Regal Capital Acquisitions

The Manager maintains only a contractual (not fiduciary) relationship with investors, and the Company has agreed to limit the Manager's liability and indemnify it against certain liabilities, restricting investor remedies.

“The Manager maintains a contractual, as opposed to a fiduciary relationship, with the Company and its investors. Accordingly, the Company and its investors will only have recourse and be able to seek remedies against the Manager to the extent it breaches its obligations under the Operating Agreement.”

The Manager serves as both the managing member of 286 Lenox Partners LLC (representing investor interests) and the manager of OpCo (the operating entity), creating a structural conflict of interest between the two entities.

“The Manager is also the OpCo Manager. There may be circumstances under which OpCo wishes to take or refrain from taking certain actions that are not in the Company's best interest. In those circumstances, the Manager may have a conflict of interest between the Company's interests and the interests of OpCo.”

The Property Manager (Regal Property Management LLC) is an affiliate of the Manager (Regal Capital Acquisitions LLC), creating a conflict of interest as the Manager controls both the entity engaging the property manager and the property manager receiving the 3% management fee.

“The day-to-day operations of the Building are managed by Regal Property Management LLC (the "Property Manager"), an affiliate of OpCo, pursuant to the terms of a management agreement between OpCo and the Property Manager. The annual management fee payable to the Property Manager under this agreement is three percent (3%) of gross revenue of OpCo”