Preview
FILED
4/11/2022 11:22 AM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Lafonda Sims DEPUTY
CAUSE NO. DC-21-11406
MILTON 635 GRAVOIS ROAD LLC, IN THE DISTRICT COURT
635 GRAVOIS ROAD LEASING LLC, and
635 GRAVOIS ROAD REAL ESTATE,
LLC,
Plaintiffs,
"a 4474 JUDICIAL DISTRICT
TRT HOLDINGS, INC.,
RBR REAL ESTATE HOLDINGS, LLC,
BRIAN ZELMAN, and ADAM ZEITSIFF,
DALLAS COUNTY, TEXAS
Defendants.
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
Pursuant to Texas Rule of Civil Procedure 166a(c), Defendants TRT Holdings, Inc.
(“TRT”), RBR Real Estate Holdings, LLC (“RBR”), Brian Zelman (“Zelman”), and Adam Zeitsiff
(“Zeitsiff’) (collectively, “Defendants”) move for summary judgment as to all of Plaintiffs’ claims.
In support, Defendants state as follows:
I. INTRODUCTION
This fraud dispute arises from Plaintiffs’ purchase of a shopping center from RBR.
Plaintiffs allege Defendants fraudulently induced them into buying the shopping center by
misrepresenting during contract negotiations that its anchor tenant, Gold’s Gym, was a “solid,”
“fiscally well-managed,” company because its parent company filed for bankruptcy six months
after the parties entered into the Agreement of Purchase and Sale (the “PSA”). Notwithstanding
that these subjective statements are not actionable under Texas law, Plaintiffs clearly and
unequivocally intended to and did disclaim any reliance on RBR’s statements in the PSA’s merger
clause. The merger clause also stated that the PSA expressly superseded—and unambiguously
prohibited—all prior negotiations and agreements between the parties. In purported fraud cases
with “clear and unequivocal” disclaimers of reliance like the one in this case, Texas law instructs
courts to uphold such provisions in contracts that are negotiated at arm’s length by knowledgeable,
sophisticated business players represented by legal counsel—all of which occurred here.
Plaintiffs’ five fraud-based claims are therefore contractually barred as a matter of law and fact,
and, consequently, Plaintiffs cannot satisfy the reliance element for any of their claims.
Accordingly, Defendants are entitled to summary judgment.
IL. SUMMARY JUDGMENT EVIDENCE
The following exhibits are attached to and support this Motion:
Declaration of Jesse Smith (“Smith Decl.”)
PSA (RBR000408-432)
First Amendment to Agreement of Purchase and Sale (RBR000128-78)
First Amendment to Amended and Restated Shopping Center Lease (RBR000262-64)
Amended and Restated Guaranty (RBR000265-67)
Redlined June 2018 Letter of Intent (RBR000948-50)
April 11, 2019 Mark Cohen Email and Attachments (RBR000956-1111)
Ti. FACTUAL BACKGROUND
The lawsuit arises from Plaintiffs’ allegations that Defendants fraudulently induced them
into buying a shopping center in 2019. Specifically, on May 1, 2019, RBR entered into the PSA
for a shopping center located in Fenton, Missouri (the “Shopping Center’) with nonparty Leeton
Real Estate Inc. (hereinafter, the “Deal”). Ex. 2 at 1. Leeton Real Estate Inc. (“Leeton”), which
Plaintiffs characterize as their “affiliate,” Am. Pet. § 14, agreed to buy the Shopping Center for
$10,500,000, Ex. 2 at 1. Section 4.4 of the PSA allocated the $10,500,000 purchase price as
follows:
Land & Land Improvements: $2,600,000
Buildings & Leases: $7,900,000
Ex.
2 at 5.
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 2
The $7.9 million allocation for buildings and leases accounted for three tenants leasing
space in the Shopping Center. See Ex. 2 at 25 (“Schedule of Fenton Leases”). Among the three
was a lease between RBR and nonparty Gold’s St. Louis, LLC (“Tenant”), which leased the anchor
space in the Shopping Center to operate a Gold’s Gym. The Deal was also contingent upon Leeton
buying two similar Texas properties from RBR, which were located in Killeen and San Antonio,
Texas. Ex. 2 at 2 (see “Recitals,” ¢ C). Accordingly, the Deal was complex and in addition to the
PSA, it included various ancillary documents such as separate purchase agreements for each of the
two Texas properties; agreements with brokers; Subordination, Non-Disturbance and Attornment
Agreements and Estoppel Certificates related to the Shopping Center’s tenants; various lender-
related documents; and multiple assignments.
But when Leeton failed to deliver the required “Go Forward Notice” indicating its intent
to move forward with purchasing the properties, the PSA terminated automatically at the end of
its inspection period. See Ex. 3. However, the parties subsequently reinstated the PSA with
amendments on September 27, 2019 in the First Amendment to Agreement of Purchase and Sale
(the “APSA”). Id.
Relevant to this dispute, the APSA acknowledged that RBR and Tenant had agreed to
amend the lease between them to extend its term. Jd. 4 B. They did so by entering into a First
Amendment to Amended and Restated Shopping Center Lease (“Lease Extension”) dated
November 26, 2019. Ex. 4. Gold’s Gym International, Inc., the ultimate parent of Gold’s St.
Louis, LLC and all of the Gold’s Gym franchisees, had guaranteed the Amended and Restated
Shopping Center Lease for Tenant in 2018 (an act that predated the Deal), see Ex. 5, and
consequently, also executed the Lease Extension as Tenant’s guarantor, see Ex. 4. Zeitsiff, in his
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 3
capacity as president and CEO, executed the Lease Extension on behalf of both Tenant and Gold’s
Gym International, Inc. /d. The Deal closed on November 27, 2019. Smith Decl. § 5.
Plaintiffs now allege Defendants misrepresented the Shopping Center’s value in stating
that Tenant was a “solid,” “fiscally well-managed” company that could “assure financial
performance” of the Shopping Center. Am. Pet. §] 15-16. The undisputed material facts, however,
do not support Plaintiffs’ fraud claims, including where: (1) Plaintiffs expressly disclaimed
reliance on any of Defendants’ alleged representations in the PSA, and the PSA and the APSA
were negotiated at arm’s length by knowledgeable, sophisticated business players who were
represented by legal counsel of their choice. See Answ. to Am. Pet. 44 (asserting affirmative
defense of disclaimer of reliance).
A. The PSA includes a disclaimer of reliance provision.
Section 20.6 of the PSA is a merger clause in which the parties disclaimed any reliance on
any statements, representations, warranties, and agreements by the other:!
20.6 Merger/Prior_ Agreements. THIS AGREEMENT CONSTITUTES THE
FINAL AGREEMENT BETWEEN THE PARTIES. IT IS THE COMPLETE AND EXCLUSIVE
EXPRESSION OF THE PARTIES’ AGREEMENT ON THE MATTERS CONTAINED IN THIS
AGREEMENT. ALL PRIOR AND CONTEMPORANEOUS NEGOTIATIONS AND
AGREEMENTS BETWEEN THE PARTIES ON THE MATTERS CONTAINED IN THIS
AGREEMENT ARE EXPRESSLY MERGED INTO AND SUPERSEDED BY THIS
AGREEMENT. THE PROVISIONS OF THIS AGREEMENT MAY NOT BE EXPLAINED,
SUPPLEMENTED, OR QUALIFIED TITROUGH EVIDENCE OF TRADE USAGE OR A PRIOR
COURSE OF DEALINGS. IN ENTERING IN’ ‘0 THIS AGREEMENT, THE PARTIES HAV.
NOT RELIED UPON ANY STATEME IT, REPRESENTATION, WARRANTY, OR
AGREEMENT OF THE OTHER PARTY EXCEPT FOR THOSE EXPRESSLY CONTAINED IN
THIS AGREEMENT. THERE IS NO CONDITION PRECEDENT TO THE EFFECTIVENESS
OF THIS AGREEMENT OTHER THAN THOSE EXPRESSLY STATED IN THIS
AGREEMENT.
' The APSA did not amend this provision. Notably, the APSA provides: “All of the provisions of
the Agreement [the PSA] as amended hereby shall remain in full force and effect and are hereby ratified
and confirmed.” APSA § 8.
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 4
Id. This clause expressly prohibits the parties from using the parties re prior course of dealings” t
later “explain[], supplement[], or qualif[y]” the PSA’s provisions, which, relevant here, applies to
the purchase price.
Consistent with Section 20.6, Section 9 of the PSA also includes an extensive “as is”
provision in which Leeton agreed to accept the Property as is and disclaimed any reliance on any
representations by RBR. Section 9 states, in pertinent part:
BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER HAS
NOT MADE AND ARE NOT LIABLE FOR OR BOUND BY, ANY EXPRESS
OR IMPLIED WARRANTIES, GUARANTEES, STATEMENTS,
REPRESENTATIONS OR INFORMATION PERTAINING TO THE
PROPERTY, THE LAND OR THE IMPROVEMENTS OR RELATING
THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION,
PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT
TO THE PROPERTY) BUYER REPRESENTS THAT IT IS A
KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF
REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN
EXPERTISE AND THAT OF BUYER’S CONSULTANTS IN PURCHASING
THE PROPERTY ....
Ex. 2 at 9. In the same provision, Leeton waived all rights to any claims arising from or in any
way connected with the Property. /d.
B. The Deal was arm’s length.
Leeton and RBR had no relationship, confidential or otherwise, before entering into the
PSA and APSA. Smith Decl. ¥ 8. Nor do Plaintiffs allege or suggest otherwise. Rather, in their
First Amended Petition, §j 13, they allege they first learned of the Shopping Center’s listing through
RBR’s “marketing efforts.”
C. Plaintiffs are highly sophisticated business players.
Plaintiffs’ and Leeton’s principals, Michael? and David Shabsels (the “Shabsels,” and
? Michael Shabsels is also the manager of plaintiff 635 Gravois Road Leasing, LLC. See Pls.’
Verified Resp. Opposing Defs.’ Verified Plea to Jurisdiction and Special Exceptions, Decl. of Michael
Shabsels.
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 5
hereinafter, also “Plaintiffs”), were highly sophisticated business players knowledgeable about
acquiring multimillion dollar real estate assets. Smith Decl. 7. By way of example, when the
parties began negotiating the Deal, the Shabsels were the nation’s largest owner of for-profit
summer camps, and in the few years before entering into the PSA, they had acquired approximately
$89 million in real estate assets separate and apart from the summer camps business. Jd.
The Shabsels were also aided by Mark Sher, a “realtor associate” with Fox and Foxx
Realty. When the Shabsels first approached Leeton about a potential agreement, they entered into
a letter of intent in June 2018 to buy the Shopping Center and the Killeen property (the “LOI’).
See Ex. 6. Sher assisted the Shabsels with negotiating the LOI’s terms. /d.
Plaintiffs relied on at least four entities for this Deal. None of the Plaintiffs is a party to
the PSA or APSA, but Plaintiffs are entities Leeton’s principals created specifically for the Deal.
In their First Amended Petition, Plaintiffs contend Leeton assigned the APSA to Plaintiff 635
Gravois Road LLC, and “Plaintiff Gravois Leasing and Plaintiff Gravois Real Estate
contemporaneously with the conveyance entered into a ground lease with Plaintiff Gravois LLC,
for the Premises.” Am. Pet. § 17. They also contend Plaintiff 635 Gravois Road Leasing LLC
acquired the Shopping Center Lease, and Plaintiff 635 Road Real Estate LLC “acquired the
improvements and certain other property which made up a part of the Premises.” /d.
D. Plaintiffs were represented by counsel in the Deal.
To help negotiate the legal terms of the Deal, the Shabsels retained Mark Cohen as their
counsel. Smith Decl. 4 6. Cohen represented Plaintiffs from the time before the parties entered
into the PSA in May 2019 through and after the Deal closed in November 2019, specifically
negotiating, discussing, and revising terms within the PSA, APSA, and other documents ancillary
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 6
to the Deal, including the terms of the agreements for the other two properties in Killeen and San
Antonio. Id.
E. The Parties negotiated the terms of the PSA and APSA.
The PSA and APSA were not merely boilerplate agreements whose terms the parties did
not revise or negotiate. See id. A key reflection of this fact is the following April 11, 2019 email
Plaintiffs’ attorney sent to RBR to negotiate the terms of the purchases for the Shopping Center
and the two Texas properties:
Greetings, Jesse and Chris.
I understand that the deal is “back on”. Attached hereto please find three (3)
separate agreements, one for each property, each in word, together with pdf
comparisons, against each other as well as marked against the original agreement.
I have also attached the brokerage agreements.
Kindly have the word versions of the agreements, as well as the brokerage
agreements, executed by your clients and then circulated back to all on this email.
Thank you very much.
Regards,
Mark
Mark S. Cohen
Attorney at Law
Ex. 7. Cohen attached to this email substantive redlined revisions to the purchase agreements for
the various properties, showing that the agreements, including the PSA, were not mere boilerplate
agreements of adhesion whose terms the Plaintiffs were forced to accept. See id. Plaintiffs could
and did negotiate the PSA’s terms. See id.; Smith Decl. § 6.
F. The PSA and APSA are binding on Successors or Assigns.
While Plaintiffs are not parties to the PSA and APSA, they are bound to these agreements’
terms. Section 20.11 of the PSA, which the APSA does not amend, provides:
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 7
The terms, conditions, covenants, and agreements of this Agreement extend to and
are binding upon Seller, Buyer, and their respective heirs, administrators,
executors, legal representatives and permitted successors and assigns, if any, and
upon any person or entity coming into ownership or possession of any interest in
the Property by operation of law or otherwise.
Ex. 2 at 19.
Iv. ARGUMENTS AND AUTHORITIES
A. Legal Standard
A movant for traditional summary judgment bears the burden to establish that no genuine
issue of a material fact exists and that it is entitled to judgment as a matter of law. TEX. R. CIV.
P. 166a(c); Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d 507, 511 (Tex.
2014). A fact issue exists only if more than a scintilla of probative evidence exists to support
each element of the plaintiffs claim. Neely v. Wilson, 418 S.W.3d 52, 59 (Tex. 2013). Thus, for
the defendant to prevail on summary judgment, it must either disprove at least one element of the
plaintiff's theory of recovery or plead and conclusively establish each essential element of an
affirmative defense. Muckelroy v. Richardson Indep. Sch. Dist., 884 S.W.2d 825, 828 (Tex.
App.—Dallas 1994, writ denied).
B. Plaintiffs are bound by the PSA and APSA.
As a preliminary matter, Plaintiffs are bound by the terms of the PSA and APSA. Under
Section 20.11, the “terms, conditions, covenants, and agreements” of the PSA and APSA are
binding on successors and assigns as well “any person or entity coming into ownership or
possession of any interest in the Property by operation of law or otherwise.” Plaintiffs concede
they aren’t parties to the PSA and APSA but characterize themselves as “affiliates,” Am. Pet. §
14, which they go on to describe as including that Leeton assigned the PSA and APSA to Plaintiff
635 Gravois Road LLC. /d. J 17. They also contend: (1) Plaintiff 635 Gravois Road Leasing and
Plaintiff 635 Gravois Road Real Estate entered into a ground lease with Plaintiff 635 Gravois Road
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 8
for the Shopping Center, (2) Plaintiff 635 Gravois Road Leasing acquired the Shopping Center
Lease, and (3) Plaintiff 635 Road Real Estate “acquired the improvements and certain other
property which made up a part of the Premises.” /d. As the purported assignees and/or entities
that came into ownership or possession of interests in the Shopping Center, Plaintiffs are
indisputably bound by the terms of PSA and APSA. E.g., Burns v. Bishop, 48 S.W.3d 459, 466
(Tex. App.—Houston [14th Dist.] 2001, no pet.) (“It is axiomatic that an assignee...walks in the
shoes of his assignor and takes the assigned rights subject to all defenses which the opposing party
might be able to assert against his assignor.”).
C. Disclaimer of Reliance Provision
It is well settled under Texas law that parties to an agreement may contract to disclaim
reliance on representations not captured in the agreement. See Forest Oil Corp. v. McAllen, 268
S.W.3d 51, 61 (Tex. 2008); Schlumberger Tech. Corp. v. Swanson, 959 §.W.2d 171, 181 (Tex.
1997). Whether a disclaimer-of-reliance provision is binding and precludes fraud-based claims is
a question of law. Forest Oil Corp., 268 S.W.3d at 55. To determine if a disclaimer-of-reliance
provision is binding, the court must consider whether: (1) the disclaimer language is clear; (2) the
contract was the product of an arm’s-length transaction; (3) the parties were knowledgeable in
business; (4) the complaining party was represented by counsel; and (5) the terms of the agreement
were negotiated rather than boilerplate. /talian Cowboy Partners, Ltd. v. Prudential Ins. Co. of
America, 341 S.W.3d 323, 337 n.8 (Tex. 2011); Forest Oil, 268 S.W.3d at 60.
The Supreme Court of Texas found the following disclaimer language to be a “clear and
unequivocal expression of intent necessary to disclaim reliance”:
[E]ach of us [plaintiffs] expressly warrants and represents and does hereby state ...
and represent ... that no promise or agreement which is not herein expressed has
been made to him or her in executing this release, and that none of us is relying
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 9
upon any statement or representation of any agent of the parties being released
hereby.
Schlumberger, 959 §.W.2d at 180-81 (emphasis in original); see also Forest Oil, 268 S.W.3d at
65 n.4 (upholding similar disclaimer language: “[We] expressly represent and warrant ... that no
promise or agreement which is not herein expressed has been made to them in executing the
releases contained in this Agreement, and that [we] are not relying upon any statement or
representation of any of the parties being released hereby”).
Once it is established the disclaimer is clear, the four remaining factors examine the totality
of the circumstances surrounding the contract’s formation. Schlumberger, 959 S.W.2d at 179. In
Schlumberger, the Supreme Court of Texas held that, as a matter of law, the disclaimer of reliance
was binding where the record showed:
“highly competent and able legal counsel” represented the parties;
the transaction was arm’s length;
the parties were “sophisticated business players”;
the contract involved a multi-million dollar project; and
the contract sought to end the parties’ deal due in part to disagreements over
issues that required finality, i.e., about the commercial feasibility and value.
Id. at 180. See also Prime Income Asset Mgmt. Inc. v. One Dallas Ctr. Associates LP, 358 Fed.
Appx. 569, 572-73 (5th Cir. 2009) (applying Texas law) (upholding disclaimer of reliance in “a
multimillion dollar arm’s length transaction for the sale of a downtown Dallas commercial building
between sophisticated parties, both represented by attorneys”). But see Italian Cowboy Partners,
341 S.W.3d at 336 (holding that the purported disclaimer did not disclaim reliance because it stated
only that the parties had not “made any representations or promises” but did not state they were
not relying on those representations or promises). In Forest Oil, the court enforced the disclaimer
of reliance based on the “paramount principle that Texas courts should uphold contracts negotiated
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 10
at arm’s length by ‘knowledgeable and sophisticated business players’ represented by ‘highly
competent and able legal counsel.’” 268 S.W.3d at 58.
1. The PSA contains a clear and unequivocal reliance disclaimer.
First, the disclaimer language in the PSA is nearly identical in expression to the language
in the two leading Texas Supreme Court cases:
Schlumberger Forest Oil PSA
959 S.W.2d at 180-81 268 S.W.3d at 65 n.4 § 20.6
[E]ach of us [the plaintiffs] [We] expressly represent ...- The provisions of this
expressly warrants and and warrant ... that no agreement may not be
represents and does hereby promise or agreement which explained, supplemented, or
state ... and represent ... that is not herein expressed has qualified through evidence
no promise or agreement been made to them in of trade usage or a prior
which is not herein executing the releases course of dealings. In
expressed has been made to contained in this Agreement, entering into this agreement,
him or her in executing this and that [we] are not the parties have not relied
release, and that none of us relying upon any statement upon any statement,
is relying upon any r_ representation of any of epresentation, warranty,
statement or the parties being released 1 agreement of the other
representation of any hereby. party except for those
agent of the parties being expressly contained in this
released hereby. agreement.
By entering into the PSA, Plaintiffs expressly and unequivocally disclaimed reliance on
the very representations, warranties, and agreements that now form the basis of their claims.
Plaintiffs’ main complaint is that Defendants allegedly represented that “if Plaintiffs acquired the
Premises from RBR and the lease to Tenant, the Premises would enjoy a stable, long-term lease at
‘a good, solid-performing location’ in Fenton, Missouri, as a result of the rents to be paid by
Tenant.” Am. Pet. § 15; see id. § 28 (“Defendants intentionally misrepresented the past and
existing facts regarding the Premises, then known to Defendants, so that Defendants could unload
a known troubled asset, at Plaintiffs’ expense.”). But the PSA unambiguously superseded—and
expressly prohibited—evidence of the parties’ prior course of dealings. See Pogue v. Williamson,
605 S.W.3d 656, 666 (Tex. App.—Houston [1st Dist.] 2020, no pet.) (reversing and remanding
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 11
where plaintiff maintained that defendants misrepresented the property’s condition but the
disclaimer of reliance clause said she was “not relying upon any representations, statements,
assertions or non-assertions by the [defendants] with respect to the Property condition clause”).
2. The totality of the circumstances shows the parties intended to disclaim
reliance for the type of representations Plaintiffs now allege.
Second, the totality of the circumstances shows the parties had a clear, specific intent to
disclaim reliance. Like in Schlumberger and Forest Oil, the Property sale here was an arm’s
length, multi-million dollar transaction between highly sophisticated business players; both sides
were represented by competent and able legal counsel of their choice; they negotiated the terms of
the deal, including the PSA and APSA; and the very purpose of these documents was to achieve a
final sale of the Property at a price that reflected the agreed-upon value of the Shopping Center,
including the leases. The totality of the circumstances shows the disclaimer is binding.
a. Arm’s-Length Transaction
First, it is undisputed the Deal was at arm’s length. An arm’s length transaction is one
“To]f or relating to dealings between two parties who are not related or not on close terms and who
are presumed to have roughly equal bargaining power; not involved a confidential
relationship.” Pogue, 605 S.W.3d at 667 (quoting Arm’s-length, Black’s Law Dictionary (9th ed.
2009)); see Schlumberger, 959 S.W.2d at 175-77. Here, the parties were not related or otherwise
on close terms or in a confidential relationship. Smith Decl. 48. Nor do Plaintiffs allege or suggest
otherwise. See id.; Am. Pet. {| 13 (alleging they learned of the Property’s listing through RBR’s
“marketing efforts”). This factor militates in favor of enforcing the disclaimer.
b. Plaintiffs’ Business Knowledge
Second, the Deal was complex and involved the sale of a multi-million dollar commercial
property, three commercial leases, and certain other property between highly sophisticated parties.
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 12
This factor about Plaintiffs’ business knowledge “is aimed at identifying those transactions in
which one party exploits the other’s inexperience.” Pogue, 605 S.W.3d at 668.
Here, Plaintiffs were highly experienced and knowledgeable in real estate acquisitions,
having acquired nearly $100 million in real estate assets before this sale. Smith Decl. § 7; Ex. 6.
Plaintiffs also had a sophisticated real-estate professional advising them during the Deal. Pogue,
605 S.W.3d at 668 (“Working with a real-estate agent will show some business knowledge.”).
Plaintiffs’ very existence are also exemplars of the business acumen present here. Plaintiffs
contend four separate entities—Leeton and Plaintiffs—were involved and/or created for this Deal:
one to enter the PSA and APSA, two to acquire the leases, and one to acquire the real estate assets.
This factor therefore also militates in favor of enforcing the disclaimer.
c. Representation by Counsel
Third, Plaintiffs were represented by counsel of their choice throughout the Deal, including
when the parties first entered the PSA on May 1, 2019 and when they entered the APSA on
September 27, 2019. It is undisputed that their counsel assisted them with negotiating the PSA’s
and APSA’s terms. This factor favors enforcing the disclaimer.
d. Negotiation
Fourth, the parties negotiated the terms of the PSA, including through drafting and revising
the PSA and APSA; these agreements were not merely boilerplate. Importantly, “[t]his factor is
neither a requirement that every sentence in a contract be negotiated nor a requirement that the
parties negotiated the disclaimer-of-reliance clause.” Pogue, 605 S.W.3d at 666. The focus,
rather, is on whether the parties specifically discussed the issue that has become the topic of the
subsequent dispute. Forest Oil, 268 S.W. 3d at 60. In Schlumberger, for instance, the court held
that in light of the disclaimer-of-reliance clause, it had to assume that the parties contemplated that
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 13
the plaintiffs would not rely on any of the defendant’s representations about the commercial
feasibility and value of the project because these were “the very dispute that the release was
supposed to resolve.” /d. at 180. See Forest Oil at 61 (“If disclaimers of reliance cannot ensure
finality and preclude post-deal claims for fraudulent inducement, then freedom of contract, even
among the most knowledgeable parties advised by the most knowledgeable legal counsel, is
grievously impaired.”).
Here, it is undisputed that Plaintiffs negotiated the terms of the PSA, including by revising
drafts of the PSA. Indeed, when the parties decided to move forward with the Deal in April 2019,
it was Plaintiffs’ attorney Cohen who initiated sending redlined drafts of the PSA, leaving the
disclaimer language untouched.
Further, the ultimate issue at the heart of the present dispute is the appropriate value of the
Shopping Center. Plaintiffs contend they were induced into believing the Shopping Center and
one of its leases were worth more than Defendants represented: “[T]he actual value of the Premises
at the time of the closing was far less than the value of the Premises as represented by Defendants
and the Plaintiffs have been damaged in the amount of their benefit of the bargain loss . ...” Am.
Pet. § 21. But like in Schlumberger, where the parties here negotiated and ultimately agreed on a
purchase price and to disclaim reliance on their prior dealings, it is evident the PSA was intended
to preclude this category of post-deal claims for fraud.
D. Plaintiffs’ Reliance-Based Claims
Each of the fraud-related claims Plaintiffs bring here—statutory fraud under § 27.01 of the
Texas Business and Commerce Code, fraud/fraudulent misrepresentation, fraud by
omission/nondisclosure, and negligent misrepresentation—trequires Plaintiffs to show some form
of reliance; the disclaimer of reliance precludes them from doing so. See, e.g., Schlumberger, 959
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 14
S.W.2d at 181 (holding that disclaimer of reliance precluded plaintiffs from proving reliance for
claims for fraud, fraud-by-nondisclosure, and statutory fraud claim under § 27.01 of the Texas
Business and Commerce Code); Forest Oil, 268 S.W.3d at *52 (holding that the waiver-of-reliance
provision “conclusively defeat[ed]” the plaintiff's fraudulent inducement claim); see also Prime
Income Asset Mgmt., 358 Fed. Appx. at 572 (holding that fraud and negligent misrepresentation
claims failed because disclaimers in the parties’ agreement negated any reliance).
As a corollary, Plaintiffs’ claim for conspiracy to commit fraud also fails. To prove civil
conspiracy, Plaintiffs must show Defendants participated in the underlying intentional tort, i.e.,
fraud. Where Plaintiffs cannot prove their fraud claim in the absence of justifiable reliance, their
civil conspiracy claim to commit fraud necessarily fails. Petrobras Am., Inc. v. Astra Oil Trading
NV, 633 S.W.3d 606, 628 (Tex. App.—Houston [14th Dist.] 2020, pet. granted), review granted
(Oct. 15, 2021) (holding that where the reliance disclaimer barred the fraud claims, the civil
conspiracy claim based on those claims also failed).
Vv. CONCLUSION
Defendants respectfully request that the Court grant their Motion for Summary Judgment,
grant Defendants all other relief they are entitled to, including their reasonable attorneys’ fees and
costs, and order Plaintiffs to take nothing.
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 15
April 11, 2022 Respectfully submitted,
/s/ Elliot Strader
Elliot Strader
Texas Bar No. 24063966
Xakema Henderson
Texas Bar No. 24107805
AKERMAN LLP
2001 Ross Avenue, Suite 3600
Dallas, Texas 75201
Tel: 214-720-4380
Fax: 214-981-9339
elliot.strader@akerman.com
Counsel for Defendants
CERTIFICATE OF SERVICE
Thereby certify that a true and correct copy of the foregoing was served on all counsel of
tecord in accordance with the Texas Rules of Civil Procedure on April 11, 2022.
/s/ Elliot Strader
Elliot Strader
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 16
CAUSE NO. DC-21-11406
MILTON 635 GRAVOIS ROAD LLC, IN THE DISTRICT COURT
635 GRAVOIS ROAD LEASING LLC, and
635 GRAVOIS ROAD REAL ESTATE,
LLC,
Plaintiffs,
Vv. 447 JUDICIAL DISTRICT
TRT HOLDINGS, INC.,
RBR REAL ESTATE HOLDINGS, LLC,
BRIAN ZELMAN, and ADAM ZEITSIFF,
DALLAS COUNTY, TEXAS
Defendants.
DECLARATION OF JESSE SMITH
STATE OF TEXAS §
§
COUNTY OF DALLAS §
1 My name is Jesse Smith. I am over 18 years of age, have never been convicted of
a felony or crime involving moral turpitude, and I am fully competent to make this Declaration. I
have personal knowledge of the facts stated herein, all of which are true and correct.
2 lam Vice President and Senior Counsel for Defendant TRT Holdings, Inc. in the
above-captioned lawsuit. I am a member of the TRT Holdings, Inc. in-house legal team that
provides legal services to RBR Real Estate Holdings, LLC (“RBR”), among other TRT Holdings,
Inc. affiliates.
3 I have read Defendants’ Motion for Summary Judgment (the “Motion”) and the
exhibits attached to it.
4. Attached to the Motion as Exhibit 2 is a true and correct copy of the Agreement of
Purchase and Sale (“PSA”) between Defendant RBR and nonparty Leeton Real Estate Inc.
(“Leeton”) for the sale of property located in Fenton, Missouri. Leeton’s principals initially used
EXHIBIT
1
a different entity, Poplar Springs Investment Trust, as buyer before advising RBR that Leeton
would be the purchasing entity.
5 Attached to the Motion as Exhibit 3 is a true and correct copy of the First
Amendment to Agreement of Purchase and Sale (“APSA”) between Defendant and nonparty
Leeton, dated November 26, 2019. The transaction closed on November 27, 2019.
6 The terms of the PSA and APSA were negotiated by RBR and its counsel, on the
one hand, and Leeton and its counsel, Mark Cohen, on the other. Leeton was also aided by Mark
Sher, a “realtor associate” with Fox and Foxx Realty.
7
Leeton’s principals were Michael and David Shabsels (the “Shabsels”). The
Shabsels are highly sophisticated business players knowledgeable about acquiring multimillion
dollar real estate. The Shabsels represented to RBR that they are the nation’s largest owner of for-
profit summer camps, and in the few years before entering into the PSA, they had acquired
approximately $89 million in real estate assets separate and apart from the summer camps business.
8 Leeton and RBR had no relationship, confidential or otherwise, before entering into
the PSA and APSA. Leeton represented it learned about the Shopping Center through marketing
materials RBR’s broker, HFF, had prepared.
9 Attached to the Motion as Exhibit 4 is a true and correct copy of the First
Amendment to Amended and Restated Shopping Center Lease.
10. Attached to the Motion as Exhibit 5 is a true and correct copy of the Amended and
Restated Guaranty.
11. Attached to the Motion as Exhibit 6 is a true and correct copy of the redlined June
2018 Letter of Intent between RBR and the Shabsels that includes redlines by Sher and/or other
representatives of the Shabsels.
12s Attached to the Motion as Exhibit 7 is a true and correct copy of the April 11, 2019
email from Mark Cohen, attaching redlined, revised copies of the agreements for the properties
identified in the PSA.
My work address is 4001 Maple Ave., Suite 600, Dallas, Texas 75219, United States. I
declare under penalty of perjury that the foregoing is true and correct.
Executed in Dallas County, State of Texas, on April ==2022.
a,
JESSE ITH
AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
(Portfolio: 635 Gravois Rd, Fenton, MO 63026)
KEY PROVISIONS SUMMARY
Effective Date: The date this Agreement is acknowledged and executed by the Escrow Agent as
shown on the signature page(s) attached hereto.
Seller: RBR Real Estate Holdings, LLC, a Texas limited liability company
Any reference herein to “party” or the “parties” shall mean (i) the Seller, as one
party, and (ii) the Buyer, as the other party.
Buyer: Leeton Real Estate Inc.
Property: That certain real property located at 635 Gravois Rd, Fenton, MO 63026, as more
particularly described on Exhibit_A, with all appurtenances, rights, privileges,
warranties, and easements benefiting, belonging, or pertaining theret
Escrow Agent: Stewart Title Guaranty Company
929 Kings Highway East, 3rd Floor
Fairfield, CT 06825
Attn: Troy Denunzio
Email: tdenunzio@stewart.com
— Phone: (646) 787-2505 (Seetion 3)
Initial Earnest $100,000.00 (Section 3.1)
Money:
Additional Earnest $150,000.00 (Section 3.2)
Money: es
Purchase Price: $10,500,000.00 (Section4) |
Acceptance Date: May 30, 2019 (Section 21)
Inspection Period: The period beginning on the Effective Date and ending 60 days thereafter
(Section 2.2)
_ sf
Closing Date 30 days from the expiration of the Inspection Period (Section 10.1)
Brokers: HFF and Quadstar Realty (Section 19)
Notices: Sell Buyer: :
(Section 18) RBR Real Estate Holdings, LLC Leeton Real Estate Inc. a New York
4001 Maple Ave, Ste. 600 corporation
Dallas, Texas 75219 455 Tarrytown Road, Suite 1526
Attention: Jesse T. Smith, Counsel White Plains, New York 10607
Email: jt-smith@trtholdings.com Attention: Mark Graham, Sole
Shareholder
E-mail Address:
mark, graham 15@gmail.com
With a copy to:
RBR Real Estate Holdings, LLC.
4001 Maple Ave, Ste. 600
Dallas, Texas 75219
Attention: Brian Zelman
Email: bzelman@irtholdings.com
EXHIBIT
RBR000408
(Portfolio: 635 Grevois Rd, Fenton, MO 63026; 902 W. Central Texas Expy, Killeen, TX 76541; and 635 Gravois Rd, Fenton, MO 63026)
=4
Exhibits: Exhibit A — Legal Description of Property
Exhibit B ~ Schedule of Leases
Page 2
RBR000409
(Portfolio: 635 Gravois Rd, Fenton, MO 63026)
AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS (the “Agreement”) is made as of the Effective Date (as set forth in the Key Provisions
Summary) by and between Seller and Buyer.
Recitals
A. Seller is the owner in fee simple of the Property.
B Seller desires to sell to Buyer and Buyer desires to purchase from Seller the Property
upon the terms and conditions set forth in this Agreement.
Cc Simultaneously with the Closing of the transactions contemplated by this Agreement,
Buyer and Seller desire to close (1) the transactions contemplated by that certain Agreement of Purchase
and Sale and Joint Escrow Instructions dated even date herewith for certain real property located at 902
W. Central Texas Expy, Killeen, TX 7654 (the “Killeen Transaction”) and (2) the transactions
contemplated by that certain Agreement of Purchase and Sale and Joint Escrow Instructions dated even
date herewith for certain real property located at 7650 FM 78, San Antonio, TX 78244 (the “Walzem
Transaction’).
NOW, THEREFORE, in consideration of the mutual covenants contained herein, payment of
the Earnest Money, and other good and valuable consideration, the receipt and sufficiency of which is
acknowledged, the parties mutually covenant and agree as follows:
1 Key Provisions Summary; Enumeration of Exhibits. References in the body of this
Agreement to a portion of the Key Provisions Summary (e.g., the defined terms in the left-hand column of
the Key Provisions Summary) shall be deemed and construed to incorporate all the terms provided under
each such referenced portion of the Key Provisions Summary. References in the Key Provisions
Summary to a portion of the body of this Agreement (e.g., Section references in the right-hand column of
the Key Provisions Summary) shall be deemed and construed to incorporate all the terms provided under
each such referenced portion of the body of the Agreement. Notwithstanding anything set forth above, if
there is any inconsistency between the Key Provisions Summary and another portion of this Agreement,
the terms of the Key Provisions Summary shall control. The Exhibits enumerated in the Key Provisions
Summary and attached to this Agreement are incorporated in this Agreement by reference and are to be
construed as a part of this Agreement. Each party shall perform any obligations on its part as set forth in
any and all such Exhibits.
2. Agreement of Purchase and Sale. Seller shall sell to Buyer, and Buyer shall purchase from
Seller, upon the terms and conditions set forth in this Agreement, the Property.
3. Earnest Money.
3.1 Within one (1) business day following the mutual execution of this Agreement,
Buyer shall deposit with the Escrow Agent (as set forth in the Key Provisions Summary) the Initial
Earnest Money (as set forth in the Key Provisions Summary). If Buyer does not timely deliver the Initial
Earnest Money, or if the Escrow Agent is not immediately able to obtain good funds in respect of the
Initial Earnest Money, Seller may, at its option, terminate this Agreement and no party shall have any
further right or obligation hereunder.
Page 3
RBR000410
(Portfolio: 635 Gravois Rd, Fenton, MO 63026)
3.2 Buyer will have the Inspection Period within which to review the Due Diligence
Materials (as defined in Section 7.2), and conduct the investigations, studies or tests of the Property
deemed necessary by Buyer to determine whether Buyer desires to complete the acquisition of the
Property, as detailed in Section 7.2. Buyer, in its sole and absolute discretion for any reason or no reason
whatsoever, may proceed to go forward with this Agreement by delivering written notice to Seller (the
“Ga Forward Notice”) of Buyer’s determination to so proceed under this Agreement prior to the
expiration date of the Inspection Period. If Buyer does not deliver a Go Forward Notice prior to the
expiration of the Inspection Period, regardless of whether or not Buyer has then performed any of Buyer’s
obligations under this Agreement, the Initial Earnest Money will be returned to Buyer, minus One
Hundred and No/Dollars $100.00 (the “Independent Consideration”), which shall represent the
independent consideration to support Buyer’s inspection rights contained herein, and thereafter the parties
to this Agreement shall have no further rights or obligations hereunder except for those provisions of this
Agreement which, by their express terms, survive the termination of this Agreement. If Buyer does
deliver a Go Forward Notice prior to the expiration of the Inspection Period, the Initial Earnest Money
will become nonrefundable to Buyer (other than as expressly set forth in this Agreement), and this
Agreement will conti
Preview
FILED 4/11/2022 11:22 AM FELICIA PITRE DISTRICT CLERK DALLAS CO., TEXAS Lafonda Sims DEPUTY CAUSE NO. DC-21-11406 MILTON 635 GRAVOIS ROAD LLC, IN THE DISTRICT COURT 635 GRAVOIS ROAD LEASING LLC, and 635 GRAVOIS ROAD REAL ESTATE, LLC, Plaintiffs, "a 4474 JUDICIAL DISTRICT TRT HOLDINGS, INC., RBR REAL ESTATE HOLDINGS, LLC, BRIAN ZELMAN, and ADAM ZEITSIFF, DALLAS COUNTY, TEXAS Defendants. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Pursuant to Texas Rule of Civil Procedure 166a(c), Defendants TRT Holdings, Inc. (“TRT”), RBR Real Estate Holdings, LLC (“RBR”), Brian Zelman (“Zelman”), and Adam Zeitsiff (“Zeitsiff’) (collectively, “Defendants”) move for summary judgment as to all of Plaintiffs’ claims. In support, Defendants state as follows: I. INTRODUCTION This fraud dispute arises from Plaintiffs’ purchase of a shopping center from RBR. Plaintiffs allege Defendants fraudulently induced them into buying the shopping center by misrepresenting during contract negotiations that its anchor tenant, Gold’s Gym, was a “solid,” “fiscally well-managed,” company because its parent company filed for bankruptcy six months after the parties entered into the Agreement of Purchase and Sale (the “PSA”). Notwithstanding that these subjective statements are not actionable under Texas law, Plaintiffs clearly and unequivocally intended to and did disclaim any reliance on RBR’s statements in the PSA’s merger clause. The merger clause also stated that the PSA expressly superseded—and unambiguously prohibited—all prior negotiations and agreements between the parties. In purported fraud cases with “clear and unequivocal” disclaimers of reliance like the one in this case, Texas law instructs courts to uphold such provisions in contracts that are negotiated at arm’s length by knowledgeable, sophisticated business players represented by legal counsel—all of which occurred here. Plaintiffs’ five fraud-based claims are therefore contractually barred as a matter of law and fact, and, consequently, Plaintiffs cannot satisfy the reliance element for any of their claims. Accordingly, Defendants are entitled to summary judgment. IL. SUMMARY JUDGMENT EVIDENCE The following exhibits are attached to and support this Motion: Declaration of Jesse Smith (“Smith Decl.”) PSA (RBR000408-432) First Amendment to Agreement of Purchase and Sale (RBR000128-78) First Amendment to Amended and Restated Shopping Center Lease (RBR000262-64) Amended and Restated Guaranty (RBR000265-67) Redlined June 2018 Letter of Intent (RBR000948-50) April 11, 2019 Mark Cohen Email and Attachments (RBR000956-1111) Ti. FACTUAL BACKGROUND The lawsuit arises from Plaintiffs’ allegations that Defendants fraudulently induced them into buying a shopping center in 2019. Specifically, on May 1, 2019, RBR entered into the PSA for a shopping center located in Fenton, Missouri (the “Shopping Center’) with nonparty Leeton Real Estate Inc. (hereinafter, the “Deal”). Ex. 2 at 1. Leeton Real Estate Inc. (“Leeton”), which Plaintiffs characterize as their “affiliate,” Am. Pet. § 14, agreed to buy the Shopping Center for $10,500,000, Ex. 2 at 1. Section 4.4 of the PSA allocated the $10,500,000 purchase price as follows: Land & Land Improvements: $2,600,000 Buildings & Leases: $7,900,000 Ex. 2 at 5. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 2 The $7.9 million allocation for buildings and leases accounted for three tenants leasing space in the Shopping Center. See Ex. 2 at 25 (“Schedule of Fenton Leases”). Among the three was a lease between RBR and nonparty Gold’s St. Louis, LLC (“Tenant”), which leased the anchor space in the Shopping Center to operate a Gold’s Gym. The Deal was also contingent upon Leeton buying two similar Texas properties from RBR, which were located in Killeen and San Antonio, Texas. Ex. 2 at 2 (see “Recitals,” ¢ C). Accordingly, the Deal was complex and in addition to the PSA, it included various ancillary documents such as separate purchase agreements for each of the two Texas properties; agreements with brokers; Subordination, Non-Disturbance and Attornment Agreements and Estoppel Certificates related to the Shopping Center’s tenants; various lender- related documents; and multiple assignments. But when Leeton failed to deliver the required “Go Forward Notice” indicating its intent to move forward with purchasing the properties, the PSA terminated automatically at the end of its inspection period. See Ex. 3. However, the parties subsequently reinstated the PSA with amendments on September 27, 2019 in the First Amendment to Agreement of Purchase and Sale (the “APSA”). Id. Relevant to this dispute, the APSA acknowledged that RBR and Tenant had agreed to amend the lease between them to extend its term. Jd. 4 B. They did so by entering into a First Amendment to Amended and Restated Shopping Center Lease (“Lease Extension”) dated November 26, 2019. Ex. 4. Gold’s Gym International, Inc., the ultimate parent of Gold’s St. Louis, LLC and all of the Gold’s Gym franchisees, had guaranteed the Amended and Restated Shopping Center Lease for Tenant in 2018 (an act that predated the Deal), see Ex. 5, and consequently, also executed the Lease Extension as Tenant’s guarantor, see Ex. 4. Zeitsiff, in his DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 3 capacity as president and CEO, executed the Lease Extension on behalf of both Tenant and Gold’s Gym International, Inc. /d. The Deal closed on November 27, 2019. Smith Decl. § 5. Plaintiffs now allege Defendants misrepresented the Shopping Center’s value in stating that Tenant was a “solid,” “fiscally well-managed” company that could “assure financial performance” of the Shopping Center. Am. Pet. §] 15-16. The undisputed material facts, however, do not support Plaintiffs’ fraud claims, including where: (1) Plaintiffs expressly disclaimed reliance on any of Defendants’ alleged representations in the PSA, and the PSA and the APSA were negotiated at arm’s length by knowledgeable, sophisticated business players who were represented by legal counsel of their choice. See Answ. to Am. Pet. 44 (asserting affirmative defense of disclaimer of reliance). A. The PSA includes a disclaimer of reliance provision. Section 20.6 of the PSA is a merger clause in which the parties disclaimed any reliance on any statements, representations, warranties, and agreements by the other:! 20.6 Merger/Prior_ Agreements. THIS AGREEMENT CONSTITUTES THE FINAL AGREEMENT BETWEEN THE PARTIES. IT IS THE COMPLETE AND EXCLUSIVE EXPRESSION OF THE PARTIES’ AGREEMENT ON THE MATTERS CONTAINED IN THIS AGREEMENT. ALL PRIOR AND CONTEMPORANEOUS NEGOTIATIONS AND AGREEMENTS BETWEEN THE PARTIES ON THE MATTERS CONTAINED IN THIS AGREEMENT ARE EXPRESSLY MERGED INTO AND SUPERSEDED BY THIS AGREEMENT. THE PROVISIONS OF THIS AGREEMENT MAY NOT BE EXPLAINED, SUPPLEMENTED, OR QUALIFIED TITROUGH EVIDENCE OF TRADE USAGE OR A PRIOR COURSE OF DEALINGS. IN ENTERING IN’ ‘0 THIS AGREEMENT, THE PARTIES HAV. NOT RELIED UPON ANY STATEME IT, REPRESENTATION, WARRANTY, OR AGREEMENT OF THE OTHER PARTY EXCEPT FOR THOSE EXPRESSLY CONTAINED IN THIS AGREEMENT. THERE IS NO CONDITION PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT OTHER THAN THOSE EXPRESSLY STATED IN THIS AGREEMENT. ' The APSA did not amend this provision. Notably, the APSA provides: “All of the provisions of the Agreement [the PSA] as amended hereby shall remain in full force and effect and are hereby ratified and confirmed.” APSA § 8. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 4 Id. This clause expressly prohibits the parties from using the parties re prior course of dealings” t later “explain[], supplement[], or qualif[y]” the PSA’s provisions, which, relevant here, applies to the purchase price. Consistent with Section 20.6, Section 9 of the PSA also includes an extensive “as is” provision in which Leeton agreed to accept the Property as is and disclaimed any reliance on any representations by RBR. Section 9 states, in pertinent part: BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER HAS NOT MADE AND ARE NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTEES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY, THE LAND OR THE IMPROVEMENTS OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) BUYER REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF BUYER’S CONSULTANTS IN PURCHASING THE PROPERTY .... Ex. 2 at 9. In the same provision, Leeton waived all rights to any claims arising from or in any way connected with the Property. /d. B. The Deal was arm’s length. Leeton and RBR had no relationship, confidential or otherwise, before entering into the PSA and APSA. Smith Decl. ¥ 8. Nor do Plaintiffs allege or suggest otherwise. Rather, in their First Amended Petition, §j 13, they allege they first learned of the Shopping Center’s listing through RBR’s “marketing efforts.” C. Plaintiffs are highly sophisticated business players. Plaintiffs’ and Leeton’s principals, Michael? and David Shabsels (the “Shabsels,” and ? Michael Shabsels is also the manager of plaintiff 635 Gravois Road Leasing, LLC. See Pls.’ Verified Resp. Opposing Defs.’ Verified Plea to Jurisdiction and Special Exceptions, Decl. of Michael Shabsels. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 5 hereinafter, also “Plaintiffs”), were highly sophisticated business players knowledgeable about acquiring multimillion dollar real estate assets. Smith Decl. 7. By way of example, when the parties began negotiating the Deal, the Shabsels were the nation’s largest owner of for-profit summer camps, and in the few years before entering into the PSA, they had acquired approximately $89 million in real estate assets separate and apart from the summer camps business. Jd. The Shabsels were also aided by Mark Sher, a “realtor associate” with Fox and Foxx Realty. When the Shabsels first approached Leeton about a potential agreement, they entered into a letter of intent in June 2018 to buy the Shopping Center and the Killeen property (the “LOI’). See Ex. 6. Sher assisted the Shabsels with negotiating the LOI’s terms. /d. Plaintiffs relied on at least four entities for this Deal. None of the Plaintiffs is a party to the PSA or APSA, but Plaintiffs are entities Leeton’s principals created specifically for the Deal. In their First Amended Petition, Plaintiffs contend Leeton assigned the APSA to Plaintiff 635 Gravois Road LLC, and “Plaintiff Gravois Leasing and Plaintiff Gravois Real Estate contemporaneously with the conveyance entered into a ground lease with Plaintiff Gravois LLC, for the Premises.” Am. Pet. § 17. They also contend Plaintiff 635 Gravois Road Leasing LLC acquired the Shopping Center Lease, and Plaintiff 635 Road Real Estate LLC “acquired the improvements and certain other property which made up a part of the Premises.” /d. D. Plaintiffs were represented by counsel in the Deal. To help negotiate the legal terms of the Deal, the Shabsels retained Mark Cohen as their counsel. Smith Decl. 4 6. Cohen represented Plaintiffs from the time before the parties entered into the PSA in May 2019 through and after the Deal closed in November 2019, specifically negotiating, discussing, and revising terms within the PSA, APSA, and other documents ancillary DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 6 to the Deal, including the terms of the agreements for the other two properties in Killeen and San Antonio. Id. E. The Parties negotiated the terms of the PSA and APSA. The PSA and APSA were not merely boilerplate agreements whose terms the parties did not revise or negotiate. See id. A key reflection of this fact is the following April 11, 2019 email Plaintiffs’ attorney sent to RBR to negotiate the terms of the purchases for the Shopping Center and the two Texas properties: Greetings, Jesse and Chris. I understand that the deal is “back on”. Attached hereto please find three (3) separate agreements, one for each property, each in word, together with pdf comparisons, against each other as well as marked against the original agreement. I have also attached the brokerage agreements. Kindly have the word versions of the agreements, as well as the brokerage agreements, executed by your clients and then circulated back to all on this email. Thank you very much. Regards, Mark Mark S. Cohen Attorney at Law Ex. 7. Cohen attached to this email substantive redlined revisions to the purchase agreements for the various properties, showing that the agreements, including the PSA, were not mere boilerplate agreements of adhesion whose terms the Plaintiffs were forced to accept. See id. Plaintiffs could and did negotiate the PSA’s terms. See id.; Smith Decl. § 6. F. The PSA and APSA are binding on Successors or Assigns. While Plaintiffs are not parties to the PSA and APSA, they are bound to these agreements’ terms. Section 20.11 of the PSA, which the APSA does not amend, provides: DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 7 The terms, conditions, covenants, and agreements of this Agreement extend to and are binding upon Seller, Buyer, and their respective heirs, administrators, executors, legal representatives and permitted successors and assigns, if any, and upon any person or entity coming into ownership or possession of any interest in the Property by operation of law or otherwise. Ex. 2 at 19. Iv. ARGUMENTS AND AUTHORITIES A. Legal Standard A movant for traditional summary judgment bears the burden to establish that no genuine issue of a material fact exists and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d 507, 511 (Tex. 2014). A fact issue exists only if more than a scintilla of probative evidence exists to support each element of the plaintiffs claim. Neely v. Wilson, 418 S.W.3d 52, 59 (Tex. 2013). Thus, for the defendant to prevail on summary judgment, it must either disprove at least one element of the plaintiff's theory of recovery or plead and conclusively establish each essential element of an affirmative defense. Muckelroy v. Richardson Indep. Sch. Dist., 884 S.W.2d 825, 828 (Tex. App.—Dallas 1994, writ denied). B. Plaintiffs are bound by the PSA and APSA. As a preliminary matter, Plaintiffs are bound by the terms of the PSA and APSA. Under Section 20.11, the “terms, conditions, covenants, and agreements” of the PSA and APSA are binding on successors and assigns as well “any person or entity coming into ownership or possession of any interest in the Property by operation of law or otherwise.” Plaintiffs concede they aren’t parties to the PSA and APSA but characterize themselves as “affiliates,” Am. Pet. § 14, which they go on to describe as including that Leeton assigned the PSA and APSA to Plaintiff 635 Gravois Road LLC. /d. J 17. They also contend: (1) Plaintiff 635 Gravois Road Leasing and Plaintiff 635 Gravois Road Real Estate entered into a ground lease with Plaintiff 635 Gravois Road DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 8 for the Shopping Center, (2) Plaintiff 635 Gravois Road Leasing acquired the Shopping Center Lease, and (3) Plaintiff 635 Road Real Estate “acquired the improvements and certain other property which made up a part of the Premises.” /d. As the purported assignees and/or entities that came into ownership or possession of interests in the Shopping Center, Plaintiffs are indisputably bound by the terms of PSA and APSA. E.g., Burns v. Bishop, 48 S.W.3d 459, 466 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (“It is axiomatic that an assignee...walks in the shoes of his assignor and takes the assigned rights subject to all defenses which the opposing party might be able to assert against his assignor.”). C. Disclaimer of Reliance Provision It is well settled under Texas law that parties to an agreement may contract to disclaim reliance on representations not captured in the agreement. See Forest Oil Corp. v. McAllen, 268 S.W.3d 51, 61 (Tex. 2008); Schlumberger Tech. Corp. v. Swanson, 959 §.W.2d 171, 181 (Tex. 1997). Whether a disclaimer-of-reliance provision is binding and precludes fraud-based claims is a question of law. Forest Oil Corp., 268 S.W.3d at 55. To determine if a disclaimer-of-reliance provision is binding, the court must consider whether: (1) the disclaimer language is clear; (2) the contract was the product of an arm’s-length transaction; (3) the parties were knowledgeable in business; (4) the complaining party was represented by counsel; and (5) the terms of the agreement were negotiated rather than boilerplate. /talian Cowboy Partners, Ltd. v. Prudential Ins. Co. of America, 341 S.W.3d 323, 337 n.8 (Tex. 2011); Forest Oil, 268 S.W.3d at 60. The Supreme Court of Texas found the following disclaimer language to be a “clear and unequivocal expression of intent necessary to disclaim reliance”: [E]ach of us [plaintiffs] expressly warrants and represents and does hereby state ... and represent ... that no promise or agreement which is not herein expressed has been made to him or her in executing this release, and that none of us is relying DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 9 upon any statement or representation of any agent of the parties being released hereby. Schlumberger, 959 §.W.2d at 180-81 (emphasis in original); see also Forest Oil, 268 S.W.3d at 65 n.4 (upholding similar disclaimer language: “[We] expressly represent and warrant ... that no promise or agreement which is not herein expressed has been made to them in executing the releases contained in this Agreement, and that [we] are not relying upon any statement or representation of any of the parties being released hereby”). Once it is established the disclaimer is clear, the four remaining factors examine the totality of the circumstances surrounding the contract’s formation. Schlumberger, 959 S.W.2d at 179. In Schlumberger, the Supreme Court of Texas held that, as a matter of law, the disclaimer of reliance was binding where the record showed: “highly competent and able legal counsel” represented the parties; the transaction was arm’s length; the parties were “sophisticated business players”; the contract involved a multi-million dollar project; and the contract sought to end the parties’ deal due in part to disagreements over issues that required finality, i.e., about the commercial feasibility and value. Id. at 180. See also Prime Income Asset Mgmt. Inc. v. One Dallas Ctr. Associates LP, 358 Fed. Appx. 569, 572-73 (5th Cir. 2009) (applying Texas law) (upholding disclaimer of reliance in “a multimillion dollar arm’s length transaction for the sale of a downtown Dallas commercial building between sophisticated parties, both represented by attorneys”). But see Italian Cowboy Partners, 341 S.W.3d at 336 (holding that the purported disclaimer did not disclaim reliance because it stated only that the parties had not “made any representations or promises” but did not state they were not relying on those representations or promises). In Forest Oil, the court enforced the disclaimer of reliance based on the “paramount principle that Texas courts should uphold contracts negotiated DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 10 at arm’s length by ‘knowledgeable and sophisticated business players’ represented by ‘highly competent and able legal counsel.’” 268 S.W.3d at 58. 1. The PSA contains a clear and unequivocal reliance disclaimer. First, the disclaimer language in the PSA is nearly identical in expression to the language in the two leading Texas Supreme Court cases: Schlumberger Forest Oil PSA 959 S.W.2d at 180-81 268 S.W.3d at 65 n.4 § 20.6 [E]ach of us [the plaintiffs] [We] expressly represent ...- The provisions of this expressly warrants and and warrant ... that no agreement may not be represents and does hereby promise or agreement which explained, supplemented, or state ... and represent ... that is not herein expressed has qualified through evidence no promise or agreement been made to them in of trade usage or a prior which is not herein executing the releases course of dealings. In expressed has been made to contained in this Agreement, entering into this agreement, him or her in executing this and that [we] are not the parties have not relied release, and that none of us relying upon any statement upon any statement, is relying upon any r_ representation of any of epresentation, warranty, statement or the parties being released 1 agreement of the other representation of any hereby. party except for those agent of the parties being expressly contained in this released hereby. agreement. By entering into the PSA, Plaintiffs expressly and unequivocally disclaimed reliance on the very representations, warranties, and agreements that now form the basis of their claims. Plaintiffs’ main complaint is that Defendants allegedly represented that “if Plaintiffs acquired the Premises from RBR and the lease to Tenant, the Premises would enjoy a stable, long-term lease at ‘a good, solid-performing location’ in Fenton, Missouri, as a result of the rents to be paid by Tenant.” Am. Pet. § 15; see id. § 28 (“Defendants intentionally misrepresented the past and existing facts regarding the Premises, then known to Defendants, so that Defendants could unload a known troubled asset, at Plaintiffs’ expense.”). But the PSA unambiguously superseded—and expressly prohibited—evidence of the parties’ prior course of dealings. See Pogue v. Williamson, 605 S.W.3d 656, 666 (Tex. App.—Houston [1st Dist.] 2020, no pet.) (reversing and remanding DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 11 where plaintiff maintained that defendants misrepresented the property’s condition but the disclaimer of reliance clause said she was “not relying upon any representations, statements, assertions or non-assertions by the [defendants] with respect to the Property condition clause”). 2. The totality of the circumstances shows the parties intended to disclaim reliance for the type of representations Plaintiffs now allege. Second, the totality of the circumstances shows the parties had a clear, specific intent to disclaim reliance. Like in Schlumberger and Forest Oil, the Property sale here was an arm’s length, multi-million dollar transaction between highly sophisticated business players; both sides were represented by competent and able legal counsel of their choice; they negotiated the terms of the deal, including the PSA and APSA; and the very purpose of these documents was to achieve a final sale of the Property at a price that reflected the agreed-upon value of the Shopping Center, including the leases. The totality of the circumstances shows the disclaimer is binding. a. Arm’s-Length Transaction First, it is undisputed the Deal was at arm’s length. An arm’s length transaction is one “To]f or relating to dealings between two parties who are not related or not on close terms and who are presumed to have roughly equal bargaining power; not involved a confidential relationship.” Pogue, 605 S.W.3d at 667 (quoting Arm’s-length, Black’s Law Dictionary (9th ed. 2009)); see Schlumberger, 959 S.W.2d at 175-77. Here, the parties were not related or otherwise on close terms or in a confidential relationship. Smith Decl. 48. Nor do Plaintiffs allege or suggest otherwise. See id.; Am. Pet. {| 13 (alleging they learned of the Property’s listing through RBR’s “marketing efforts”). This factor militates in favor of enforcing the disclaimer. b. Plaintiffs’ Business Knowledge Second, the Deal was complex and involved the sale of a multi-million dollar commercial property, three commercial leases, and certain other property between highly sophisticated parties. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 12 This factor about Plaintiffs’ business knowledge “is aimed at identifying those transactions in which one party exploits the other’s inexperience.” Pogue, 605 S.W.3d at 668. Here, Plaintiffs were highly experienced and knowledgeable in real estate acquisitions, having acquired nearly $100 million in real estate assets before this sale. Smith Decl. § 7; Ex. 6. Plaintiffs also had a sophisticated real-estate professional advising them during the Deal. Pogue, 605 S.W.3d at 668 (“Working with a real-estate agent will show some business knowledge.”). Plaintiffs’ very existence are also exemplars of the business acumen present here. Plaintiffs contend four separate entities—Leeton and Plaintiffs—were involved and/or created for this Deal: one to enter the PSA and APSA, two to acquire the leases, and one to acquire the real estate assets. This factor therefore also militates in favor of enforcing the disclaimer. c. Representation by Counsel Third, Plaintiffs were represented by counsel of their choice throughout the Deal, including when the parties first entered the PSA on May 1, 2019 and when they entered the APSA on September 27, 2019. It is undisputed that their counsel assisted them with negotiating the PSA’s and APSA’s terms. This factor favors enforcing the disclaimer. d. Negotiation Fourth, the parties negotiated the terms of the PSA, including through drafting and revising the PSA and APSA; these agreements were not merely boilerplate. Importantly, “[t]his factor is neither a requirement that every sentence in a contract be negotiated nor a requirement that the parties negotiated the disclaimer-of-reliance clause.” Pogue, 605 S.W.3d at 666. The focus, rather, is on whether the parties specifically discussed the issue that has become the topic of the subsequent dispute. Forest Oil, 268 S.W. 3d at 60. In Schlumberger, for instance, the court held that in light of the disclaimer-of-reliance clause, it had to assume that the parties contemplated that DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 13 the plaintiffs would not rely on any of the defendant’s representations about the commercial feasibility and value of the project because these were “the very dispute that the release was supposed to resolve.” /d. at 180. See Forest Oil at 61 (“If disclaimers of reliance cannot ensure finality and preclude post-deal claims for fraudulent inducement, then freedom of contract, even among the most knowledgeable parties advised by the most knowledgeable legal counsel, is grievously impaired.”). Here, it is undisputed that Plaintiffs negotiated the terms of the PSA, including by revising drafts of the PSA. Indeed, when the parties decided to move forward with the Deal in April 2019, it was Plaintiffs’ attorney Cohen who initiated sending redlined drafts of the PSA, leaving the disclaimer language untouched. Further, the ultimate issue at the heart of the present dispute is the appropriate value of the Shopping Center. Plaintiffs contend they were induced into believing the Shopping Center and one of its leases were worth more than Defendants represented: “[T]he actual value of the Premises at the time of the closing was far less than the value of the Premises as represented by Defendants and the Plaintiffs have been damaged in the amount of their benefit of the bargain loss . ...” Am. Pet. § 21. But like in Schlumberger, where the parties here negotiated and ultimately agreed on a purchase price and to disclaim reliance on their prior dealings, it is evident the PSA was intended to preclude this category of post-deal claims for fraud. D. Plaintiffs’ Reliance-Based Claims Each of the fraud-related claims Plaintiffs bring here—statutory fraud under § 27.01 of the Texas Business and Commerce Code, fraud/fraudulent misrepresentation, fraud by omission/nondisclosure, and negligent misrepresentation—trequires Plaintiffs to show some form of reliance; the disclaimer of reliance precludes them from doing so. See, e.g., Schlumberger, 959 DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 14 S.W.2d at 181 (holding that disclaimer of reliance precluded plaintiffs from proving reliance for claims for fraud, fraud-by-nondisclosure, and statutory fraud claim under § 27.01 of the Texas Business and Commerce Code); Forest Oil, 268 S.W.3d at *52 (holding that the waiver-of-reliance provision “conclusively defeat[ed]” the plaintiff's fraudulent inducement claim); see also Prime Income Asset Mgmt., 358 Fed. Appx. at 572 (holding that fraud and negligent misrepresentation claims failed because disclaimers in the parties’ agreement negated any reliance). As a corollary, Plaintiffs’ claim for conspiracy to commit fraud also fails. To prove civil conspiracy, Plaintiffs must show Defendants participated in the underlying intentional tort, i.e., fraud. Where Plaintiffs cannot prove their fraud claim in the absence of justifiable reliance, their civil conspiracy claim to commit fraud necessarily fails. Petrobras Am., Inc. v. Astra Oil Trading NV, 633 S.W.3d 606, 628 (Tex. App.—Houston [14th Dist.] 2020, pet. granted), review granted (Oct. 15, 2021) (holding that where the reliance disclaimer barred the fraud claims, the civil conspiracy claim based on those claims also failed). Vv. CONCLUSION Defendants respectfully request that the Court grant their Motion for Summary Judgment, grant Defendants all other relief they are entitled to, including their reasonable attorneys’ fees and costs, and order Plaintiffs to take nothing. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 15 April 11, 2022 Respectfully submitted, /s/ Elliot Strader Elliot Strader Texas Bar No. 24063966 Xakema Henderson Texas Bar No. 24107805 AKERMAN LLP 2001 Ross Avenue, Suite 3600 Dallas, Texas 75201 Tel: 214-720-4380 Fax: 214-981-9339 elliot.strader@akerman.com Counsel for Defendants CERTIFICATE OF SERVICE Thereby certify that a true and correct copy of the foregoing was served on all counsel of tecord in accordance with the Texas Rules of Civil Procedure on April 11, 2022. /s/ Elliot Strader Elliot Strader DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Page 16 CAUSE NO. DC-21-11406 MILTON 635 GRAVOIS ROAD LLC, IN THE DISTRICT COURT 635 GRAVOIS ROAD LEASING LLC, and 635 GRAVOIS ROAD REAL ESTATE, LLC, Plaintiffs, Vv. 447 JUDICIAL DISTRICT TRT HOLDINGS, INC., RBR REAL ESTATE HOLDINGS, LLC, BRIAN ZELMAN, and ADAM ZEITSIFF, DALLAS COUNTY, TEXAS Defendants. DECLARATION OF JESSE SMITH STATE OF TEXAS § § COUNTY OF DALLAS § 1 My name is Jesse Smith. I am over 18 years of age, have never been convicted of a felony or crime involving moral turpitude, and I am fully competent to make this Declaration. I have personal knowledge of the facts stated herein, all of which are true and correct. 2 lam Vice President and Senior Counsel for Defendant TRT Holdings, Inc. in the above-captioned lawsuit. I am a member of the TRT Holdings, Inc. in-house legal team that provides legal services to RBR Real Estate Holdings, LLC (“RBR”), among other TRT Holdings, Inc. affiliates. 3 I have read Defendants’ Motion for Summary Judgment (the “Motion”) and the exhibits attached to it. 4. Attached to the Motion as Exhibit 2 is a true and correct copy of the Agreement of Purchase and Sale (“PSA”) between Defendant RBR and nonparty Leeton Real Estate Inc. (“Leeton”) for the sale of property located in Fenton, Missouri. Leeton’s principals initially used EXHIBIT 1 a different entity, Poplar Springs Investment Trust, as buyer before advising RBR that Leeton would be the purchasing entity. 5 Attached to the Motion as Exhibit 3 is a true and correct copy of the First Amendment to Agreement of Purchase and Sale (“APSA”) between Defendant and nonparty Leeton, dated November 26, 2019. The transaction closed on November 27, 2019. 6 The terms of the PSA and APSA were negotiated by RBR and its counsel, on the one hand, and Leeton and its counsel, Mark Cohen, on the other. Leeton was also aided by Mark Sher, a “realtor associate” with Fox and Foxx Realty. 7 Leeton’s principals were Michael and David Shabsels (the “Shabsels”). The Shabsels are highly sophisticated business players knowledgeable about acquiring multimillion dollar real estate. The Shabsels represented to RBR that they are the nation’s largest owner of for- profit summer camps, and in the few years before entering into the PSA, they had acquired approximately $89 million in real estate assets separate and apart from the summer camps business. 8 Leeton and RBR had no relationship, confidential or otherwise, before entering into the PSA and APSA. Leeton represented it learned about the Shopping Center through marketing materials RBR’s broker, HFF, had prepared. 9 Attached to the Motion as Exhibit 4 is a true and correct copy of the First Amendment to Amended and Restated Shopping Center Lease. 10. Attached to the Motion as Exhibit 5 is a true and correct copy of the Amended and Restated Guaranty. 11. Attached to the Motion as Exhibit 6 is a true and correct copy of the redlined June 2018 Letter of Intent between RBR and the Shabsels that includes redlines by Sher and/or other representatives of the Shabsels. 12s Attached to the Motion as Exhibit 7 is a true and correct copy of the April 11, 2019 email from Mark Cohen, attaching redlined, revised copies of the agreements for the properties identified in the PSA. My work address is 4001 Maple Ave., Suite 600, Dallas, Texas 75219, United States. I declare under penalty of perjury that the foregoing is true and correct. Executed in Dallas County, State of Texas, on April ==2022. a, JESSE ITH AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (Portfolio: 635 Gravois Rd, Fenton, MO 63026) KEY PROVISIONS SUMMARY Effective Date: The date this Agreement is acknowledged and executed by the Escrow Agent as shown on the signature page(s) attached hereto. Seller: RBR Real Estate Holdings, LLC, a Texas limited liability company Any reference herein to “party” or the “parties” shall mean (i) the Seller, as one party, and (ii) the Buyer, as the other party. Buyer: Leeton Real Estate Inc. Property: That certain real property located at 635 Gravois Rd, Fenton, MO 63026, as more particularly described on Exhibit_A, with all appurtenances, rights, privileges, warranties, and easements benefiting, belonging, or pertaining theret Escrow Agent: Stewart Title Guaranty Company 929 Kings Highway East, 3rd Floor Fairfield, CT 06825 Attn: Troy Denunzio Email: tdenunzio@stewart.com — Phone: (646) 787-2505 (Seetion 3) Initial Earnest $100,000.00 (Section 3.1) Money: Additional Earnest $150,000.00 (Section 3.2) Money: es Purchase Price: $10,500,000.00 (Section4) | Acceptance Date: May 30, 2019 (Section 21) Inspection Period: The period beginning on the Effective Date and ending 60 days thereafter (Section 2.2) _ sf Closing Date 30 days from the expiration of the Inspection Period (Section 10.1) Brokers: HFF and Quadstar Realty (Section 19) Notices: Sell Buyer: : (Section 18) RBR Real Estate Holdings, LLC Leeton Real Estate Inc. a New York 4001 Maple Ave, Ste. 600 corporation Dallas, Texas 75219 455 Tarrytown Road, Suite 1526 Attention: Jesse T. Smith, Counsel White Plains, New York 10607 Email: jt-smith@trtholdings.com Attention: Mark Graham, Sole Shareholder E-mail Address: mark, graham 15@gmail.com With a copy to: RBR Real Estate Holdings, LLC. 4001 Maple Ave, Ste. 600 Dallas, Texas 75219 Attention: Brian Zelman Email: bzelman@irtholdings.com EXHIBIT RBR000408 (Portfolio: 635 Grevois Rd, Fenton, MO 63026; 902 W. Central Texas Expy, Killeen, TX 76541; and 635 Gravois Rd, Fenton, MO 63026) =4 Exhibits: Exhibit A — Legal Description of Property Exhibit B ~ Schedule of Leases Page 2 RBR000409 (Portfolio: 635 Gravois Rd, Fenton, MO 63026) AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (the “Agreement”) is made as of the Effective Date (as set forth in the Key Provisions Summary) by and between Seller and Buyer. Recitals A. Seller is the owner in fee simple of the Property. B Seller desires to sell to Buyer and Buyer desires to purchase from Seller the Property upon the terms and conditions set forth in this Agreement. Cc Simultaneously with the Closing of the transactions contemplated by this Agreement, Buyer and Seller desire to close (1) the transactions contemplated by that certain Agreement of Purchase and Sale and Joint Escrow Instructions dated even date herewith for certain real property located at 902 W. Central Texas Expy, Killeen, TX 7654 (the “Killeen Transaction”) and (2) the transactions contemplated by that certain Agreement of Purchase and Sale and Joint Escrow Instructions dated even date herewith for certain real property located at 7650 FM 78, San Antonio, TX 78244 (the “Walzem Transaction’). NOW, THEREFORE, in consideration of the mutual covenants contained herein, payment of the Earnest Money, and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties mutually covenant and agree as follows: 1 Key Provisions Summary; Enumeration of Exhibits. References in the body of this Agreement to a portion of the Key Provisions Summary (e.g., the defined terms in the left-hand column of the Key Provisions Summary) shall be deemed and construed to incorporate all the terms provided under each such referenced portion of the Key Provisions Summary. References in the Key Provisions Summary to a portion of the body of this Agreement (e.g., Section references in the right-hand column of the Key Provisions Summary) shall be deemed and construed to incorporate all the terms provided under each such referenced portion of the body of the Agreement. Notwithstanding anything set forth above, if there is any inconsistency between the Key Provisions Summary and another portion of this Agreement, the terms of the Key Provisions Summary shall control. The Exhibits enumerated in the Key Provisions Summary and attached to this Agreement are incorporated in this Agreement by reference and are to be construed as a part of this Agreement. Each party shall perform any obligations on its part as set forth in any and all such Exhibits. 2. Agreement of Purchase and Sale. Seller shall sell to Buyer, and Buyer shall purchase from Seller, upon the terms and conditions set forth in this Agreement, the Property. 3. Earnest Money. 3.1 Within one (1) business day following the mutual execution of this Agreement, Buyer shall deposit with the Escrow Agent (as set forth in the Key Provisions Summary) the Initial Earnest Money (as set forth in the Key Provisions Summary). If Buyer does not timely deliver the Initial Earnest Money, or if the Escrow Agent is not immediately able to obtain good funds in respect of the Initial Earnest Money, Seller may, at its option, terminate this Agreement and no party shall have any further right or obligation hereunder. Page 3 RBR000410 (Portfolio: 635 Gravois Rd, Fenton, MO 63026) 3.2 Buyer will have the Inspection Period within which to review the Due Diligence Materials (as defined in Section 7.2), and conduct the investigations, studies or tests of the Property deemed necessary by Buyer to determine whether Buyer desires to complete the acquisition of the Property, as detailed in Section 7.2. Buyer, in its sole and absolute discretion for any reason or no reason whatsoever, may proceed to go forward with this Agreement by delivering written notice to Seller (the “Ga Forward Notice”) of Buyer’s determination to so proceed under this Agreement prior to the expiration date of the Inspection Period. If Buyer does not deliver a Go Forward Notice prior to the expiration of the Inspection Period, regardless of whether or not Buyer has then performed any of Buyer’s obligations under this Agreement, the Initial Earnest Money will be returned to Buyer, minus One Hundred and No/Dollars $100.00 (the “Independent Consideration”), which shall represent the independent consideration to support Buyer’s inspection rights contained herein, and thereafter the parties to this Agreement shall have no further rights or obligations hereunder except for those provisions of this Agreement which, by their express terms, survive the termination of this Agreement. If Buyer does deliver a Go Forward Notice prior to the expiration of the Inspection Period, the Initial Earnest Money will become nonrefundable to Buyer (other than as expressly set forth in this Agreement), and this Agreement will conti