary to (i) maintain, renew and keep in full force and effect its organizational existence and all rights, permits and franchises necessary to enable it to continue its business as currently conducted; (ii) continue in operation in substantially the same manner as at present; (iii) keep its properties in good operating condition and repair; and (iv) make all necessary and proper repairs, renewals, replacements, additions and improvements thereto.
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4.5. Insurance. Maintain, with financially sound and reputable insurers, insurance with respect to its property and business against such casualties and contingencies, of such types and in such amounts, as is customary for established companies engaged in the same or similar business and similarly situated. In the event of a conflict between the provisions of this Section and the terms of any Security Documents relating to insurance, the provisions in the Security Documents will control.
4.6. Compliance with Laws. Comply in all material respects with all laws applicable to the Borrower and to the operation of its business (including without limitation any statute, ordinance, rule or regulation relating to employment practices, pension benefits or environmental, occupational and health standards and controls).
4.7. Bank Accounts. Establish and maintain at the Bank some of the Borrower’s depository accounts.
4.8. Financial Covenants. Comply with all of the financial and other covenants, if any, set forth on the Addendum.
4.9. Additional Reports. Provide prompt written notice to the Bank of the occurrence of any of the following (together with a description of the action which the Borrower proposes to take with respect thereto): (i) any Event of Default or any event, act or condition which, with the passage of time or the giving of notice, or both, would constitute an Event of Default (a “Default”); (ii) any litigation filed by or against the Borrower that could reasonably be expected to have a material adverse effect on the Borrower’s business, assets, operations or financial condition; (iii) any Reportable Event or Prohibited Transaction with respect to any Employee Benefit Plan(s) (as defined in ERISA) or (iv) any event which might reasonably be expected to result in a material adverse change in the business, assets, operations, condition (financial or otherwise) or results of operation of the Borrower.
4.10. Certification of Beneficial Owners and Other Additional Information. Provide: (i) such information and documentation as may reasonably be requested by the Bank from time to time for purposes of compliance by the Bank with applicable laws (including without limitation the USA PATRIOT Act and other “know your customer” and anti-money laundering rules and regulations), and any policy or procedure implemented by the Bank to comply therewith; and (ii) if the Borrower is or was required to deliver a Certification of Beneficial Owners to the Bank, (a) confirmation of the accuracy of the information set forth in the most recent Certification of Beneficial Owners provided to the Bank, as and when requested by the Bank; and (b) a new Certification of Beneficial Owners in form and substance acceptable to the Bank when the individual(s) identified as a controlling party and/or a direct or indirect individual owner on the most recent Certification of Beneficial Owners provided to the Bank have changed.
4.11. Compliance with Anti-Corruption Laws; Anti-Money Laundering Laws and International Trade Laws. (i) In the event that any Collateral becomes Blocked Property, promptly notify the Bank and provide to the Bank Collateral that is not Blocked Property of at least equal value to the Collateral that became Blocked Property, except to the extent prohibited by applicable Law; and (ii) comply with applicable International Trade Laws, Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws and maintain and enforce policies and procedures reasonably designed to ensure compliance with all applicable International Trade Laws, Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws by each Covered Entity, each Covered Entity’s directors and officers, and any employee, agent or affiliate acting on behalf of each Covered Entity in connection with this Agreement.
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5. Negative Covenants. The Borrower covenants and agrees that from the date of this Agreement until all Obligations have been paid in full and any commitments of the Bank to the Borrower have been terminated, except as set forth in the Addendum, the Borrower will not, without the Bank’s prior written consent:
5.1. Indebtedness. Create, incur, assume or suffer to exist any indebtedness for borrowed money other than:
(a) the Loan and any subsequent indebtedness to the Bank; and
(b) any indebtedness under the Corporate Credit Agreement or any indebtedness permitted under the Corporate Credit Agreement.
5.2. Liens and Encumbrances. Except as provided in Section 3.6, create, assume, incur or permit to exist any mortgage, pledge, encumbrance, security interest, lien or charge of any kind upon any of its property, now owned or hereafter acquired, or acquire or agree to acquire any kind of property subject to any conditional sales or other title retention agreement, except liens securing indebtedness permitted pursuant to Section 5.1 above.
5.3. Guarantees. Guarantee, endorse or become contingently liable for the obligations of any person, firm, corporation or other entity, except in connection with the endorsement and deposit of checks for collection in the ordinary course of business.
5.4. Investments, Loans or Advances. Purchase or hold beneficially any stock, other securities or evidence of indebtedness of, or make or have outstanding, any loans or advances to, or otherwise extend credit to, or make any investment or acquire any interest whatsoever in, any other person, firm, corporation or other entity, except investments permitted under the Corporate Credit Agreement, or that are otherwise acceptable to the Bank in its sole discretion.
5.5. Merger or Transfer of Assets. Liquidate or dissolve, or merge or consolidate with or into any person, firm, corporation or other entity, or sell, lease, transfer or otherwise dispose of all or a substantial part of its property, assets, operations or business, whether now owned or hereafter acquired.
5.6. Change in Business, Management or Ownership. Make or permit, nor shall any Guarantor or grantor under the Security Documents make or permit, any change in (i) its form of organization, including a division into two or more entities; (ii) the nature of its business as carried on as of the date hereof that could reasonably be expected to have a material adverse effect on the Borrower’s ability to perform its obligations under this Agreement; (iii) the composition of its current executive management, except for changes in the ordinary course of business; or (iv) (A) for Borrower, its equity ownership, and (B) for Guarantor, its equity ownership that results in a change of control.
5.7. Dividends. Declare or pay any dividends on or make any distribution with respect to any class of its equity or ownership interest, or purchase, redeem, retire or otherwise acquire any of its equity except as provided in the Corporate Credit Agreement.
5.8. Acquisitions; Subsidiaries. (i) Make acquisitions of all or substantially all of the property or assets of any person, firm, corporation or other entity; or (ii) create, directly or indirectly, any subsidiaries, except as provided in the Corporate Credit Agreement.
5.9. Affiliate Transactions. Enter into or carry out any transaction with any affiliate of the Borrower (including purchasing property or services from or selling property or services to any affiliate of the
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Borrower) unless: (i) such transaction is not otherwise prohibited by this Agreement; (ii) is entered into in the ordinary course of business upon fair and reasonable arm’s-length terms and conditions which are promptly and fully disclosed to the Bank; and (iii) is in accordance with all applicable law. As used in this Section, “affiliate” shall mean, with respect to the Borrower, another person, firm, corporation or other entity, that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Borrower.
5.10. Anti-Corruption Laws; Anti-Money Laundering Laws; International Trade Laws. (I) Do any of the following, nor permit any of its directors, officers or employees, or, to the Borrower’s actual knowledge, any agents or affiliates acting on behalf of any Loan Party in connection with this Agreement, nor such Loan Party’s subsidiaries to (a) become a Sanctioned Person; (b) directly or indirectly (through a third party or otherwise) provide, use, or make available the proceeds of any Loan hereunder (i) to fund any activities or business of, with, or for the benefit of any Person that, at the time of such funding or facilitation, is a Sanctioned Person, (ii) to fund or facilitate any activities or business of or in any Sanctioned Jurisdiction, (iii) in any manner that could result in a violation by any Person (including the Bank) of Anti-Corruption Laws, Anti-Money Laundering Laws or International Trade Laws or (iv) in violation of any applicable Law, including, without limitation, any applicable Anti-Corruption Law, Anti-Money Laundering Law or International Trade Law; (c) directly or indirectly, repay any Loan with Blocked Property or funds derived from any unlawful activity; or (d) permit any Collateral to become Blocked Property; (II) directly or indirectly provide, use, or make available the proceeds of any Loan hereunder to any such Loan Party’s subsidiaries that is not party to this Agreement, nor (III) do business in or with, or derive any of its income, directly or indirectly, from any Sanctioned Jurisdiction or Sanctioned Person.
6. Events of Default. The occurrence of any of the following will be deemed to be an “Event of Default”:
6.1. Covenant Default. The Borrower shall default in the performance of any of the covenants or agreements contained in this Agreement.
6.2. Breach of Warranty. Any Financial Statement, representation, warranty or certificate made or furnished by the Borrower to the Bank in connection with this Agreement shall be false, incorrect or incomplete in any material respect when made.
6.3. Other Default. The occurrence of (i) an Event of Default as defined in the Note or any of the other Loan Documents, (ii) a default or event of default under or as defined in any other agreement, instrument or document between the Borrower and PNC Bank, National Association or any of its subsidiaries or affiliates that has not been cured within any applicable cure period, and (iii) an event of default under the Corporate Credit Agreement that has not been cured within any applicable cure period.
Upon the occurrence of an Event of Default, the Bank will have all rights and remedies specified in the Note and the other Loan Documents and all rights and remedies available under applicable law or in equity.
7. Conditions. The Bank’s obligation to make any advance under any Loan, or to issue any letter of credit, is subject to the conditions that as of the date of the advance:
7.1. No Event of Default. No Event of Default or Default shall have occurred and be continuing.
7.2. Authorization Documents. The Bank shall have received certified copies of resolutions of the board of directors, the general partners or the members or managers of any partnership, corporation or
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limited liability company that executes this Agreement, the Note or any of the other Loan Documents; or other proof of authorization satisfactory to the Bank.
7.3. Receipt of Loan Documents. The Bank shall have received the Loan Documents and such other instruments and documents which the Bank may reasonably request in connection with the transactions provided for in this Agreement, which may include an opinion of counsel in form and substance satisfactory to the Bank for any party executing any of the Loan Documents.
7.4. Fees. The Bank shall have received all fees owing in respect of the Loan.
8. Fees; Expenses. The Borrower agrees to reimburse the Bank, upon the execution of this Agreement, and otherwise on demand, all fees due and payable to the Bank hereunder and under the other Loan Documents and all reasonable and documented costs and expenses incurred by the Bank in connection with the preparation, negotiation and delivery of this Agreement and the other Loan Documents, and any modifications or amendments thereto or renewals thereof, and the collection of all of the Obligations, including but not limited to enforcement actions, relating to the Loan, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions or proceedings arising out of or relating to this Agreement, including (i) reasonable fees and expenses of counsel; (ii) all reasonable costs related to conducting UCC, title and other public record searches; (iii) fees for filing and recording documents in the public records to perfect the Bank’s liens and security interests; (iv) reasonable expenses for auditors, appraisers and environmental consultants; and (v) taxes. The Borrower hereby authorizes and directs the Bank to charge Borrower's deposit account(s) with the Bank for any and all of the foregoing fees, costs and expenses.
9. Increased Costs. On written demand, together with written evidence of the justification therefor, the Borrower agrees to pay the Bank all direct costs incurred, any losses suffered or payments made by the Bank as a result of any Change in Law (hereinafter defined), imposing any reserve, deposit, allocation of capital or similar requirement (including without limitation, Regulation D of the Board of Governors of the Federal Reserve System) on the Bank, its holding company or any of their respective assets relative to the Loan. “Change in Law” means the occurrence, after the date hereof, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty; (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any governmental authority or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any governmental authority; provided that notwithstanding anything herein to the contrary, (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (b) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
10. Miscellaneous.
10.1. Notices. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing (except as may be agreed otherwise above with respect to borrowing requests or as otherwise provided in this Agreement) and will be effective upon receipt. Notices may be given in any manner to which the parties may agree. Without limiting the foregoing, first-class mail, postage prepaid, facsimile transmission and commercial courier service are hereby agreed to as acceptable methods for giving Notices. In addition, the parties agree that Notices may be sent electronically to any electronic address provided by a party from time to time. Notices may be sent to a party’s address as set forth above or to such other address as any party may give to the other for such purpose in accordance with this Section.
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10.2. Preservation of Rights; Waivers of Marshalling, Setoff, and Certain Other Rights. No delay or omission on the Bank’s part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Bank’s action or inaction impair any such right or power. The Bank’s rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Bank may have under other agreements, at law or in equity. In addition to the other waivers hereunder, the Borrower waives, to the extent permitted by applicable law, (i) any and all rights to require the Bank to marshal assets or collateral, to proceed first against, or realize on, any assets or collateral or other credit support before proceeding against or realizing on any other assets or collateral or other credit support, or to otherwise require the Bank to exercise rights or remedies in any particular sequence, in connection with any of the Obligations, and (ii) any and all rights to set off or reduce the amount of the Obligations or any related deficiency against any obligations of the Bank, or on account of the value of any collateral or other credit support, or otherwise, whether any such rights described in this sentence are based on or asserted under any statutory provision, common law, equity or otherwise.
10.3. Illegality. If any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, it shall not affect or impair the validity, legality and enforceability of the remaining provisions of this Agreement.
10.4. Changes in Writing. . No modification, amendment or waiver of, or consent to any departure by the Borrower from, any provision of this Agreement will be effective unless made in a writing signed by the party to be charged, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Notwithstanding the foregoing, the Bank may modify this Agreement or any of the other Loan Documents for the purposes of completing missing content or correcting erroneous content, without the need for a written amendment, provided that the Bank shall send a copy of any such modification to the Borrower (which notice may be given by electronic mail). No notice to or demand on the Borrower will entitle the Borrower to any other or further notice or demand in the same, similar or other circumstance.
10.5. Entire Agreement. This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. The representations, warranties, covenants, and agreements in this Agreement regarding Anti-Corruption Laws, International Trade Laws and Anti-Money Laundering Laws will control to the extent of any inconsistency between any such provisions and any provision in any Note regarding such matters.
10.6. Counterparts. This Agreement and any other Loan Document may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement or any other Loan Document by facsimile transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Agreement or any other Loan Document by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.
10.7. Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Borrower and the Bank and their respective heirs, executors, administrators, successors and assigns; provided, however, that the Borrower may not assign this Agreement in whole or in part without the Bank’s prior written consent and the Bank at any time may assign this Agreement in whole or in part.
10.8. Interpretation. In this Agreement, unless the Bank and the Borrower otherwise agree in writing, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to statutes are to be construed as including all statutory provisions consolidating, amending or
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replacing the statute referred to; the word “or” shall be deemed to include “and/or”, the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to articles, sections (or subdivisions of sections) or exhibits are to those of this Agreement; and references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications to such instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of this Agreement. Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. Unless otherwise specified in this Agreement, all accounting terms shall be interpreted and all accounting determinations shall be made in accordance with the Applicable Accounting Standards. If this Agreement is executed by more than one party as Borrower, the obligations of such persons or entities will be joint and several.
10.9. No Consequential Damages, Etc. The Bank will not be responsible for any damages, consequential, incidental, special, punitive or otherwise, that may be incurred or alleged by any person or entity, including the Borrower and any Guarantor, as a result of this Agreement, the other Loan Documents, the transactions contemplated hereby or thereby, or the use of the proceeds of the Loan.
10.10. Assignments and Participations. At any time, without any notice to the Borrower, the Bank may sell, assign, transfer, negotiate, grant participations in, or otherwise dispose of all or any part of the Bank’s interest in the Loan. The Borrower hereby authorizes the Bank to provide, without any notice to the Borrower, any information concerning the Borrower, including information pertaining to the Borrower’s financial condition, business operations or general creditworthiness, to any assignee of or participant in or any prospective assignee of or participant in all or any part of the Bank’s interest in the Loan.
10.11. USA PATRIOT Act Notice. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each Borrower that opens an account. What this means: when the Borrower opens an account, the Bank will ask for the business name, business address, taxpayer identifying number and other information or documentation that will allow the Bank to identify the Borrower, such as organizational documents. For some businesses and organizations, the Bank may also need to ask for identifying information and documentation relating to certain individuals associated with the business or organization.
10.12. Important Information about Phone Calls. By providing telephone number(s) to the Bank, now or at any later time, the Borrower hereby authorizes the Bank and its affiliates and designees to contact the Borrower regarding the Borrower’s account(s) with the Bank or its affiliates, whether such accounts are Borrower’s individual accounts or business accounts for which Borrower is a contact, at such numbers using any means, including but not limited to placing calls using an automated dialing system to cell, VoIP or other wireless phone number, or by leaving prerecorded messages or sending text messages, even if charges may be incurred for the calls or text messages. Borrower hereby consents that any phone call with the Bank may be monitored or recorded by the Bank.
10.13. Confidentiality. In connection with the Obligations, this Agreement and the other Loan Documents, the Bank and the Borrower will be providing to each other, whether orally, in writing or in electronic format, nonpublic, confidential or proprietary information (collectively, “Confidential Information”). Each of the Borrower and the Bank agrees (i) to hold the Confidential Information of the other in confidence; and (ii) not to disclose or permit any other person or entity access to the Confidential Information of the other party, except for disclosure or access (a) to a party’s affiliates and its or their employees, officers, directors, agents, representatives, in each case who have a need to know such information and who are bound by confidentiality obligations at least as protective as those contained herein, (b) to other third parties that provide or may provide ancillary support relating to the Obligations, this Agreement and/or the other Loan Documents, provided such third parties are bound by confidentiality obligations at least as protective as those contained herein, (c) in
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connection with the exercise of any remedies or enforcement of rights under this Agreement or any action or proceeding relating to the Obligations, this Agreement and/or the other Loan Documents, (d) to its external or internal auditors or regulatory authorities, or (e) upon the order of a court or other governmental agency having jurisdiction over a party, provided that prior notice of such disclosure shall be provided to the other party to the extent legally permitted. It is understood and agreed that the obligation to protect such Confidential Information shall be satisfied if the party receiving such Confidential Information utilizes the same control (but no less than reasonable) as it does to avoid disclosure of its own confidential and valuable information. It is also understood and agreed that no information shall be within the protection of this Agreement where such information: (w) is or becomes publicly available through no fault of the party to whom such Confidential Information has been disclosed, (x) is released by the originating party to anyone without restriction, (y) is rightly obtained from third parties who are not, to such receiving party's knowledge, under an obligation of confidentiality, or (z) is required to be disclosed by subpoena or similar process of applicable law or regulations.
For the purposes of this Agreement, Confidential Information of a party shall include, without limitation, any financial information, scientific or technical information, design, process, procedure or improvement and all concepts, documentation, reports, data, data formats, specifications, computer software, source code, object code, user manuals, financial models, screen displays and formats, software, databases, inventions, knowhow, showhow and trade secrets, whether or not patentable or copyrightable, whether owned by a party or any third party, together with all memoranda, analyses, compilations, studies, notes, records, drawings, manuals or other documents or materials which contain or otherwise reflect any of the foregoing information.
Each of the Borrower and the Bank agrees to return to the other or destroy all Confidential Information of the other upon the termination of this Agreement; provided, however, each party may retain such limited information for customary archival and audit purposes only for reference with respect to prior dealings between the parties subject at all times to the continuing terms of this Section 10.13.
Each of the Borrower and the Bank agrees not to use the other's name or logo in any marketing, advertising or related materials, without the prior written consent of the other party.
10.14. Sharing Information with Affiliates of the Bank. The Borrower acknowledges that from time to time other financial and banking services may be offered or provided to the Borrower or one or more of its subsidiaries and/or affiliates (in connection with this Agreement or otherwise) by the Bank or by one or more subsidiaries or affiliates of the Bank or of The PNC Financial Services Group, Inc., and the Borrower hereby authorizes the Bank to share any information delivered to the Bank by the Borrower and/or its subsidiaries and/or affiliates pursuant to this Agreement or any of the Loan Documents to any subsidiary or affiliate of the Bank and/or The PNC Financial Services Group, Inc., subject to any provisions of confidentiality in this Agreement or any other Loan Documents.
10.15. Electronic Signatures and Records. Notwithstanding any other provision herein, the Borrower agrees that this Agreement, the Loan Documents, any amendments thereto, and any other information, notice, signature card, agreement or authorization related thereto (each, a “Communication”) may, at the Bank’s option, be in the form of an electronic record. Any Communication may, at the Bank’s option, be signed or executed using electronic signatures. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Bank of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format) for transmission, delivery and/or retention.
10.16. Governing Law and Jurisdiction. This Agreement has been delivered to and accepted by the Bank and will be deemed to be made in the State where the Bank’s office indicated above is located. This Agreement will be interpreted and the rights and liabilities of the Bank and the Borrower determined in accordance with the laws of the state where the Bank’s office indicated above is located, excluding its
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conflict of laws rules, including without limitation the Electronic Transactions Act (or equivalent) in effect in the state where the Bank’s office indicated above is located (or, to the extent controlling, the laws of the United States of America, including without limitation the Electronic Signatures in Global and National Commerce Act). The Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Bank’s office indicated above is located; provided that nothing contained in this Agreement will prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the Borrower individually, against any security or against any property of the Borrower within any other county, state or other foreign or domestic jurisdiction. The Bank and the Borrower agree that the venue provided above is the most convenient forum for both the Bank and the Borrower. The Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement.
10.17. WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE BANK IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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WITNESS the due execution hereof as a document under seal, as of the date first written above.
HARVEST VENTURES HOLDING COMPANY, a Texas corporation
By: /s/ Barry R. Wood
Name: Barry R. Wood
Title: Vice President-Finance, Secretary and Treasurer
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Natalie Hill
Name: Natalie Hill
Title: Senior Vice President
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ADDENDUM
ADDENDUM to that certain Loan Agreement dated May 15, 2026 between HARVEST VENTURES HOLDING COMPANY, a Texas corporation as the Borrower and PNC Bank, National Association, as the Bank. Capitalized terms used in this Addendum and not otherwise defined shall have the meanings given them in the Agreement. Section numbers below refer to the sections of the Agreement. This Addendum is incorporated into and made a part of the Agreement. All references in the Agreement and this Addendum to the “Agreement” shall include both the Agreement and this Addendum.
3.6 Title to Assets. Describe additional liens and encumbrances below:
Permitted encumbrances listed on Exhibit B of the Deed of Trust.
Liens permitted under the Corporate Credit Agreement.
3.7 Litigation. Describe pending and threatened litigation, investigations, proceedings, etc. below:
None.
3.10 Environmental Matters. Describe pending or threatened (in writing) litigation or proceeding arising under, relating to or in connection with any Environmental Law below:
None.
4.2 Financial Reporting Requirements.
1. Financial Reporting.
(a)Annual Financial Statements. As soon as practicable and in any event within ninety (90) days (or, if earlier, on the date of any required public filing thereof) after the end of each fiscal year (commencing with the fiscal year ended December 31, 2025), an audited consolidated balance sheet of the Guarantor and its Subsidiaries as of the close of such fiscal year and audited consolidated statements of income, retained earnings and cash flows including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding fiscal year and prepared in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the year. Such annual financial statements shall be audited by an independent certified public accounting firm of recognized national standing reasonably acceptable to the Bank, and accompanied by a report and opinion thereon by such certified public accountants prepared in accordance with generally accepted auditing standards that is not subject to any “going concern” or similar qualification or exception or any qualification as to the scope of such audit or with respect to accounting principles followed by the Guarantor or any of its Subsidiaries not in accordance with GAAP. The Bank agrees that the foregoing financial statement disclosure requirement shall be satisfied by Guarantor’s filing of its Form 10-K with the Securities Exchange Commission.
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(b)Interim Financial Statements. As soon as practicable and in any event within forty-five (45) days (or, if earlier, on the date of any required public filing thereof) after the end of the first three fiscal quarters of each Fiscal Year (commencing with the fiscal quarter ended March 31, 2026), an unaudited consolidated balance sheet of the Guarantor and its Subsidiaries as of the close of such fiscal quarter and unaudited consolidated statements of income, retained earnings and cash flows for the fiscal quarter then ended and that portion of the fiscal year then ended, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the corresponding period in the preceding fiscal year and prepared by the Guarantor in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the period, and certified by the chief financial officer of the Guarantor to present fairly in all material respects the financial condition of the Guarantor and its Subsidiaries on a consolidated basis as of their respective dates and the results of operations of the Guarantor and its Subsidiaries for the respective periods then ended, subject to normal year-end adjustments and the absence of footnotes. The Bank agrees that the foregoing financial statement disclosure requirement shall be satisfied by Guarantor’s filing of its Form 10-Q with the Securities Exchange Commission.
(c)Certificates and Other Disclosures. Deliver to the Bank:
(i)at each time financial statements are delivered pursuant to Sections 4.2.1(a) or (b) above a copy of the duly completed Compliance Certificate (as defined in the Corporate Credit Agreement) which is delivered under the Corporate Credit Agreement or after the Corporate Credit Agreement ceases to be in effect, a Compliance Certificate in form acceptable to the Bank;
(ii)promptly upon the request thereof, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Guarantor, and copies of all annual, regular, periodic and special reports and registration statements which the Guarantor may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, or with any national securities exchange, and in any case not otherwise required to be delivered to the Bank pursuant hereto;
(iii)promptly, and in any event within five (5) Business Days after receipt thereof by Guarantor or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of Guarantor or any Subsidiary thereof;
(iv)promptly upon the request thereof, such other information and documentation required under applicable “know your customer” rules and regulations, the PATRIOT Act or any applicable Anti-Money Laundering Laws or Anti-Corruption Laws, in each case as from time to time reasonably requested by the Bank; and
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(v)promptly upon the request thereof, Borrower’s annual rent-roll to include a list of all tenants, and summarizing the terms of their respective leases, in form and content satisfactory to the Bank.
(d)Other Information. Within 45 days after the Bank’s request, such other financial and business information that the Bank may request from time to time concerning the Guarantor, any Guarantor or any pledgor, mortgagor or other person or entity providing collateral support for the Guarantor’s obligations to the Bank, which may include, without limitation, interim financial statements, financial projections, 13-week cash flow forecast models, budgets, debt schedules, accounts receivable agings, accounts payable agings, inventory reports, work-in-progress schedules, and business tax returns.
4.8 Financial Covenants. While the Corporate Credit Agreement is outstanding, the following financial covenants will not be tested but they will be tested as of the last day of each March, June, September, and December beginning with the first such date to occur after the Corporate Credit Agreement ceases to be in effect.
(a)Consolidated Total Leverage Ratio. Guarantor may not, as of the last day of any fiscal quarter, permit the Consolidated Total Leverage Ratio to be greater than 3.50 to 1.00.
(b)Consolidated Interest Coverage Ratio. Guarantor may not, as of the last day of any fiscal quarter, permit the Consolidated Interest Coverage Ratio to be less than 3.00 to 1.00.
As used herein:
“Acquired EBITDA” means, with respect to any Person or business acquired pursuant to an acquisition for any period, the amount for such period of Consolidated EBITDA of any such Person or business so acquired (determined using such definitions as if references to the Guarantor and its Subsidiaries therein were to such Person or business), as calculated by the Guarantor in good faith and which shall be factually supported by historical financial statements; provided, that, notwithstanding the foregoing to the contrary, in determining Acquired EBITDA for any Person or business that does not have historical financial accounting periods which coincide with that of the financial accounting periods of the Guarantor and its Subsidiaries (a) references to Reference Period in any applicable definitions shall be deemed to mean the same relevant period as the applicable period of determination for the Guarantor and its Subsidiaries and (b) to the extent the commencement of any such Reference Period shall occur during a fiscal quarter of such acquired Person or business (such that only a portion of such fiscal quarter shall be included in such Reference Period), Acquired EBITDA for the portion of such fiscal quarter so included in such Reference Period shall be deemed to be an amount equal to (x) Acquired EBITDA otherwise attributable to the entire fiscal quarter (determined in a manner consistent with the terms set forth above) multiplied by (y) a fraction, the numerator of which shall be the number of months of such fiscal quarter included in the relevant Reference Period and the denominator of which shall be actual months in such fiscal quarter.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as finance leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
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“Consolidated” means, when used with reference to financial statements or financial statement items of any Person, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.
“Consolidated EBITDA” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Guarantor and its Subsidiaries:
(a)Consolidated Net Income for such period plus
(b)the sum of the following, without duplication, to the extent deducted in determining Consolidated Net Income for such period:
(i)Consolidated Interest Expense;
(ii)expense for Taxes measured by net income, profits or capital (or any similar measures), paid or accrued, including federal and state and local income Taxes, foreign income Taxes and franchise Taxes;
(iii)depreciation, amortization and other non-cash charges or expenses (including stock based compensation and write-downs of goodwill), excluding any non-cash charge or expense that represents an accrual for a cash expense to be taken in a future period;
(iv)all transaction fees, charges and other amounts (including any financing fees, merger and acquisition fees, legal fees and expenses, due diligence fees or any other fees and expenses in connection therewith) in connection with any Permitted Acquisition, Investment, disposition, issuance or repurchase of Equity Interests, or the incurrence, amendment or waiver of Indebtedness permitted hereunder (other than those related to the Transactions or with respect to any amendment or modification of the Loan Documents), in each case, whether or not consummated, in each case to the extent paid within six (6) months of the closing or effectiveness of such event or the termination or abandonment of such transaction, as the case may be; provided that (A) the aggregate amount added back pursuant to this clause (b)(iv) with respect to any one transaction shall not exceed $2,000,000 for the applicable period and (B) any amounts added back for such applicable period shall be set forth in reasonable detail on the Compliance Certificate for such period;
(v)non-cash charges and losses (excluding any such non-cash charges or losses to the extent (A) there were cash charges with respect to such charges and losses in past accounting periods or (B) there is a reasonable expectation that there will be cash charges with respect to such charges and losses in future accounting periods); and
(vi)unusual and non-recurring expenses, charges or losses (excluding losses from discontinued operations);
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(vii)less
(c)the sum of the following, without duplication, to the extent included in determining Consolidated Net Income for such period:
(i)interest income;
(ii)federal, state, local and foreign income Tax credits of the Guarantor and its Subsidiaries for such period (to the extent not netted from income Tax expense);
(iii)any unusual and non-recurring gains;
(iv)non-cash gains (excluding any such non-cash gains to the extent (A) there were cash gains with respect to such gains in past accounting periods or (B) there is a reasonable expectation that there will be cash gains with respect to such gains in future accounting periods); and
(v)any cash expense made during such period which represents the reversal of any non-cash expense that was added in a prior period pursuant to clause (b)(iii) above subsequent to the fiscal quarter in which the relevant non-cash expenses, charges or losses were incurred.
For purposes of this Agreement, Consolidated EBITDA shall be calculated on a Pro Forma Basis.
“Consolidated Funded Indebtedness” means, as of any date of determination, for the Guarantor and its Subsidiaries on a Consolidated basis, the sum of, without duplication, (a) all liabilities, obligations and indebtedness for borrowed money including, but not limited to, obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person, (b) all purchase money Indebtedness, (c) all obligations to pay the deferred purchase price of property or services of any such Person (including all payment obligations under non-competition, earn-out or similar agreements, solely to the extent any such payment obligation under non-competition, earn-out or similar agreements becomes a liability on the balance sheet of such Person in accordance with GAAP), except trade payables arising in the ordinary course of business not more than ninety (90) days past due, or that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of such Person, (d) the Attributable Indebtedness of such Person with respect to such Person’s Capital Lease Obligations and Synthetic Leases (regardless of whether accounted for as indebtedness under GAAP), (e) all drawn and unreimbursed obligations, contingent or otherwise, of any such Person relative to letters of credit, including any reimbursement obligation, and banker’s acceptances issued for the account of any such Person, (f) all obligations of any such Person in respect of Disqualified Equity Interests which shall be valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends that are past due, (g) all Guarantees of any such Person with respect to any of the foregoing and (h) all Indebtedness of the types referred to in clauses (a) through (g) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability
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company) in which such Person is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.
“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the most recently completed Reference Period to (b) Consolidated Interest Expense for the most recently completed Reference Period.
“Consolidated Interest Expense” means, for any period, as determined on a Consolidated basis, without duplication, for the Guarantor and its Subsidiaries in accordance with GAAP, interest expense (including interest expense attributable to Capital Lease Obligations and all net payment obligations pursuant to Hedge Agreements) for such period.
“Consolidated Net Income” means, for any period, the net income (or loss) of the Guarantor and its Subsidiaries for such period, determined on a Consolidated basis, without duplication, in accordance with GAAP; provided, that in calculating Consolidated Net Income of the Guarantor and its Subsidiaries for any period, there shall be excluded (a) the net income (or loss) of any Person (other than a Subsidiary which shall be subject to clause (c) below), in which the Guarantor or any of its Subsidiaries has a joint interest with a third party, except to the extent such net income is actually paid in cash to the Guarantor or any of its Subsidiaries by dividend or other distribution during such period, (b) the net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Guarantor or any of its Subsidiaries or is merged into or consolidated with the Guarantor or any of its Subsidiaries or that Person’s assets are acquired by the Guarantor or any of its Subsidiaries except to the extent included pursuant to the foregoing clause (a), (c) the net income (if positive), of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary to the Guarantor or any of its Subsidiaries of such net income (i) is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary or (ii) would be subject to any taxes payable on such dividends or distributions, but in each case only to the extent of such prohibition or taxes, (d) the net income (or loss) of any Subsidiary that is not a Wholly-Owned Subsidiary to the extent such net income (or loss) is attributable to the minority interest in such Subsidiary and (e) any gain or loss from Asset Dispositions during such period.
“Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness on such date to (b) Consolidated EBITDA for the most recently completed Reference Period.
“Disposed EBITDA” means, with respect to any Person or business that is sold or disposed of in an Asset Disposition during any period, the amount for such period of Consolidated EBITDA of any such Person or business subject to such asset disposition (determined using such definitions as if references to the Guarantor and its Subsidiaries therein were to such Person or business), as calculated by the Guarantor in good faith.
“Disqualified Equity Interests” means, with respect to any Person, any Equity Interests of such Person that, by their terms (or by the terms of any security or other Equity Interest into which they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (a) mature or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a
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sinking fund obligation or otherwise (except as a result of a change of control or sale of substantially all of the assets of the Guarantor (on a consolidated basis) so long as any rights of the holders thereof upon the occurrence of a change of control or sale of substantially all of the assets of the Guarantor (on a consolidated basis) shall be subject to the prior repayment in full in cash of the Loan (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests) (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full in cash of the Loans and all other Obligations (other than contingent indemnification obligations not then due) and the termination of the Commitments), in whole or in part, (c) provide for the scheduled payment of dividends in cash or (d) are or become convertible into, or exchangeable for, Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case of clauses (a) through (d), prior to the date that is 91 days after the latest scheduled maturity date of the Loan; provided that if such Equity Interests are issued pursuant to a plan for the benefit of the Guarantor or its Subsidiaries or by any such plan to such officers or employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by the Guarantor or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.
“Equity Interests” means (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, membership interests, (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person and (f) any and all warrants, rights or options to purchase any of the foregoing.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity.
“Pro Forma Basis” means:
(a) for purposes of calculating Consolidated EBITDA for any period during which one or more Specified Transactions occurs, that (i) such specified transaction (and all other specified transactions that have been consummated during the applicable period) shall be deemed to have occurred as of the first day of the applicable period of measurement, (ii) there shall be included in determining Consolidated EBITDA for such period, without duplication, the Acquired EBITDA of any Person or business, or attributable to any property or asset, acquired by the Guarantor or any Subsidiary during such period (but not the Acquired EBITDA of any related Person or business or any Acquired EBITDA attributable to any assets or property, in each case to the extent not so acquired) in connection with a permitted acquisition to the extent not subsequently sold, transferred, abandoned or otherwise disposed of by the Guarantor or such Subsidiary during such period, based on the actual Acquired EBITDA of such acquired entity or business for such period (including the portion thereof occurring prior to such acquisition) plus any expenses eliminated as a result of such specified transactions and (iii) there shall be excluded in determining Consolidated EBITDA for such period, without duplication, the Disposed EBITDA of any Person or business, or attributable to any property or asset, disposed of by the Guarantor or any Subsidiary during such period in connection with a specified disposition or discontinuation of operations, based on the Disposed EBITDA of such disposed entity or business or
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discontinued operations for such period (including the portion thereof occurring prior to such disposition or discontinuation); provided that the foregoing amounts shall be without duplication of any adjustments that are already included in the calculation of Consolidated EBITDA; and
(b) in the event that the Guarantor or any Subsidiary thereof incurs (including by assumption or guarantees) or repays (including by redemption, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness included in the calculations of any financial ratio or test (in each case, other than Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes), (i) during the applicable measurement period or (ii) subsequent to the end of the applicable measurement period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence or repayment of Indebtedness, to the extent required, as if the same had occurred on the first day of the applicable measurement period and any such Indebtedness that is incurred (including by assumption or guarantee) that has a floating or formula rate of interest shall have an implied rate of interest for the applicable period determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as of the relevant date of determination.
“Qualified Equity Interests” means any Equity Interests that are not Disqualified Equity Interests.
“Reference Period” means, as of any date of determination, the period of four (4) consecutive fiscal quarters ended on or immediately prior to such date for which financial statements of the Guarantor and its Subsidiaries have been delivered to the Bank hereunder.
“Synthetic Lease” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with GAAP.
All of the above financial covenants shall be computed and determined in accordance with the Applicable Accounting Standards applied on a consistent basis (subject to normal year-end adjustments).
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EX-10.2
EX-10.2
Filename: exhibit102.htm · Sequence: 3
Document
Exhibit 10.2
Term Note
$44,800,000.00
May 15, 2026
FOR VALUE RECEIVED, Harvest Ventures Holding Company, a Texas corporation (the “Borrower”), with an address at 711 Broadway, Suite 320, San Antonio, Texas 78215, promises to pay to the order of PNC BANK, NATIONAL ASSOCIATION (the “Bank”), in lawful money of the United States of America in immediately available funds at its offices located at 112 E Pecan Street, Suite 200, San Antonio, Texas 78205, or at such other location as the Bank may designate from time to time, the principal sum of $44,800,000 (the “Facility”), together with interest accruing on the outstanding principal balance from the date hereof, all as provided below.
1. Interest Rate. Amounts outstanding under this Note will bear interest at a rate per annum equal to the sum of (A) the Term SOFR Rate in effect on each Reset Date (each as defined below) plus (B) 125 basis points (1.25%).
2. Payments. Principal shall be due and payable in the respective amounts and at the times as set forth on Schedule “A” attached hereto and made a part hereof. Notwithstanding the foregoing, the Bank may deliver a replacement Schedule “A” in accordance with the notice provisions of this Note, without any further action or consent of the Borrower, solely for the purpose of updating the principal payments due under this Note to align with an associated swap, which replacement Schedule shall be deemed to amend and replace the existing Schedule “A”. Accrued interest on the unpaid principal balance of this Note shall be payable in arrears at the same times as the principal payments; provided that if principal is payable less frequently than every 3 months, then interest shall also be paid every 3 months. Any outstanding principal and accrued interest shall be due and payable in full on the Maturity Date (as defined below).
3. Certain Definitions. If the following terms are used in this Note, such terms shall have the meanings set forth below:
“Alternate Rate” shall mean the sum of (A) the Base Rate plus (B) 225 basis points (2.25%).
“Base Rate” shall mean the higher of (A) the Prime Rate, and (B) the sum of the Overnight Bank Funding Rate plus 50 basis points (0.50%); provided, however, if the Base Rate as determined above would be less than zero, then such rate shall be deemed to be zero. If and when the Base Rate as determined above changes, the rate of interest with respect to any amounts hereunder to which the Base Rate applies will change automatically without notice to the Borrower, effective on the date of any such change.
“Business Day” shall mean any day other than (A) a Saturday or Sunday or (B) a legal holiday on which commercial banks are authorized or required by law to be closed for business in Pittsburgh, Pennsylvania; provided that, when used in connection with an amount that bears interest at a rate based on SOFR or any direct or indirect calculation or determination of SOFR, the term “Business Day” means any such day that is also a U.S. Government Securities Business Day.
18317474v7
“Default Rate” shall mean the rate per annum equal to (A) the sum of 3% plus the interest rate otherwise then in effect under this Note until the next succeeding Reset Date and (B) the sum of 3% plus the Alternate Rate at all times thereafter; provided that in no event shall the Default Rate exceed the Maximum Rate.
“Floor” means a rate of interest per annum equal to zero.
“Maturity Date” shall mean May 15, 2036.
“Maximum Rate” shall mean the maximum rate of interest allowed by applicable law.
“NYFRB” shall mean the Federal Reserve Bank of New York.
“Overnight Bank Funding Rate” shall mean, for any day, the rate comprised of both overnight federal funds and overnight Eurocurrency borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB, as set forth on its public website from time to time, and as published on the next succeeding Business Day as the overnight bank funding rate by the NYFRB (or by such other recognized electronic source (such as Bloomberg) selected by the Bank for the purpose of displaying such rate); provided, that if such day is not a Business Day, the Overnight Bank Funding Rate for such day shall be such rate on the immediately preceding Business Day; provided, further, that if such rate shall at any time, for any reason, no longer exist, a comparable replacement rate determined by the Bank at such time (which determination shall be conclusive absent manifest error). If the Overnight Bank Funding Rate determined as above would be less than zero, then such rate shall be deemed to be zero. The rate of interest charged shall be adjusted as of each Business Day based on changes in the Overnight Bank Funding Rate without notice to the Borrower.
“Prime Rate” shall mean the rate publicly announced by the Bank from time to time as its prime rate. The Prime Rate is determined from time to time by the Bank as a means of pricing some loans to its borrowers. The Prime Rate is not tied to any external rate of interest or index and does not necessarily reflect the lowest rate of interest actually charged by the Bank to any particular class or category of customers.
“Reset Date” shall mean (A) the date of this Note, and (B) subject to the proviso below, the last day of every month thereafter, provided that: (i) if any such day is not a Business Day, then the first succeeding day that is a Business Day shall instead apply, unless that day falls in the next succeeding calendar month, in which case the next preceding day that is a Business Day shall instead apply, and (ii) if any such day is a day of a calendar month for which there is no numerically corresponding day in certain other months (each, a “Non-Conforming Month”), then any Reset Date that falls within a Non-Conforming Month shall be the last Business Day of such Non-Conforming Month.
“SOFR” shall mean a rate equal to the secured overnight financing rate as administered by the NYFRB (or a successor administrator of the secured overnight financing rate).
“SOFR Reserve Percentage” shall mean, for any day, the maximum effective percentage in effect on such day, if any, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to SOFR funding.
“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Bank in its reasonable discretion).
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“Term SOFR Rate” shall mean, for each Reset Date, the interest rate per annum determined by the Bank by dividing (A) the rate per annum equal to the 1-month Term SOFR Reference Rate, as published by the Term SOFR Administrator on the day (the “Term SOFR Determination Date”) that is 2 Business Days prior to such Reset Date, by (B) a number equal to 1.00 minus the SOFR Reserve Percentage. If the Term SOFR Reference Rate for the applicable tenor has not been published or replaced with a Benchmark Replacement (as defined below) by 5:00 p.m. (Pittsburgh, Pennsylvania time) on the Term SOFR Determination Date, then the Term SOFR Reference Rate, for purposes of clause (A) in the preceding sentence, shall be the Term SOFR Reference Rate for such tenor on the first Business Day preceding such Term SOFR Determination Date for which such Term SOFR Reference Rate for such tenor was published in accordance herewith, so long as such first preceding Business Day is not more than 3 Business Days prior to such Term SOFR Determination Date. If the Term SOFR Rate, determined as provided above, would be less than the Floor, then the Term SOFR Rate shall be deemed to be the Floor. The Term SOFR Rate shall be adjusted automatically without notice to the Borrower on and as of (i) each Reset Date, and (ii) the effective date of any change in the SOFR Reserve Percentage.
“Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.
“U.S. Government Securities Business Day” means any day except for (A) a Saturday or Sunday or (B) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
4. Interest Calculation; Maximum Rate. Interest will be calculated based on the actual number of days that principal is outstanding over a year of 360 days. In no event will the effective rate of interest hereunder, inclusive of all fees, charges, and other amounts that are treated as interest under applicable law, exceed the Maximum Rate. Regardless of any other provision of this Note or the other Loan Documents (as defined below), if for any reason such effective interest rate should exceed the Maximum Rate, such effective interest rate shall be deemed reduced to, and shall be, the Maximum Rate, and (i) the amount which would be excessive interest shall be deemed applied to the reduction of the principal balance of this Note and not to the payment of interest, and (ii) if the loan evidenced by this Note has been or is thereby paid in full, the excess shall be returned to the party paying same, such application to the principal balance of this Note or the refunding of such excess to be a complete settlement and acquittance thereof.
5. Conforming Changes; Benchmark Replacement Provisions. The Bank shall have the right to make any technical, administrative or operational changes from time to time that the Bank decides may be appropriate to reflect the adoption and implementation of SOFR or any other Benchmark (as defined below) or to permit the use and administration thereof by the Bank in a manner substantially consistent with market practice or in such other manner as the Bank decides is reasonably necessary. Notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such technical, administrative or operational changes will become effective without any further action or consent of the Borrower. The Bank shall provide notice to the Borrower of any such amendment reasonably promptly after such amendment becomes effective.
If the applicable interest rate under this Note is based on a Benchmark and the Bank determines (which determination shall be final and conclusive) that (A) such Benchmark cannot be determined pursuant to its definition other than as a result of a Benchmark Transition Event (as defined below), or (B) any enactment, promulgation or adoption of or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by a governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Bank with any guideline, request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impracticable for the Bank to make or maintain or fund loans based on that Benchmark, then
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the Bank shall give notice thereof to the Borrower. Thereafter, until the Bank notifies the Borrower that the circumstances giving rise to such determination no longer exist, (a) the availability of any interest rate based on that Benchmark shall be suspended, and (b) the interest rate for all amounts then bearing interest based on that Benchmark shall be converted to a rate of interest per annum equal to the Alternate Rate either (i) on the next succeeding Reset Date if the Bank may lawfully continue to maintain or fund loans based on that Benchmark to such day, or (ii) immediately if the Bank may not lawfully continue to maintain or fund loans based on that Benchmark.
Notwithstanding anything to the contrary herein or in any other Loan Document, if the Bank determines (which determination shall be final and conclusive) that a Benchmark Transition Event has occurred with respect to a Benchmark, the Bank may amend this Note to replace such Benchmark with a Benchmark Replacement (as defined below); and any such amendment shall be in writing, shall specify the date that the Benchmark Replacement is effective and will not require any further action or consent of the Borrower. Until the Benchmark Replacement is effective, amounts bearing interest with reference to a Benchmark will continue to bear interest with reference to such Benchmark as long as such Benchmark is available, and otherwise such amounts automatically will bear interest at the Alternate Rate.
For purposes of this Section, the following terms have the meanings set forth below:
“Benchmark” means, at any time, any interest rate index (or tenor of an interest rate index) then used in the determination of an interest rate under the terms of this Note. Once a Benchmark Replacement becomes effective under this Note, it is a Benchmark. For example, SOFR is a Benchmark under this Note.
“Benchmark Replacement” means, for any Benchmark, the sum of (a) an alternate benchmark rate and (b) an adjustment (which may be a positive or negative value or zero), in each case that has been selected by the Bank as the replacement for such Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by the official sector or any official sector-sponsored committee or working group, for U.S. dollar-denominated credit facilities at such time; provided that, if the Benchmark Replacement as determined pursuant to the foregoing would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Note and the other Loan Documents.
“Benchmark Transition Event” shall mean a public statement or publication by or on behalf of the administrator of a Benchmark, the regulatory supervisor of such administrator, the Board of Governors of the Federal Reserve System, NYFRB, an insolvency official or resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease to provide such Benchmark permanently or indefinitely, provided that at the time of such statement or publication there is no successor administrator that will continue to provide such Benchmark or (b) such Benchmark is or will no longer be representative.
6. Other Payment Terms. If any payment under this Note is due on a day of a calendar month for which there is no numerically corresponding day in a Non-Conforming Month, then the payment in a Non-Conforming Month shall be due on the last day of such Non-Conforming Month. If any payment under this Note shall become due on a day other than a Business Day, such payment shall be due on the next succeeding Business Day, except that if such day falls in the next succeeding calendar month and such payment includes interest based on SOFR, such payment shall be due on the next preceding day that is a Business Day. Interest shall be computed to, but excluding, the date payment is due. The Borrower hereby authorizes the Bank to charge the Borrower’s deposit account at the Bank for any payment when due under this Note or any other Loan Document. Payments received
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will be applied to charges, fees and expenses (including attorneys’ fees), accrued interest and principal in any order the Bank may choose, in its sole discretion. Any amortization schedule provided to Borrower is only an estimate and is superseded by the terms of this Note regarding the accrual and payment of interest.
7. Late Payments; Default Rate. If the Borrower fails to make any payment of principal, interest or other amount coming due pursuant to the provisions of this Note within 15 calendar days of the date due and payable, the Borrower also shall pay to the Bank a late charge equal to the lesser of 5% of the amount of such payment or $100.00 (the “Late Charge”). Such 15-day period shall not be construed in any way to extend the due date of any such payment. Upon maturity, whether by acceleration, demand or otherwise, and at the Bank’s option upon the occurrence of any Event of Default (as hereinafter defined) and during the continuance thereof, amounts outstanding under this Note shall bear interest at the Default Rate. The Default Rate shall continue to apply whether or not judgment shall be entered on this Note. Both the Late Charge and the Default Rate are imposed as liquidated damages for the purpose of defraying the Bank’s expenses incident to the handling of delinquent payments, but are in addition to, and not in lieu of, the Bank’s exercise of any rights and remedies hereunder, under the other Loan Documents or under applicable law, and any fees and expenses of any agents or attorneys which the Bank may employ. In addition, the Default Rate reflects the increased credit risk to the Bank of carrying a loan that is in default. The Borrower agrees that the Late Charge and Default Rate are reasonable forecasts of just compensation for anticipated and actual harm incurred by the Bank, and that the actual harm incurred by the Bank cannot be estimated with certainty and without difficulty.
8. Prepayment. The Borrower shall have the right to prepay any amounts outstanding hereunder at any time and from time to time, in whole or in part; subject, however, to payment of any break funding indemnification amounts owing pursuant to the paragraph entitled “Break Funding Indemnification” below.
9. Increased Costs; Yield Protection. On written demand, together with written evidence of the justification therefor, the Borrower agrees to pay the Bank all direct costs incurred, any losses suffered or payments made by the Bank as a result of any Change in Law (hereinafter defined), imposing any reserve, deposit, allocation of capital or similar requirement (including without limitation, Regulation D of the Board of Governors of the Federal Reserve System) on the Bank, its holding company or any of their respective assets relative to the Facility. “Change in Law” means the occurrence, after the date of this Note, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any governmental authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any governmental authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
10. Break Funding Indemnification. The Borrower agrees to indemnify the Bank against any liabilities, losses or expenses (including, without limitation, loss of margin, any loss or expense sustained or incurred in liquidating or employing deposits from third parties, and any loss or expense incurred in connection with funds acquired to effect, fund or maintain any amounts hereunder (or any part thereof) bearing interest based on the Term SOFR Rate) which the Bank sustains or incurs as a consequence of either (i) the Borrower’s failure to make a payment on the due date thereof, (ii) the Borrower’s revocation (expressly, by later inconsistent notices or otherwise) in whole or in part of any notice given to Bank to request, convert, renew or prepay any amounts bearing interest based on the Term SOFR Rate, or (iii) the Borrower’s payment or prepayment (whether voluntary, after acceleration of the maturity of this Note or otherwise) or conversion of any amounts bearing interest based on the Term SOFR Rate on a day other than the regularly scheduled due date therefor. A notice as
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to any amounts payable pursuant to this paragraph given to the Borrower by the Bank shall, in the absence of manifest error, be conclusive and shall be payable upon demand. The Borrower’s indemnification obligations hereunder shall survive the payment in full of all amounts payable hereunder.
11. Other Loan Documents. This Note is issued in connection with a letter agreement or loan agreement between the Borrower and the Bank, dated on or before the date hereof, and the other agreements and documents executed and/or delivered in connection therewith or referred to therein, the terms of which are incorporated herein by reference (as amended, modified or renewed from time to time, collectively the “Loan Documents”), and is secured by the property (if any) described in the Loan Documents and by any and all mortgages, security agreements, assignments, loan agreements, pledge agreements and other documents or instruments evidencing a security interest or other lien in favor of the Bank and delivered by the Borrower or by any third party with reference to indebtedness of the Borrower, whether such documents were previously or are hereafter executed, and whether given expressly as security for payment of this Note or generally as security for any and all indebtedness of the Borrower to the Bank. Such documents may be executed contemporaneously with the execution of this Note, or they may be executed and delivered at another time. Collateral securing other obligations of the Borrower to the Bank may also secure this Note.
12. Events of Default. The occurrence of any of the following events will be deemed to be an “Event of Default” under this Note: (i) the nonpayment of any principal under this Note when due, or the nonpayment of any interest or other indebtedness under this Note within three (3) days of the date when due; (ii) the occurrence of any event of default or any default, or any Obligor’s failure to observe or perform any covenant or other agreement (other than a payment obligation), under or contained in any Loan Document or any other document now or in the future evidencing or securing any debt, liability or obligation of any Obligor to the Bank, provided that, no such failure to observe or perform any such covenant or other agreement (excluding financial covenants, financial reporting covenants, and negative covenants) shall constitute an Event of Default unless such failure continues for a period of 30 days after the earlier to occur of (a) the date when any Obligor becomes aware of such failure and (b) the date when the Bank gives written notice to the Borrower of such failure; (iii) the filing by or against any Obligor of any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation, conservatorship or similar proceeding (and, in the case of any such proceeding instituted against any Obligor, such proceeding is not dismissed or stayed within sixty (60) days of the commencement thereof, provided that the Bank shall not be obligated to advance additional funds hereunder during such period); (iv) any assignment by any Obligor for the benefit of creditors, or any levy, garnishment, attachment or similar proceeding is instituted against any property of any Obligor held by or deposited with the Bank which is not dismissed or bonded within thirty (30) days; (v) a default with respect to any other indebtedness of any Obligor for borrowed money in excess of $500,000, if the effect of such default is to cause or permit the acceleration of such debt; (vi) the commencement of any foreclosure or forfeiture proceeding, execution or attachment against any material collateral securing the obligations of any Obligor to the Bank which is not dismissed within thirty (30) days; (vii) the entry of a final non-appealable judgment against any Obligor in excess of $250,000 and the failure of such Obligor to discharge or bond the judgment within ten (10) days of the entry thereof; (viii) any change in any Obligor’s business, assets, operations, financial condition or results of operations that has a material adverse effect on any Obligor’s ability to perform its obligations under this Note or any other Loan Document; (ix) any Obligor ceases doing business as a going concern; (x) any representation or warranty made by any Obligor to the Bank in any Loan Document or any other documents now or in the future evidencing or securing the obligations of any Obligor to the Bank, is false, erroneous or misleading in any material respect; (xi) if this Note or any guarantee executed by any Obligor is secured, the failure of any Obligor to provide the Bank with additional collateral within thirty (30) days after written demand if in the Bank’s credit judgment the market value of any of the collateral securing this Note or any guarantee has depreciated below that required pursuant to the Loan Documents or deemed material by Bank in its credit judgment; (xii) the revocation or attempted revocation, in whole or in part, of any guarantee by any Obligor; or (xiii) the death, incarceration, indictment or legal incompetency of any individual Obligor or, if any Obligor is a partnership or limited liability company, the death,
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incarceration, indictment or legal incompetency of any individual general partner or member. As used herein, the term “Obligor” means any Borrower and any guarantor of, or any pledgor, mortgagor or other person or entity providing collateral support for, the Borrower’s obligations to the Bank existing on the date of this Note or arising in the future.
Upon the occurrence of an Event of Default: (a) the Bank shall be under no further obligation to make advances hereunder; (b) if an Event of Default specified in clause (iii) or (iv) above shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts payable hereunder shall be immediately due and payable without demand or notice of any kind; (c) if any other Event of Default shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts payable hereunder, at the Bank’s option and without demand or notice of any kind, may be accelerated and become immediately due and payable; (d) at the Bank’s option, this Note will bear interest at the Default Rate from the date of the occurrence of the Event of Default; and (e) the Bank may exercise from time to time any of the rights and remedies available under the Loan Documents or under applicable law. These rights and remedies shall include, without limitation, the right to apply by appropriate judicial proceedings for appointment of a receiver for the Borrower or all or part of any collateral or any assets of the Borrower.
13. Right of Setoff. In addition to all liens upon and rights of setoff against the Borrower’s money, securities or other property given to the Bank by law, the Bank shall have, with respect to the Borrower’s obligations to the Bank under this Note and to the extent permitted by law, a contractual possessory security interest in and a contractual right of setoff against, and the Borrower hereby grants the Bank a security interest in, and hereby assigns, conveys, delivers, pledges and transfers to the Bank, all of the Borrower’s right, title and interest in and to, all of the Borrower’s deposits, moneys, securities and other property now or hereafter in the possession of or on deposit with, or in transit to, the Bank or any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., whether held in a general or special account or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such security interest and right of setoff may be exercised without demand upon or notice to the Borrower.
14. Indemnity. The Borrower agrees to indemnify each of the Bank, each legal entity, if any, who controls, is controlled by or is under common control with the Bank, and each of their respective directors, officers and employees (the “Indemnified Parties”), and to defend and hold each Indemnified Party harmless from and against any and all claims, damages, losses, liabilities and expenses (including reasonable fees and charges of external counsel with whom any Indemnified Party may consult and reasonable expenses of litigation and preparation therefor) (each, a “Claim”) which any Indemnified Party may incur or which may be asserted against any Indemnified Party by any person, entity or governmental authority (including any person or entity claiming derivatively on behalf of the Borrower), in connection with or arising out of or relating to the matters referred to in this Note or in the other Loan Documents or the use of any advance hereunder, whether (a) arising from or incurred in connection with any breach of a representation, warranty or covenant by the Borrower, or (b) arising out of or resulting from any suit, action, claim, proceeding or governmental investigation, pending or threatened (in writing), whether based on statute, regulation or order, or tort, or contract or otherwise, before any court or governmental authority; provided, however, that the foregoing indemnity agreement shall not apply to any Claim that is determined by a court of competent jurisdiction in a final, non-appealable judgment to have been solely attributable to an Indemnified Party's gross negligence or willful misconduct. The indemnity agreement contained in this paragraph shall survive the termination of this Note, payment of any amounts hereunder and the assignment of any rights hereunder. The Borrower may participate at its expense in the defense of any such action or claim.
15. Miscellaneous. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing (except as may be agreed otherwise above with respect to borrowing requests or as otherwise provided in this Note). Notices may be given in any manner to which the
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parties may agree. Without limiting the foregoing, first-class mail, postage prepaid, facsimile transmission and commercial courier service are hereby agreed to as acceptable methods for giving Notices. In addition, the parties agree that Notices may be sent electronically to any electronic address provided by a party from time to time or through an automated platform that the Bank provides to the Borrower. Notices may be sent to a party’s address as set forth above or to such other address as any party may give to the other for such purpose in accordance with this paragraph. Notices will be effective upon receipt. For purposes hereof, “receipt” shall mean: (i) for notices sent by U.S. mail, the third business day after the date such notice was sent; (ii) for notices delivered by hand or sent by overnight courier service, the date delivered; (iii) for notices sent by facsimile or electronic communication, the date when sent; and (iv) for notices sent by any other method, the date received. No delay or omission on the Bank’s part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Bank’s action or inaction impair any such right or power. The Bank’s rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Bank may have under other agreements, at law or in equity. Except as otherwise set forth in this Note, no modification, amendment or waiver of, or consent to any departure by the Borrower from, any provision of this Note will be effective unless made in a writing signed by the Bank and Borrower, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Notwithstanding the foregoing, the Bank may modify this Note for the purposes of completing missing content or correcting erroneous content, without the need for a written amendment, provided that the Bank shall send a copy of any such modification to the Borrower (which notice may be given by electronic mail). The Borrower agrees to pay on demand, to the extent permitted by law, all costs and expenses incurred by the Bank in the enforcement of its rights in this Note and in any security therefor, including without limitation reasonable fees and expenses of the Bank’s counsel. If any provision of this Note is found to be invalid, illegal or unenforceable in any respect by a court, all the other provisions of this Note will remain in full force and effect. The Borrower and all other makers and indorsers of this Note hereby forever waive presentment, protest, notice of dishonor, notice of non-payment, notice of intent to accelerate and notice of acceleration, and any other notice of any kind. The Borrower also waives all defenses based on suretyship or impairment of collateral. If this Note is executed by more than one Borrower, the obligations of such persons or entities hereunder will be joint and several. This Note shall bind the Borrower and its heirs, executors, administrators, successors and assigns, and the benefits hereof shall inure to the benefit of the Bank and its successors and assigns; provided, however, that the Borrower may not assign this Note in whole or in part without the Bank’s written consent and the Bank at any time may assign this Note in whole or in part.
16. Governing Law and Venue. This Note has been delivered to and accepted by the Bank and will be deemed to be made in the State where the Bank’s office indicated above is located (the “State”). This Note will be interpreted and the rights and liabilities of the Bank and the Borrower determined in accordance with the laws of the state, excluding its conflict of laws rules, including without limitation the Electronic Transactions Act (or equivalent) in effect in the state (or, to the extent controlling, the laws of the United States Of America, including without limitation the Electronic Signatures in Global and National Commerce Act). The Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Bank’s office indicated above is located; provided that nothing contained in this Note will prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the Borrower individually, against any security or against any property of the Borrower within any other county, state or other foreign or domestic jurisdiction. The Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and the Borrower. The Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note.
17. Commercial Purpose. The Borrower represents that the indebtedness evidenced by this Note is being incurred by the Borrower solely for the purpose of acquiring or carrying on a business, professional or commercial activity, and not for personal, family or household purposes.
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18. USA PATRIOT Act Notice. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each Borrower that opens an account. What this means: when the Borrower opens an account, the Bank will ask for the business name, business address, taxpayer identifying number and other information that will allow the Bank to identify the Borrower, such as organizational documents. For some businesses and organizations, the Bank may also need to ask for identifying information and documentation relating to certain individuals associated with the business or organization.
19. Representation by Counsel. The Borrower hereby represents that it has been represented by competent counsel of its choice, or has knowingly waived its right to use and retain counsel, in the negotiation and execution of this Note and the other Loan Documents; that it has read and fully understood the terms hereof; that the Borrower and any retained counsel have been afforded an opportunity to review, negotiate and modify the terms of this Note and the other Loan Documents; and that it intends to be bound hereby. In accordance with the foregoing, the general rule of construction to the effect that any ambiguities in a contract are to be resolved against the party drafting the contract shall not be employed in the construction and interpretation of this Note or any other Loan Document.
20. Authorization to Obtain Credit Reports. By signing below, each person, who is signing in his or her individual capacity, requests and provides written authorization to the Bank or its designee (and any assignee or potential assignee hereof) to obtain such individual’s personal credit profile from one or more national credit bureaus. This authorization extends to obtaining a credit profile in (i) considering an application for credit that is evidenced, guaranteed or secured by this document, (ii) assessing creditworthiness and (iii) considering extensions of credit, including on an ongoing basis, as necessary for the purposes of (a) update, renewal or extension of such credit or additional credit, (b) reviewing, administering or collecting the resulting account and (c) reporting on the repayment and satisfaction of such credit obligations. By signing below, such individual further ratifies and confirms his or her prior requests and authorizations with respect to the matters set forth herein. For the avoidance of doubt, this provision does not apply to persons signing below in their capacities as officers or other authorized representatives of entities, organizations or governmental bodies.
21. Counterparts; Electronic Signatures and Records. This Note and any other Loan Document may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. Notwithstanding any other provision herein, the Borrower agrees that this Note, the Loan Documents, any amendments thereto, and any other information, notice, signature card, agreement or authorization related thereto (each, a “Communication”) may, at the Bank’s option, be in the form of an electronic record. Any Communication may, at the Bank’s option, be signed or executed using electronic signatures. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Bank of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format) for transmission, delivery and/or retention.
22. Reserved.
23. Depository. The Borrower will establish and maintain depository accounts with the Bank.
24. WAIVER OF JURY TRIAL. The Borrower irrevocably waives any and all rights the Borrower may have to a trial by jury in any action, proceeding or claim of any nature relating to this Note, any documents executed in connection with this Note or any transaction contemplated in any of such documents. The Borrower Acknowledges that the foregoing waiver is knowing and voluntary.
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25. State-Specific Provisions.
(a) Additional Agreement Regarding Indemnity. The Borrower agrees that any undertaking to indemnify the Indemnified Parties made by the Borrower hereunder or under any other Loan Document with respect to any Claim is made WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE NEGLIGENCE OF ANY PARTY OR PARTIES, WHETHER SUCH NEGLIGENCE IS SOLE, JOINT, CONCURRENT, ACTIVE OR PASSIVE, except to the extent expressly provided otherwise.
(b) Determination of Maximum Rate of Interest. Notwithstanding any other provision of this Note, the Maximum Rate applicable under this Note shall be the “weekly ceiling” specified in Chapter 303 of the Texas Finance Code; it being understood that if any applicable law permits greater interest, the law permitting the greatest interest shall apply.
(c) NOTICE OF FINAL AGREEMENT.
THIS WRITTEN NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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The Borrower acknowledges that it has read and understands all the provisions of this Note, including the waiver of jury trial, and has been advised by counsel as necessary or appropriate.
WITNESS the due execution hereof as a document under seal, as of the date first written above, with the intent to be legally bound hereby.
HARVEST VENTURES HOLDING COMPANY, a Texas corporation
By: /s/ Barry R. Wood
Name: Barry R. Wood
Title: Vice President-Finance, Secretary and Treasurer
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EX-10.3
EX-10.3
Filename: exhibit103.htm · Sequence: 4
Document
Exhibit 10.3
Guaranty and Suretyship Agreement
THIS GUARANTY AND SURETYSHIP AGREEMENT (this “Guaranty”) is made and entered into as of May 15, 2026, by XPEL, INC., a Nevada corporation (the “Guarantor”), with an address at 711 Broadway, Suite 320, San Antonio, Texas 78215, in consideration of the extension of credit by PNC BANK, NATIONAL ASSOCIATION (the “Bank”), with an address at 112 E Pecan Street, Suite 200, San Antonio, Texas 78205, to HARVEST VENTURES HOLDING COMPANY, a Texas corporation (the “Borrower”), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.
1. Guaranteed Obligations
(a) The Guarantor hereby unconditionally guarantees, as a primary obligor, and becomes surety for (i) the prompt payment and performance of the Obligations and (ii) the prompt payment of all costs and expenses of the Bank (including reasonable attorneys’ fees and expenses) incurred in the documentation, negotiation, modification, enforcement, collection and otherwise in connection with the Obligations (collectively, the “Guaranteed Obligations”). As used herein, “Obligations” means all loans, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the Bank or to any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., of any kind or nature, present or future (including any interest accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, whether or not (i) evidenced by any note, guaranty or other instrument, (ii) arising under any agreement, instrument or document, (iii) for the payment of money, (iv) arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, (v) under any interest rate, commodity or currency swap, future, option or other similar transaction or agreement, (vi) under or by reason of any foreign currency transaction, forward, option or other similar transaction providing for the purchase of one currency in exchange for the sale of another currency, or in any other manner, (vii) arising out of overdrafts on deposit or other accounts or out of electronic funds transfers (whether by wire transfer or through automated clearing houses or otherwise) or out of the return unpaid of, or other failure of the Bank to receive final payment for, any check, item, instrument, payment order or other deposit or credit to a deposit or other account, or out of the Bank’s non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository or other similar arrangements, or (viii) arising from any amendments, extensions, renewals and increases of or to any of the foregoing.
(b) Notwithstanding anything to the contrary contained herein, the definition of "Obligations" shall specifically exclude any and all Excluded Swap Obligations. The foregoing limitation of the definition of Obligations shall only be deemed applicable to the obligations of the Guarantor (or solely any particular Guarantor(s) if there is more than one Guarantor) under the particular Swap (or Swaps), or, if arising under a master agreement governing more than one Swap, the portion thereof, that constitute Excluded Swap Obligations. As used herein, (i) “Excluded Swap Obligations” means, with respect to each Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a Swap if, and to the extent that, all or any portion of this Guaranty that relates to the obligations under such Swap is or becomes illegal as to such Guarantor under the Commodity Exchange Act (7 U.S.C.§1 et seq.), as amended from time to time, and any successor statute (the “CEA”), or any rule, regulation, or order of the Commodity Futures Trading Commission (the “CFTC”), by virtue of such Guarantor’s failure for any reason to qualify as an “eligible contract participant” (as defined in the CEA and regulations promulgated thereunder) on the Eligibility Date for such
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Swap; (ii) “Eligibility Date” means the date on which this Guaranty becomes effective with respect to the particular Swap (for the avoidance of doubt, the Eligibility Date shall be the date of the execution of the particular Swap if this Guaranty is then in effect, and otherwise it shall be the date of execution and delivery of this Guaranty); and (iii) “Swap” means any “swap” as defined in Section 1a(47) of the CEA and regulations thereunder between the Borrower and the Bank, other than (A) a swap entered into on, or subject to the rules of, a board of trade designated as a contract market under Section 5 of the CEA, or (B) a commodity option entered into pursuant to CFTC Regulation 32.3(a).
(c) If the Borrower defaults under any Obligations, the Guarantor will pay the Guaranteed Obligations due to the Bank.
2. Nature of Guaranty; Waivers. This is a guaranty of payment and performance, and not merely of collection and the Bank shall not be required or obligated, as a condition of the Guarantor's liability, to make any demand upon or to pursue any of its rights against the Borrower, or to pursue any rights which may be available to it with respect to any other person who may be liable for the payment of the Obligations.
This is an absolute, unconditional, irrevocable and continuing guaranty and will remain in full force and effect until all of the Obligations have been indefeasibly paid in full, and the Bank has terminated this Guaranty. This Guaranty will remain in full force and effect even if there is no principal balance outstanding under the Obligations at a particular time or from time to time. This Guaranty will not be affected by any surrender, exchange, acceptance, compromise or release by the Bank of any other party, or any other guaranty or any security held by it for any of the Obligations, by any failure of the Bank to take any steps to perfect or maintain its lien or security interest in or to preserve its rights to any security or other Collateral for any of the Obligations or any guaranty, or by any irregularity, unenforceability or invalidity of any of the Obligations or any part thereof or any security or other guaranty thereof; provided, however, that the Guarantor’s obligations hereunder shall be reduced dollar-for-dollar by any amounts actually recovered by the Bank from the Borrower or from any collateral securing the Obligations. The Guarantor's obligations hereunder shall not be affected, modified or impaired by any counterclaim, set-off, recoupment, deduction or defense based upon any claim the Guarantor may have (directly or indirectly) against the Borrower or the Bank, except payment or performance of the Obligations.
Notice of acceptance of this Guaranty, notice of extensions of credit to the Borrower from time to time, notice of default, diligence, presentment, notice of dishonor, protest, demand for payment, and any defense based upon the Bank's failure to comply with the notice requirements under Sections 9-611 and 9-612 of the Uniform Commercial Code as in effect from time to time are hereby waived. The Guarantor waives all defenses based on suretyship or impairment of collateral, and all defenses or benefits relating to or arising under any anti-deficiency laws.
The Bank at any time and from time to time, without notice to or the consent of the Guarantor, and without impairing or releasing, discharging or modifying the Guarantor's liabilities hereunder, may (a) change the manner, place, time or terms of payment or performance of or interest rates on, or other terms relating to, any of the Obligations; (b) renew, substitute, modify, amend or alter, or grant consents or waivers relating to any of the Obligations, any other guaranties, or any security for any Obligations or guaranties; (c) apply any and all payments by whomever paid or however realized including any proceeds of any Collateral, to any Obligations of the Borrower in such order, manner and amount as the Bank may determine in its sole discretion; (d) settle, compromise or deal with any other person, including the Borrower or the Guarantor, with respect to any Obligations in such manner as the Bank deems appropriate in its sole discretion; (e) substitute, exchange or release any security or guaranty; or (f) take such actions and exercise such remedies hereunder as provided herein.
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3. Repayments or Recovery from the Bank. If any demand is made at any time upon the Bank for the repayment or recovery of any amount received by it in payment or on account of any of the Obligations and if the Bank repays all or any part of such amount by reason of any judgment, decree or order of any court or administrative body or by reason of any settlement or compromise of any such demand, the Guarantor will be and remain liable hereunder for the amount so repaid or recovered to the same extent as if such amount had never been received originally by the Bank. The provisions of this section will be and remain effective notwithstanding any contrary action which may have been taken by the Guarantor in reliance upon such payment, and any such contrary action so taken will be without prejudice to the Bank's rights hereunder and will be deemed to have been conditioned upon such payment having become final and irrevocable.
4. Financial Statements. Unless compliance is waived in writing by the Bank or until all of the Obligations have been paid in full, the Guarantor will promptly submit to the Bank such information relating to the Guarantor’s affairs (including but not limited to annual financial statements and tax returns for the Guarantor) or any security for the Guaranty as the Bank may reasonably request.
5. Enforceability of Obligations. No modification, limitation or discharge of the Obligations arising out of or by virtue of any bankruptcy, reorganization or similar proceeding for relief of debtors under federal or state law will affect, modify, limit or discharge the Guarantor's liability in any manner whatsoever and this Guaranty will remain and continue in full force and effect and will be enforceable against the Guarantor to the same extent and with the same force and effect as if any such proceeding had not been instituted. The Guarantor waives all rights and benefits which might accrue to it by reason of any such proceeding and will be liable to the full extent hereunder, irrespective of any modification, limitation or discharge of the liability of the Borrower that may result from any such proceeding.
The Guarantor expressly waives the effect of any statute of limitations or other limitations on any actions under this Guaranty.
6. Events of Default. The occurrence of any of the following shall be an “Event of Default”: (i) any Event of Default (as defined in any of the Obligations) that has not been cured within any applicable cure period; (ii) any default under any of the Obligations that does not have a defined set of “Events of Default” and the lapse of any notice or cure period provided in the Obligations with respect to such default; (iii) demand by the Bank under any of the Obligations that have a demand feature; (iv) the Guarantor’s failure to perform any of its obligations hereunder; (v) the falsity, inaccuracy or material breach by the Guarantor of any written warranty, representation or statement made or furnished to the Bank by or on behalf of the Guarantor; or (vi) the termination or attempted termination of this Guaranty. Upon the occurrence of any Event of Default, (a) the Guarantor shall pay to the Bank the amount of the Guaranteed Obligations; or (b) on demand of the Bank, the Guarantor shall immediately deposit with the Bank, in U.S. dollars, all amounts due or to become due under the Guaranteed Obligations, and the Bank may at any time use such funds to repay the Obligations; or (c) the Bank in its discretion may exercise with respect to any Collateral any one or more of the rights and remedies provided a secured party under the applicable version of the Uniform Commercial Code; or (d) the Bank in its discretion may exercise from time to time any other rights and remedies available to it at law, in equity or otherwise.
7. Right of Setoff. In addition to all liens upon and rights of setoff against the Guarantor’s money, securities or other property given to the Bank by law, the Bank shall have, with respect to the Guarantor's obligations to the Bank under this Guaranty and to the extent permitted by law, a contractual possessory security interest in and a contractual right of setoff against, and the Guarantor hereby grants Bank a security interest in, and hereby assigns, conveys, delivers, pledges and transfers to the Bank all of the Guarantor's right, title and interest in and to, all of the Guarantor’s deposits, moneys, securities and other property now or hereafter in the possession of or on deposit with, or in transit to, the Bank or any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., whether held in a general or special account or deposit, whether held jointly with
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someone else, or whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such security interest and right of setoff may be exercised without demand upon or notice to the Guarantor. Every such right of setoff shall be deemed to have been exercised immediately upon the occurrence of an Event of Default hereunder without any action of the Bank, although the Bank may enter such setoff on its books and records at a later time.
8. Collateral. This Guaranty is secured by the property described in any collateral security documents which the Guarantor executes and delivers to the Bank and by such other Collateral as previously may have been or may in the future be granted to the Bank to secure any obligations of the Guarantor to the Bank.
9. Costs. To the extent that the Bank incurs any costs or expenses in protecting or enforcing its rights under the Obligations or this Guaranty, including reasonable attorneys' fees and the costs and expenses of litigation, such costs and expenses will be due on demand, will be included in the Guaranteed Obligations and will bear interest from the incurring or payment thereof at the Default Rate (as defined in any of the Obligations).
10. Postponement of Subrogation. Until the Obligations are indefeasibly paid in full, expire, are terminated and are not subject to any right of revocation or rescission, the Guarantor postpones and subordinates in favor of the Bank or its designee (and any assignee or potential assignee) any and all rights which the Guarantor may have to (a) assert any claim whatsoever against the Borrower based on subrogation, exoneration, reimbursement, or indemnity or any right of recourse to security for the Obligations with respect to payments made hereunder, and (b) any realization on any property of the Borrower, including participation in any marshalling of the Borrower's assets; provided, however, that upon full payment and satisfaction of all Obligations, the Guarantor shall be fully subrogated to all rights of the Bank against the Borrower to the extent of payments made by the Guarantor hereunder.
11. Notices. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing (except as otherwise provided in this Guaranty) and will be effective upon receipt. Notices may be given in any manner to which the Bank and the Guarantor may agree. Without limiting the foregoing, first-class mail, postage prepaid, electronic transmission and commercial courier service are hereby agreed to as acceptable methods for giving Notices. In addition, the Bank and the Guarantor agree that Notices may be sent electronically to any electronic address provided by either to the other from time to time. Notices may be sent to addresses for the Bank and the Guarantor as set forth above or to such other address as either may give to the other for such purpose in accordance with this section.
12. Preservation of Rights; Waivers of Marshalling, Setoff, and Certain Other Rights. No delay or omission on the Bank's part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Bank's action or inaction impair any such right or power. The Bank's rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Bank may have under other agreements, at law or in equity. The Bank may proceed in any order against the Borrower, the Guarantor or any other obligor of, or any Collateral securing, the Obligations. In addition to the other waivers hereunder, the Guarantor waives, to the extent permitted by applicable law, (i) any and all rights to require the Bank to marshal assets or collateral, to proceed first against, or realize on, any assets or collateral or other credit support before proceeding against or realizing on any other assets or collateral or other credit support, or to otherwise require the Bank to exercise rights or remedies in any particular sequence, in connection with any of the Guaranteed Obligations, and (ii) any and all rights to set off or reduce the amount of the Guaranteed Obligations or any related deficiency against any obligations of the Bank, or on account of the value of any collateral or other credit support, or otherwise, whether any such rights described in this sentence are based on or asserted under any statutory provision, common law, equity or otherwise.
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13. Illegality. If any provision contained in this Guaranty should be invalid, illegal or unenforceable in any respect, it shall not affect or impair the validity, legality and enforceability of the remaining provisions of this Guaranty.
14. Changes in Writing. No modification, amendment or waiver of, or consent to any departure by the Guarantor from, any provision of this Guaranty will be effective unless made in a writing signed by both the Bank and the Guarantor, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Guarantor will entitle the Guarantor to any other or further notice or demand in the same, similar or other circumstance.
15. Entire Agreement. This Guaranty (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the Guarantor and the Bank with respect to the subject matter hereof; provided, however, that this Guaranty is in addition to, and not in substitution for, any other guarantees from the Guarantor to the Bank.
16. Successors and Assigns. This Guaranty will be binding upon and inure to the benefit of the Guarantor and the Bank and their respective heirs, executors, administrators, successors and assigns; provided, however, that the Guarantor may not assign this Guaranty in whole or in part without the Bank's prior written consent and the Bank at any time may assign this Guaranty in whole or in part.
17. Interpretation. In this Guaranty, unless the Bank and the Guarantor otherwise agree in writing, the singular includes the plural and the plural the singular; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to; the word “or” shall be deemed to include “and/or”, the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; and references to sections or exhibits are to those of this Guaranty. Section headings in this Guaranty are included for convenience of reference only and shall not constitute a part of this Guaranty for any other purpose. Each Guarantor is jointly and severally liable with any other guarantor that has executed, or may hereafter execute, this Guaranty or any other guaranty in favor of the Bank with respect to the Obligations. The Bank may enforce this Guaranty or any other guaranty against any guarantor without affecting the liability of any other guarantor.
18. Anti-Corruption Laws and International Trade Laws; Anti-Money Laundering Laws; Certain Definitions.
18.1 Representations and Warranties. The Guarantor hereby makes the following representations and warranties, which shall be continuing in nature and remain in full force and effect until the Guaranteed Obligations are paid in full:
(a)None of the Guarantor, any of its directors, officers, or employees, nor, to the knowledge of the Guarantor, any agents or affiliates acting on behalf of the Guarantor: (i) is a Sanctioned Person; (ii) does business in or with, or derives any of its operating income, directly or indirectly, from any Sanctioned Jurisdiction or Sanctioned Person; or (iii) is in violation of, or is, directly or indirectly, taking any action that could cause the Guarantor to be in violation of, applicable International Trade Laws, Sanctions, Anti-Money Laundering Laws, or Anti-Corruption Laws.
(b)None of the Guarantor, any of its directors, officers, or employees, nor, to the knowledge of the Guarantor, any agents or affiliates acting on behalf of the Guarantor: (i) is in receipt of any notice or communication from any Compliance Authority that alleges, or otherwise pertains to, an actual or potential violation of any International Trade Laws, Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws; or (ii) is the target or subject of any investigation, or has received any request for information, involving any
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allegation relating to a violation of any International Trade Laws, Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws by an Official Body. There is no Blocked Property pledged by the Guarantor as Collateral.
Any false, erroneous or misleading representation or warranty made as to Sanctions is automatically deemed material for purposes of determining the occurrence or existence of a default or event of default under any Loan Document.
18.2 Affirmative Covenants. The Guarantor agrees that until all Guaranteed Obligations have been paid in full and any commitments of the Bank to the Borrower have been terminated, the Guarantor shall (i) in the event that any Collateral pledged by the Guarantor becomes Blocked Property, promptly notify the Bank and provide to the Bank Collateral that is not Blocked Property of at least equal value to the Collateral that became Blocked Property, except to the extent prohibited by applicable Law; and (ii) comply with applicable International Trade Laws, Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws and maintain and enforce policies and procedures reasonably designed to ensure compliance with all applicable International Trade Laws, Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws by the Guarantor, each Guarantor’s directors and officers, and any employee, agent or affiliate acting on behalf of the Guarantor in connection with this Guaranty.
18.3 Negative Covenants. The Guarantor covenants and agrees that until all Guaranteed Obligations have been paid in full and any commitments of the Bank to the Borrower have been terminated, the Guarantor will not, without the Bank’s prior written consent, (I) do any of the following, nor permit any of its directors, officers, or employees, or, to the Guarantor’s knowledge, any agents or affiliates acting on behalf of the Guarantor in connection with this Guaranty, nor such Guarantor’s subsidiaries to (a) become a Sanctioned Person; (b) directly or indirectly (through a third party or otherwise) provide, use, or make available the proceeds of any loan or advance from the Bank (i) to fund any activities or business of, with, or for the benefit of any Person that, at the time of such funding or facilitation, is a Sanctioned Person, (ii) to fund or facilitate any activities or business of or in any Sanctioned Jurisdiction, (iii) in any manner that could result in a violation by any Person (including the Bank) of Anti-Corruption Laws, Anti-Money Laundering Laws or International Trade Laws or (iv) in violation of any applicable Law, including, without limitation, any applicable Anti-Corruption Law, Anti-Money Laundering Law or International Trade Law; (c) directly or indirectly, repay any Guaranteed Obligations with Blocked Property or funds derived from any unlawful activity; or (d) permit any Collateral pledged by the Guarantor to become Blocked Property; (II) directly or indirectly provide, use, or make available the proceeds of any loan or advance from the Bank to any subsidiary of the Guarantor that is not party to the loan agreement governing such loan or advance, nor (III) do business in or with, or derive any of its income, directly or indirectly, from any Sanctioned Jurisdiction or Sanctioned Person.
18.4 Certain Definitions. As used herein:
“Anti-Corruption Laws” means (a) the U.S. Foreign Corrupt Practices Act of 1977, as amended; (b) the U.K. Bribery Act 2010, as amended; and (c) any other applicable Law relating to anti-bribery or anti-corruption in any jurisdiction in which any Loan Party is located or doing business.
“Anti-Money Laundering Laws” means (a) the Bank Secrecy Act and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, each as amended; (b) the U.K. Proceeds of Crime Act 2002, the Money Laundering Regulations 2017, as amended and the Terrorist Asset-Freezing Act 2010, each as amended; and (c) any other applicable Law relating to anti-money laundering and countering the financing of terrorism and related financial record keeping and reporting requirements in any jurisdiction in which any Loan Party is located or doing business.
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“Blocked Property” means any property: (a) required to be reported as blocked property under 31 C.F.R. §501.603, as amended; (b) owned, directly or indirectly, by, or due to or from, a Sanctioned Person subject to blocking or comprehensive Sanctions; (c) in which a Sanctioned Person subject to blocking or comprehensive Sanctions otherwise holds any interest; (d) located or originated in, or otherwise subject to restrictions due to its ties to, a Sanctioned Jurisdiction or (e) that otherwise could cause any actual or potential violation by the Bank of any applicable International Trade Law if the Bank were to obtain an encumbrance on, lien on, pledge, or security interest in such property, or provide services in consideration of such property.
“Collateral” means any collateral securing any debt, liabilities, or other obligations of any Loan Party to the Bank.
“Compliance Authority” means (a) any Official Body of the United States (including the U.S. Department of State, the U.S. Department of the Treasury and its Office of Foreign Assets Control) (b) the government of Canada or any agency thereof; (c) the European Union or any agency thereof; (d) the government of the United Kingdom or any agency thereof; (e) the United Nations Security Council; and (f) any other Official Body with jurisdiction to administer Anti-Corruption Laws, Anti-Money Laundering Laws or International Trade Laws with respect to the conduct of a Covered Entity.
“Covered Entity” means (a) the Borrower and each of the Borrower’s subsidiaries; (b) each Guarantor and any pledgor of Collateral under any Loan Document; and (c) each Person that directly or indirectly controls a Person described in clause (a) or (b) above.
“International Trade Laws” means all Laws relating to export controls, trade embargoes, customs, and antiboycott measures.
“Law” means any law(s) (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, executive order, injunction, writ, decree, bond, judgment, authorization or approval, lien or award, or any settlement arrangement, by agreement, consent or otherwise, of any Official Body, foreign or domestic.
“Loan Party” means the Borrower and any Guarantors.
“Official Body” means the government of the United States of America or of any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Official Body, or other entity.
“Sanctioned Jurisdiction” means, at any time, any country, area, territory, or jurisdiction that is the subject or target of comprehensive Sanctions.
“Sanctioned Person” means any Person (a) located in, organized under the laws of, or ordinarily resident in a Sanctioned Jurisdiction; (b) identified on any sanctions-related list maintained by any Compliance
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Authority; or (c) owned 50% or more, in the aggregate, directly or indirectly by, controlled by, or acting for, on behalf of, or at the direction of, one or more Persons described in clauses (a) or (b) above; or (d) otherwise the subject or target of Sanctions.
“Sanctions” means Laws relating to economic or financial sanctions, sectoral sanctions, or secondary sanctions, administered, or enforced from time to time by any Compliance Authority.
19. Indemnity. The Guarantor agrees to indemnify each of the Bank, each legal entity, if any, who controls, is controlled by or is under common control with the Bank, and each of their respective directors, officers and employees (the “Indemnified Parties”), and to defend and hold each Indemnified Party harmless from and against any and all claims, damages, losses, liabilities and expenses (including reasonable fees and charges of external counsel with whom any Indemnified Party may consult and reasonable expenses of litigation and preparation therefor) (each, a “Claim”) which any Indemnified Party may incur or which may be asserted against any Indemnified Party by any person, entity or governmental authority (including any person or entity claiming derivatively on behalf of the Guarantor), in connection with or arising out of or relating to the matters referred to in this Guaranty, whether (a) arising from or incurred in connection with any breach of a representation, warranty or covenant by the Guarantor, or (b) arising out of or resulting from any suit, action, claim, proceeding or governmental investigation, pending or threatened, whether based on statute, regulation or order, or tort, or contract or otherwise, before any court or governmental authority; provided, however, that the foregoing indemnity agreement shall not apply to any Claim that is determined by a court of competent jurisdiction in a final, non-appealable judgment to have been solely attributable to an Indemnified Party's gross negligence or willful misconduct. The indemnity agreement contained in this Section shall survive the termination of this Guaranty. The Guarantor may participate at its expense in the defense of any such action or Claim.
20. Governing Law and Jurisdiction. This Guaranty has been delivered to and accepted by the Bank and will be deemed to be made in the State where the Bank's office indicated above is located (the “State”). This Guaranty will be interpreted and the rights and liabilities of the Bank and the Guarantor determined in accordance with the laws of the State, excluding its conflict of laws rules, including without limitation the Electronic Transactions Act (or equivalent) in such State (or, to the extent controlling, the laws of the United States of America, including without limitation the Electronic Signatures in Global and National Commerce Act). The Guarantor hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Bank's office indicated above is located; provided that nothing contained in this Guaranty will prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the Guarantor individually, against any security or against any property of the Guarantor within any other county, state or other foreign or domestic jurisdiction. The Guarantor acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and the Guarantor. The Guarantor waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Guaranty.
21. Counterparts; Electronic Signatures and Records. This Guaranty may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. Notwithstanding any other provision herein, the Guarantor agrees that this Guaranty, any amendments thereto and any other information, notice, signature card, agreement or authorization related thereto (each, a “Communication”) may, at the Bank’s option, be in the form of an electronic record. Any Communication may, at the Bank’s option, be signed or executed using electronic signatures. For the avoidance of doubt, the authorization under this section may include, without limitation, use or acceptance by the Bank of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format) for transmission, delivery and/or retention.
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22. Limitation of Personal Liability. Notwithstanding anything contained herein to the contrary, it is agreed that, unless an exception to the requirements of Regulation B of the Board of Governors of the Federal Reserve System applies in connection with the extension of the Obligations and the execution of this Guaranty, the spouse who is deemed not to be the applicant for purposes of such regulation shall not be personally liable under this Guaranty, provided that this provision will not limit the Bank's right to obtain such judgment, order or other relief against such individual as may be necessary for the Bank to exercise all of its rights and remedies with respect to assets held jointly as of the date of the Guarantor's most recent financial statement delivered prior to the date hereof or thereafter acquired.
23. Equal Credit Opportunity Act. If the Guarantor is not an “applicant for credit” under Section 202.2 (e) of the Equal Credit Opportunity Act of 1974 (“ECOA”), the Guarantor acknowledges that (i) this Guaranty has been executed to provide credit support for the Obligations, and (ii) the Guarantor was not required to execute this Guaranty in violation of Section 202.7(d) of the ECOA.
24. Reserved.
25. Representation by Counsel. The Guarantor hereby represents that it has been represented by competent counsel of its choice, or has knowingly waived its right to use and retain counsel, in the negotiation and execution of this Guaranty; that it has read and fully understood the terms hereof; that the Guarantor and any retained counsel have been afforded an opportunity to review, negotiate and modify the terms of this Guaranty; and that it intends to be bound hereby. In accordance with the foregoing, the general rule of construction to the effect that any ambiguities in a contract are to be resolved against the party drafting the contract shall not be employed in the construction and interpretation of this Guaranty.
26. Waiver of Jury Trial. The Guarantor irrevocably waives any and all right the Guarantor may have to a trial by jury in any action, proceeding or claim of any nature relating to this Guaranty, any documents executed in connection with this Guaranty or any transaction contemplated in any of such documents. The Guarantor acknowledges that the foregoing waiver is knowing and voluntary.
27. State Specific Provisions.
(a) Additional Waivers. Without limitation of the Guarantor’s waiver of all defenses based on suretyship or impairment of collateral set forth above, the Guarantor hereby waives any and all rights under Sections 51.003, 51.004 and 51.005 of the Texas Property Code, and under any amendments, recodifications, supplements or any successor statute or law of or to any such statute or law. The foregoing waivers, including those set out under Section 2 of the Guaranty, shall apply regardless of whether the same arise under (A) Rule 31 of the Texas Rules of Civil Procedure, (B) Chapter 17, Section 17.001 of the Texas Civil Practice and Remedies Code, (C) Chapter 43 of the Texas Civil Practice and Remedies Code, or (D) any other statute or law, common law, in equity, under contract or otherwise, or under any amendments, recodifications, supplements or any successor statute or law of or to any such statute or law.
(b) Additional Agreement regarding Indemnity. The Guarantor agrees that any undertaking to indemnify the Indemnified Parties made by the Guarantor hereunder or under any other documents executed in connection with the Guaranteed Obligations with respect to any Claim is made WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE NEGLIGENCE OF ANY PARTY OR PARTIES WHETHER SUCH NEGLIGENCE IS SOLE, JOINT, CONCURRENT, ACTIVE, OR PASSIVE, except to the extent expressly provided otherwise.
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(c) Notice of Final Agreement. THIS WRITTEN GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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WITNESS the due execution hereof as a document under seal, as of the date first written above, with the intent to be legally bound hereby.
XPEL, INC., a Nevada corporation
By: /s/ Barry R. Wood
Name: Barry R. Wood
Title: Senior Vice President and Chief Financial Officer
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EX-10.4
EX-10.4
Filename: exhibit104.htm · Sequence: 5
Document
Exhibit 10.4
Execution Version
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), effective as of May 15, 2026 (the “Amendment Effective Date”), is entered into by and among XPEL, INC. (the “Borrower”), the Lenders (as defined below) party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”).
RECITALS
WHEREAS, the Borrower, the lenders party thereto (the “Lenders”) and the Administrative Agent are parties to that certain Credit Agreement dated as of April 6, 2023 (as amended, the “Credit Agreement”); and
WHEREAS, the Borrower has requested the Lenders and the Administrative Agent to amend certain provisions of the Credit Agreement; and
WHEREAS, the Administrative Agent and the Lenders are willing to amend the Credit Agreement, subject to the terms and conditions set forth herein, provided that the Borrower ratifies and confirms all of its obligations under the Credit Agreement and the other Loan Documents.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Amendment, the Borrower, the Lenders and the Administrative Agent agree as follows:
1.Defined Terms. Unless otherwise defined herein, capitalized terms used herein have the meanings assigned to them in the Credit Agreement.
2.Amendments to Credit Agreement.
(a)Section 1.1 of the Credit Agreement is hereby amended to restate the definition of “Excluded Subsidiary” in its entirety as follows:
“Excluded Subsidiary” means (a) each CFC, (b) each Subsidiary that is a direct or indirect Subsidiary of a CFC, (c) each CFC Holdco, (d) any Subsidiary that is prohibited by Applicable Law or by any contractual obligation existing on the Closing Date or existing at the time of acquisition of such Subsidiary after the Closing Date (and not incurred in contemplation of such acquisition, in each case from Guaranteeing the Obligations, but only so long as such prohibition exists, (e) any Domestic Subsidiary that is not a Material Domestic Subsidiary, (f) Harvest Ventures, (g) Harvest Industrial and (h) any other Subsidiary with
respect to which the Administrative Agent and the Borrower mutually agree that the cost of providing a Guarantee would be excessive in relation to the benefit to be afforded thereby.
(b)Section 1.1 of the Credit Agreement is hereby amended to add the following new definitions in proper alphabetical order:
“Harvest Industrial” means Harvest Industrial Corp., a Texas corporation.
“Harvest Ventures” means Harvest Ventures Holding Company, a Texas corporation.
“PanAm Expressway Acquisition Contract” means that certain Standard Purchase and Sale Agreement dated effective as of January 29, 2026, by and between SL Industrial, LP, a Texas limited partnership, as seller, and Borrower, as purchaser, as amended by that certain First Amendment to Standard Purchase and Sale Agreement dated effective as of March 4, 2026, assigned by Borrower to Harvest Ventures by that certain Assignment and Assumption Agreement dated April 9, 2026, and further amended by that certain Second Amendment to Standard Purchase and Sale Agreement dated April 23, 2026, pursuant to which Harvest Ventures will acquire the PanAm Expressway Property and seller’s rights under the PanAm Expressway Storage Area Lease.
“PanAm Expressway Property” means, collectively, the real property and improvements located at 3167, 3215, 3251 and 3319 North PanAm Expressway, San Antonio, Texas.
“PanAm Expressway Storage Area Lease” means that certain Storage Area Lease dated as of June 12, 2019, as extended by that certain Extension Notice dated September 27, 2024 (as the same may be further amended, restated, supplemented or otherwise modified from time to time), between SL Project Texas 2, LP, a Texas limited partnership, as tenant, and Westcore Alpha AC, LLC, a Delaware limited liability company, as landlord, the tenant’s interest in which is to be assigned to and assumed by Harvest Ventures at the closing of the acquisition of the PanAm Expressway Property pursuant to the PanAm Expressway Acquisition Contract.
(c)Section 9.1 of the Credit Agreement is hereby amended to delete the word “and” at the end of clause (o) thereof, delete the period at the end of clause (p) thereof and substitute in its place a semicolon and the word “and” and add the following new clause (q) thereto:
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“(q) Indebtedness of Harvest Ventures incurred to finance the acquisition of the PanAm Expressway Property in an aggregate principal amount not to exceed $44,800,000 at any time outstanding, and the Guarantee by the Borrower of such Indebtedness; provided that the obligations in respect of such Guarantee shall not be secured by any Liens other than those permitted pursuant to Section 9.2(p).”
(d)Section 9.2 of the Credit Agreement is hereby amended to delete the word “and” at the end of clause (m) thereof, delete the period at the end of clause (n) thereof and substitute in its place a semicolon and add the following new clauses (o) and (p) thereto:
“(o) Liens on the PanAm Expressway Property and other personal property assets of Harvest Ventures to secure Indebtedness permitted by Section 9.1(q); provided that such Liens shall not apply to any other property or assets of the Borrower or any of its Subsidiaries; and
(p) Liens consisting of a right of set off against the Borrower’s deposits, moneys, securities and other property in the possession of or on deposit with, or in transit to, PNC Bank, National Association or any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., as granted by the Borrower in that certain Guaranty and Suretyship Agreement executed in connection with Indebtedness incurred pursuant to Section 9.1(q); provided that the aggregate amount of such deposits, moneys, securities and other property shall not exceed $1,000,000 at any time.”
(e)Section 9.3 of the Credit Agreement is hereby amended to delete the word “and” at the end of clause (p) thereof, delete the period at the end of clause (q) thereof and substitute in its place a semicolon and the word “and” and add the following new clause (r) thereto:
(f)“(r) Investments by the Borrower in Harvest Ventures and Harvest Industrial in an aggregate amount not to exceed $18,000,000 at any time outstanding; provided that such Investments are used solely to (A) capitalize Harvest Ventures and Harvest Industrial, (B) fund the acquisition of the PanAm Expressway Property pursuant to the PanAm Expressway Acquisition Contract and costs and expenses incidental thereto, and (C) fund the ordinary course operating and administrative expenses of Harvest Ventures and Harvest Industrial as permitted by Section 9.17.”
(g)Section 9.5 of the Credit Agreement is hereby amended to delete the word “and” at the end of clause (l) thereof, delete the period at the end of clause (m) thereof and substitute in its place a semicolon and the word “and” and add the following new clause (n) thereto:
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(h)“(n) the transfer of the PanAm Expressway Acquisition Contract by the Borrower to Harvest Ventures pursuant to that certain Assignment and Assumption Agreement dated April 9, 2026.”
(i)Section 9.7 of the Credit Agreement is hereby amended to delete the period at the end of clause (vi) thereof and substitute in its place a semicolon and the word “and” and add the following new clause (vii) thereto:
(j)“(vii) the lease by Harvest Ventures to the Borrower of the PanAm Expressway Property and personal property incidental to the ownership thereof as contemplated by Section 9.17(a), and any transactions between the Borrower and Harvest Ventures or Harvest Industrial that are expressly permitted by, or contemplated under, Section 9.17.”
(k)Section 9.10(a) of the Credit Agreement is hereby amended to delete the word “and” immediately before clause (iv) thereof, substitute a comma in its place and add the word “and” and the following new clause (v) thereto:
“(v) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 9.1(q) (provided that any such restriction contained therein relates only to the PanAm Expressway Property, the PanAm Expressway Storage Area Lease and other personal property assets of Harvest Ventures).”
(l)Section 9.10(b) of the Credit Agreement is hereby amended to delete the word “and” immediately before clause (B) thereof, substitute a comma in its place and add the word “and” and the following new clause (C) thereto:
“(C) any document or instrument governing Indebtedness incurred pursuant to Section 9.1(q) (provided that any such restriction contained therein relates only to Harvest Ventures).
(m)Section 9.10(c) of the Credit Agreement is hereby amended to delete the word “and” immediately before clause (H) of subsection (ii) thereof, substitute a comma in its place and add the word “and” and the following new clause (I) thereto:
“(I) any document or instrument governing Indebtedness incurred pursuant to Section 9.1(q) (provided that any such restriction contained therein relates only to the PanAm Expressway Property, the PanAm Expressway Storage Area Lease and other personal property assets of Harvest Ventures).”
(n)Article IX of the Credit Agreement is hereby amended to add the following new Section 9.17 thereto:
“SECTION 9.17 Limitations on Harvest Ventures and Harvest Industrial.
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(a) Harvest Ventures will not
(i) hold any assets other than (A) the PanAm Expressway Property and personal property incidental to the ownership thereof, (B) rights as lessor under any lease of the Panam Expressway Property to the Borrower and any third party tenants, (C) rights as tenant under the PanAm Expressway Storage Area Lease, and (D) rights as lessor under any lease of the premises under the PanAm Expressway Storage Area Lease to any third party tenants;
(ii) have any liabilities other than (A) liabilities under the Indebtedness permitted pursuant to Section 9.1(q), (B) tax liabilities in the ordinary course of business, (C) corporate, administrative and operating expenses in the ordinary course of business, (D) liabilities under any lease described in clauses (i)(B), (i)(C) and (i)(D) above; or
(iii) engage in any activities or business other than holding the assets and incurring the liabilities described in this Section 9.17(a) and activities incidental and related thereto.
(b) Harvest Industrial will not
(i) hold any assets other than that certain Permit by Rule Registration Number 183387 issued by the Texas Commission on Environmental Quality in respect of the PanAm Expressway Property;
(ii) have any liabilities other than (A) liabilities, if any, under the permit described in clause (i) above, (B) tax liabilities in the ordinary course of business and (C) corporate, administrative and operating expenses in the ordinary course of business; or
(iii) engage in any activities or business other than holding the assets and incurring the liabilities described in this Section 9.17(b) and activities incidental and related thereto.”
3.Conditions to Effectiveness. Upon satisfaction of the following conditions precedent, this Amendment shall be effective on the Amendment Effective Date, except with respect to the amendment set forth in Section 2(f), which shall be effective as of April 9, 2026:
(a)no Default or Event of Default shall exist; and
(b)the Administrative Agent shall have received:
(i)counterparts of this Amendment duly executed by the Borrower and the Required Lenders;
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(ii)true and correct copies of the loan documents evidencing the Indebtedness permitted by Section 9.1(q) of the Credit Agreement, in form and substance reasonably satisfactory to the Administrative Agent; and
(iii)all fees and amounts due and payable pursuant to the Loan Documents on or prior to the date hereof, including reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement.
4.Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents are and shall continue to be in full force and effect as amended and modified by this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, lien, security interest or entitlement of any of the Lenders or the Administrative Agent created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained herein or therein.
5.Representations and Warranties. The Borrower hereby represents and warrants to the Lenders and the Administrative Agent that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment, and the Credit Agreement after giving effect to this Amendment, constitute valid and legally binding agreements enforceable against the Borrower in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, (c) the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof (or in all respects if already qualified by Material Adverse Effect or materiality), both before and after giving effect to the transactions contemplated hereby and as though made as of the date hereof, except for such representations and warranties as are by their express terms limited to a specific date, in which case such representations and warranties were true and correct in all material respects as of such specific date (or in all respects if already qualified by Material Adverse Effect or materiality), (d) no Default or Event of Default exists under the Credit Agreement or under any other Loan Document or will exist immediately upon consummation of the transactions contemplated hereby, and (e) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.
6.Release and Indemnity.
(a)The Borrower hereby releases and forever discharges the Administrative Agent and each of the Lenders and each affiliate thereof and each of their respective employees, officers, directors, trustees, agents, attorneys, successors, assigns or other representatives from any and all claims, demands, damages, actions, cross-actions, causes of action, costs and expenses (including legal expenses), of any kind or nature whatsoever, whether based on law or equity, which any of said parties has held or may now own or hold, whether known or unknown, for or because of any matter or thing done, omitted or suffered to be done on or before the actual date upon which this Amendment is signed by any of such parties (i) arising directly or indirectly out of the Loan Documents, or any other documents, instruments or any other transactions
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relating thereto and/or (ii) relating directly or indirectly to all transactions by and between the Borrower or its representatives and the Administrative Agent, and each Lender or any of their respective directors, officers, agents, employees, attorneys or other representatives. Such release, waiver, acquittal and discharge shall and does include, without limitation, any claims of usury, fraud, duress, misrepresentation, lender liability, control, exercise of remedies and all similar items and claims, which may, or could be, asserted by the Borrower including any such caused by the actions or negligence of the indemnified party (other than its gross negligence or willful misconduct).
(b)The Borrower hereby ratifies the indemnification provisions contained in the Loan Documents, including, without limitation, Section 12.3 of the Credit Agreement, and agrees that this Amendment and losses, claims, damages and expenses related thereto shall be covered by such indemnities.
7.Counterparts. This Amendment may be signed in any number of counterparts, which may be delivered in original, facsimile or other electronic form (i.e., “PDF”) each of which shall be construed as an original, but all of which together shall constitute one and the same instrument.
8.Governing Law. This Amendment shall be construed, and the rights of the parties hereto determined, in accordance with and governed by the internal law of the State of Texas (without regard to any conflicts of law principles) to the extent controlling, and the federal law of the United States of America.
9.Agreement is a Loan Document; References to the Credit Agreement. This Amendment is a Loan Document, as defined in the Credit Agreement. All references in the Credit Agreement to “this Agreement” and in the other Loan Documents to “the Credit Agreement” shall mean the Credit Agreement as amended by this Amendment.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.
XPEL, INC., as Borrower
By: /s/ Barry R. Wood
Name: Barry R. Wood
Title: Senior Vice President, Chief Financial Officer and Secretary
XPEL, Inc.
Signature Page to Second Amendment to Credit Agreement
EX-10.5
EX-10.5
Filename: exhibit105.htm · Sequence: 6
Document
Exhibit 10.5
PURCHASE AND SALE AGREEMENT
BETWEEN
SL INDUSTRIAL, LP,
a Texas limited partnership,
as Seller
AND
XPEL, INC.,
a Nevada corporation,
as Purchaser
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BASIC INFORMATION SUMMARY
a) Effective Date: The date that the Title Company executes the Joinder to this Agreement.
b) Title Company: Prominent Title
1111 West 6th St.
Building A, Suite 210
Austin, Texas 78703
Attention: Corby Jastrow
Phone:
Email:
c) Purchase Price: $60,000,000.00 [Section 3.1]
d) Deposit: $750,000.00 (Initial Deposit) [Section 4.1(a)]
$1,250,000.00 (Additional Deposit) [Section 4.1(b)]
e) Title Review Period: The period ending at 5:00 p.m. Central Time on January 16, 2026 [Section 6.2]
f) Access Agreement: Access Agreement (PanAm West Portfolio) dated as of December 29, 2025 (the “Access Agreement Effective Date”), between Seller and Purchaser, pursuant to which Purchaser and its employees, agents, representatives, consultants and contractors (collectively, “Licensee’s Agents”) were granted the right to enter upon the Property and conduct non-intrusive physical and environmental inspections of the Property. The Access Agreement is being terminated as of the Effective Date; provided, however, that Purchaser’s obligations under the Access Agreement that expressly survive such termination and the entering into of this Agreement shall survive such termination and the entering into of this Agreement and are incorporated herein by this reference; provided, however, to the extent of any conflict between such surviving provisions and the terms of this Agreement, the terms of this Agreement shall control.
g) Property Approval Period: The period beginning on the Access Agreement Effective Date and ending at 5:00 p.m. (Central Time) on February 27, 2026 [Section 5.4]
h) Closing Date: March 31, 2026, as the same may be adjourned to another date pursuant to the terms of this Agreement, or such earlier date as Seller and Purchaser may agree upon in writing. [Section 10.1]
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STANDARD PURCHASE AND SALE AGREEMENT
THIS STANDARD PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of the Effective Date (as hereinafter defined) is by and between SL INDUSTRIAL, LP, a Texas limited partnership (“Seller”), and XPEL, INC., a Nevada corporation (“Purchaser”).
In consideration of the mutual promises, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Capitalized terms shall have the meanings set forth in this Agreement. For purposes of this Agreement, capitalized terms used but not defined in the body of this Agreement shall have the meanings set forth on Schedule 1.1 attached hereto.
Section 1.2 References; Exhibits and Schedules. Except as otherwise specifically indicated, all references in this Agreement to Articles or Sections refer to Articles or Sections of this Agreement, and all references to Exhibits or Schedules refer to Exhibits or Schedules attached hereto, all of which Exhibits and Schedules are incorporated into, and made a part of, this Agreement by reference. The words “herein,” “hereof,” “hereinafter” and words and phrases of similar import refer to this Agreement as a whole and not to any particular Section or Article.
ARTICLE II
AGREEMENT OF PURCHASE AND SALE
Section 2.1 Agreement. Seller hereby agrees to sell, convey and assign to Purchaser, and Purchaser hereby agrees to purchase and accept from Seller, on the Closing Date and subject to the terms and conditions of this Agreement, all of the following (collectively, the “Property”):
(a) the Real Property, the Improvements and the Personal Property;
(b) the Tenant Leases in effect on the Closing Date and, subject to the terms of the respective applicable Tenant Leases, the Tenant Deposits (if any);
(c) the Service Contracts in effect on the Closing Date that Purchaser elects to assume pursuant to Section 7.3 hereof;
(d) the Licenses and Permits, in each case to the extent assignable without the necessity of consent or approval and, if consent or approval is required, to the extent any necessary consent or approval has been obtained; and
(e) the Intangible Personal Property.
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ARTICLE III
CONSIDERATION
Section 3.1 Purchase Price. The purchase price for the Property (the “Purchase Price”) will be SIXTY MILLION AND NO/100 DOLLARS ($60,000,000.00) in lawful currency of the United States of America, payable as provided in Section 3.2.
Section 3.2 Method of Payment of Purchase Price. No later than the Deposit Time, Purchaser will deposit in escrow with the Title Company the Purchase Price (subject to adjustments described in Section 10.4 and credit for the Deposit being applied to the Purchase Price), together with all other costs and amounts to be paid by Purchaser at Closing pursuant to the terms of this Agreement, by Federal Reserve wire transfer of immediately available funds to an account to be designated by the Title Company. As soon as the Title Company has received confirmation that the Deeds (as defined in Section 10.3(a) below) are ready to be recorded on the Closing Date in accordance with this Agreement and the conditions set forth in Purchaser’s closing escrow instruction letter and Seller’s closing escrow instruction letter, respectively, have been satisfied: (a) Purchaser will authorize the Title Company to (i) pay to Seller by Federal Reserve wire transfer of immediately available funds to an account or accounts to be designated by Seller, the Purchase Price (subject to adjustments described in Section 10.4 and any credit for the Deposit being applied to the Purchase Price), less any costs or other amounts to be paid by Seller at Closing pursuant to this Agreement, and (ii) pay to all appropriate payees the other costs and amounts to be paid by Purchaser at Closing pursuant to the terms of this Agreement, and (b) Seller will direct the Title Company to pay to the appropriate payees out of the proceeds of Closing payable to Seller, all costs and amounts to be paid by Seller at Closing pursuant to this Agreement.
Section 3.3 Independent Consideration. Notwithstanding any other provision of this Agreement, the Title Company shall pay directly to Seller, upon the earlier to occur of the Closing or the termination of this Agreement for any reason, a portion of the Deposit in the sum of One Hundred and No/100 Dollars ($100.00) (the “Independent Consideration”), which shall constitute independent consideration to Seller for the execution of this Agreement and the willingness of Seller to afford to Purchaser the diligence and inspection rights hereunder, and is expressly acknowledged to be adequate. The Independent Consideration shall be deemed fully earned when received by Seller and shall not be refundable to Purchaser under any circumstances whatsoever. In all circumstances where the Deposit is to be returned to Purchaser, it shall be returned net of the Independent Consideration. In the event of Closing, the Independent Consideration shall be applied against the Purchase Price together with the remainder of the Deposit.
ARTICLE IV
DEPOSIT AND ESCROW INSTRUCTIONS
Section 4.1 Deposit.
(a) Within two (2) Business Days after the Effective Date, Purchaser shall deposit with the Title Company, in immediately available funds, the sum of SEVEN HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($750,000.00) (together with any interest earned
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thereon, the “Initial Deposit”), to be held by the Title Company in an interest-bearing account. If Purchaser fails to timely deliver any portion of the Initial Deposit and fails to cure such default within one (1) Business Day following Purchaser’s receipt of written notice from Seller, Seller, as its sole and exclusive remedy, may at any time thereafter prior to the cure of such default terminate this Agreement by delivering written notice of termination to Purchaser, in which event the Title Company shall deliver any portion of the Initial Deposit that Title Company has received, if any, to Purchaser or as otherwise instructed by Purchaser in writing, and neither party shall have any further right or obligation hereunder except for the Termination Surviving Obligations.
(b) If this Agreement is not terminated (or deemed terminated) by Purchaser prior to the expiration of the Property Approval Period pursuant to the terms of Section 5.4, then Purchaser shall deposit with the Title Company within two (2) Business Days after the expiration of the Property Approval Period, in immediately available funds, the additional sum of ONE MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($1,250,000.00) (the “Additional Deposit” and together, the Initial Deposit, the Additional Deposit and the Closing Extension Deposit (if applicable) are referred to herein as the “Deposit”), to be held by the Title Company in an interest-bearing account. If Purchaser fails to timely deliver any portion of the Additional Deposit and fails to cure such default within one (1) Business Day following Purchaser’s receipt of written notice from Seller, Seller, as its sole and exclusive remedy, may at any time thereafter prior to the cure of such default terminate this Agreement by delivering written notice of termination to Purchaser, in which event the Title Company shall deliver the Initial Deposit to Seller, as Seller’s liquidated damages pursuant to the terms of Section 13.2, and neither party shall have any further right or obligation hereunder except for the Termination Surviving Obligations.
(c) If Purchaser does not exercise its termination right under Section 5.4 prior to the expiration of the Property Approval Period, then upon the expiration of the Property Approval Period, the Initial Deposit (and, upon deposit, the Additional Deposit) will become non-refundable to Purchaser, except as otherwise provided in this Agreement.
(d) At the Closing, the Deposit shall be applied towards payment of the Purchase Price. In the event the transaction contemplated by this Agreement is not closed, then the Title Company shall disburse the Deposit in the manner provided for elsewhere herein.
Section 4.2 Escrow Instructions. Article IV of this Agreement constitutes the escrow instructions of Seller and Purchaser to the Title Company with regard to the Deposit and the Closing (the “Escrow Instructions”). By its execution of the joinder attached hereto, the Title Company agrees to be bound by the provisions of this Article IV. If any requirements relating to the obligations of the Title Company hereunder are not acceptable to the Title Company, or if the Title Company requires additional instructions, the parties agree to make such modifications to the Escrow Instructions as Purchaser and Seller hereafter mutually approve in writing and which do not substantially alter this Agreement or its intent. In the event of any conflict between this Agreement (excluding this Article IV) and such additional escrow instructions, this Agreement will control.
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Section 4.3 Funds and Documents Deposited into Escrow. Provided that all conditions to Purchaser’s obligations to Closing set forth in this Agreement have been satisfied as of the Closing Date, then, on or before the Deposit Time, (a) Purchaser will cause the difference between the Purchase Price and the Deposit and interest thereon (subject to the prorations provided for in Section 10.4 and with the addition of all Closing costs to be paid by Purchaser) to be transferred to the Title Company’s escrow account, in accordance with the timing and other requirements of Section 3.2, (b) Purchaser will deliver in escrow to the Title Company the documents described and provided for in Section 10.2 below, and (c) Seller will deliver in escrow to the Title Company the documents described and provided for in Section 10.3 below.
Section 4.4 Close of Escrow. Provided that the Title Company has not received from Seller or Purchaser any written termination notice as provided for in this Agreement (or if such a notice has been previously received, the Title Company has received a withdrawal of such notice), when Purchaser and Seller have delivered the funds and documents required by Section 4.3, the Title Company will, subject to and in accordance with Purchaser’s closing escrow instruction letter and Seller’s closing escrow instruction letter, respectively:
(a) If applicable and when required, file with the Internal Revenue Service (with copies to Purchaser and Seller) the reporting statement required under Section 6045(e) of the Internal Revenue Code and Section 4.8;
(b) Insert the applicable Closing Date as the date of any document delivered to the Title Company undated, and assemble counterparts into single instruments;
(c) Disburse to Seller, by wire transfer to Seller of immediately available federal funds, in accordance with wiring instructions to be obtained by the Title Company from Seller, all sums to be received by Seller from Purchaser at the Closing, consisting of the Purchase Price as adjusted in accordance with the provisions of this Agreement, as set forth on the Closing Statement;
(d) Deliver the Deed to Purchaser by agreeing to cause the same to be recorded in the Official Records and agreeing to obtain conformed copies of the recorded Deed for delivery to Purchaser and to Seller following recording;
(e) Issue to Purchaser the Title Policy required by Section 6.3 of this Agreement within ten (10) days after Closing;
(f) Deliver to Seller, in addition to Seller’s Closing proceeds, all documents deposited with the Title Company for delivery to Seller at the Closing; and
(g) Deliver to Purchaser (i) all documents deposited with the Title Company for delivery to Purchaser at the Closing and (ii) any funds deposited by Purchaser in excess of the amount required to be paid by Purchaser pursuant to this Agreement.
Section 4.5 Termination Notice. If at any time prior to the expiration of the Property Approval Period, the Title Company receives a notice from Purchaser that Purchaser has
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exercised its termination right, under Section 5.4, the Title Company, within one (1) Business Day after the receipt of such notice, will deliver the Initial Deposit to Purchaser or as otherwise instructed by Purchaser in writing. For the avoidance of doubt, Seller and the Title Company acknowledge and agree that (a) Seller shall have no right to consent to, or object to, the delivery of the Deposit to Purchaser in accordance with this Section 4.5 (and any purported objection by Seller shall be ignored and of no force or effect), and (b) no notice to Seller shall be required for such delivery of the Initial Deposit to Purchaser pursuant to this Section 4.5.
Section 4.6 Maintenance of Confidentiality by Title Company. Except as may otherwise be required by law or by this Agreement, the Title Company will maintain in strict confidence and not disclose to anyone the existence of this Agreement, the identity of the parties hereto, the amount of the Purchase Price, the provisions of this Agreement or any other information concerning the transactions contemplated hereby, without the prior written consent of Purchaser and Seller in each instance.
Section 4.7 Investment of Deposit. Title Company will invest and reinvest the Deposit, at the instruction and sole election of Purchaser, only in an interest-bearing account at a commercial bank mutually acceptable to Seller, Purchaser and Title Company. All interest earned on the Deposit will be the property of the party entitled to the Deposit.
Section 4.8 Designation of Reporting Person. In order to assure compliance with the requirements of Section 6045 of the Internal Revenue Code of 1986, as amended (for purposes of this Section 4.8, the “Code”), and any related reporting requirements of the Code, the parties hereto agree that (a) the Title Company (for purposes of this Section 4.8, the “Reporting Person”), by its execution hereof, hereby assumes all responsibilities for information reporting required under Section 6045(e) of the Code; and (b) Seller and Purchaser each hereby agree (i) to provide to the Reporting Person all information and certifications regarding such party, as required to be provided by a party to the transaction described herein under Section 6045 of the Code, and (ii) to provide to the Reporting Person such party’s taxpayer identification number and a statement (on Internal Revenue Service Form W-9 or on any other form the applicable Code sections and regulations might require), signed under penalties of perjury, stating that the taxpayer identification number supplied by such party to the Reporting Person is correct.
ARTICLE V
INSPECTION OF PROPERTY
Section 5.1 Entry and Inspection.
(a) During the Property Approval Period and thereafter if Purchaser has not sent a Termination Notice (as hereinafter defined) to Seller during the Property Approval Period, and subject to the remaining provisions of this Agreement, Licensee’s Agents shall have the right to inspect and investigate the Property and conduct such tests, evaluations and assessments of the Property as Purchaser deems necessary, appropriate or prudent in any respect and for all purposes in connection with Purchaser’s acquisition of the Property and the consummation of the transaction contemplated by this Agreement. Subject to the provisions of this Section 5.1 and subject to the obligations set forth in Section 5.3 below, Seller will permit the Licensee’s Agents to enter upon the Real Property and Improvements at all reasonable times, during normal
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business hours, and to perform inspections of the Property. Seller agrees to reasonably cooperate in facilitating communication between Purchaser and Tenants and service providers; provided, however, Purchaser shall coordinate all such communication through Seller and Seller shall have the right to participate in any such interviews and communications. Purchaser will provide to Seller written notice of the intention of any Licensee’s Agents to enter the Real Property or Improvements at least twenty-four (24) hours in advance and specify the intended purpose therefor and the inspections and examinations contemplated to be made (which notice may be by email). At Seller’s option, Seller may be present for any such entry, inspection and communication with any Tenants and service providers, provided that Seller’s attendance shall not unreasonably delay or impede Purchaser’s activities. Purchaser shall have the right, without Seller’s prior consent, to conduct Phase I environmental assessments and other similar non-invasive testing of the Real Property and Improvements to the extent the same is to be completed by a reputable and insured consultant licensed as required by the State in which the applicable Constituent Real Property is located and carrying the insurance required under Section 5.3 below; provided, that Purchaser shall not conduct any invasive physical testing or sampling, environmental or otherwise, without first obtaining Seller’s prior written consent, which consent may be withheld in Seller’s sole and absolute discretion.
(b) Should Purchaser or the Licensee’s Agents desire to communicate directly with the Authorities for any good faith reasonable purpose in connection with the transaction contemplated by this Agreement, Purchaser shall provide Seller at least twenty-four (24) hours prior written notice of such request (which such notice may be by email). Except as set forth below, Purchaser shall not contact any Authorities in connection with the transaction contemplated by this Agreement without Seller’s prior written consent, which consent may be withheld at Seller’s sole and absolute discretion. In the event Seller grants to Purchaser the right to communicate directly with the Authorities, such right shall be subject to the obligations set forth in Section 5.3 below, and Seller shall have the right to participate in any such communications. Notwithstanding the foregoing, Purchaser or Licensee’s Agents may contact the Authorities, without obtaining Seller’s prior written consent, to request tax and lien searches, and those items necessary to obtain customary zoning reports for the Properties. Notwithstanding the foregoing, neither Purchaser nor Licensee’s Agents shall be required to provide Seller prior written notice or obtain Seller’s written consent prior to conducting generic due diligence (e.g., accessing public records held at an Authority or making customary inquiries regarding the zoning/compliance status of the Property from Authorities), so long as neither Purchaser nor Licensee’s Agents are engaging in discussions (other than requesting information) or conducting interviews regarding the Property with any such Authorities.
Section 5.2 Document Review.
(a) Before the Effective Date, Seller has made available to Purchaser, either via electronic access to the Data Room or by delivery of materials to Purchaser’s representatives, the documents and other information concerning the Property set forth on Exhibit F attached hereto (collectively, the “Documents”).
(b) Except as may otherwise be expressly set forth in the Seller Representations (defined below), Purchaser hereby acknowledges that Seller has not made and does not make any representation or warranty regarding the truth, accuracy or completeness of the Documents except that the Documents provided are true and complete copies of what Seller
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possesses in its files, and Seller has not withheld any Documents in its possession responsive to Exhibit F.
Section 5.3 Entry and Inspection Obligations.
(a) Purchaser agrees that in entering upon and inspecting or examining the Property and communicating with any Tenants, the Licensee’s Agents will take reasonable steps to not unreasonably disturb the Tenants or unreasonably interfere with their use of the Property pursuant to their respective Tenant Leases; unreasonably interfere with the operation and maintenance of the Property; damage any part of the Property or any personal property owned or held by any Tenant or any other person or entity located at the Property; injure or otherwise cause bodily harm to Seller or any Tenant, or to any other person or entity; permit any liens to attach to the Property by reason of the exercise of Purchaser’s rights under this Article V; or communicate with the Tenants or service providers except in accordance with this Article V. Purchaser will: (i) maintain and cause those Licensee’s Agents entering the Property to maintain comprehensive general liability (occurrence) insurance in an amount not less than One Million and No/100 Dollars ($1,000,000.00) covering any accident arising in connection with the activities of the Licensee’s Agents on the Property in connections with the performance of any investigations, examinations or studies thereon, and deliver to Seller a certificate of insurance verifying such coverage with Seller and its property manager being provided additional insured status on such coverage prior to entry upon the Property; (ii) promptly pay when due the costs of all inspections, entries, samplings and tests and examinations done with regard to the Property by any of the Licensee’s Agents; and (iii) to the extent that the physical condition of the Property is altered by any such inspection, investigations, examinations, entries, samplings and tests by any of the Licensee’s Agents, promptly restore the Property substantially to its condition as existed immediately prior to any such alteration.
(b) PURCHASER HEREBY INDEMNIFIES, DEFENDS AND HOLDS SELLER AND ITS MEMBERS, MANAGERS, PARTNERS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, SUCCESSORS, ASSIGNS AND AFFILIATES HARMLESS FROM AND AGAINST ANY AND ALL THIRD PARTY LIENS, CLAIMS AND/OR CAUSES OF ACTION FOR ACTUAL DAMAGES (BUT IN NO EVENT CONSEQUENTIAL, SPECULATIVE, SPECIAL OR PUNITIVE DAMAGES), (INCLUDING BUT NOT LIMITED TO COURT COSTS AND REASONABLE, OUT-OF-POCKET ATTORNEYS’ FEES) ARISING OUT OF ANY INSPECTIONS, INVESTIGATIONS, EXAMINATIONS, ENTRIES, SAMPLINGS OR TESTS CONDUCTED BY ANY LICENSEE PARTY, WITH RESPECT TO THE PROPERTY OR ANY VIOLATION OF THE PROVISIONS OF THIS SECTION 5.3; PROVIDED THAT THE FOREGOING INDEMNITY SHALL NOT APPLY TO LIABILITY, COST, LOSS, DAMAGE OR EXPENSE TO THE EXTENT ATTRIBUTABLE TO (i) THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SELLER OR ANY OF SELLER’S MEMBERS, MANAGERS, PARTNERS, AGENTS, OFFICERS, DIRECTORS, AFFILIATES, CONTRACTORS, OR EMPLOYEES, OR (ii) ANY CLAIMS, DAMAGES OR OTHER COSTS ARISING BY VIRTUE OF THE MERE DISCOVERY OF ANY PRE-EXISTING CONDITION AT THE PROPERTY BY OR IN CONNECTION WITH ANY INSPECTIONS, INVESTIGATIONS, EXAMINATIONS, ENTRIES, SAMPLINGS OR TESTS CONDUCTED BY PURCHASER OR ANY LICENSEE PARTY, OR (iii) ANY DIMINUTION IN THE VALUE OF THE PROPERTY RESULTING FROM THE MERE DISCOVERY OF ANY PRE-EXISTING
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CONDITION AT THE PROPERTY BY OR IN CONNECTION WITH ANY INSPECTIONS, INVESTIGATIONS, EXAMINATIONS, ENTRIES, SAMPLINGS OR TESTS CONDUCTED BY PURCHASER OR ANY OTHER LICENSEE PARTY, SO LONG AS ANY SUCH PRE-EXISTING CONDITION IS NOT EXACERBATED BY PURCHASER OR ANY OTHER LICENSEE PARTY (AND THEN ONLY TO THE EXTENT OF SUCH EXACERBATION).
Section 5.4 Property Approval Period. During the term of this Agreement, Purchaser shall have the right to review and investigate the Property and the items set forth in Section 5.2 above (collectively, the “Due Diligence Items”). Purchaser, in Purchaser’s sole and absolute discretion, may determine whether or not the Property is acceptable to Purchaser within the Property Approval Period. At any time on or prior to the expiration of the Property Approval Period, Purchaser may elect, in its sole and absolute discretion and for any reason or no reason, to terminate this Agreement by delivering a written notice (“Termination Notice”) to Seller (with a copy to the Title Company). If Purchaser has not delivered a Termination Notice to Seller by the expiration of the Property Approval Period, Purchaser will be deemed to have waived its right to terminate pursuant to this Section 5.4. If prior to the expiration of the Property Approval Period, Purchaser delivers a Termination Notice, then this Agreement shall automatically terminate, and the Title Company shall cause the return of the Initial Deposit to Purchaser in accordance with Section 4.5 without further notice to, or consent from, Seller or any other person being required, and except for Termination Surviving Obligations, the parties shall have no further rights or obligations to one another under this Agreement.
Section 5.5 Sale “As Is”. THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT HAS BEEN NEGOTIATED BETWEEN SELLER AND PURCHASER, AND THIS AGREEMENT REFLECTS THE MUTUAL AGREEMENT OF SELLER AND PURCHASER. AS A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, PURCHASER AND SELLER AGREE THAT EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT AND THE DOCUMENTS DELIVERED AT CLOSING (COLLECTIVELY, THE “CLOSING DOCUMENTS”), SELLER IS SELLING AND PURCHASER IS PURCHASING AND TAKING THE PROPERTY ON AN “AS IS, WHERE IS” BASIS, WITH ANY AND ALL LATENT AND PATENT DEFECTS OR OTHER FAULTS. PURCHASER ACKNOWLEDGES THAT PURCHASER IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED PURCHASER OF REAL ESTATE, THAT IT IS SOLELY RELYING UPON ITS EXAMINATION OF THE PROPERTY AND, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT AND THE CLOSING DOCUMENTS, THAT PURCHASER IS NOT RELYING UPON ANY REPRESENTATION, WARRANTY, STATEMENT OR OTHER ASSERTION OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS MANAGERS, MEMBERS, PARTNERS, OFFICERS, DIRECTORS, SHAREHOLDERS, AGENTS, EMPLOYEES, AFFILIATES, REPRESENTATIVES, ATTORNEYS OR BROKERS (THE “SELLER PARTIES”), NOR IS ANY SELLER PARTY MAKING ANY REPRESENTATION, WARRANTY, STATEMENT OR OTHER ASSERTION OF ANY KIND WHATSOEVER TO PURCHASER, AS TO ANY MATTER CONCERNING THE PROPERTY, INCLUDING, WITHOUT LIMITATION: (I) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE STRUCTURAL ELEMENTS, FOUNDATION, ROOF, APPURTENANCES, ACCESS,
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PARKING FACILITIES AND THE ELECTRICAL, MECHANICAL, HVAC, PLUMBING, SEWAGE, AND UTILITY SYSTEMS, FACILITIES AND APPLIANCES, (II) THE QUALITY, NATURE, ADEQUACY, AND PHYSICAL CONDITION OF SOILS, GEOLOGY AND ANY GROUNDWATER, (III) THE EXISTENCE, QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF UTILITIES SERVING THE PROPERTY, (IV) THE DEVELOPMENT POTENTIAL OF THE PROPERTY, AND THE PROPERTY’S USE, HABITABILITY, MERCHANTABILITY, SUITABILITY, MARKETABILITY, VALUE OR FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE, (V) THE ZONING OR OTHER LEGAL STATUS OF THE PROPERTY OR ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS ON USE OF THE PROPERTY, (VI) THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES, LAWS, REGULATIONS, STATUTES, ORDINANCES, COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL ENTITY OR OF ANY OTHER PERSON OR ENTITY, (VII) THE PRESENCE OF HAZARDOUS SUBSTANCES ON, UNDER OR ABOUT THE PROPERTY OR THE ADJOINING OR NEIGHBORING PROPERTY, (VIII) THE QUALITY OF ANY LABOR AND MATERIALS USED IN ANY IMPROVEMENTS ON THE REAL PROPERTY AND THE DESIGN THEREOF, (IX) THE CONDITION OF TITLE TO THE PROPERTY, AND (X) THE ECONOMICS OF THE OPERATION OF THE PROPERTY OR THE FINANCIAL CONDITION OF THE TENANTS OF THE PROPERTY. PURCHASER HAS CONDUCTED (OR WILL CONDUCT PRIOR TO THE EXPIRATION OF THE PROPERTY APPROVAL PERIOD) ITS OWN INDEPENDENT EXAMINATION OF THE PROPERTY, AS PURCHASER DEEMS NECESSARY OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY MATTER RELATING TO THE PROPERTY, INCLUDING HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND AS TO PURCHASER’S PROPOSED USE OF THE PROPERTY. PURCHASER, WITH PURCHASER’S COUNSEL, HAS FULLY REVIEWED THE DISCLAIMERS AND WAIVERS SET FORTH IN THIS AGREEMENT, AND UNDERSTANDS THE SIGNIFICANCE AND EFFECT THEREOF. PURCHASER ACKNOWLEDGES AND AGREES THAT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH HEREIN ARE AN INTEGRAL PART OF THIS AGREEMENT, AND THAT SELLER WOULD NOT HAVE AGREED TO SELL THE PROPERTY TO PURCHASER FOR THE PURCHASE PRICE WITHOUT THE DISCLAIMER AND OTHER AGREEMENTS SET FORTH IN THIS AGREEMENT. THE TERMS AND CONDITIONS OF THIS SECTION 5.5 WILL EXPRESSLY SURVIVE THE CLOSING AND WILL NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS.
UPON CLOSING, EXCEPT WITH RESPECT TO A BREACH BY SELLER OF ANY OF SELLER’S REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE CLOSING DOCUMENTS AND THE OBLIGATIONS OF SELLER IN THIS AGREEMENT AND IN THE CLOSING DOCUMENTS, PURCHASER WILL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER’S INSPECTIONS AND INVESTIGATIONS. WITHOUT LIMITING ANY OF THE PROVISIONS ABOVE IN THIS SECTION 5.5, EXCEPT WITH RESPECT TO A
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BREACH BY SELLER OF ANY OF SELLER’S REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE CLOSING DOCUMENTS AND ANY OTHER OBLIGATIONS OF SELLER THAT BY THE EXPRESS TERMS OF THIS AGREEMENT OR THE CLOSING DOCUMENTS SURVIVE THE CLOSING OR TERMINATION OF THIS AGREEMENT, PURCHASER, FOR AND ON BEHALF OF ITSELF, ANY ENTITY AFFILIATED WITH PURCHASER AND ITS SUCCESSORS AND ASSIGNS, WAIVES ITS RIGHT TO RECOVER FROM AND FOREVER RELEASES AND DISCHARGES THE SELLER AND THE OTHER SELLER PARTIES FROM AND AGAINST ANY AND ALL DEMANDS, CLAIMS, LEGAL OR ADMINISTRATIVE PROCEEDINGS, LOSSES, LIABILITIES, DAMAGES, PENALTIES, FINES, LIENS, JUDGMENTS, COSTS OR EXPENSES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND COSTS) OF WHATEVER KIND OR NATURE, DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING AND FUTURE, CONTINGENT OR OTHERWISE (INCLUDING ANY ACTION OR PROCEEDING, BROUGHT OR THREATENED, OR ORDERED BY ANY APPROPRIATE GOVERNMENTAL ENTITY) THAT MAY ARISE ON ACCOUNT OF OR IN ANY WAY BE CONNECTED WITH OR RELATING TO THE PROPERTY CONDITION OR ANY LAW OR REGULATION APPLICABLE THERETO, INCLUDING WITHOUT LIMITATION, ENVIRONMENTAL LAWS, ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, OR ANY ZONING, ENTITLEMENT AND/OR USE RESTRICTIONS, VIOLATIONS OF ANY APPLICABLE LAWS AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY.
NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT OR THE CLOSING DOCUMENTS, THE FOREGOING SHALL NOT APPLY TO (AND PURCHASER EXPLICITLY DOES NOT RELEASE SELLER OR ANY OF THE OTHER SELLER PARTIES FROM): (I) ANY CLAIMS ARISING FROM OR RELATED TO A BREACH BY SELLER OF ANY OF SELLER’S REPRESENTATIONS, COVENANTS AND/OR WARRANTIES SET FORTH IN THIS AGREEMENT OR ANY OF THE OTHER CLOSING DOCUMENTS (SUBJECT TO THE LIMITATIONS IN SECTION 16.1), (II) ANY OTHER BREACH BY SELLER OF ANY OBLIGATION OF SELLER UNDER THIS AGREEMENT OR THE CLOSING DOCUMENTS THAT SURVIVES CLOSING, (III) ANY CLAIMS RELATED TO SELLER’S FRAUD, OR (IV) ANY PREEXISTING TORT OR PERSONAL INJURY CLAIM ARISING FROM AN EVENT OCCURRING AT THE PROPERTY PRIOR TO THE CLOSING (AND NOT CAUSED BY PURCHASER OR ANY OF THE LICENSEE’S AGENTS).
ARTICLE VI
TITLE AND SURVEY MATTERS
Section 6.1 Survey. Before the Effective Date, Seller delivered to Purchaser a copy of such surveys of the Real Property and the Improvements as Seller has in its possession (collectively, the “Existing Survey”). If the Title Company accepts utilization of the Existing Survey for removal of the standard survey title exceptions, Seller shall be prepared to issue, and shall issue at Closing, the T-47 Affidavit in connection with the Existing Survey (with any changes to the Property since the date of the Existing Survey noted thereon). If the Existing
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Survey is not approved by Title Company for removal of the standard survey title exceptions, Purchaser shall have the right, at its sole cost and expense, to either update the Existing Survey (if any) or procure its own survey of the Real Property and the Improvements (collectively, the “Updated Survey”).
Section 6.2 Title and Survey Review.
(a) Before the Effective Date, Seller caused the Title Company to furnish or otherwise make available to Purchaser one or more title commitments for the Title Policy (as hereinafter defined) covering the Real Property and the Improvements (the “Title Commitment”, whether one or more), and copies of all underlying title documents described in the Title Commitment. Purchaser shall have until 5:00 p.m. Central Time on January 16, 2026 (the “Title Review Period”), to notify Seller, of any objections (the “Title Objections”) with respect to the Title Commitment and the Existing Survey based on Purchaser’s review thereof. If Purchaser does not notify Seller of any Title Objections during the Title Review Period, such failure shall be conclusively deemed to be full and complete approval of the Title Commitment and the Existing Survey and any matter disclosed therein. If Purchaser does notify Seller of Title Objections prior to the end of the Title Review Period, Seller shall have the opportunity, but not an obligation (other than with respect to Mandatory Title Cure Matters), until 5:00 p.m. Central Time on January 30, 2026, to notify Purchaser as to those Title Objections that Seller will cure as of the Closing. If Seller does not elect (or is deemed not to have elected) to cure a particular Title Objection prior to Closing, Purchaser shall elect on or before the expiration of the Property Approval Period, as its sole and exclusive remedy (except with respect to Mandatory Title Cure Matters) to either (i) terminate this Agreement, in which case the Deposit shall promptly be refunded to Purchaser, and neither party shall have any further rights or obligations pursuant to this Agreement, except for the Termination Surviving Obligations, or (ii) waive the unsatisfied Title Objection (which shall thereupon become a Permitted Exception) and proceed to Closing.
(b) If after expiration of the Title Review Period, and prior to the Closing Date, the Title Commitment, Existing Survey or any Updated Survey are revised to include any lien, encumbrance or other exception other than those that Purchaser approved or was deemed to have approved pursuant to Section 6.2(a) above, Seller shall have the opportunity, but not the obligation (except with respect to Mandatory Title Cure Matters), to remove such lien, encumbrance or exception within five (5) days after receiving actual notice of same, and the Closing Date shall be extended if necessary. If Seller is unable or unwilling to remove such lien, encumbrance or exception within such five (5) day period (except with respect to Mandatory Title Cure Matters), Seller shall so notify Purchaser in writing. Purchaser shall elect within three (3) Business Days after receipt of the applicable Seller’s notice to either (i) terminate this Agreement by written notice to Seller whereupon the Deposit will be returned to Purchaser, without further notice to, or consent from, Seller or any other person being required, and neither party shall have any right or obligation pursuant to this Agreement, except for the Termination Surviving Obligations, or (ii) waive the lien, encumbrance or other exception in writing (which shall thereupon become a Permitted Exception) and proceed to Closing. If Purchaser makes no election, Purchaser shall be deemed to have elected to waive such lien, encumbrance or other exception (except with respect to Mandatory Title Cure Matters).
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(c) Notwithstanding anything to the contrary herein, (i) Seller shall be obligated to remove of record as of the Closing all Mandatory Title Cure Matters, (ii) Purchaser shall have no obligation to object to any Mandatory Title Cure Matter, and (iii) no Mandatory Title Cure Matter shall constitute a Permitted Exception; provided, however, that notwithstanding clause (i) above, with respect to mechanics and materialmen’s liens granted or created by Seller, Seller may cure the same by providing, at its sole cost, either an amount to be held in escrow with the Title Company or a bond sufficient, in either case, to cause the Title Company to remove such matter from the Title Policy at no cost or liability to Purchaser.
Section 6.3 Title Insurance. At the Closing, and as a condition to Purchaser’s duty to close, the Title Company shall commit to issue to Purchaser a TLTA Owner’s Policy of Title Insurance (the “Title Policy”) in the amount of the Purchase Price, insuring Purchaser’s fee simple title to the Real Property and the Improvements, subject only to (i) the pre-printed standard exceptions in such Title Policy, except that: (1) the exception relating to ad valorem taxes shall relate only to taxes not due and payable as of the Closing and owing for the year of Closing and subsequent years; and (2) the parties in possession exception shall be deleted except as to the Tenants, as tenants only, with no purchase rights or options, rights of first refusal or offer or similar rights, under the Tenant Leases as set forth on the Rent Roll or entered into after the Effective Date in accordance with this Agreement, (ii) exceptions approved or deemed approved by Purchaser pursuant to Section 6.2 above, (iii) any taxes and assessments for the year of Closing that are not yet due and payable, subject to proration in accordance with this Agreement, (iv) any other matters approved by Purchaser in writing, and (v) any exceptions arising from Purchaser’s actions (collectively, the “Permitted Exceptions”). The Title Policy shall include, at Purchaser’s expense, such endorsements as Purchaser may request and that are offered and made available by the Title Company and that the Title Company agreed to provide prior to the expiration of the Property Approval Period.
ARTICLE VII
INTERIM OPERATING COVENANTS AND ESTOPPELS
Section 7.1 Interim Operating Covenants. Seller covenants to Purchaser that Seller will:
(a) Operations. From the Effective Date until Closing, continue to operate, manage, lease and maintain the Real Property and Improvements in the ordinary course of Seller’s business, in accordance with Governmental Regulations and substantially in accordance with Seller’s present practice, subject to ordinary wear and tear and Article IX of this Agreement.
(b) Maintain Insurance. From the Effective Date until Closing, maintain all property and extended coverage insurance on the Improvements which is at least equivalent in all material respects to Seller’s insurance policies covering the Improvements as of the Effective Date.
(c) Personal Property. From the Effective Date until Closing, not transfer or remove any Personal Property from the Improvements except for the purpose of repair or replacement thereof in the ordinary course of business.
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(d) Leases. During the term of this Agreement, Seller shall keep Purchaser informed of all leasing activity at the Property. From the Effective Date until Closing, Seller shall not enter into any Lease Transaction without the prior written consent of Purchaser, which consent may be given or withheld in Purchaser’s sole and absolute discretion; provided that prior to the commencement of the Restricted Period, Purchaser’s consent shall be given or withheld in Purchaser’s reasonable discretion. Furthermore, nothing herein shall be deemed to require Purchaser’s consent to any expansion, renewal or other amendment which Seller, as landlord, is required to honor pursuant to the express terms of any Tenant Lease as of the Effective Date; provided, that Seller shall promptly provide notice to Purchaser of the same.
(e) Service Contracts. From the Effective Date until Closing, not enter into, or renew the term of, or amend in any material respect, or terminate, any Service Contract or other agreement or contract (other than Tenant Leases, which shall be governed by Section 7.1(d)), unless such Service Contract or other agreement is terminable without cause on thirty (30) days (or less) prior notice without penalty or fees or unless Purchaser consents thereto in writing, which consent may be granted or withheld in Purchaser’s sole discretion.
(f) Notices; Rent Roll. To the extent received by Seller, from the Effective Date until Closing, promptly deliver to Purchaser copies of written default notices, notices of lawsuits (or lawsuits threatened in writing), notices of violations from any Authority, and notices of breach (or alleged breach) of any recorded instrument affecting the Property. Seller will also provide to Purchaser copies of any material notice from a Tenant. From time to time, if requested by Purchaser, Seller will deliver to Purchaser an updated rent roll (including delinquency report) in the form customarily provided by Seller’s property management team.
(g) Termination of Existing Management and Leasing Brokerage Agreements. Terminate management and leasing brokerage agreements with respect to each Constituent Real Property, if any, as of the Closing Date, at Seller’s sole cost and expense. On the Closing Date, there shall be no contract or agreement in effect between Seller and any party for management or leasing of any Constituent Real Property after the Closing Date. Without limitation on the foregoing, in no event shall Purchaser be obligated to employ any of Seller’s employees or property managers from and after the Closing.
(h) Transfer of Warranties. Seller shall: (i) promptly deliver written notice to any party (“Warrantor”) that is liable for any assignable roof, HVAC, LED lighting, sprinkler system or other material warranty that is outstanding with respect to the Improvements (collectively “Warranties”), (ii) use commercially reasonable efforts to cause the Warrantor to deliver to Seller all forms and other requirements for the assignment of the Warranty to Purchaser at or following the Closing (“Warranty Assignment Package”); (iii) keep Purchaser reasonably informed as to the status of Seller’s efforts to cause the Warranties to be assigned to Purchaser at Closing and no later than the expiration of the Property Approval Period, deliver to Purchaser a list of all of the Warranties, together with a written report on the status of the transfer of the same to Purchaser as of the Closing. To the extent any Warranty is not validly assigned at Closing (because, for example, a consent was not obtained), Seller shall continue after Closing to cooperate with Purchaser to have such Warranties validly assigned to Purchaser. All costs associated with the transfer of the Warranties to Purchaser, including any transfer fees (collectively, “Warranty Transfer Costs”) for the roof, shall be paid by Seller. Any other
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Warranty Transfer Costs shall be paid by Purchaser. The obligation to cooperate to transfer Warranties after Closing and to pay the costs of such transfer will survive Closing.
(i) Encumbrances. From the Effective Date until Closing, Seller shall not sell, transfer or otherwise dispose of the Real Property, or any portion thereof, nor enter into any deeds, mortgages, restrictions, encumbrances, liens or other instruments or agreements affecting the Property (or amendments thereto) without the prior written consent of the Purchaser.
Whenever in this Section 7.1 Seller is required to obtain Purchaser’s approval with respect to any transaction or agreement described therein, Seller shall provide a written notice (in accordance to the notice requirements set forth in Section 14.1) that describes the proposed matter in reasonable detail, contains a complete copy of any proposed lease, lease amendment, contract or other proposed agreement relating thereto, and contains the following statement (in capital letters): “NOTE: FAILURE TO RESPOND TO THIS REQUEST FOR APPROVAL WITHIN FIVE (5) BUSINESS DAYS WILL RESULT IN A DEEMED APPROVAL” (any such notice, an “Approval Request Notice”). Purchaser shall, within five (5) Business Days after receipt of Seller’s Approval Request Notice, notify Seller of its approval or disapproval of same and, if Purchaser fails to notify Seller of its approval or disapproval within said five (5) Business Day period, Purchaser shall be deemed to have approved same.
Section 7.2 Tenant Estoppel Certificates; SNDAs. Seller shall use commercially reasonable efforts to obtain and deliver to Purchaser not later than five (5) Business Days prior to the Closing Date, tenant estoppel certificates (each, an “Estoppel Certificate”) dated no earlier than forty-five (45) days prior to the originally scheduled Closing Date, without modification from the form of estoppel certificate attached hereto as Exhibit B (other than in immaterial or de minimis respects), or, if a Tenant Lease specifies or contemplates another form of tenant estoppel certificate, then such other specified or contemplated form) from all of the Tenants (other than Purchaser) (collectively, the “Required Estoppel Certificates”). Notwithstanding the foregoing, if any executed Estoppel Certificate discloses (i) a default, failure or breach by Seller under the applicable Tenant Lease, (ii) any matter which is inconsistent in any material respect with Seller’s representations or warranties in Section 8.1(h) below, or (iii) any adverse matter which is inconsistent in any material respect with the terms and conditions of the applicable Tenant Lease, then such Estoppel Certificate shall not constitute a Conforming Estoppel Certificate. Purchaser and Seller each acknowledge and agree that any Estoppel Certificate may name parties in addition to Purchaser, including Purchaser’s lenders. Purchaser shall have the one-time right, upon not less than three (3) Business Days prior written notice to the Seller, to extend the Closing Date for up to an additional fifteen (15) days in order to allow Seller to obtain the Required Estoppel Certificates, and Seller shall have the one-time right, upon not less than three (3) Business Days prior written notice to the Purchaser, to extend the Closing Date for up to an additional fifteen (15) days in order to obtain the Required Estoppel Certificates. If, despite Seller’s commercially reasonable efforts, Seller fails to obtain the Required Estoppel Certificates in accordance with the provisions of this Section 7.2, the same shall not constitute a default by Seller under this Agreement, and Purchaser’s sole and exclusive remedy for Seller’s failure to obtain the Required Estoppel Certificates prior to the Closing Date notwithstanding Seller’s commercially reasonable efforts shall be to either (A) terminate this Agreement and receive a refund of the Deposit in accordance with Section 10.9 below or (B) proceed with Closing and waive the condition precedent related to the Required Estoppel Certificates. Upon the written
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request of Purchaser, Seller hereby agrees to forward Purchaser’s lender’s form of Subordination, Non-Disturbance and Attornment Agreement (if any) to each Tenant (each, a “SNDA”). Following the end of the Property Approval Period, or earlier with Seller’s prior written consent, Seller shall permit Purchaser to contact Tenants directly to negotiate, finalize and obtain SNDAs. Receipt of the SNDAs shall not be a condition to Closing, and any failure by Seller to obtain the same shall not constitute a default by Seller under this Agreement.
Section 7.3 Contracts. On or prior to the expiration of the Property Approval Period, Purchaser will advise Seller in writing, in Purchaser’s sole and absolute discretion, of which Service Contracts it will assume and which Service Contracts Seller must terminate at or prior to Closing. Seller shall, at Seller’s sole cost, terminate as of or prior to Closing any such Service Contracts which Purchaser does not agree to assume. All management and leasing brokerage agreements shall be terminated by Seller at or before the Closing in accordance with Section 7.1(g).
Section 7.4 REA Estoppels. Seller shall promptly request an estoppel certificate in a form reasonably acceptable to Purchaser (each, an “REA Estoppel”) from each party to each Reciprocal Easement Agreement and shall use commercially reasonable efforts (without cost or liability to Seller other than customary legal fees) to obtain such estoppel certificates, provided that Seller’s inability to deliver such estoppel certificates, despite such commercially reasonable efforts, shall not be deemed a default hereunder. Seller shall deliver to Purchaser a complete copy of each REA Estoppel received by Seller or its agent promptly upon receipt thereof.
Section 7.5 Exclusivity. After the commencement of the Restricted Period, none of Seller, its Affiliates or their respective agents shall make, accept, negotiate, facilitate, or otherwise pursue any offers for sale, purchase or refinancing of the Property.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Section 8.1 Seller’s Representations and Warranties. Subject to the limitations set forth in Article XVI of this Agreement and the remainder of this Section 8.1, Seller represents and warrants to Purchaser, as of the Effective Date and as of the Closing Date, the following:
(a) Status. Seller is a limited partnership, duly organized, validly existing and qualified to do business under the laws of the State of Texas.
(b) Authority. Seller has full power and authority to execute, deliver and carry out the terms and provisions of this Agreement, each Closing Document and all other agreements, instruments and documents herein required to be made or delivered by Seller hereto, and the execution and delivery of this Agreement and the performance of Seller’s obligations hereunder have been duly authorized by all necessary action on the part of Seller, and this Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by general equitable principles and principles governing creditors’ rights generally. No authorization, consent, or approval of any Authorities or any other person or entity is required for the execution and delivery by Seller of this Agreement or the performance of its obligations hereunder.
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(c) Non-Contravention. The execution and delivery of this Agreement by Seller and the performance by Seller of Seller’s obligations under this Agreement will not violate any judgment, order, injunction, decree, regulation or ruling of any court or Authority or conflict with, result in a breach of, or constitute a default under the organizational documents of Seller, any note or other evidence of indebtedness, any mortgage, deed of trust or indenture, or any lease or other material agreement or instrument to which Seller is a party or by which Seller is bound.
(d) Suits and Proceedings, No Violation Notices. Seller has received no written notice of any legal actions, suits or similar proceedings pending, served or threatened with respect to the Property, Seller or Seller’s ownership or operation of the Property, including without limitation condemnation, takings or similar proceedings; and Seller has received no written notice of any violations of any laws, codes, statutes, or other governmental regulation or restrictive covenant relating to the Property; and there are no pending or, to Seller’s knowledge, threatened challenges relating to any Licenses or Permits relating to the Property.
(e) Non-Foreign Entity. With respect to Seller, either (1) Seller is not a disregarded entity as defined in Section 1445 of the Code and Seller is not a nonresident alien individual, foreign partnership, foreign person, foreign corporation, foreign trust or foreign estate, as those terms are defined in the Code or (2) Seller is a disregarded entity as defined in Section 1445 of the Code, but the entity treated as the owner of Seller for income tax purposes is not a nonresident alien individual, foreign partnership, foreign person, foreign corporation, foreign trust or foreign estate, as those terms are defined in the Code.
(f) Bankruptcy. Seller is not insolvent, has not been adjudicated as bankrupt, and is not a party to any voluntary or involuntary proceedings in bankruptcy, reorganization or similar proceedings under the Federal bankruptcy laws or under any state laws relating to the protection of debtors (a “Bankruptcy Proceeding”), or subject to any general assignment for the benefit of creditors, and, to Seller’s knowledge, no such action has been threatened against the Seller or the Property in writing.
(g) Non-Foreign Assets. Seller is in compliance with the requirements of the Executive Order and other similar requirements contained in the rules and regulations of OFAC and in any enabling legislation or other Executive Orders in respect thereof (the Executive Order and such other rules, regulations, legislation, or orders are collectively called the “Orders”). Seller: (i) is not listed on the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to the Executive Order and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Orders (such lists are collectively referred to as the “Lists”); (ii) has not been determined by competent authority to be subject to the prohibitions contained in the Orders; and (iii) Seller is not controlled by, and to Seller’s knowledge is not owned by and does not act for or on behalf of, any person or entity on the Lists or any other person or entity that has been determined by competent authority to be subject to the prohibitions contained in the Orders.
(h) Tenant Leases. Before the Effective Date, Seller has delivered or made available to Seller in the Data Room true, correct and complete copies of all Tenant Leases in effect as of the Effective Date, all related guaranties, and all amendments, modifications and
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supplements thereto. As of the Effective Date, the rent roll attached hereto as Schedule 8.1(h) (the “Rent Roll”) is true, correct and complete in all material respects and is the rent roll that Seller relies upon and uses in the ordinary course of its business. There are no leases, licenses or other occupancy agreements to which Seller is a party or is bound affecting any portion of the Real Property other than the Tenant Leases set forth on the Rent Roll or entered into after the Effective Date in accordance with this Agreement. Seller is the sole owner of the lessor’s interest in all of the Tenant Leases. As of the Effective Date, except as expressly disclosed in the Rent Roll: (1) each Tenant Lease is in full force and effect and constitutes the entire agreement between the applicable Seller and Tenant with respect to the Property; and (2) there are no Tenant Leases that give any Tenant the right to purchase the Property or any part thereof. All security deposits paid by Tenants under the Tenant Leases in effect on the Effective Date are shown on the Rent Roll, and the Rent Roll accurately identifies whether such deposits are in the form of cash, letter of credit or another form. As of the Effective Date, the arrearages schedule that is either contained within or attached to the Rent Roll is true, correct and complete in all material respects. All Existing Leasing Costs (as defined in Section 10.4(g)) are accurately set forth on Exhibit G.
(i) Service Contracts. Except for the Service Contracts listed on Schedule 8.1(i) hereto, or entered into after the Effective Date in accordance with this Agreement (and any Service Contracts that Purchaser elects to assume pursuant to Section 7.3 hereof), there are no Service Contracts to which Seller is a party and by which it is bound that will be binding on Purchaser or the Property after Closing. As of the Effective Date, Schedule 8.1(i) hereto contains a true, correct and complete list of all Service Contracts. Before the Effective Date, Seller has delivered or made available to Purchaser true, correct and complete copies of the Service Contracts (and all amendments, modifications, extensions and supplements thereto), and the same constitute the entire agreement between Seller and the respective counterparty relating to the Property. As of the Effective Date, Seller has not received nor delivered any written notice of any default under any Service Contract that has not been cured or waived in writing.
(j) ERISA. Seller is not, and is not acting on behalf of, (i) an “employee benefit plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”)) that is subject to Title I of ERISA, (ii) a “plan” as defined in Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code (each of the foregoing a “Plan”), (iii) an entity or account the assets of which constitute “plan assets” of one or more such Plans within the meaning of Department of Labor Regulation 29 CFR Section 2510.3-101, as modified by Section 3(42) of ERISA, or (iv) a “governmental plan” within the meaning of Section 3(32) of ERISA.
(k) Hazardous Substances. Except as set forth on Schedule 8.1(k), Seller has not received any written notice of: (1) the presence of any Hazardous Substances at the Property in violation of any Environmental Law or that require any remediation under applicable Environmental Laws; or (2) the presence of any underground storage tanks on any portion of the Property (other than as disclosed in any environmental reports provided to Purchaser before the Effective Date).
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(l) Personal Property. The Personal Property listed on Schedule 8.1(l) constitutes all of the material Personal Property owned by Seller and currently used in connection with the ownership and operation of the Improvements.
(m) No Preemptive Rights. Seller is the sole legal fee owner of the Property, and is not holding fee title as a nominee for any other person or entity. Seller has not granted any option, right of first or last refusal, right of first offer, or similar right to purchase the Property or any portion thereof to any party.
(n) Employees. No individuals have been or presently are employed by Seller and there are no employment agreements to which Seller is party, which will be binding on Purchaser or the Property after the Closing. Following the Closing, there will be no obligations concerning any pre-Closing employees or property manager with which Seller has entered into a property management agreement, which will be binding on Purchaser or the Property.
(o) Definition of Seller’s Knowledge. The individual or individuals named in the definition of “To Seller’s knowledge” herein are the representatives of the entity that controls Seller who as of the Effective Date, are most familiar with the ownership, leasing and operation of the Property on a daily basis.
Seller’s representations and warranties set forth in this Agreement and in the Closing Documents (collectively, the “Seller Representations”) are qualified by all matters that are within Purchaser’s knowledge as of the Closing. For purposes of this Agreement, a matter or state of facts shall be deemed to be within Purchaser’s knowledge if (and only if): (1) it is expressly disclosed in any executed Estoppel Certificate received by Purchaser before the Closing; (2) it is expressly contained in the Documents or any other documents delivered to or made available to Purchaser by or on behalf of Seller not less than two (2) Business Days before the Closing; (3) it is expressly disclosed in writing to Purchaser promptly after Seller receives or otherwise obtains such information with notice to Purchaser of same and in any event not less than two (2) Business Days before Closing; or (4) it is otherwise actually known to Purchaser’s Representative before the Closing. For purposes of this Agreement, Documents and other information and agreements shall be considered to have been delivered to or made available to Purchaser only if, not less than two (2) Business Days before the expiration of the Property Approval Period (or if received or otherwise obtained by Seller after the expiration of the Property Approval Period, promptly after Seller receives or otherwise obtains such information with notice to Purchaser of same), but in any event, no less than two (2) Business Days before Closing, such documents, agreements or information are placed into the following data site (the “Data Room”): If Seller has actual knowledge that any of the representations and warranties contained in this Section 8.1 may cease to be true, Seller shall give prompt written notice to Purchaser (which notice shall include copies of the instrument, correspondence, or document, if any, upon which Seller’s notice is based and include a specific reference to the applicable Seller Representation) and Seller shall have the opportunity to cure the same in accordance with this paragraph (provided, that, such cure shall be completed prior to the scheduled Closing Date). In the event Seller elects not to, does not, or cannot cure, the inaccurate representation or warranty pursuant to its cure rights in this paragraph, then Seller shall be deemed unable to meet the condition precedent set forth in Section 10.8 and Purchaser may terminate this Agreement by written notice to Seller and the Title Company shall promptly return the Deposit to Purchaser,
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and the parties hereto shall thereafter have no further obligation to each other, except for the Termination Surviving Obligations.
Section 8.2 Purchaser’s Representations and Warranties. Purchaser represents and warrants to Seller the following:
(a) Status. Purchaser is a corporation, duly organized and validly existing under the laws of the State of Nevada.
(b) Authority. The execution and delivery of this Agreement and the performance of Purchaser’s obligations hereunder have been (or shall be as of the Closing) duly authorized by all necessary action on the part of Purchaser and its constituent owners and/or beneficiaries and this Agreement constitutes the legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except as such enforceability may be limited by general equitable principles and principles governing creditors’ rights generally. To Purchaser’s knowledge, no authorization, consent, or approval of any governmental authority or any other person or entity is required for the execution and delivery by Purchaser of this Agreement or the performance of its obligations hereunder.
(c) Non-U.S. Pension Plan. The execution and delivery of this Agreement, the performance of Purchaser’s obligations hereunder and the consummation of the transactions contemplated hereby, including, without limitation, the purchase and holding of the Property, do not and will not result in a violation of any law, statute, regulation, administrative decision, policy or any other legal authority applicable to any employee benefit plan or arrangement not subject to Title I of ERISA, or Section 4975 of the Code, but subject to provisions under any other federal state, local, non-U.S. or other laws or regulations that are substantively similar to such provisions of ERISA or the Code.
(d) Non-Contravention. The execution and delivery of this Agreement by Purchaser and the consummation by Purchaser of the transactions contemplated hereby will not violate any judgment, order, injunction, decree, regulation or ruling of any court or Authority or conflict with, result in a breach of, or constitute a default under the organizational documents of Purchaser, any note or other evidence of indebtedness, any mortgage, deed of trust or indenture, or any lease or other material agreement or instrument to which Purchaser is a party or by which it is bound.
(e) Consents. No consent, waiver, approval or authorization is required from any person or entity (that has not already been obtained) in connection with the execution and delivery of this Agreement by Purchaser or, subject to Section 5.4, the performance by Purchaser of the transactions contemplated hereby.
(f) Prohibited Persons. Purchaser is in compliance with the requirements of the Orders. Purchaser: (i) is not listed on the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to the Executive Order and/or on any other List; (ii) has not been determined by competent authority to be subject to the prohibitions contained in the Orders; and (iii) Purchaser is not controlled by, and to Purchaser’s knowledge is not owned by and does not act for or on behalf of, any person or entity on the Lists or any other person or
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entity that has been determined by competent authority to be subject to the prohibitions contained in the Orders.
ARTICLE IX
CONDEMNATION AND CASUALTY
Section 9.1 Significant Casualty. If, prior to the Closing Date, all or any portion of the Real Property and the Improvements thereon is destroyed or damaged by fire or other casualty, Seller will promptly notify Purchaser in writing of such casualty, which notice shall include a reasonably detailed description thereof, including the estimated cost to repair (any such notice, a “Casualty Notice”). Purchaser will have the option, in the event all or any Significant Portion of such Real Property or Improvements thereon is so destroyed or damaged, to terminate this Agreement upon notice to Seller given not later than ten (10) days after receipt of Seller’s Casualty Notice. If this Agreement is terminated, the Deposit will promptly be returned to Purchaser, without further notice to, or consent from, Seller or any other person being required, and thereafter neither Seller nor Purchaser will have any further rights or obligations to the other hereunder except with respect to the Termination Surviving Obligations. If Purchaser does not elect to terminate this Agreement, Seller will repair such damage at Seller’s expense as and when required by any Tenant Lease, applicable law or, with Purchaser’s prior written consent which may not be unreasonably withheld, conditioned or delayed, prudent ownership and management standards. If repairs are not required by any Tenant Lease, applicable law or prudent ownership and management standards, or cannot be completed prior to the Closing Date, Seller will not be obligated to repair such damage or destruction, and if Purchaser does not elect to terminate this Agreement but instead elects to proceed to Closing, (a) Seller will assign and turn over to Purchaser all of the insurance proceeds net of reasonable third party out-of-pocket collection costs and less any reasonable, out-of-pocket, third party amounts expended by Seller to make any repairs or to remedy any unsafe conditions at the Real Property (as documented to Purchaser’s reasonable satisfaction), other than repairs which are the responsibility of Tenants under Tenant Leases (or, if such proceeds have not been awarded, all of its right, title and interest therein) payable with respect to such fire or other casualty (excluding any proceeds of insurance that are payable on account of any business interruption, rental insurance or similar coverage intended to compensate Seller for loss of rental or other income from the Real Property attributable to periods prior to the Closing (as documented to Purchaser’s reasonable satisfaction)), (b) the parties will proceed to Closing pursuant to the terms hereof without abatement of the Purchase Price; provided, however, that the Purchase Price shall be reduced by any applicable deductible or uninsured portion of the casualty, and (c) Seller shall not compromise, settle, or adjust any claims to such insurance proceeds without Purchaser’s prior written consent, which may not be unreasonably withheld, conditioned or delayed. If the Closing Date would otherwise occur sooner, it shall automatically be extended to the date that is twenty (20) Business Days after written notice from Seller to Purchaser of the casualty.
Section 9.2 Casualty of Less Than a Significant Portion. If less than a Significant Portion of the Real Property and the Improvements thereon is damaged as aforesaid, Purchaser shall not have the right to terminate this Agreement and Seller will not be obligated to repair such damage or destruction unless failure to promptly do so would constitute a default under any Tenant Lease, a violation of applicable law or risk to health or safety, but (a) Seller will assign and turn over to Purchaser all of the insurance proceeds net of reasonable third party out-of-
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pocket collection costs documented to Purchaser’s reasonable satisfaction (or, if such proceeds have not been awarded, all of its right, title and interest therein) payable with respect to such fire or other casualty (excluding any proceeds of insurance that are payable on account of any business interruption, rental insurance or similar coverage intended to compensate Seller for loss of rental or other income from the Constituent Real Property attributable to periods prior to the Closing (as documented to Purchaser’s reasonable satisfaction)), and (b) the parties will proceed to Closing pursuant to the terms hereof without abatement of the Purchase Price, except that Purchaser will receive a credit against cash due at Closing for the amount of the deductible on such insurance policy, and/or any uninsured portion of such casualty, less any third party amounts expended by Seller to collect any such insurance proceeds or to make such repairs or to remedy any unsafe conditions at the Real Property (in each case as documented to Purchaser’s reasonable satisfaction), other than repairs which are the responsibility of Tenants under Tenant Leases.
Section 9.3 Condemnation of Property. In the event of condemnation or sale or proceeding in lieu of condemnation of all or any Significant Portion of the Real Property and the Improvements thereon or if Seller shall receive an official notice from any governmental authority having eminent domain power over the Real Property and the Improvements thereon of its intention to take, by eminent domain proceeding or otherwise, all or any Significant Portion of the Real Property and the Improvements thereon, Purchaser will have the option, by providing Seller written notice within ten (10) days after receipt of Seller’s written notice of such condemnation or sale (the “Condemnation Notice”), of terminating Purchaser’s obligations under this Agreement or electing to have this Agreement remain in full force and effect. In the event Purchaser does not terminate this Agreement pursuant to the preceding sentence, Seller will assign to Purchaser any and all claims for the proceeds of such condemnation or sale to the extent the same are applicable to the Real Property and the Improvements thereon, and Purchaser will take title to the Real Property with the assignment of such proceeds and subject to such condemnation and without reduction of the Purchase Price. Should Purchaser elect to terminate Purchaser’s obligations under this Agreement under the provisions of this Section 9.3, the Deposit will promptly be returned to Purchaser, without further notice to, or consent from, Seller or any other person being required, and neither Seller nor Purchaser will have any further obligation under this Agreement except for the Termination Surviving Obligations. Notwithstanding anything to the contrary herein, if any eminent domain or condemnation proceeding is instituted (or notice of same is given) solely for the taking of any subsurface rights for utility easements or for any right-of-way easement, and after such taking, in Purchaser’s reasonable determination, the surface may be used in substantially the same manner as though such rights have not been taken, Purchaser will not be entitled to terminate this Agreement as to any part of the Property, but any award resulting therefrom will be assigned to Purchaser at Closing and will be the exclusive property of Purchaser upon Closing. If the Closing Date would otherwise occur sooner, it shall automatically be extended to give Purchaser the full ten (10) day period following receipt of the Condemnation Notice to make an election.
Section 9.4 Post-Closing Cooperation. If any insurance or condemnation proceeds paid or payable on account of a fire (or other casualty) or any taking or condemnation are to be assigned to Purchaser in accordance with the provisions of this Agreement, Seller shall cooperate as reasonably requested by Purchaser, at Purchaser’s sole cost and expense, to effectuate such assignment (including, if necessary, prosecuting claims in Purchaser’s name or for Purchaser’s
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benefit), and Seller’s obligation to so cooperate shall survive the Closing. The provisions of this Section 9.4 shall survive the Closing.
ARTICLE X
CLOSING
Section 10.1 Closing. The Closing of the sale of the Property by Seller to Purchaser will occur on the Closing Date through the escrow established with the Title Company. At Closing, the events set forth in this Article X will occur, it being understood that the performance or tender of performance of all matters set forth in this Article X are mutually concurrent conditions which may be waived by the party for whose benefit they are intended.
Section 10.2 Purchaser’s Closing Obligations. On or before the Deposit Time, Purchaser, at its sole cost and expense, will deliver the following items in escrow with the Title Company pursuant to Section 4.3, for delivery to Seller at Closing as provided herein:
(a) The Purchase Price, after credit for the Deposit and all adjustments are made at the Closing as herein provided, by Federal Reserve wire transfer of immediately available funds, in accordance with the timing and other requirements of Section 3.2;
(b) Two (2) counterparts of the General Assignment attached hereto as Exhibit C (the “General Assignment”), duly executed by Purchaser;
(c) Subject to Section 10.7, a counterpart of each of the Tenant Notice Letters (as defined in Section 10.7 below), duly executed by Purchaser;
(d) The Property Management Agreement (as hereinafter defined), duly executed by Purchaser;
(e) Such disclosures and reports as are customarily required from a buyer by applicable state and local law in connection with the conveyance of real property, including, but not limited to, transfer tax forms; and
(f) Such other documents as may be reasonably necessary or appropriate to effect the consummation of the transactions which are the subject of this Agreement, including, without limitation, the Closing Statement (as defined in Section 10.4), duly executed and delivered.
Section 10.3 Seller’s Closing Obligations. Seller, at its sole cost and expense, will deliver the following items in escrow with the Title Company pursuant to Section 4.3 on or before the Deposit Time (provided that items (k), (l), and (m) may be delivered to Purchaser outside of escrow upon receipt of the Purchase Price):
(a) A Special Warranty Deed substantially in the form attached hereto as Exhibit D (the “Deed”), duly executed and acknowledged by Seller conveying title in fee simple to the Real Property and the Improvements, subject only to the Permitted Exceptions.
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(b) Two (2) counterparts of the General Assignment, duly executed by Seller;
(c) The Tenant Notice Letters, duly executed by Seller;
(d) The Property Management Agreement, duly executed by Property Manager (as hereinafter defined);
(e) A certificate in the form attached hereto as Exhibit E, as applicable (each, a “Certificate as to Foreign Status”), duly executed by or on behalf of Seller certifying that Seller is not a “foreign person” as defined in Section 1445 of the Internal Revenue Code of 1986, as amended;
(f) The Tenant Deposits as part of an adjustment to the Purchase Price. In the event the Tenant Deposits are in the form of a letter of credit, then Seller shall deliver at Closing the original letter(s) of credit, together with documentation sufficient to cause the letter(s) of credit to be assigned to Purchaser upon approval thereof by the issuer of the letter(s) of credit. If any security deposit that is comprised of a letter of credit is not actually transferred to Purchaser effective as of the Closing, (1) Seller and Purchaser shall cooperate with each other following the Closing so as, as soon as reasonably possible, to transfer the same to Purchaser or obtain a replacement letter of credit with respect thereto in favor of Purchaser, (2) until any such letter of credit shall be transferred to Purchaser or replaced by a new letter of credit in favor of Purchaser, Seller shall hold the existing letter of credit on behalf of, and as agent for, Purchaser, and shall act with respect thereto solely as directed by Purchaser (including drawing on the same and delivering the proceeds thereof to Purchaser if Purchaser so directs). Purchaser shall indemnify, defend and hold harmless Seller from any and all loss, cost, damage or liability (including reasonable attorneys’ fees) incurred by Seller as a result of Seller acting, following the Closing, with respect to any such letter of credit in accordance with Purchaser’s written directions. Any applicable fees and charges imposed by the issuer(s) to effect a transfer of letter of credit or other non-cash security deposits shall be paid by Seller to the extent not the obligation of the subject Tenant under its Tenant Lease. The provisions of this Section 10.3(e) with respect to the post-Closing transfer of letters of credit (or other non-cash security deposits) to Purchaser shall survive the Closing;
(g) All original Estoppel Certificates and REA Estoppels (as applicable);
(h) An updated Rent Roll and arrearages report with respect to each Constituent Real Property, certified by the Seller to be true, correct and complete (except in any de minimis or immaterial respect), each dated not earlier than one (1) Business Day prior to the Closing Date;
(i) Evidence of the payment in full by Seller of all Existing Leasing Costs and any other amounts that were due and payable by the landlord under the Tenant Leases before the Closing and/or a credit against the Purchase Price in the amount of any unpaid Existing Leasing Costs or other such amounts;
(j) Evidence reasonably satisfactory to Purchaser of termination of (1) all property management agreements and leasing brokerage agreements relating to any Constituent
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Real Property and (2) all other Service Contracts to be terminated by Seller pursuant to Section 7.3;
(k) Such affidavits, documents and certifications as the Title Company may reasonably require with respect to the issuance of the Title Policy to Purchaser in accordance with Section 6.3, including a debt, liens and possession affidavit, and such evidence or documents as may be reasonably required by the Title Company (A) to allow it to delete any exceptions for: (i) mechanics’ or materialmen’s liens granted or created by Seller; or (ii) parties in possession other than the Tenants, as Tenants only, under the Tenant Leases; or (B) relating to the status and capacity of Seller and the authority of the person or persons who are executing the various documents on behalf of Seller in connection with the sale of the Property;
(l) Originals or, if unavailable, copies, of all permits, licenses and approvals relating to the ownership, use or operation of the Real Property, books and records, plans, specifications, guaranties and warranties relating to the ownership, use or operation of the Property, all to the extent in Seller’s possession or control;
(m) The Personal Property;
(n) All keys and combinations to the Improvements which are in Seller’s possession or control;
(o) Such disclosures and reports as are customarily required from a seller by applicable state and local law in connection with the conveyance of real property, including, but not limited to, transfer tax forms; and
(p) Such other documents as may be reasonably required by the Title Company to issue the Title Policy or as may be reasonably necessary or appropriate to effect the consummation of the transactions which are the subject of this Agreement, including, without limitation, the Closing Statement duly executed and delivered.
Section 10.4 Prorations.
(a) The day of Closing shall belong to Purchaser and all prorations hereinafter provided to be made as of 11:59 pm (Central time) on the day immediately preceding the Closing Date (the “Closing Time”). Seller will be charged and credited for each proration set forth below (collectively, the “Proration Items”), relating to the period up to and including the Closing Time, and Purchaser will be charged and credited for all of the Proration Items relating to the period after the Closing Time. Such preliminary estimated Closing prorations shall be set forth on a preliminary closing statement to be prepared by Seller and submitted to Purchaser for Purchaser’s approval at least five (5) Business Days prior to the Closing Date (the “Closing Statement”); and Seller shall provide Purchaser with evidentiary documentation of such estimated Closing prorations when reasonably requested by Purchaser. The Closing Statement, once agreed upon, shall be signed by Purchaser and Seller and delivered to the Title Company for purposes of making the preliminary proration adjustment at Closing subject to the final cash settlement provided for below. The preliminary proration shall be paid at Closing by Purchaser to Seller (if the preliminary prorations result in a net credit to Seller) or by Seller to Purchaser (if the preliminary prorations result in a net credit to Purchaser) by increasing or reducing the cash
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to be delivered by Purchaser in payment of the Purchase Price at the Closing. If the actual amounts of the Proration Items are not known as of the Closing Time, the prorations will be made at Closing on the basis of the best evidence then available; thereafter, when actual figures are received (but in any event, no later than the outside time periods provided in this Section 10.4), re-prorations will be made on the basis of the actual figures, and a final cash settlement will be made between Seller and Purchaser.
(b) Purchaser will receive a credit on the Closing Statement for the prorated amount (as of the Closing Time) of all Rentals previously paid to and collected by Seller and attributable to any period following the Closing Time. After the Closing, Seller will cause to be paid or turned over to Purchaser all Rentals, if any, received by Seller after Closing and properly attributable to any period following the Closing Time. “Rentals” as used herein includes all rent payable under the Tenant Leases (excluding Tenant payments for Expense Reimbursements (as defined in Section 10.4(c) below) and other collected income from the Property, excluding specific tenant billings which are governed by Section 10.4(d) below. Rentals are “Delinquent” if they were due prior to the Closing Time and payment thereof has not been made on or before the Closing Time. Delinquent Rentals will not be prorated. Without limitation on the foregoing rights of Seller, to the extent Purchaser receives Rentals on or after the Closing Date, from any Tenant (excluding Tenant payments for Expense Reimbursements attributable to the period prior to the Closing Time governed by Section 10.4(c) below and Tenant specific billings for Tenant work orders and other specific services as described in and governed by Section 10.4(d) below, which shall be payable to and belong to Seller in all events), such Rentals will be applied first, to Purchaser’s reasonable cost of collection, second, to Rentals due for any period after the Closing Time, until all such amounts are paid in full to Purchaser, and then, to Rentals for the month of Closing, and then to prior delinquencies owed by such Tenant to Seller for the period prior to the Closing Time. From and after the Closing, Seller shall have no right to pursue the collection of Delinquent Rentals or to institute any litigation or eviction proceeding regarding the same. Following the Closing for a period of ninety (90) days, Purchaser shall use commercially reasonable efforts (in accordance with its ordinary course of its business) to collect Rentals that are Delinquent as of the Closing, provided that Purchaser shall have no obligation to issue any default notices, terminate any Tenant Lease, apply any security deposit or institute litigation or eviction proceedings regarding the same. Any sums collected by Purchaser and due Seller pursuant to the terms of this Agreement will be promptly remitted to Seller, and any sums collected by Seller and due Purchaser pursuant to the terms of this Agreement will be promptly remitted to Purchaser, in all instances within fourteen (14) days after collection. Seller will promptly notify Purchaser if it receives any Rentals following Closing and, if Purchaser notifies Seller that it is owed Rentals from the Tenant who paid such Rentals, then Seller will promptly turn over such Rentals to Purchaser for apportionment in accordance with this Agreement, subject to Section 10.4(c) or (d) below, if applicable.
(c) Seller, as landlord under the Tenant Leases, is currently collecting from the Tenants under the Tenant Leases additional rent (collectively, “Expense Reimbursements”) to cover taxes, insurance, utilities (to the extent not paid directly by Tenants), common area maintenance and other operating costs and expenses (collectively, “Operating Costs”) in connection with the ownership, operation, maintenance and management of the Property. Purchaser and Seller acknowledge and agree that Expense Reimbursements which Seller has collected from Tenants under the Tenant Leases for calendar year 2026 from January 1, 2026,
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through and including the date immediately prior to the Closing Date (“Seller’s Reconciliation Period”), have not yet been reconciled with the Tenants to the extent Seller’s recovery of such expenses from the Tenants for such period exceeds, or is less than, the actual amount of Operating Costs for such period (the “Tenant Reconciliation”). In connection with the Tenant Reconciliation, the parties agree that within a reasonable time after Closing (not to exceed ninety (90) days after Closing), Seller shall deliver to Purchaser the data reasonably supporting the Expense Reimbursements Seller collected from the Tenants during Seller’s Reconciliation Period and the amount of Operating Costs actually paid by Seller during Seller’s Reconciliation Period. If a Tenant has underpaid such Operating Costs, Purchaser shall bill the Tenant for such Operating Costs and shall remit any amounts actually received with respect to such underpaid Operating Costs to Seller promptly upon receipt form the particular Tenant. If a Tenant has overpaid Operating Costs, Seller shall promptly remit to Purchaser landlord’s portion of such overpaid Operating Costs. All Expense Reimbursements received by Purchaser following the Closing shall be applied against Operating Costs accrued during Purchaser’s ownership unless a Tenant has specified in writing that such payment relates to an amount due prior to the Closing. Operating Costs for Seller’s period of ownership shall be reasonably estimated by the parties if final bills are not available. Operating Costs that are payable by Tenants directly to the applicable service providers shall not be prorated between Seller and Purchaser.
(d) With respect to specific Tenant billings for work orders, special items performed or provided at the request of a given Tenant or other specific services, which are collected by Purchaser or Seller after the Closing Time but relate to any such specific services rendered by Seller or its property manager prior to the Closing Time and which are identified on the Tenant’s payment as relating to such specific services or which are clearly identifiable as being payment for any such specific services, provided Seller delivers to Purchaser on or prior to Closing detailed documentation supporting these items. Purchaser shall use commercially reasonable efforts (in accordance with its ordinary course of its business) for a period of ninety (90) days after the Closing, at no out-of-pocket cost to Purchaser, to collect the special service billing and cause any collected amounts to be paid to Seller, or Seller may retain such payment if such payment is received by Seller after the Closing Time, with notice to Purchaser that Seller has received payment of same.
(e) Real estate taxes and assessments imposed by governmental authority that are not yet due and payable and that are not payable by Tenants under the Tenant Leases directly to the governmental authorities shall be prorated as of the Closing based upon the most recent ascertainable assessed values and tax rates. Purchaser shall receive a credit at Closing in the amount of all unpaid real estate taxes and assessments attributable to the period of January 1, 2026 through the Closing Time. Seller shall receive a credit for any taxes and assessments paid by Seller and applicable to any period after the Closing. Any delinquent taxes and assessments will be paid by Seller at Closing.
(f) Seller shall arrange for a billing under all those Service Contracts that Purchaser has elected to assume pursuant to Section 7.3 hereof and for which fees are based on usage and with utility companies for a billing for utilities, to include all utilities or services used up to the Closing Time, and Seller shall pay the resultant bills. In the event any of the Service Contracts that Purchaser has elected to terminate extend over periods beyond the Closing Time, Seller shall be solely responsible for the timely payment of any amounts applicable to such
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Service Contracts. Seller will be entitled to all deposits presently in effect with the utility providers, and Purchaser will be obligated to make its own arrangements for deposits with the utility providers.
(g) For the purposes hereof, “Leasing Costs” means any Leasing Commissions (as hereafter defined) and any out-of-pocket payments required under a Tenant Lease to be paid by the landlord thereunder (including the cost of work to be performed by or on behalf of the landlord) to or for the benefit of the Tenant thereunder, which is in the nature of a tenant inducement or concession, including, without limitation, tenant improvement costs, and other work allowances, lease buyout costs, and moving allowances. “Leasing Commissions” shall mean any leasing commission payable to any broker in connection with a Tenant Lease for the initial term of any Tenant Lease or in connection with any renewal, or extension period and/or expansion option. At or before the Closing, Seller shall pay (or provide Purchaser with a credit against the Purchase Price in the amount of) all Leasing Costs relating to or arising from any Tenant Lease or renewal, amendment, modification or supplement thereto, executed prior to the Effective Date (other than any Leasing Costs that relate to the exercise, after the Effective Date, of a renewal or expansion option set forth in the Tenant Leases as of the Effective Date), all of which are specifically identified on Exhibit G attached hereto (collectively, the “Existing Leasing Costs”). Following the Closing, Purchaser shall be responsible for the payment of all Leasing Costs relating to or arising from any Tenant Lease or renewal, amendment, modification or supplement thereto, executed from or after the Effective Date, in accordance with this Agreement. If, as of the date of Closing, Seller shall not have paid any of the Existing Leasing Costs identified on Exhibit G attached hereto (as documented to Purchaser’s reasonable satisfaction), Purchaser shall receive a credit against the Purchase Price at Closing in an amount equal to such unpaid Existing Leasing Costs and Purchaser shall assume (to the extent of such credit) the obligation to pay same. Following the Closing, Purchaser will be solely responsible for and shall pay all “New Tenant Costs,” which means any Leasing Costs for any spaces within the Property that are not leased as of the Effective Date, but thereafter are leased to third parties by Seller in compliance with this Agreement or for which Tenant Leases in effect as of the Effective Date are renewed, expanded or extended after the Effective Date, whether pursuant to a renewal, expansion or extension option set forth in the applicable Tenant Lease as of the Effective Date or otherwise. If Seller has paid any New Tenant Costs prior to the Closing, then such costs (as documented to Purchaser’s reasonable satisfaction) shall be a credit to Seller at Closing; if such New Tenant Costs have not been paid by Seller prior to the Closing, then Purchaser shall be responsible for paying the same after the Closing.
(h) At Closing, Seller shall provide Purchaser with a credit for any abated and/or free rent/zero rent (including any abated common area maintenance and other operating expenses) under any Tenant Lease that is executed on or before the Effective Date and that is applicable to the period from and after the Closing.
(i) All other items of operating income and expense with respect to the Property that are customarily apportioned in connection with real estate closings of commercial properties located in Texas shall be apportioned in accordance with customary closing practices.
(j) If final prorations cannot be made at Closing for any item being prorated under this Section or if any of the aforesaid prorations were calculated inaccurately, then
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Purchaser and Seller agree to allocate such items on a fair and equitable basis as soon as reasonably possible after the Closing Date, to the effect that income and expenses are received and paid by the parties on a cash basis with respect to their period of ownership. Payments in connection with the final adjustment shall be due within thirty (30) days of written notice. The provisions of this paragraph shall survive the Closing for one (1) year (and thereafter with respect to any written claim made by Seller or Purchaser within such period).
(k) PURCHASER WILL INDEMNIFY, DEFEND, AND HOLD SELLER HARMLESS FROM AND AGAINST ALL DEMANDS AND CLAIMS MADE BY TENANTS ARISING OUT OF THE TRANSFER OR DISPOSITION OF ANY TENANT DEPOSITS BUT ONLY TO THE EXTENT SUCH TENANT DEPOSITS HAVE BEEN ACTUALLY TRANSFERRED TO PURCHASER AND WILL REIMBURSE SELLER FOR ALL REASONABLE ATTORNEYS’ FEES INCURRED OR THAT MAY BE INCURRED AS A RESULT OF ANY SUCH CLAIMS OR DEMANDS AS WELL AS FOR ALL LOSSES, EXPENSES, VERDICTS, JUDGMENTS, SETTLEMENTS, INTEREST, COSTS AND OTHER EXPENSES INCURRED OR THAT MAY BE INCURRED BY SELLER AS A RESULT OF ANY SUCH CLAIMS OR DEMANDS BY TENANTS. THE INDEMNITY SET FORTH IN THIS PARAGRAPH SHALL SURVIVE CLOSING.
Section 10.5 Delivery of Real Property. Upon completion of the Closing, Seller will deliver to Purchaser possession of the Real Property and Improvements, subject only to the Tenant Leases and the Permitted Exceptions.
Section 10.6 Costs of Title Company and Closing Costs. Costs of the Title Company and other Closing costs incurred in connection with the Closing will be allocated as follows:
(a) Purchaser will pay (i) all premiums for the area and boundary deletion and any endorsements or modifications to the Title Policy requested by Purchaser, (ii) all premiums and other costs for any mortgagee policy of title insurance, including but not limited to any endorsements or deletions, (iii) Purchaser’s attorney’s fees, (iv) 1/2 of any escrow fee, (v) recording fees (other than the recording fees to be paid by Seller in accordance with Section 10.6(b)), and (vi) other expenses stipulated to be paid by Purchaser under other provisions of this Agreement;
(b) Seller will pay (i) the basic premium for the Title Policy, except for the premiums for the area and boundary deletion and any endorsements or modifications requested by Purchaser, which shall be paid by Purchaser, (ii) 1/2 of any escrow fee, (iii) tax certificates, (iv) Seller’s attorneys’ fees, (v) the cost of the Existing Survey, (vi) the cost to record any documents necessary in order for Seller to convey title to the Property as required by this Agreement (including all costs related to obtaining and recording any releases of any mortgages, liens or other encumbrances that are not Permitted Exceptions), and (vii) other expenses stipulated to be paid by Seller under other provisions of this Agreement; and
(c) Any other costs and expenses of Closing not provided for in this Section 10.6 shall be allocated between Purchaser and Seller in accordance with the custom in the county in which the Real Property is located.
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Section 10.7 Post-Closing Delivery of Tenant Notice Letters. Within one (1) Business Day following the Closing, the Title Company shall deliver to Purchaser for Purchaser’s delivery to each Tenant (via overnight mail or certified mail, return receipt requested) a written notice, which notices shall be prepared by Seller using the form attached hereto as Exhibit H and executed by Purchaser and Seller (the “Tenant Notice Letters”). At Seller’s written request, Purchaser shall provide to Seller a copy of each Tenant Notice Letter promptly after delivery of same. This Section 10.7 shall survive Closing.
Section 10.8 General Conditions Precedent to Purchaser’s Obligations Regarding the Closing. In addition to the conditions to Purchaser’s obligations set forth elsewhere in this Agreement, the obligations and liabilities of Purchaser to Close the sale/purchase transaction hereunder shall in all respects be conditioned upon the satisfaction of each of the following conditions, any of which may be waived by written notice from Purchaser to Seller:
(a) Seller shall have complied with and otherwise performed each of the covenants and obligations of Seller set forth in this Agreement (other than in immaterial or de minimis respects), as of the date of Closing.
(b) The Title Company shall be committed to issue the Title Policy or a proforma Title Policy to Purchaser as provided in Section 6.3, subject only to the payment of the premium.
(c) Purchaser shall have received the Required Estoppel Certificates.
(d) The representations and warranties of Seller set forth in this Agreement being true and correct (other than in immaterial or de minimis respects) as if made as of the Closing, subject to the terms of Section 8.1; provided, however, that (A) with respect to any representation and warranty that is made as of a specified date, this condition shall be satisfied as long as such representation and warranty was true and correct in all respects as of the specified date (other than in immaterial or de minimis respects), except to the extent that the failure of such representation and warranty to be true and correct in all respects (other than in immaterial or de minimis respects) as of the Closing is the result of an action by Seller in violation of this Agreement; and (B) to the extent that any such representation and warranty contains a materiality qualification, it shall be true and correct in all respects as of the Closing (i.e., there shall be no double materiality).
(e) There shall be no litigation pending that challenges or seeks to prevent the sale of any Constituent Property to Purchaser as contemplated by this Agreement.
Section 10.9 Failure of Condition. If any condition precedent to Purchaser’s obligation to effect the Closing (as set forth in Section 10.8 or elsewhere in this Agreement) is not satisfied by the Closing Date, then Purchaser shall be entitled to terminate this Agreement by notice thereof to Seller and Title Company. If this Agreement is so terminated, then Purchaser shall be entitled to receive the Deposit (and all accrued interest thereon) and neither party shall have any further obligations hereunder, except the Termination Surviving Obligations. Notwithstanding the foregoing, if the applicable conditions precedent are not satisfied due to a default by Seller hereunder, then Article XIII shall govern and this Section 10.9 shall not apply.
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Section 10.10 Post Closing Transfer of Warranties. With respect to any Warranties that are not transferred to Purchaser at Closing, Seller shall cause such Warranties to be transferred to Purchaser as soon as possible following the Closing, and Seller shall pay all related Warranty Transfer Costs for the roof, with Purchaser to pay any other Warranty Transfer Costs. Seller’s and Purchaser’s obligations under this Section 10.10 shall survive the Closing.
ARTICLE XI
BROKERAGE
Section 11.1 Brokers. Seller agrees to pay to 4M Realty Company (“Broker”) a real estate commission in an amount equal to one-half of one percent (0.50%) of the Purchase Price at Closing (but only in the event of Closing in strict compliance with this Agreement) pursuant to a separate written agreement between Purchaser and Broker. Despite the fact that Seller is paying Broker, Purchaser initiated the relationship with Broker, and to the extent allowed by applicable law Purchaser and Seller agree that, notwithstanding the Texas Real Estate License Act, Broker has been retained by and is representing Purchaser. Broker is not Seller's agent or in any manner acting on Seller's behalf, and no oral or written statements, acts or omissions of Broker shall in any manner be binding upon or attributed to Seller. Other than as stated in the first sentence of this Section 11.1, Purchaser and Seller represent to the other that no real estate brokers, agents or finders’ fees or commissions are due or will be due or arise in conjunction with the execution of this Agreement or consummation of this transaction by reason of the acts of such party, and Purchaser and Seller will indemnify, defend and hold the other party harmless from any brokerage or finder’s fee or commission claimed by any person asserting his entitlement thereto at the alleged instigation of the indemnifying party for or on account of this Agreement or the transactions contemplated hereby. The provisions of this Article XI will survive any Closing or termination of this Agreement.
ARTICLE XII
CONFIDENTIALITY
Section 12.1 Confidentiality. Seller and Purchaser each expressly acknowledges and agrees that, unless and until the Closing occurs, the transactions contemplated by this Agreement, the terms, conditions, and negotiations concerning the same, and all information obtained in connection with the Property will be held in the strictest confidence by each of them and will not be disclosed by either of them except to their respective affiliates, agents, representatives, legal counsel, accountants, consultants, advisors, investors (potential and actual), lenders (potential and actual), rating agencies (if Purchaser is financing its acquisition through a loan that may be securitized) officers, investors, clients, partners, members, directors, employees and shareholders, and except and only to the extent that such disclosure may be necessary for their respective performances hereunder, or for purposes of financing Purchaser’s acquisition, or as otherwise required by applicable law or directed by any Authority. Nothing contained in this Article XII will preclude or limit either party to this Agreement from disclosing or accessing any information otherwise deemed confidential under this Article XII in connection with that party’s enforcement of its rights following a disagreement hereunder, or in response to lawful process or subpoena or other valid or enforceable order of a court of competent jurisdiction or any filings with Authorities required by reason of the transactions provided for herein; provided, however, in the event such disclosure is required pursuant to a subpoena or court order, the applicable
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party shall promptly notify the other party thereof so that the other party may seek a protective order, waive compliance with this Article XII, and/or take any other action mutually agreed upon by the parties. The provisions of this Article XII will survive any termination of this Agreement. From and after Closing, neither Purchaser nor Seller shall issue a press release with respect to the transaction described in this Agreement without obtaining the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed. The terms of the immediately preceding sentence shall survive the Closing.
ARTICLE XIII
REMEDIES
Section 13.1 Default by Seller. In the event the Closing of the transaction provided for herein does not occur as herein provided by reason of any default of Seller, and if such default is not cured within three (3) Business Days of notice of written notice thereof from Purchaser to Seller, Purchaser may, as Purchaser’s sole and exclusive remedy, either: (a) terminate this Agreement, in which event Purchaser will receive from the Title Company the Deposit (less the Independent Consideration), and recover from Seller reimbursement for out-of-pocket costs and expenses incurred by Purchaser in connection with its investigation of the Property and attempt to purchase the Property, not to exceed $75,000 (“Pursuit Costs”), after payment of which Seller and Purchaser will have no further rights or obligations under this Agreement, except with respect to the Termination Surviving Obligations; or (b) pursue specific performance of this Agreement, so long as any action or proceeding commenced by Purchaser against Seller shall be filed and served within sixty (60) days after the scheduled Closing Date; provided, that if specific performance is not available because Seller has conveyed an interest in all or a portion of the Property after the Effective Date of this Agreement in violation of this Agreement, (i) the Deposit shall be returned to Purchaser, (ii) Seller shall reimburse Purchaser for its Pursuit Costs, and (iii) in addition to any other remedy available to Purchaser, Purchaser shall have the right to sue Seller for damages in an amount equal to the difference between the purchase price received by Seller from the sale of the Property to such other purchaser and the Purchase Price hereunder. The provisions of this Section 13.1 shall survive the termination of this Agreement.
Section 13.2 Default by Purchaser. If after satisfaction of the conditions precedent to Purchaser’s obligation to purchase the Property in accordance with this Agreement, Purchaser defaults in its obligation to acquire the Property (a “Purchaser Closing Default”), and if such default is not cured within three (3) Business Days from written notice thereof from Seller to Purchaser, Seller may, as Seller’s sole and exclusive remedy at law and in equity, terminate this Agreement and receive the Deposit as liquidated damages, and thereafter, the parties shall have no further rights or obligations hereunder, except with respect to the Termination Surviving Obligations. Purchaser and Seller hereby agree that actual damages would be difficult or impossible to ascertain and such amount is a reasonable estimate of the damages for such breach. The provisions of this Section 13.2 shall survive the termination of this Agreement.
Section 13.3 Incidental, Special, Exemplary, Consequential and Punitive Damages. Each of Seller and Purchaser hereby waive any right to sue the other for any incidental, special, exemplary, consequential or punitive damages for matters arising under this Agreement. This Section 13.3 shall survive Closing or termination of this Agreement.
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ARTICLE XIV
NOTICES
Section 14.1 Notices. All notices or other communications required or permitted hereunder will be in writing, and will be given by (a) personal delivery, (b) professional expedited delivery service (such as UPS or Federal Express) with proof of delivery, or (c) electronic mail, sent to the intended addressee at the address set forth below, or to such other address or to the attention of such other person as the addressee will have designated by written notice sent in accordance herewith. All such notices will be deemed to have been given upon actual receipt, or, at the time of personal delivery, or, in the case of expedited delivery service, as of the date of first attempted delivery on a Business Day at the address or in the manner provided herein, or, in the case of electronic mail transmission, upon transmission if delivered prior to 5:00 p.m. (Central Time) on a Business Day and, otherwise, on the next Business Day. If a notice is transmitted by email, then a duplicate copy of such notice shall be sent by expedited delivery service (such as UPS or FedEx) within one (1) Business Day thereafter. Unless changed in accordance with the preceding sentence, the addresses for notices given pursuant to this Agreement will be as follows:
To Purchaser: with copies (which shall not constitute notice) to:
XPEL, Inc. Jackson Walker LLP
711 Broadway, Suite 320 1900 Broadway, Suite 1200
San Antonio, Texas 78215-1803 San Antonio, Texas 78215
Attention: Barry R. Wood Attention: James M. McDonough
Email: Email:
To Seller: with copies (which shall not constitute notice) to:
c/o Stonelake Capital Partners, LLC Sheppard, Mullin, Richter & Hampton LLP
100 Crescent Court, Suite 850 845 Texas Avenue, 25th Floor
Dallas, Texas 75201 Houston, Texas 77002
Attention: Kenneth E. Aboussie, Jr. Attention: Douglas A. Yeager
Email: Email:
and
c/o Stonelake Capital Partners, LLC
4200 Westheimer, Suite 900
Houston, Texas 77027
Attention: Hunter Sage
Email:
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and
c/o Stonelake Capital Partners, LLC
415 Colorado Street, Suite 1800
Austin, Texas 78701
Attention: Cole Wilson
Email:
ARTICLE XV
ASSIGNMENT AND BINDING EFFECT
Section 15.1 Assignment; Binding Effect. Purchaser will not have the right to assign this Agreement without Seller’s prior written consent, to be given or withheld in Seller’s sole and absolute discretion. Notwithstanding the foregoing, Purchaser may assign this Agreement to one or more Affiliates of Purchaser without Seller’s consent. Upon any permitted assignment, Purchaser and the assignee shall execute and deliver to Seller an assignment and assumption of this Agreement, and all references herein to the Purchaser shall be deemed to be references to such assignee. This Agreement will be binding upon and inure to the benefit of Seller and Purchaser and their respective successors and permitted assigns, and no other party will be conferred any rights by virtue of this Agreement or be entitled to enforce any of the provisions hereof. Whenever a reference is made in this Agreement to Seller or Purchaser, such reference will include the successors and permitted assigns of such party under this Agreement.
ARTICLE XVI
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 16.1 Survival of Representations, Warranties and Covenants.
(a) Following the Closing, Seller shall be liable to Purchaser for any loss, cost or damages suffered by Purchaser as a result of the breach or inaccuracy of any of the Seller Representations; provided, however, that: (i) the total liability of Seller therefor shall not, in the aggregate, exceed ONE MILLION THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($1,350,000.00) (the “Claim Cap”), (ii) Seller shall have no liability for any breach of the Seller Representations unless and until the losses or damages sustained as a result thereof exceed, in the aggregate with respect to all such breaches, SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS ($75,000.00) (the “Aggregate Floor Amount”), and (iii) such representations and warranties shall survive the Closing for a period of six (6) months (the “Survival Period”), and no action or proceeding thereon shall be valid or enforceable, at law or in equity, if a written claim is not delivered to Seller within that time. Once Purchaser’s losses or damages sustained as a result of one or more breaches of the Seller Representations exceed, in the aggregate with respect to all such breaches, the Aggregate Floor Amount, Seller shall be liable from the first dollar of such losses or damages, up to an amount equal to the Claim Cap. Seller’s obligations under this Section 16.1(a) shall expressly survive the Closing until the end of the Survival Period (and thereafter with respect to any claim for a breach of any Seller Representation that is made in writing within the Survival Period, until such claim is fully and finally resolved).
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(b) Notwithstanding the foregoing, following the Closing, Seller shall have no liability with respect to any breach or inaccuracy of Seller’s Representations if, prior to the Closing, such breach or inaccuracy was actually known by Purchaser.
(c) The Closing Surviving Obligations will survive Closing without limitation unless a specified period is otherwise provided in this Agreement. All other representations, warranties, covenants and agreements made or undertaken by Seller or Purchaser under this Agreement, unless otherwise specifically provided herein, will not survive the Closing Date but will be merged into the Closing Documents delivered at the Closing. The Termination Surviving Obligations shall survive termination of this Agreement without limitation unless a specified period is otherwise provided in this Agreement.
(d) As a material inducement to Purchaser to enter into this Agreement, and in furtherance of the foregoing, Stonelake Industrial, L.P., a Delaware limited partnership (“Joinder Party”), joins in the execution of this Agreement for the sole purpose of guaranteeing to Purchaser the payment of any amounts that Seller may owe to Purchaser for Seller’s post-Closing liability under this Section 16.1(a), subject to the Claim Cap, the Aggregate Floor Amount and the Survival Period set forth above (subject to the above carveouts) and the other limitations on Seller’s liability contained herein.
ARTICLE XVII
MISCELLANEOUS
Section 17.1 Waivers. No waiver of any breach of any covenant or provisions contained herein will be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision contained herein. No extension of time for performance of any obligation or act will be deemed an extension of the time for performance of any other obligation or act.
Section 17.2 Recovery of Certain Fees. In the event a party hereto files any action or suit against another party hereto by reason of any breach of any of the covenants, agreements or provisions contained in this Agreement, then the prevailing party, as determined by a final, non-appealable judgment, will be entitled to have and recover of and from the other party all reasonable attorneys’ fees and costs resulting therefrom. For purposes of this Agreement, the term “attorneys’ fees” or “attorneys’ fees and costs” shall mean all court costs and the reasonable fees and expenses of counsel to the parties hereto, which may include printing, duplicating, freight charges, and fees billed for paralegals and other persons not admitted to the bar but performing services under the supervision of an attorney, and the costs and fees incurred in connection with the enforcement or collection of any judgment obtained in any such proceeding. The provisions of this Section 17.2 shall survive the termination of this Agreement, the Closing and the entry of any judgment, and shall not merge, or be deemed to have merged, into any judgment.
Section 17.3 Time of Essence. Seller and Purchaser hereby acknowledge and agree that time is strictly of the essence with respect to all terms, conditions, obligations and provisions hereof.
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Section 17.4 Construction. Headings at the beginning of each article and section are solely for the convenience of the parties and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular will include the plural and the masculine will include the feminine and vice versa. This Agreement will not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Any capitalized term used in any exhibit or schedule which is not defined therein will have the meaning attributable to such term in the body of this Agreement. In the event the date on which Purchaser or Seller are required to take any action under the terms of this Agreement is not a Business Day, the action will be taken on the next succeeding Business Day.
Section 17.5 Counterparts. To facilitate execution of this Agreement, this Agreement may be executed in multiple counterparts, each of which, when assembled to include an original, faxed or electronic mail (in .PDF or similar file) signature for each party contemplated to sign this Agreement, will constitute a single, complete and fully executed agreement. An electronic signature of this Agreement (including by DocuSign or similar software) or any other agreements described herein (excluding electronic documents or as may be otherwise required by the parties) shall have the same effect as an original signature.
Section 17.6 Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any rule of law or public policy, all of the other conditions and provisions of this Agreement will nevertheless remain in full force and effect, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any adverse manner to either party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the parties hereto will negotiate in good faith to modify this Agreement so as to reflect the original intent of the parties as closely as possible in an acceptable manner to the extent possible.
Section 17.7 Entire Agreement. This Agreement is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof, and supersedes all prior understandings with respect thereto. This Agreement may not be modified, changed, supplemented or terminated, nor may any obligations hereunder be waived, except by written instrument, signed by the party to be charged or by its agent duly authorized in writing, or as otherwise expressly permitted herein.
Section 17.8 Governing Law. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS APPLICABLE TO A CONTRACT EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF. THE PARTIES AGREE THAT ANY ACTION IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED IN THE DISTRICT COURTS OF DALLAS COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION (THE “SPECIFIED COURTS”), AND THE PARTIES HEREBY CONSENT AND AGREE TO THE JURISDICTION OF THE SPECIFIED COURTS.
Section 17.9 No Recording. The parties hereto agree that neither this Agreement nor any memorandum concerning it will be recorded.
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Section 17.10 Further Actions. The parties agree to execute such instructions to the Title Company and such other instruments and to do such further acts as may be reasonably necessary to carry out the provisions of this Agreement.
Section 17.11 No Partnership. Notwithstanding anything to the contrary contained herein, this Agreement shall not be deemed or construed to make the parties hereto partners or joint venturers, it being the intention of the parties to merely create the relationship of Seller and Purchaser with respect to the Property to be conveyed as contemplated hereby.
Section 17.12 Limitations on Benefits. It is the explicit intention of Purchaser and Seller that no person or entity other than Purchaser and Seller and their permitted successors and assigns is or shall be entitled to bring any action to enforce any provision of this Agreement against any of the parties hereto, and the covenants, undertakings and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, Purchaser and Seller or their respective successors and assigns as permitted hereunder.
Section 17.13 Exculpation. Except as expressly stated in the Joinder attached hereto with respect to the Joinder Party, in no event whatsoever shall recourse be had or liability asserted against any of Seller’s or Purchaser’s partners, members, shareholders, employees, agents, directors, officers or other owners of Seller or Purchaser or their respective constituent members, partners, shareholders, employees, agents, directors, officers or other owners. Except as expressly stated in the Joinder attached hereto with respect to the Joinder Party, Seller’s and Purchaser’s direct and indirect shareholders, partners, members, beneficiaries and owners and their respective trustees, officers, directors, employees, agents and security holders, assume no personal liability for any obligations entered into on behalf of Seller or Purchaser, respectively, under this Agreement and the Closing Documents.
Section 17.14 Waiver of Jury Trial. THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREE THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 17.15 Interpretation. Whenever the words “including”, “include” or “includes” are used in this Agreement, they shall be interpreted in a non-exclusive manner. Each party acknowledges and agrees that this Agreement (a) has been reviewed by it and its counsel, and (b) is the product of negotiations between the parties. In the event of any dispute between the parties concerning this Agreement, the parties agree that any ambiguity in the language of this Agreement is to not to be resolved against Seller or Purchaser, but shall be given a reasonable interpretation in accordance with the plain meaning of the terms of this Agreement and the intent of the parties as manifested hereby.
Section 17.16 Property Management Agreement. Stonelake Property Manager, LLC, a Texas limited liability company (the “Property Manager”) will be engaged as the property manager for the Property at a flat fee of $11,250.00 per month in accordance with the terms of a property management agreement to be entered into between Purchaser and Property Manager at Closing (the “Property Management Agreement”). Seller and Purchaser will negotiate the
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form of the Property Management Agreement in good faith during the Property Approval Period with the goal of agreeing upon the final form of Property Management Agreement no later than two (2) Business Days prior to the end of the Property Approval Period. The initial term of the Property Management Agreement will end on December 31, 2026. Thereafter, the term of the Property Management Agreement shall automatically renew for additional twelve (12) month periods unless either Property Manager or Purchaser gives written notice to the other of its election not to renew at least thirty (30) days prior to the expiration of the initial term or prior renewal term, as applicable. Purchaser may terminate the Property Management Agreement at any time upon thirty (30) days’ notice.
Section 17.17 Like Kind Exchange. Each party agrees to reasonably cooperate with the other (at no material cost, delay or liability to the cooperating party) in effecting a tax deferred exchange under Section 1031 of the Internal Revenue Code, including by executing customary documentation and permitting assignment to a qualified intermediary or exchange accommodation titleholder; provided that no such exchange shall delay Closing or increase the non exchanging party’s obligations, and the exchanging party shall be solely responsible for all costs and liabilities in connection therewith.”
[Signature Pages Follow]
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IN WITNESS WHEREOF, Seller and Purchaser have respectively executed this Agreement to be effective as of the Effective Date.
SELLER:
SL INDUSTRIAL, LP,
a Texas limited partnership
By: SL Industrial GP, LLC,
a Texas limited liability company,
its General Partner
By: /s/ Kenneth E. Aboussie, Jr.
Name: Kenneth E. Aboussie, Jr.
Title: President
PURCHASER:
XPEL, INC.,
a Nevada corporation
By: /s/ Barry R. Wood
Name: Barry R. Wood
Title: Senior Vice President, Chief Financial Officer and Secretary
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EX-10.6
EX-10.6
Filename: exhibit106.htm · Sequence: 7
Document
Exhibit 10.6
FIRST AMENDMENT TO STANDARD PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO STANDARD PURCHASE AND SALE AGREEMENT, hereinafter referred to as this “Amendment”, dated effective as of March 4, 2026 (the “Effective Date”), is made and entered into by and between SL INDUSTRIAL, LP, a Texas limited partnership (“Seller”), and XPEL, INC., a Nevada corporation (“Purchaser”).
RECITALS:
Seller and Purchaser entered into that certain Standard Purchase and Sale Agreement dated effective as of January 29, 2026 (the “Agreement”).
Seller and Purchaser now desire to amend the Agreement and enter into the agreements as more fully set forth hereinbelow.
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser do hereby agree as follows:
Section 1. Definitions and References. Terms used herein, which are not otherwise defined or modified herein but which are defined in the Agreement, shall have the meanings therein ascribed to them. The term “Agreement” as used in the Agreement or any other instrument, document or writing furnished to Seller by Purchaser shall mean the Agreement as hereby amended.
Section 2. Deposit. The Additional Deposit is hereby increased from $1,250,000.00 to $1,500,000.00. On or before March 5, 2026, Purchaser shall deposit with the Title Company, in immediately available funds, the Additional Deposit. If Purchaser fails to timely deliver any portion of the Additional Deposit and fails to cure such default within one (1) Business Day following Purchaser’s receipt of written notice from Seller, Seller, as its sole and exclusive remedy, may at any time thereafter prior to the cure of such default terminate the Agreement by delivering written notice of termination to Purchaser, in which event the Title Company shall deliver the Initial Deposit to Seller, as Seller’s liquidated damages pursuant to the terms of Section 13.2 of the Agreement and neither party shall have any further right or obligation under the Agreement except for the Termination Surviving Obligations. Upon the Title Company’s receipt of the Additional Deposit, the Title Company is hereby authorized and directed to release and deliver the entire Deposit (being the Initial Deposit in the amount of $750,000.00 and the Additional Deposit in the amount of $1,500,000.00) to Seller. At Closing, the Deposit shall be applied to the Purchase Price.
Section 3. Property Approval Period. The Property Approval Period shall expire on the Effective Date and the Deposit (and, upon deposit, the Additional Deposit) shall become non-refundable to Purchaser, except as otherwise provided in the Agreement.
SMRH:4923-0919-4640.5
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30426 98HK-432119
Section 4. Closing Date. The definition of “Closing Date” set forth in the Basic Information Summary at the beginning of the Agreement and in Schedule 1.1 of the Agreement are hereby amended and restated in their entireties, to be and read as follows:
h) Closing Date: The earlier of (i) April 30, 2026, and (ii) five (5) days following written notice from Purchaser to Seller that Purchaser is ready to close. In no event shall the Closing Date be later than April 30, 2026. The Closing Date may occur on such earlier date as Seller and Purchaser may agree upon in writing. [Section 10.1]
Section 5. Ratification. Except as expressly amended hereby, the Agreement and all rights and powers created thereby or thereunder are in all respects ratified and confirmed and remain in full force and effect. Where any paragraph of the Agreement is modified or deleted by this Amendment, any unaltered provision of such paragraph of the Agreement shall remain in full force and effect. However, where any provision of this Amendment conflicts or is inconsistent with the Agreement, the provision of this Amendment shall control.
Section 6. Miscellaneous. This Amendment (a) shall be binding upon and inure to the benefit of Seller and Purchaser and their respective successors and assigns; (b) may be modified or amended only by a writing signed by each party hereto; (c) shall be governed by and construed in accordance with the laws of the State of Texas and the United States of America; (d) may be executed in any number of counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same instrument; (e) delivery of an executed counterpart of this Amendment by email in portable document format (PDF) or DocuSign shall be as effective as delivery of a manually executed counterpart hereof; and (f) together with the Agreement, embodies the entire agreement and understanding between the parties with respect to the subject matter of the Agreement, as amended by this Amendment, and supersedes all prior agreements, consents and understandings relating to such subject matter. The headings herein shall be accorded no significance in interpreting this Amendment.
[Signatures on Following Page]
IN WITNESS WHEREOF, Seller and Purchaser have caused this Amendment to be executed effective as of the Effective Date.
SELLER:
SL INDUSTRIAL, LP,
a Texas limited partnership
By: SL Industrial GP, LLC,
a Texas limited liability company,
its General Partner
By: /s/ Kenneth E. Aboussie, Jr.
Name: Kenneth E. Aboussie, Jr.
Title: President
PURCHASER:
XPEL, INC.,
a Nevada corporation
By: /s/ Barry R. Wood
Name: Barry R. Wood
Title: Senior Vice President and Chief Financial Officer
EX-10.7
EX-10.7
Filename: exhibit107.htm · Sequence: 8
Document
Exhibit 10.7
ASSIGNMENT AND ASSUMPTION AGREEMENT
3167, 3215, 3251 & 3319 North PanAm Expressway, San Antonio, Texas
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is executed as of April 9, 2026 (the “Effective Date”), by and between XPEL, Inc., a Nevada corporation (“Assignor”), and Harvest Ventures Holding Company, a Texas corporation (“Assignee”).
RECITALS:
A.Assignor, as Purchaser, and SL Industrial, LP, a Texas limited partnership (“Seller”), entered into that certain Standard Purchase and Sale Agreement dated effective as of January 29, 2026, as amended by that certain First Amendment to Standard Purchase and Sale Agreement dated effective as of March 4, 2026 (as amended, the “Acquisition Contract”) whereby Seller agreed to sell to Assignor and Assignor agreed to purchase from Seller the real property and personal property described in the Acquisition Contract (the “Property”), upon the terms and conditions set forth in the Acquisition Contract, the Property being situated in Bexar County, Texas, commonly known as 3167 North PanAm Expressway, 3215 North PanAm Expressway, 3251 North PanAm Expressway, and 3319 North PanAm Expressway, San Antonio, Texas, and being more particularly described in the Acquisition Contract.
B.Assignor desires to assign the Acquisition Contract to Assignee, and Assignee desires to accept and assume such assignment. In addition to the Acquisition Contract, Assignor desires to assign to Assignee all earnest money and other payments, deposits, and fees made or paid by Assignor pursuant to the Acquisition Contract and all reports, studies and other due diligence documents obtained by Assignor.
C.
D.Assignor and Assignee may each be referred to as a “Party” and collectively referred to as the “Parties”.
AGREEMENTS:
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which each Party acknowledges, the Parties agree as follows:
1.Assignment and Assumption. Assignor hereby assigns to Assignee all of Assignor’s right, title, and interest in, to, and under the Acquisition Contract, including without limitation all earnest money and other payments, deposits, and fees made or paid by Assignor pursuant to the Acquisition Contract (collectively, “Deposits”), and in consideration thereof, Assignee hereby assumes all of Assignor’s liabilities, duties, and obligations under the Acquisition Contract. Assignor hereby authorizes Assignee to enforce performance of all covenants and conditions contained in the Acquisition Contract, including without limitation, the right to demand and receive the deed covenanted to be given in the Acquisition Contract, as hereby assigned, in the same manner and with the same effect as Assignor could have done had this Agreement not been made. Assignor also hereby assigns to Assignee the right to use all feasibility reports, studies, and other due diligence items obtained by Assignor in its investigations and inspections of the Property.
2.Miscellaneous.
(a)Entire Agreement. This Agreement and the exhibits hereto contain the entire agreement of the Parties with respect to the Property and the assigned rights and supersede all prior written or oral agreements with respect thereto.
(b)Successors and Assigns. This Agreement is for the benefit of and is binding upon the heirs, personal representatives, successors, and assigns of each of the Parties.
(c)Severability. If any provision of this Agreement is illegal, invalid, or unenforceable under present or future laws, the remainder of this Agreement will not be affected and, in lieu of each illegal, invalid, or unenforceable provision, a provision as similar in terms to the illegal, invalid, or unenforceable provision as possible but that is legal, valid, and enforceable will be added.
(d)Headings. The section and paragraph headings in this Agreement are for convenience only and do not change the meaning of the sections and paragraphs.
(e)Counterparts. This Agreement may be executed in a number of identical counterparts which, taken together, shall constitute collectively one agreement. The Parties agree that this Agreement may be transmitted by facsimile machine or by electronic scanning and email, and the Parties intend that faxed or scanned signatures shall constitute original signatures. A facsimile copy or any counterpart or conformed copy of this Agreement with the signature, original, faxed, or scanned, of all of the Parties shall be binding on the Parties. The Parties further agree that this Agreement may be executed by using DocuSign or similar technology.
[Remainder of this page intentionally left blank.]
EXECUTED by the parties to be effective as of the Effective Date.
ASSIGNOR:
XPEL, INC.,
a Nevada corporation
By: /s/ Barry R. Wood
Name: Barry R. Wood
Title: Senior Vice President and Chief Financial Officer
ASSIGNEE:
HARVEST VENTURES HOLDING COMPANY,
a Texas corporation
By: /s/ Barry R. Wood
Name: Barry R. Wood
Title: Vice President-Finance, Secretary and Treasurer
EX-10.8
EX-10.8
Filename: exhibit108.htm · Sequence: 9
Document
Exhibit 10.8
SECOND AMENDMENT TO STANDARD PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO STANDARD PURCHASE AND SALE AGREEMENT, hereinafter referred to as this “Amendment”, dated effective as of April 23, 2026 (the “Effective Date”), is made and entered into by and between SL INDUSTRIAL, LP, a Texas limited partnership (“Seller”), and HARVEST VENTURES HOLDING COMPANY, a Texas corporation (“Purchaser”).
RECITALS:
Seller and Xpel, Inc., a Nevada corporation (“Original Purchaser”) entered into that certain Standard Purchase and Sale Agreement dated effective as of January 29, 2026, and as amended by that certain First Amendment to Standard Purchase and Sale Agreement dated March 4, 2026, and as assigned by Original Purchaser to Purchaser by that certain Assignment and Assumption Agreement dated April 9, 2026 (as amended and assigned, the “Agreement”).
Seller and Purchaser now desire to further amend the Agreement and enter into the agreements as more fully set forth hereinbelow.
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser do hereby agree as follows:
Section 1. Definitions and References. Terms used herein, which are not otherwise defined or modified herein but which are defined in the Agreement, shall have the meanings therein ascribed to them. The term “Agreement” as used in the Agreement or any other instrument, document or writing furnished to Seller by Purchaser shall mean the Agreement as hereby amended.
Section 2. Purchase Price. The “Purchase Price” is hereby increased from $60,000,000.00 to $60,400,000.00.
Section 3. Closing Date. The definition of “Closing Date” set forth in the Basic Information Summary at the beginning of the Agreement and in Schedule 1.1 of the Agreement are hereby amended and restated in their entireties, to be and read as follows:
h) Closing Date: The earlier of (i) May 15, 2026, and (ii) five (5) days following written notice from Purchaser to Seller that Purchaser is ready to close. In no event shall the Closing Date be later than May 15, 2026. The Closing Date may occur on such earlier date as Seller and Purchaser may agree upon in writing. [Section 10.1]
Section 4. Extension Deposit. Within one (1) Business Day of the Effective Date, Purchaser shall deposit with the Title Company, in immediately available funds, an additional deposit of $400,000.00 (the “Extension Deposit”, which shall be considered part of the Deposit). If Purchaser fails to timely deliver any portion of the Extension Deposit and fails to cure such default within one (1) Business Day following Purchaser’s receipt of written notice from Seller, Seller, as its sole and exclusive
SMRH:4924-2411-4587.3
-1-
remedy, may at any time thereafter prior to the cure of such default terminate the Agreement by delivering written notice of termination to Purchaser, in which event Seller may retain the Deposit and any portion of the Extension Deposit that it has already received, as Seller’s liquidated damages pursuant to the terms of Section 13.2 of the Agreement and neither party shall have any further right or obligation under the Agreement except for the Termination Surviving Obligations. Upon the Title Company’s receipt of the Extension Deposit, the Title Company is hereby authorized and directed to release and deliver the entire Extension Deposit to Seller. At Closing, the Extension Deposit shall be applied to the Purchase Price. Purchaser acknowledges that the entire Deposit (including the Extension Deposit) shall be non-refundable to Purchaser except in the event Purchaser exercises its right to terminate the Agreement pursuant to Section 6.2(b) (new title and survey matters), Section 8.1 (change in Seller Representations), Section 9.1 (Significant Casualty), Section 9.3 (Condemnation), Section 10.9 (Failure of Condition), or Section 13.1 (Default by Seller) of the Agreement.
Section 5. Estoppel Certificates. Purchaser acknowledges receipt of the Required Estoppel Certificates pursuant to Section 7.2 of the Agreement. Purchaser has reviewed and approved the Required Estoppel Certificates. The parties agree that Seller is not obligated to provide updated Estoppel Certificates from any of the Tenants notwithstanding that the originally scheduled Closing Date has been extended.
Section 6. Ratification. Except as expressly amended hereby, the Agreement and all rights and powers created thereby or thereunder are in all respects ratified and confirmed and remain in full force and effect. Where any paragraph of the Agreement is modified or deleted by this Amendment, any unaltered provision of such paragraph of the Agreement shall remain in full force and effect. However, where any provision of this Amendment conflicts or is inconsistent with the Agreement, the provision of this Amendment shall control.
Section 7. Miscellaneous. This Amendment (a) shall be binding upon and inure to the benefit of Seller and Purchaser and their respective successors and assigns; (b) may be modified or amended only by a writing signed by each party hereto; (c) shall be governed by and construed in accordance with the laws of the State of Texas and the United States of America; (d) may be executed in any number of counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same instrument; (e) delivery of an executed counterpart of this Amendment by email in portable document format (PDF) or DocuSign shall be as effective as delivery of a manually executed counterpart hereof; and (f) together with the Agreement, embodies the entire agreement and understanding between the parties with respect to the subject matter of the Agreement, as amended by this Amendment, and supersedes all prior agreements, consents and understandings relating to such subject matter. The headings herein shall be accorded no significance in interpreting this Amendment.
[Signatures on Following Page]
SMRH:4924-2411-4587.3
IN WITNESS WHEREOF, Seller and Purchaser have caused this Amendment to be executed effective as of the Effective Date.
SELLER:
SL INDUSTRIAL, LP,
a Texas limited partnership
By: SL Industrial GP, LLC,
a Texas limited liability company,
its General Partner
By: /s/ Kenneth E. Aboussie, Jr.
Name: Kenneth E. Aboussie, Jr.
Title: President
SMRH:4924-2411-4587.3
PURCHASER:
HARVEST VENTURES HOLDING COMPANY,
a Texas corporation
By: /s/ Barry R. Wood
Name: Barry R. Wood
Title: Vice President-Finance, Secretary and Treasurer
SMRH:4924-2411-4587.3
EX-99.1
EX-99.1
Filename: exhibit991.htm · Sequence: 10
Document
Exhibit 99.1
XPEL Announces Approximately $110 Million Manufacturing and Supply Chain Investment, Including .Expansion of San Antonio Operations and Acquisition of Manufacturing Facility in China
SAN ANTONIO--May 19, 2026-- XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, today announced two significant milestones in the execution of the manufacturing and supply chain investment strategy first outlined in November 2025. The Company expects to invest approximately $110 million in aggregate across these initiatives, including real estate, capital expenditures, and the acquisition of a manufacturing facility in China. The total investment falls within the previously communicated $75 million to $150 million investment range.
Expansion of San Antonio Operations
The Company has purchased a four-building site totaling approximately 435,000 square feet in San Antonio, Texas, in which the Company is a substantial tenant. This site will serve as the centerpiece of the Company’s North American manufacturing and operations footprint. The Company believes that acquiring a facility in which the Company already operates materially reduces execution risk and timelines, allowing the Company to scale without disruption to ongoing operations while maximizing prior capital investments made into facility.
Over the next 12 to 24 months, the Company plans to consolidate a separate leased operations facility into this building. Overall, the Company will occupy approximately 230,000 square feet of the total site.
The remainder of the site is currently leased to third parties, which provides the Company with significant flexibility and optionality for further expansion as future needs evolve.
This investment is intended to complement, and not replace, the Company’s existing supplier relationships, which remain an important part of the overall supply chain strategy.
Ryan Pape, President and Chief Executive Officer of XPEL, commented, "San Antonio has been XPEL's home for more than two decades, and we're proud to make a long-term commitment of this scale to our employees and to the city. This site gives us the space to consolidate, the room to grow our in-house manufacturing capabilities, and the flexibility to adapt as our needs evolve. It's the right footprint for the next phase of the business."
Acquisition of Manufacturing Facility in China
Separately, XPEL has acquired a manufacturing facility in China. The facility will support the Company's customers in China—where XPEL has invested significantly in its direct go-to-market presence in recent years, including the previously announced acquisition of the Company's Chinese aftermarket distributor in September 2025.
Pape continued, "Acquiring manufacturing capacity in China is a natural extension of the direct-market strategy we've executed across our key international markets. Having local production positions us to better serve the largest car market in the world."
Funding
The Company expects to fund the initiative through a combination of cash on hand, cash flow from operations and new financing associated with the real estate purchase. Apart from the real estate financing, the Company expects to fund the majority of the remaining investment from operating cash flow over the next two years.
The Company believes this funding approach preserves meaningful cash flow and debt capacity to continue to pursue other strategic initiatives or return cash to shareholders.
Reaffirmation of 2028 Margin Targets
These investments are consistent with the financial framework the Company communicated in November 2025. The Company remains committed to its goal of operating margins in the mid-20% range on a run-rate basis by the end of 2028
Excluding one-time costs associated with these transactions, the Company anticipates minimal impact to 2026 EPS from these initiatives as the incremental expense associated with the increased occupancy costs and buildout progression of its operations is expected to be mostly offset by the benefits and synergies from the acquisition of the China manufacturing facility. The Company anticipates beginning to recognize incremental margin contribution from these initiatives beginning in mid-2027.
Pape added, "The investments we are making — in San Antonio, in China, and across our supply chain — are designed to improve our agility and quality while increasing the rate of innovation and responsiveness to the varied needs of our global customer base.”
About XPEL, Inc.
XPEL is a leading provider of protective films and coatings, including paint protection film, surface protection film, window films, and ceramic coatings in the automotive, architectural, and marine industries. With a global footprint, a network of trained installers, and proprietary DAP software, XPEL is dedicated to exceeding customer expectations by providing high-quality products, leading customer service, expert technical support, and world-class training. XPEL, Inc. is publicly traded on Nasdaq under the symbol "XPEL". For more information, please visit www.xpel.com or investor.xpel.com.
Forward-Looking Statements
This release includes forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended) regarding, among other things, the Company's plans, strategies and prospects, both business and financial, including, without limitation, statements regarding the expected timing, cost, scope and benefits of the Company's planned expansion of its San Antonio operations and the acquisition and integration of its manufacturing facility in China; expectations regarding the Company's manufacturing and supply chain investments; the Company's expected sources of funding for these initiatives, including cash on hand, cash flow from operations, and additional debt; expectations regarding the Company's available cash flow and debt capacity to pursue share repurchases and tuck-in acquisitions; the Company's gross margin, operating margin, and other financial targets for 2028 and beyond; and the Company's continued use of third-party suppliers. These statements are based on the beliefs and assumptions of the Company's management. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions or expectations. Actual results may differ materially from those indicated by these forward-looking statements as a result of a variety of factors, including those described in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Contacts
XPEL, Inc.
Investor Relations
John Nesbett/Jennifer Belodeau
IMS Investor Relations
Phone: (203) 972-9200
Email: xpel@imsinvestorrelations.com
Media Contact
Steve Janisse
sjanisse@xpel.com
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Name of the Exchange on which a security is registered.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Exchange Act
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Trading symbol of an instrument as listed on an exchange.
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No definition available.
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
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Reference 1: http://www.xbrl.org/2003/role/presentationRef
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