Contract analysis

Section 1. General Principles 1.1 Proration Date The "Proration Date" shall be June 6, 2024, which is the actual closing date as determined under Section 10.1 of the Agreement, as amended by the Second Amendment dated May 28, 2024. All prorations contemplated by this Exhibit U shall be calculated as of 12:01 a.m. Eastern Time on the Proration Date, with the Proration Date being a day of Buyer's ownership. Accordingly

Section 2. Real Property Taxes and Assessments 2.1 General Tax Proration Real property taxes, general assessments, and ad valorem taxes for the tax year in which the Proration Date occurs shall be prorated between Seller and Buyer as of the Proration Date. For purposes of the Preliminary Closing Proration Statement, the estimated 2024 annual real property taxes for the entire 14-Property portfolio are $14,760,000. Ba

Section 3. Rental Income 3.1 Base Rent All fixed or base rent payable under the 87 leases in effect as of the Proration Date (collectively, the "In-Place Leases") shall be prorated as of the Proration Date. The aggregate annual in-place base rent for the entire portfolio is $74,800,000 (as reflected on the rent roll dated as of December 31, 2023, attached as Exhibit H to the Agreement, and as updated through the Pror

Section 4. Percentage Rent 4.1 Proration of Percentage Rent Percentage rent, if any, payable under any In-Place Lease shall be prorated based on the percentage rent calculation period applicable under each such lease. For leases under which the percentage rent calculation period is the calendar year (January 1 through December 31), percentage rent shall be prorated between Seller and Buyer based on their respective o

Section 5. Tenant Reimbursements — CAM, Operating Expenses, and Tax Escalations 5.1 Reconciliation of Tenant Reimbursements Common area maintenance ("CAM") charges, operating expense ("OpEx") reimbursements, and real property tax escalation payments payable by tenants under the In-Place Leases shall be prorated as of the Proration Date. The proration of tenant reimbursements shall take into account the following prin

Section 6. Utility Charges 6.1 Proration of Utility Charges All utility charges (including, without limitation, electricity, natural gas, water, sewer, stormwater, telecommunications, and similar services) for each Property shall be prorated as of the Proration Date. To the extent possible, Seller shall arrange for final meter readings for all utility accounts maintained in the name of the applicable Target Entity as

Section 7. Insurance Premiums 7.1 Existing Policies The existing property and casualty insurance policies maintained by or on behalf of the Target Entities through Argyle Property Services LLC, as Seller's property manager, are not being assigned to or assumed by Buyer in connection with the transactions contemplated by the Agreement. Buyer shall obtain replacement insurance policies through Ironclad Indemnity Insura

Section 8. Security Deposits 8.1 Transfer of Security Deposits Aggregate tenant security deposits in the amount of $4,283,000 (as reflected on the rent roll attached as Exhibit H to the Agreement) are held in the operating accounts of the 14 Target Entities maintained at Magnolia Commerce Bank, N.A. As a result of the entity-level transfer structure contemplated by the Agreement (i.e., Buyer is acquiring 100% of the

Section 9. Leasing Costs 9.1 Tenant Improvement Allowances and Leasing Commissions Seller shall be responsible for all unpaid tenant improvement allowances ("TI Allowances") and leasing commissions with respect to leases executed prior to the Proration Date, to the extent such amounts are due and payable on or before the Proration Date. For the avoidance of doubt, this includes any TI Allowance installments that have

Section 10. Service Contracts 10.1 Proration of Prepaid and Accrued Amounts Amounts prepaid or accrued under service contracts that are assumed by Buyer pursuant to the terms of the Agreement (as identified on the schedule of assumed service contracts attached as Exhibit I to the Agreement) shall be prorated as of the Proration Date. The following principles shall apply: (a) If Seller (or any Target Entity) has prepa

Section 11. Mortgage Debt Service 11.1 Interest on Assumed Debt Interest on the assumed mortgage debt shall be prorated as of the Proration Date. The aggregate outstanding principal balance of the assumed mortgage debt is $612,000,000, consisting of the following tranches: Interest for each loan shall be calculated on an actual/360 or 30/360 basis, as specified in the applicable loan documents and as set forth in the

Section 12. Transfer Taxes and Recording Charges 12.1 Transfer Taxes Estimated transfer taxes, documentary stamp taxes, and similar conveyance taxes across all applicable jurisdictions in connection with the transactions contemplated by the Agreement are as follows: Transfer taxes shall be borne equally by Buyer and Seller (50/50 split), resulting in: Buyer's Share: $1,925,000 Seller's Share: $1,925,000 Transfer taxe

Section 13. Purchase Price Adjustment — PCA Credit 13.1 PCA Repair Credit Pursuant to the negotiated terms of the Agreement (Section 6.5), Buyer shall receive a credit at Closing in the amount of $1,070,000 (the "PCA Credit"), representing 50% of the aggregate estimated immediate repair costs of $2,140,000 identified in the property condition assessments ("PCAs") prepared by Rampart Building Sciences, Inc. and delive

Section 14. Preliminary Closing Proration Statement 14.1 Preparation and Delivery No later than five (5) business days prior to the scheduled Closing, Seller, in consultation with its legal counsel, Caldwell Murray & Oakes LLP, shall prepare and deliver to Buyer a preliminary proration statement (the "Preliminary Closing Proration Statement") setting forth Seller's good-faith estimate of all prorations and adjustment

Section 15. Post-Closing Proration True-Up 15.1 True-Up Statement Within ninety (90) days after the Proration Date (i.e., no later than September 4, 2024), Buyer shall prepare and deliver to Seller a final proration true-up statement (the "True-Up Statement") in substantially the form attached to the Agreement as Exhibit V. The True-Up Statement shall set forth the actual amounts for each prorated item identified in

Section 16. Operating Account Balances 16.1 Target Entity Bank Accounts Operating accounts of the 14 Target Entities are maintained at Magnolia Commerce Bank, N.A. (225 Peachtree Street NE, Suite 100, Atlanta, GA 30303; relationship contact: Linda Prescott, Vice President, Commercial Banking). Cash balances in such operating accounts as of the Proration Date (exclusive of security deposits addressed in Section 8 and

Section 17. Miscellaneous Proration Items 17.1 Licenses, Permits, and Fees Prepaid or accrued amounts for business licenses, operating permits, elevator inspection fees, fire marshal permits, environmental permits, and similar governmental fees and charges shall be prorated as of the Proration Date where such items are transferable with the applicable Target Entity. If any such license, permit, or fee is non-transfer

Section 18. Transition Services Agreement — Fee Treatment 18.1 Transition Fees Fees under the Transition Services Agreement entered into between Argyle Property Services LLC (as service provider) and Fairwater Property Management LLC (as service recipient), in the amount of $375,000 per month for a 90-day transition period (aggregate total: $1,125,000), are Buyer's sole responsibility and shall not be subject to pror

Section 19. Title Insurance Premiums and Survey Costs 19.1 Title Premiums Title insurance premiums for owner's title policies, loan title policies, and any endorsements thereto (estimated aggregate cost: $2,420,000 for all 14 Properties) are Buyer's sole responsibility and are not subject to proration under this Exhibit U. Title insurance is being provided by Commonwealth National Title Insurance Company. 19.2 Survey

Section 20. Definitions As used in this Exhibit U, the following terms shall have the meanings set forth below. Capitalized terms used in this Exhibit U that are not defined in this Section 20 shall have the meanings ascribed to them in the Agreement. "ABR" means annual base rent, as set forth in the applicable lease or on the rent roll. "CAM" means common area maintenance, as defined in the applicable lease. "Closin