EXHIBIT 10.2

 

STOCKHOLDERS AGREEMENT

This STOCKHOLDERS AGREEMENT is entered into as of June 8, 2017, by and among
Plymouth Industrial REIT, Inc., a Maryland corporation (the “Company”), and DOF
IV REIT Holdings, LLC, a Delaware limited liability company, and DOF IV Plymouth
PM, LLC, a Delaware limited liability company (each, an “Investor,” and
together, the “Investors”).

RECITALS

Concurrently with the execution of this Agreement, DOF Plymouth and certain
affiliates of the Company have entered that certain Private Placement Agreement
(the “Placement Agreement”), providing for, among other things, as a condition
precedent to the effectiveness of such Placement Agreement the issuance of
$5,000,000 of shares (the “Initial Shares”) of the Company’s common stock, par
value $0.01 per share (the “Common Stock”), and in connection with the Placement
Agreement, the parties desire to provide the Investors with the right, among
other rights, to designate the election of a member of the board of directors of
the Company (the “Board”) in accordance with the terms of this Agreement;

WHEREAS, concurrently with the execution of this Agreement, DOF Holdings and the
Company have entered into that certain Warrant Agreement, providing for the
issuance of Warrants to acquire up to 250,000 shares of Common Stock (the
“Warrant Shares” and, together with the Initial Shares, the “Shares”); and

WHEREAS, the Investors and the Company desire to enter into this Agreement in
order to generally set forth their respective rights and responsibilities, and
to establish various arrangements and restrictions with respect to, among other
things, (a) actions that may or may not be undertaken in respect of the Shares,
(b) the governance of the Company, (c) certain registration rights with respect
to the Registrable Securities (as defined herein), (d) certain liquidity rights
with respect to the Shares, and (e) other related matters with respect to the
Company.

NOW, THEREFORE, in consideration of the premises set forth above and of the
mutual representations, covenants, and obligations hereinafter set forth, and
for other good and valuable consideration, the receipt, sufficiency, and
adequacy of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1     Certain Defined Terms.

As used herein, the following terms shall have the following meanings:

“Affiliate” means, with respect to any Person, any other Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified Person, including as to the
Investors any investment entity managed or advised by Torchlight Investors, LLC;
provided, however, that in no event shall the Company, any of its Subsidiaries,
or any of the Company’s other controlled Affiliates be deemed to be Affiliates
of the Investors for purposes of this Agreement.

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“Agreement” means this Stockholders Agreement, as it may be amended, restated,
or otherwise modified from time to time, together with all exhibits, schedules,
and other attachments hereto.

“Beneficial Ownership” means, with respect to any Security, the ownership of
such Security by any “Beneficial Owner,” as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that, in calculating the
beneficial ownership of any particular “person” (as that term is used in
Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have
beneficial ownership of all Securities that such “person” has the right to
acquire by conversion or exercise of other Securities, whether such right is
currently exercisable or is exercisable only after the passage of time. The
terms “Beneficially Own,” “Beneficially Owned” and “Beneficial Owner” shall have
correlative meaning.

“Board” means the board of directors of the Company.

“Business Day” means any day that is not a Saturday, a Sunday, or any other day
on which banks are required or authorized to be closed in the City of New York,
in the State of New York.

“Capital Stock” means, with respect to any Person at any time, any and all
shares, interests, participations, or other equivalents (however designated, and
whether voting or non-voting) of capital stock, partnership interests (whether
general or limited), limited liability company membership interests, or
equivalent ownership interests in, or issued by, such Person, whether common,
preferred or otherwise.

“Change of Control” means (i) a sale of all or substantially all of the direct
or indirect assets of the Company (including by way of any reorganization,
merger, consolidation, liquidation in a single transaction or a series of
related transactions or other similar transaction), (ii) a direct or indirect
acquisition of Beneficial Ownership by a Person or “group” (within the meaning
of Rules 13d-3 and 13d-5 under the Exchange Act) other than the Investors or
their Affiliates, including by means of any transaction or series of
transactions (including any reorganization, merger, consolidation, joint
venture, share transfer or other similar transaction) pursuant to which the
Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act) other than the Investors or their Affiliates collectively own more
than fifty percent (50%) of the Voting Securities of the Company or the
surviving entity, as the case may be, or (iii) the obtaining by any Person or
“group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of
the power (whether or not exercised) to elect a majority of the members of the
Board (or similar governing body) of the Company.

“Closing” has the meaning set forth in the Underwriting Agreement.

“Common Stock” means the Common Stock of the Company, par value $0.01 per share.

“Company” has the meaning set forth in the Recitals hereto.

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“Company Right” has the meaning set forth in Section 3.1(b).

“Contracting Party” has the meaning set forth in Section 7.10.

“control” (including the terms “controlled by” and “under common control with”),
with respect to the relationship between or among two (2) or more Persons, means
the possession, directly or indirectly, of the power to direct, or cause the
direction of, the affairs or management of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract, or by any
other means.

“Controlling Person” has the meaning set forth in Section 4.8(a).

“Convertible Securities” means any evidence of indebtedness, shares of Capital
Stock (other than Common Stock) or other Securities (including Options) that are
directly or indirectly convertible into, or otherwise exchangeable or
exercisable for, shares of Common Stock.

“Damages” has the meaning set forth in Section 4.8(a).

“Director” means, with respect to any Person, any member of the board of
directors of such Person (other than any advisory, honorary or other non-voting
member of such board).

“DTC” means The Depository Trust Company.

“Effectiveness Period” has the meaning set forth in Section 4.2(b).

“Election Notice” has the meaning set forth in Section 2.1(a).

“Equity Issuance” means any issuance, sale or placement of any Common Stock or
other Capital Stock of the Company or any of its subsidiaries, and any issuance,
sale or placement of any other Securities of the Company or any of its
subsidiaries that are convertible or exchangeable into Common Stock or other
Capital Stock of the Company or any of its subsidiaries; provided, however, that
no Permitted Issuance shall constitute or be deemed to constitute an “Equity
Issuance” for purposes of this Agreement.

“Exchange” means, initially, the New York Stock Exchange, Inc. and any successor
thereto or, in the future, any other stock market on which the Common Stock is
listed.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, together
with all rules and regulations promulgated thereunder.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“GAAP” means United States generally accepted accounting principles in effect as
of the date hereof.

“Governing Documents” means the articles of restatement and bylaws of the
Company.

“Holder” means the Investors and any Permitted Transferee that becomes a Holder
pursuant to Section 4.11.

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“Indemnified Party” has the meaning set forth in Section 4.8(c).

“Indemnifying Party” has the meaning set forth in Section 4.8(c).

“Initial Shares” has the meaning set forth in the Recitals hereto.

“Investor” and “Investors” have the meaning set forth in the Recitals hereto.

“Investor Nominated Director” has the meaning set forth in Section 2.1(a).

“Law” means any statue, law, regulation, ordinance, rule, injunction, order,
decree, directive, or any similar form of decision of, or determination by, any
governmental or self-regulatory authority.

“Mailing Date” has the meaning set forth in Section 2.1(a).

“Non-Recourse Party” has the meaning set forth in Section 7.10.

“Options” means any options, warrants, or other rights to subscribe for,
purchase, or otherwise acquire shares of Capital Stock of the Company (or any
successor thereto).

“Permitted Issuance” means (a) any issuance of Capital Stock upon the exercise
of Options outstanding and publicly disclosed as of the date of this Agreement
and in accordance with their terms as in effect on the date of this Agreement,
(b) any issuance, sale or authorization pursuant to the Company’s currently
existing and publicly filed compensation arrangements for its directors,
officers and employees, (c) any issuance, sale or authorization pursuant to any
future compensation arrangements for the Company’s directors, officers and
employees, that are approved by the Company’s compensation committee, (d) any
issuance, sale or placement of Capital Stock as consideration in any acquisition
transaction the primary purpose of which is not to raise capital, including any
Change of Control, that has been approved by the Board, and (e) any issuance of
Common Stock upon redemption of common units in the Company’s operating
partnership that are issued and outstanding or otherwise permitted to be issued
pursuant to clause (d) above pursuant to the terms of the Agreement of Limited
Partnership of the operating partnership, provided that such common units have
been issued for fair value.

“Permitted Transferee” has the meaning set forth in Section 4.11.

“Person” means an individual, corporation, partnership, limited liability
company, association, trust, or other entity or organization, including any
governmental authority.

“Piggyback Registration” has the meaning set forth in Section 4.2(a).

“Pre-Emptive Shares” means any shares of Common Stock issued or issuable to the
Investors pursuant to Section 3.1.

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“Pro Rata Portion” means, with respect to the Investors and their Affiliates at
a given time and with respect to a given Equity Issuance, a number of shares of
Common Stock, other Capital Stock or other Securities to be issued, sold or
placed in the Equity Issuance equal to the product of (a) the number of shares
of Common Stock, other Capital Stock or other Securities proposed to be issued,
sold or placed in the Equity Issuance, multiplied by (b) a fraction, the
numerator of which is the aggregate number of shares of Common Stock
Beneficially Owned by the Investor and its Affiliates immediately prior to the
Equity Issuance, and the denominator of which is the aggregate number of shares
of outstanding Common Stock immediately prior to the Equity Issuance.

“Registrable Securities” means the shares of Common Stock acquired by the
Investors pursuant to the terms of this Agreement, including, without
limitation, Pre-Emptive Shares, or by the Investors or any of their Affiliates
pursuant to the terms of the Warrant Agreement. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when they
(i) have been distributed to the public pursuant to an offering registered under
the Securities Act or sold to the public through a broker, dealer or market
maker in compliance with Rule 144 under the Securities Act (or any similar rule
then in force), (ii) have been distributed to the direct or indirect partners or
members of any Investor (unless such Investor elects otherwise), (iii) have been
effectively registered under a registration statement including a registration
statement on Form S-8 (or any successor form) or (iv) have been repurchased by
the Company. In addition, all Registrable Securities held by any Person shall
cease to be Registrable Securities (provided that, for purposes of this
provision, all Investors and all Registrable Securities held by such Investors
shall be treated as Registrable Securities held by a single Person) when all
such Registrable Securities become eligible to be sold to the public through a
broker, dealer or market maker pursuant to Rule 144 (or any similar provision
then in force), other than Rule 144(b), during a single 90-day period. For
purposes of this Agreement, a Person shall be deemed to be a holder of
Registrable Securities whenever such Person has the right to acquire such
Registrable Securities (upon conversion or exercise in connection with a
Transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), regardless of whether such
acquisition has actually been effected; provided that this sentence shall not
apply to shares of Common Stock issuable upon the exercise of unvested Options
originally issued to employees or former employees of the Company or its
Subsidiaries.

“Registration Statement” means any registration statement filed by the Company
under the Securities Act that covers the resale of any of the Registrable
Securities, including a prospectus, amendments and supplements thereto, and all
exhibits and material incorporated by reference therein.

“Rule 144” means Rule 144 promulgated under the Securities Act or any successor
federal statute, rules, or regulations thereto, and in the case of any
referenced section of any such statute, rule, or regulation, any successor
section thereto, collectively as from time to time amended and in effect.

“SEC” means the Securities and Exchange Commission.

“Securities” or “Security” means Capital Stock, limited partnership interests,
limited liability company interests, beneficial interests, warrants, options,
restricted stock units, notes, bonds, debentures, and other securities, equity
interests, ownership interests and similar obligations of every kind and nature
of any Person.

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“Securities Act” means the Securities Act of 1933 or any successor federal
statute, and the rules and regulations of the SEC thereunder, and in the case of
any referenced section of any such statute, rule or regulation, any successor
section thereto, collectively and as from time to time amended and in effect.

“Suspension Event” has the meaning set forth in Section 4.6(a).

“Suspension Notice” has the meaning set forth in Section 4.6(a).

“Transfer” means to sell, assign, dispose of, mortgage, pledge, hypothecate,
encumber or otherwise transfer, other than a sale effected on the Exchange.

“Underwriters’ Maximum Number” means, for any Piggyback Registration, that
number of Registrable Securities to which such registration should, in the
reasonable opinion of the managing underwriter(s) of such registration, in light
of marketing factors, be limited.

“Underwriting Agreement” has the meaning set forth in the Company’s registration
statement in Form S-11 (SEC File No. 333-196798).

“Voting Securities” means at any time shares of any class of Capital Stock or
other Securities of the Company, including Convertible Securities that may be
converted into, exercised for, or otherwise exchanged for such shares of Capital
Stock, that are then entitled to vote generally in the election of Directors and
not solely upon the occurrence and during the continuation of certain specified
events until the occurrence of such specified event.

“Warrant Agreement” means that certain Warrant Agreement, dated as of the date
hereof, by and between the Company and DOF IV REIT Holdings, LLC.

Section 1.2     Other Definitional Provisions. When used in this Agreement, the
words “hereof,” “herein,” and “hereunder,” and words of similar import shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Article and Section references are to this Agreement unless
otherwise specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Whenever the
words “include,” “includes,” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation.”

ARTICLE II
GOVERNANCE

Section 2.1     The Investor’s Representation on the Board.

(a)       The Company represents and warrants that prior to Closing the Board
shall have no more than six (6) members. At any time on or after the date of the
Closing, the Investors shall have the option, in their sole discretion, to
deliver to the Company a written notice (the “Election Notice”) indicating their
intent to nominate the Investor Nominated Director. Within five (5) Business
Days of the Company’s receipt of the Election Notice, the Board shall be
reconstituted such that the number of members constituting the Board shall be no
more than seven (7), subject to increase or decrease by the Board from
time-to-time, in

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accordance with the Governing Documents and this Agreement, the Company shall
promptly cause one (1) person designated by the Investors in the Election Notice
to be appointed to the Board in the manner provided in the Governing Documents
for filling vacancies on the Board. Following the appointment of the Investor
Nominated Director, subject to Section 2.1(f), for any meeting (or consent in
lieu of a meeting) of the Company’s stockholders for the election of members of
the Board, (i) so long as the Investors, together with their Affiliates, own of
record as of the date of mailing of the Company’s definitive proxy statement in
connection with such meeting (the “Mailing Date”) Common Stock and Convertible
Stock that together constitutes at least two and five-tenths percent (2.5%) of
the outstanding Common Stock, the Company shall include one (1) person
designated by the Investors as a member of the slate of Board nominees proposed
by the Board for election by the Company’s stockholders and, subject to the
Board’s duties under Maryland law, shall recommend that the Company’s
stockholders vote in favor of the election of such nominee, (ii) the Company
shall include no fewer than four (4) independent members (not counting the
member designated by Investors) in the slate of Board nominees proposed by the
Board for election by the Company’s stockholders and, subject to the Board’s
duties under Maryland law, shall recommend that the Company’s stockholders vote
in favor of the election of all such nominees, and (iii) if the Investors,
together with their Affiliates, own of record as of the Mailing Date Common
Stock and Convertible Stock that together constitutes less than two and
five-tenths percent (2.5%) of the outstanding Common Stock, the Company shall
not be required to include a person designated by the Investors as a member of
the slate of Board nominees. The member of the Board nominated or elected
pursuant to this Section 2.1(a) is referred to herein as the “Investor Nominated
Director.” The Board shall not withdraw any nomination or, subject to the
Board’s duties under Maryland law, recommendation required under this
Section 2.1(a), unless the Investor delivers to the Board a written request for
such withdrawal or the Board determines reasonably and in good faith after
consultation with outside legal counsel that such Board nominee (i) is
prohibited or disqualified from serving as a director of the Company under any
rule or regulation of the SEC, the Exchange or by applicable Law, (ii) has
engaged in acts or omissions constituting a breach of the Investor Nominated
Director’s duty of loyalty to the Company and its stockholders, (iii) has
engaged in acts or omissions that involve intentional misconduct or an
intentional violation of Law and that are felonies, violations of Law involving
moral turpitude or are materially adverse to the Company or (iv) has engaged in
any transaction involving the Company from which the Investor Nominated Director
derived an improper personal benefit that was not disclosed to the Board prior
to the authorization of such transaction if such disclosure is required pursuant
to the Governing Documents; provided, however, that the Investors shall have the
right to replace such Board nominee with a new Board nominee. Further, (i) for
any meeting (or consent in lieu of a meeting) of the Company’s stockholders for
the election of members of the Board, the Board shall not nominate, in the
aggregate, a number of nominees greater than the seven (7) members of the Board,
nor shall the Board resolve or otherwise take action to increase the number of
members constituting the Board to any number greater than seven (7) members,
except with the prior written consent of the Investors, (ii) the Company shall
not resolve or otherwise take action to introduce a staggered or classified
Board without the prior written consent of the Investors, (iii) subject to the
Board’s duties under Maryland law, the Board shall not recommend the election of
any other person to a position on the Board for which the Investor Nominated
Director has been nominated, and (iv) the Company shall use commercially
reasonable efforts to cause the Investor Nominated Director to be elected to the
Board. If elected to the Board, the Investor Nominated Director will hold his or
her office as a member of the Board for such term as is provided in the
Governing Documents, or until his or her death, resignation or removal from the
Board or until his or her successor has been duly elected and qualified in
accordance with the provisions of this Agreement, the Governing Documents, and
applicable Law.

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(b)       If the Investors’, together with their Affiliates, record ownership of
outstanding Common Stock falls below the percentage threshold set forth in
Section 2.1(a) above, the Investors shall promptly cause the Investor Nominated
Director to resign from the Board. In addition, the Investors may, at any time
at Investors’ sole election, send written notice to the Company that the
Investors have elected to permanently relinquish the Investors’ right to
nominate or appoint the Investor Nominated Director, and in such event, the
Investor Nominated Director shall be permitted to resign his or her position on
the Board. Upon the occurrence of either of the events described in the two
preceding sentences, the Investors shall no longer be entitled to designate an
Investor Nominated Director (even if the Investors or their Affiliates shall
subsequently acquire additional shares of Common Stock). In addition, the
Investors shall cause the Investor Nominated Director to resign from the Board
and any committees on which the Investor Nominated Director serves if the
Investor Nominated Director, as determined reasonably by the Board acting in
good faith after consultation with outside legal counsel, (i) is prohibited or
disqualified from serving as a director of the Company or a member of any such
committees under any rule or regulation of the SEC, the Exchange or by
applicable Law, (ii) has engaged in acts or omissions constituting a breach of
the Investor Nominated Director’s duty of loyalty to the Company and its
stockholders, (iii) has engaged in acts or omissions that involve intentional
misconduct or an intentional violation of Law and that are felonies, violations
of Law involving moral turpitude or are materially adverse to the Company or
(iv) has engaged in any transaction involving the Company from which the
Investor Nominated Director derived an improper personal benefit that was not
disclosed to the Board prior to the authorization of such transaction if such
disclosure is required pursuant to the Governing Documents or applicable Law;
provided, however, that, subject to the limitations set forth in Section 2.1(a),
the Investors shall have the right to replace such resigning Investor Nominated
Director with a new Investor Nominated Director, such newly-named Investor
Nominated Director to be appointed promptly to the Board in place of the
resigning Investor Nominated Director in the manner set forth in the Governing
Documents for filling vacancies on the Board. Further, upon the resignation of
the Investor Nominated Director, any rights granted to the Investor Nominated
Director pursuant to Section 2.1(a) shall terminate forthwith; provided,
however, that the newly-named Investor Nominated Director selected by the
Investor to replace the resigning Investor Nominated Director shall be granted
the rights set forth in Section 2.1. Nothing in this Section 2.1(b) or elsewhere
in this Agreement (except Section 2.1(d)) shall confer any third-party
beneficiary or other rights upon any person designated hereunder as an Investor
Nominated Director, whether during or after such person’s service on the Board.

(c)       For so long as the Investors have the right to designate an Investor
Nominated Director for nomination to the Board pursuant to Section 2.1(a) above,
the Board shall fill vacancies created by reason of death, removal or
resignation of the Investor Nominated Director promptly upon request by the
Investors and only as directed by the Investors, subject to the terms and
conditions set forth in Section 2.1(a) above and Sections 2.1(e) below. So long
as the Investors have named a replacement within thirty (30) days following any
death, removal or resignation of the Investor Nominated Director, and prior to
any appointment of such replacement in accordance with this Agreement, and
subject to the Board’s duties under Maryland law, the Board agrees not to
authorize or take, and agrees to cause each committee not to authorize or take,
any action that would otherwise require the consent of the Investor Nominated
Director until such time as such newly-named Investor Nominated Director has
been so appointed to the Board.

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(d)       The Investor Nominated Director that is elected to the Board shall be
indemnified by the Company and its subsidiaries, if applicable, in connection
with his or her service as a member of the Board to the fullest extent permitted
by Law and the Governing Documents and will be exculpated from liability for
damages to the fullest extent permitted by Law and the Governing Documents.
Without limiting the foregoing in this Section 2.1(d), the Investor Nominated
Director who is elected to the Board shall be entitled to receive from the
Company and its subsidiaries, if applicable, the same insurance coverage and
indemnification rights in connection with his or her service as a member of the
Board as is provided for each of the other members of the Board.

(e)       The Investors shall only designate a person to be the Investor
Nominated Director (i) who the Investors believe in good faith has the requisite
skill and experience to serve as a director of a publicly-traded company,
(ii) who is not prohibited from or disqualified from serving as a director of
the Company pursuant to any rule or regulation of the SEC, the Exchange or
applicable Law, and (iii) with respect to which no event required to be
disclosed pursuant to Item 401(f) of Regulation S-K of the Exchange Act has
occurred. Notwithstanding anything to the contrary in this Section 2.1, the
parties hereto agree that members of the Board shall retain the right to object
to the nomination, election or appointment of the Investor Nominated Director
for service on the Board if the members of the Board reasonably determine in
good faith, after consultation with outside legal counsel, that the Investor
Nominated Director fails to meet the criteria set forth above. In the event that
the members of the Board reasonably object to the nomination, election or
appointment of the Investor Nominated Director to the Board pursuant to the
terms of this Section 2.1(e), the Board shall nominate or appoint, as
applicable, another individual designated by the Investor as the Investor
Nominated Director nominated for election to the Board that meets the criteria
set forth in this Section 2.1(e) and Section 2.1(f) hereof.

(f)       Notwithstanding anything to the contrary in this Section 2.1, nothing
shall prevent the Board from acting in accordance with its respective duties
under Maryland law or applicable Law or Exchange requirements. The Board shall
have no obligation to nominate, elect or appoint the Investor Nominated Director
if such nomination, election or appointment would violate applicable Law or
Exchange requirements or result in a breach by the Board of its duties to the
Company and its stockholders; provided, however, that the foregoing shall not
affect the right of the Investor to designate an alternative individual as the
Investor Nominated Director nominated for election to the Board, subject to the
other terms, conditions and provisions in this Article II.

(g)       The Investor Nominated Director shall be entitled to compensation and
the reimbursement of expenses in accordance with the Company’s compensation of
non-employee directors in effect from time to time in connection with his or her
service on the Board. In addition, all reasonable out-of-pocket expenses of the
Investors or any of their employees or Affiliates in connection with assisting
the Company or evaluating actions by the Company shall be reimbursed by the
Company.

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ARTICLE III
pre–emptive RIGHTS AND ADDITIONAL ISSUANCES

Section 3.1     Pre-Emptive Rights.

(a)       For so long as the Investors, together with their Affiliates, own of
record Common Stock and Convertible Stock that together constitutes no less than
two and five-tenths percent (2.5%) of the outstanding Common Stock, the
Investors or one or more of their designated Affiliates shall have the option
and right (but not the obligation) to participate (or nominate any of their
Affiliates to participate) in any Equity Issuance by purchasing in the aggregate
up to the Investors’ and their Affiliates’ Pro Rata Portion of such Equity
Issuance at the same price and the same terms and conditions as offered to other
investors in the Equity Issuance. The Company agrees to use its reasonable best
efforts to take any and all action, or to cause such action to be taken, as is
necessary or appropriate to allow the Investors or their Affiliates, as
applicable, to fully participate in any Equity Issuance in accordance with the
provisions of this Agreement.

(b)       In the event the Company proposes to undertake an Equity Issuance, the
Company shall promptly give the Investors prior written notice of its intention,
describing the type of equity interests, the price at which such securities are
proposed to be issued (or, in the case of an underwritten or privately placed
offering in which the price is not known at the time the notice is given, the
method of determining the price and an estimate thereof), the timing of such
proposed Equity Issuance and the general terms and conditions upon which the
Company proposes to effect the Equity Issuance. The Investors and their
Affiliates shall have fifteen (15) Business Days (or, if the Company expects
that the proposed Equity Issuance will be effected in less than fifteen
(15) Business Days, such shorter period, that shall be as long as practicable,
as may be required in order for the Investors and their Affiliates to
participate in such proposed Equity Issuance) from the date the Investors
receive notice of the proposed Equity Issuance to elect to purchase up to their
Pro Rata Portion of such Equity Issuance for the consideration and upon the
terms specified in the notice provided by the Company pursuant to this
Section 3.1(b) by giving written notice thereof to the Company and stating
therein the quantity of equity interests to be purchased. Any such notice shall
be irrevocable; provided, however, that if the Equity Issuance does not occur
within thirty (30) Business Days following such notice or if the terms of the
Equity Issuance are materially modified, then the Investors and their Affiliates
will be provided the opportunity to similarly participate by the Company giving
a new notice in accordance with this Section 3.1(b). Any purchase of Equity
Interests by any Investor and its Affiliates pursuant to this Section 3.1 shall
occur contemporaneously with, and be subject to the same terms and conditions
as, the closing of the sale of the Equity Interests by the Company to the other
parties.

(c)       In the event that neither any Investor nor any of their Affiliates
exercise the right forth in this Section 3.1 within the applicable period as set
forth above, the Company shall be permitted to sell the equity interests in
respect of which such pre-emptive rights were not exercised. In the event that
the Company has not sold the equity interests within ninety (90) days of its
notice to Investor as contemplated by Section 3.1(b), for purposes of this
Section 3.1 such proposed Equity Offering shall be deemed to have been
terminated, and the Company shall provide Investor with a new notice prior to
undertaking a subsequent Equity Issuance.

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(d)       The Company shall have the right, in its sole discretion, at all times
prior to consummation of any proposed Equity Issuance giving rise to the rights
granted by this Section 3.1, to abandon, withdraw or otherwise terminate such
proposed Equity Issuance, without any liability to the Investors or their
Affiliates.

Section 3.2     Issuance of Senior Stock. For so long as the Investors, together
with their Affiliates, own of record Common Stock and Convertible Stock that
together constitutes no less than two and five-tenths percent (2.5%) of the
outstanding Company Stock, the Company shall not issue any Capital Stock that
ranks senior to the Common Stock with respect to voting rights, the payment of
dividends or amounts due upon liquidation without the prior written consent of
the Investors.

ARTICLE IV
REGISTRATION RIGHTS

Section 4.1     Registration Statement.

(a)       Subject to Section 4.6 and the other provisions of this Article IV,
the Company shall use its reasonable best efforts to file with the SEC a
Registration Statement covering the registration of the resale at any time or
from time to time of all remaining Registrable Securities pursuant to Rule 415
under the Securities Act and or any similar rule that may be adopted by the SEC
(the “Required Registration”) within two (2) Business Days following the
one-year anniversary of the Closing Date. To the extent the staff of the SEC
does not permit all of the Registrable Securities to be registered on a
Registration Statement, the Company shall file additional Registration
Statement(s) successively trying to register on each such additional
Registration Statement the maximum number of remaining Registrable Securities
until the earlier of (a) all of the Registrable Securities have been registered
with the SEC, or (b) the date on which all of the remaining Registrable
Securities may be sold without restriction or limitations pursuant to Rule 144
and without requirement to be in compliance with Rule 144(c)(1) (or any
successor thereto). The Registration Statement shall be on Form S-3, unless the
Company is not then eligible to file a registration statement on Form S-3 under
the Securities Act, in which case (i) such registration statement shall be on
Form S-11 or other appropriate form under the Securities Act which the Company
is then eligible to file and (ii) the Company shall undertake to register the
Registrable Securities on Form S-3 as soon as such form is available, provided
that the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the SEC.

(b)       The Company agrees (subject to Section 4.6 hereof) to cause the
Registration Statement to be declared effective by the SEC as soon as
practicable after the filing thereof. Subject to Section 4.6 hereof, the Company
agrees to use commercially reasonable efforts to keep the Registration Statement
continuously effective (including the preparation and filing of any amendments
and supplements necessary for that purpose) under the Securities Act for a
period that will terminate upon the earlier of (i) the date on which all
Registrable Securities covered by the Registration Statement have been sold and
(ii) the date on which all of the Registrable securities covered by the
Registration Statement may be sold without restriction or limitation pursuant to
Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (or
any successor thereto) under the Securities Act (the “Effectiveness Period”).

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Section 4.2     Piggyback Registration.

(a)       Subject to Section 4.6 hereof, if, at any time while there still
remain Registrable Securities, the Company is no longer eligible to use or,
notwithstanding its obligations under Section 4.1(a), otherwise the Registration
Statement is not effective, the Company proposes to file a new registration
statement under the Securities Act with respect to an offering of Common Stock
for (i) the Company’s own account (other than a registration statement on Form
S-4 or S-8 (or any substitute form that may be adopted by the Commission) or
with respect to a Company dividend reinvestment plan) or (ii) the account of any
holder of Common Stock (other than the Holders), then the Company shall give
written notice of such proposed filing to the Holders as soon as reasonably
practicable (but in no event less than twenty (20) Business Days before the
anticipated filing date of such new registration statement). Upon a written
request, given by Holders to the Company within ten (10) Business Days after
delivery of any such notice by the Company, to include Registrable Securities in
such Registration and in all related registrations or qualifications under blue
sky laws or in compliance with other registration requirements and in any
related underwriting (which request shall specify the number of Registrable
Securities proposed to be included in such new registration statement if such
registration statement is not a “pay as you go” Automatic Shelf Registration
Statement), the Company shall, subject to Section 4.6 hereof, include all such
requested Registrable Securities in such new registration statement on the same
terms and conditions as applicable to the Company’s or such holder’s Common
Stock (a “Piggyback Registration”). Notwithstanding the foregoing, if at any
time after giving written notice of such proposed filing and prior to the
effective date of such new registration statement, the Company or such holders
shall determine for any reason not to proceed with the proposed filing of the
new registration statement, then the Company may, at its election, give written
notice of such determination to the Holders and, thereupon, will be relieved of
its obligation to Register any Registrable Securities in connection with such
new registration statement.

(b)       The Holders of Registrable Securities shall be permitted to withdraw
all or any part of their shares from any Piggyback Registration at any time on
or before the second (2nd) Business Day prior to the planned effective date of
such Piggyback Registration, except as otherwise provided in any written
agreement with the Company’s underwriter(s), if any, establishing the terms and
conditions under which such Holders would be obligated to sell such securities
in such Piggyback Registration.

(c)       If a Piggyback Registration is an underwritten offering on behalf of
the Company, and the managing underwriter(s) advise the Company that in its or
their reasonable opinion the number of securities proposed to be included in
such registration exceeds the Underwriters’ Maximum Number, then the Company
shall include in such registration (i) first, the number of securities proposed
to be offered by the Company, (ii) second, the number of securities requested to
be included therein by all Holders who have requested registration of
Registrable Securities in accordance with Section 4.2(a), pro rata on the basis
of the aggregate number of Registrable Securities requested to be included by
each such Holder and (iii) third, any other securities that have been requested
to be so included by any other person.

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(d)       If a Piggyback Registration is an underwritten offering on behalf of a
holder of Company securities other than Holders, and the managing underwriter(s)
advise the Company that in its or their reasonable opinion the number of
securities proposed to be included in such registration exceeds the
Underwriters’ Maximum Number, then the Company shall include in such
registration (i) first, the number of securities requested to be included
therein by the holder(s) originally requesting such registration, (ii) second,
the number of securities proposed to be offered by the Company, (iii) third, the
number of securities requested to be included therein by all Holders who have
requested registration of Registrable Securities in accordance with
Section 4.2(a), pro rata on the basis of the aggregate number of Registrable
Securities requested to be included by each such Holder and (iv) fourth, any
other securities that have been requested to be so included by any other person.

(e)       In any Piggyback Registration that is an underwritten offering, the
Company shall have the right to select the managing underwriter(s) for such
registration provided such managing underwriter(s) shall be acceptable to the
Holders.

(f)       The Company shall not grant to any Person the right to request the
Company to register any shares of Company securities in a Piggyback Registration
unless such rights are consistent with the provisions of this Section 4.2.

(g)       If the Company has previously filed a registration statement with
respect to Registrable Securities pursuant to Section 4.2, and if such previous
registration has not been withdrawn or abandoned, the Company will not file or
cause to be effected any other registration of any of its Registrable Securities
(except on Forms S 4 or S 8 or any similar or successor forms), whether on its
own behalf or at the request of any holder or holders of such securities, until
a period of at least six (6) months has elapsed from the effective date of such
previous registration, unless the Holders otherwise agree in writing.

Section 4.3     Registration Expenses. In connection with registrations pursuant
to Section 4.1 or Section 4.2 hereof, the Company shall pay all of the costs and
expenses incurred in connection with the registrations thereunder (the
“Registration Expenses”), including (a) all registration and filing fees and
expenses, including, without limitation, those related to filings with the SEC,
(b) all fees and expenses of compliance with state securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), (c) all reasonable
processing, duplicating and printing expenses, including expenses of printing
prospectuses reasonably requested by any Holder, (d) all of the Company’s
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties, the expense of
any liability insurance and the expense of any annual audit or quarterly
review), (e) all fees and expenses incurred in connection with listing the
Registrable Securities for trading on a national securities exchange, (f) all
fees and expenses in connection with the preparation of the Registration
Statement and related documents covering the Registrable Securities, (g) all
fees and expenses, if any, incurred with respect to any filing with FINRA, (h) 
the cost of providing

13 

 

any CUSIP or other identification numbers for the Registrable Securities, (i)
all fees and expenses of any special experts retained by the Company in
connection with such registration, (j) any documented out-of-pocket expenses of
the underwriter(s) incurred with the approval of the Company, (k) all fees and
expenses and disbursements of counsel for the Company and fees and expenses for
independent certified public accountants retained by the Company (including,
without limitation, the expenses of any comfort letters or costs associated with
the delivery by independent certified public accountants of a comfort letter or
comfort letters requested) (l)  all reasonable fees and expenses of one (1)
counsel for the Holders per registration and (m) the expense of any liability
insurance. Other than as provided in the foregoing sentence, the Company shall
have no obligation to pay any out-of-pocket expenses of the Holders relating to
the registrations effected pursuant to this Agreement, including the fees and
expenses of any counsel to the Holders. Each Holder shall be responsible for the
payment of any brokerage and sales commissions, underwriting discounts and
commissions, additional fees and disbursements of such Investor’s counsel,
accountants and other advisors, and any transfer taxes relating to the sale or
disposition of the Registrable Securities by such Holder pursuant to this
Agreement. The obligation of the Company to bear the expenses described in this
Section 4.3 shall apply irrespective of whether any sales of Registrable
Securities ultimately take place.

Section 4.4     Registration Procedures. In the case of each registration
effected by the Company pursuant to this Agreement, the Company shall keep each
Holder advised in writing as to the initiation of each registration and as to
the completion thereof. In connection with any such registration:

(a)       The Company will (i) promptly prepare and file with the SEC such
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for as long as such registration is required to
remain effective pursuant to the terms hereof, (ii) cause the prospectus to be
supplemented by any required prospectus supplement, and, as so supplemented, to
be filed pursuant to Rule 424 under the Securities Act, (iii)  ensure that each
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein (in the case of prospectuses, in the
light of the circumstances in which they were made) not misleading and (iv)
comply with the provisions of the Securities Act applicable to it with respect
to the disposition of all Registrable Securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the Holders set forth in such Registration Statement or
supplement to the prospectus. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 4.4(a)) by reason of the Company filing a
report on Form 10-Q, Form 10-K or Form 8-K or any analogous report under the
Exchange Act, the Company shall have incorporated such report by reference into
such Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the Exchange Act report is
filed which created the requirement for the Company to amend or supplement such
Registration Statement. By 9:30 a.m. New York City time on the date following
the date any Registration statement or any post-effective amendment has become
effective, the Company shall file with the SEC in accordance with Rule 424 under
the Securities Act the final prospectus to be used in connection with sales
pursuant to such Registration Statement.

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(b)       The Company will, at least ten (10) Business Days prior to filing a
Registration Statement or at least five (5) Business Days prior to filing a
prospectus or any amendment or supplement to such Registration Statement or
prospectus, furnish to (i) each Holder of Registrable Securities covered by such
Registration Statement, (ii) Holders’ counsel and (iii) each underwriter of the
Registrable Securities covered by such Registration Statement, copies of such
Registration Statement and each amendment or supplement as proposed to be filed,
together with any exhibits thereto, which documents will be subject to
reasonable review and comment by each of the foregoing Persons within five (5)
Business days after delivery, and thereafter, furnish to such Holders, Holders’
counsel and the underwriter(s), if any, such number of copies of such
Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents or information as such Holder,
Holders’ counsel or the underwriter(s) may reasonably request in order to
facilitate the disposition of the Registrable Securities in accordance with the
plan of distribution set forth in the prospectus included in the Registration
Statement; provided, however, that notwithstanding the foregoing, if the Company
intends to file any prospectus, prospectus supplement or prospectus sticker that
does not make any material changes in the documents already filed, then Holders’
counsel will be afforded such opportunity to review such documents prior to
filing consistent with the time constraints involved in filing such document,
but in any event no less than one (1) Business Day.

(c)       The Company will promptly notify each Holder of any stop order issued
or threatened by the SEC and, if entered, use reasonable best efforts to prevent
the entry of such stop order or to remove it as soon as reasonably possible.

(d)       On or prior to the date on which the Registration Statement is
declared effective, the Company shall use reasonable best efforts to register or
qualify such Registrable Securities under any applicable securities or blue sky
laws of such jurisdictions and do any and all other lawful acts and things which
may be reasonably necessary or advisable to enable the Holders to consummate the
disposition in such jurisdictions of such Registrable Securities, and use
commercially reasonable efforts to keep each such registration or qualification
(or exemption therefrom) effective during the period which the Registration
Statement is required to be kept effective; provided that the Company will not
be required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d),
(ii) subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction.

(e)       The Company will notify each Holder, Holders’ counsel and the
underwriter(s) promptly in writing (provided that in no event shall such notice
contain any material, nonpublic information), (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC or any other federal
or state governmental authority for amendments or supplements to a Registration
Statement or prospectus or for additional information to be included in any
Registration Statement or prospectus or otherwise, (iii) of the issuance by any
state securities commission or other regulatory authority of any order
suspending the qualification or exemption from qualification of any of the
Registrable Securities under state securities or blue sky laws or the

15 

 

initiation of any proceedings for that purpose, and (iv) of the happening of any
event that requires the making of any changes in a Registration Statement or
related prospectus or any document incorporated or deemed to be incorporated by
reference therein so that they will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements in the Registration Statement and prospectus
not misleading in light of the circumstances in which they were made; and, as
promptly as practicable thereafter, prepare and file with the SEC and furnish a
supplement or amendment to such prospectus so that, as thereafter deliverable to
the purchasers of such Registrable Securities, such prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Each Holder hereby agrees to keep any
proper disclosures under subsection (iv) above confidential until such time as a
supplement or amendment is filed.

(f)       The Company will furnish customary closing certificates and other
deliverables to the underwriter(s) and the Holders and enter into customary
agreements satisfactory to the Company (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities.

(g)       The Company will make available for inspection by any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney, accountant or other agent retained by any such seller or underwriter
(in each case after reasonable prior notice and at reasonable times during
normal business hours and without unnecessary interruption of the Company’s
business or operations), all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with the Registration Statement.

(h)       The Company, during the period when the prospectus is required to be
delivered under the Securities Act, promptly will file all documents required to
be filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act.

(i)       The Company shall use reasonable best efforts to cause all Registrable
Securities registered pursuant to the terms hereof to be listed on the Exchange
on which the Common Stock of the Company is then listed.

(j)       The Company shall use commercially reasonable efforts to cooperate and
assist in obtaining of all necessary approvals from FINRA, if any.

(k)       The Company shall provide a transfer agent and registrar for the
Registrable Securities not later than the effective date of such Registration
Statement.

(l)       If requested, the Company shall furnish to each Holder a copy of all
documents filed with and all correspondence from or to the SEC in connection
with the offering of Registrable Securities.

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(m)       The Company otherwise shall use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC.

(n)       The Company shall furnish to any requesting underwriter in an
underwritten offering, addressed to such underwriter, (i) an opinion of the
Company’s counsel, dated the date of closing of the sale of any Registrable
Securities thereunder, as well as a consent to be named in the Registration
Statement or any prospectus thereto, and (ii) comfort letters and consent to be
named in the Registration Statement or any prospectus relating thereto signed by
the Company’s independent public accountants who have examined and reported on
the Company’s financial statements included in the Registration Statement, in
each case covering substantially the same matters with respect to the
Registration Statement (and the prospectus included therein) and (in the case of
the accountants’ comfort letters) with respect to events subsequent to the date
of the financial statements, as are customarily covered in opinions of issuer’s
counsel and in accountants’ comfort letters delivered to the underwriters in
underwritten public offerings of securities, to the extent that the Company is
required to deliver or cause the delivery of such opinion or comfort letters to
the underwriters in an underwritten offering.

(o)       The Company shall make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with, and in
the manner provided by, the provisions of Rule 158 under the Securities Act)
covering a twelve-month period beginning not later than the first day of the
Company’s fiscal quarter next following the date any Registration Statement is
declared effective.

(p)       Neither the Company nor any subsidiary or affiliate thereof shall
identify any Holder as an underwriter in any public disclosure or filing with
the SEC or any Exchange.

(q)       The Company shall hold in confidence and not make any disclosure of
information concerning a Holder provided to the Company unless (i) disclosure of
such information is reasonably determined by the Company to be necessary to
comply with federal or state securities laws, (ii) the disclosure of such
information is reasonably determined by the Company to be necessary to avoid or
correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning a Holder is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt written
notice to such Holder and allow such Holder, at the Holder’s expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.

For purposes of Section 4.4(a), the period of distribution of Registrable
Securities in a firm commitment underwritten public offering shall be deemed to
extend until each underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Registrable Securities in any
other registration shall be deemed to extend until the termination of the
Effectiveness Period.

17 

 

Section 4.5     Holders’ Obligations. The Company may require each Holder to
promptly, but in no event later than five (5) Business Days after a proper
request, furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be legally required in
connection with such registration, including all such information as may be
requested by the SEC. Each Holder agrees that, notwithstanding the provisions of
Section 4.6 hereof, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 4.4(e) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such Holder’s
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 4.4(e) hereof, and, if so directed by the Company, such Holder will
deliver to the Company all copies, other than permanent file copies then in such
Holder’s possession and retained solely in accordance with record retention
policies then-applicable to such Holder, of the most recent prospectus covering
such Registrable Securities at the time of receipt of such notice. In the event
the Company shall give such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective by the number of
days during the period from and including the date of the giving of notice
pursuant to Section 4.4(e) hereof to the date when the Company shall make
available to the Holders a prospectus supplemented or amended to conform with
the requirements of Section 4.4(e) hereof. Notwithstanding anything to the
contrary, the Company shall, to the extent that such action is not in violation
of Law, cause its transfer agent to deliver unlegended shares of Common Stock to
a transferee of a Holder in accordance with the terms of this Agreement in
connection with any sale of Registrable Securities with respect to which a
Holder has entered into a contract for sale prior to the Holder’s receipt of a
notice from the Company of the happening of any event of the kind described in
Section 4.4(e) and for which the Holder has not yet settled.

Section 4.6     Blackout Provisions.

(a)       The Company shall have the right, but not the obligation, to postpone
the filing of the Registration Statement or to suspend the use of the
Registration Statement following the effectiveness of the Registration Statement
(and the filings with any international, federal or state securities
commissions), if a Suspension Event (as defined below) occurs. If the Company
elects to suspend the effectiveness and/or use of the Registration Statement
following the occurrence of a Suspension Event, the Company, by written notice,
email transmission or such other means that the Company reasonably believes to
be a reliable means of communication (a “Suspension Notice”), shall notify the
Holders that the effectiveness of the Registration Statement has been suspended
and shall direct the Holders to suspend sales of the Registrable Securities
pursuant to the Registration Statement until the Suspension Event has ended
(provided that in no event shall such notice to any Holder contain any material,
nonpublic information, unless such Holder requested such information or has at
such time an employee designated as a director on the Board). A “Suspension
Event” shall be deemed to have occurred if: (i) the Company is actively pursuing
an underwritten primary offering of equity securities; (ii) the Company in good
faith determined that (A) the offer or sale of any Registrable Securities would
materially impede, delay or interfere with any proposed financing, offer or sale
of securities, acquisition, corporate reorganization or other significant
transaction involving the Company; (B) after the advice of counsel, sale of
Registrable Securities pursuant to the Registration Statement would require
disclosure of non-public material information not otherwise required to be

18 

 

disclosed under applicable law; and (C) (x) the Company has a bona fide business
purposes for preserving the confidentiality of such transaction, (y) disclosure
would have a material adverse effect on the Company or the Company’s ability to
consummate such transaction, or (z) disclosure would render the Company unable
to comply with SEC requirements, in each case under circumstances that would
make it impractical or inadvisable to cause the Registration Statement (or such
filings) to become effective or to promptly amend or supplement the Registration
Statement on a post-effective basis, as applicable; or (iii) the Company shall
have determined in good faith, after the advice of counsel, that it is required
by law, rule or regulation or that it is in the best interests of the Company to
supplement the Registration Statement or file a post-effective amendment to the
Registration Statement in order to incorporate information into the Registration
Statement for the purpose of (1) including in the Registration Statement any
prospectus required under Section 10(a)(3) of the Securities Act; (2) reflecting
in the prospectus included in the Registration Statement any facts or events
arising after the effective date of the Registration Statement (or of the
most-recent post-effective amendment) that, individually or in the aggregate,
represents a fundamental change in the information set forth therein; or (3)
including in the prospectus included in the Registration Statement any material
information with respect to the plan of distribution not disclosed in the
Registration Statement or any material change to such information. Upon the
occurrence of any Suspension Event, the Company shall use its commercially
reasonable efforts to cause the Registration Statement to become effective or to
promptly amend or supplement the Registration Statement or to take such action
as is necessary to make resumed use of the Registration Statement compatible
with the Company’s best interests, as applicable, so as to permit the Holders to
resume sales of the Registrable Securities as soon as practicable. In no event
shall the Company be permitted to suspend the use of a Registration Statement
for more than thirty (30) consecutive days or for more than ninety (90) days in
any 12 month period and the first day of any such suspension must be at least
five (5) days after the last day of any prior suspension as a result of a
refusal by the SEC to declare any post-effective amendment to the Registration
Statement effective after the Company has used all commercially reasonable
efforts to cause such post-effective amendment to be declared effective, in
which case the Company shall terminate the suspension of the use of the
Registration Statement immediately following the effective date of the
post-effective amendment.

(b)       If and when the Company gives a Suspension Notice to the Holders to
suspend sales of the Registrable Securities following a Suspension Event, the
Holders shall not effect any sales of the Registrable Securities pursuant to
such Registration Statement (or such filings) at any time after it has received
a Suspension Notice from the Company and prior to receipt of an End of
Suspension Notice (as defined below). If so directed by the Company, each Holder
will deliver to the Company (at the expense of the Company) all copies other
than permanent file copies then in such Holder’s possession of the prospectus
covering the Registrable Securities (the “Prospectus”) at the time of receipt of
the Suspension Notice. The Holders may recommence effecting sales of the
Registrable Securities pursuant to the Registration Statement (or such filings)
upon the delivery by the Company of notice that the Suspension Event or its
potential effects are no longer continuing (an “End of Suspension Notice”),
which End of Suspension Notice shall be given by the Company to the Holders in
the same manner as the Suspension Notice promptly following the conclusion of
any Suspension Event and its effect. Notwithstanding anything to the contrary,
the Company shall, to the extent that such action is not in violation of Law,
cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of a Holder in accordance with the terms of this Agreement in
connection with any sale of Registrable Securities with respect to which a
Holder has entered into a contract for sale prior to the Holder’s receipt of a
Suspension Notice from the Company and for which the Holder has not yet settled.

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(c)       If all reports required to be filed by the Company pursuant to the
Exchange Act have not been filed by the required date taking into account any
permissible extension, upon written notice thereof by the Company to the
Holders, the rights of the Holders to offer, sell or distribute any Registrable
Securities pursuant to any Registration Statement or to require the Company to
take action with respect to the registration or sale of any Registrable
Securities pursuant to any Registration Statement shall be suspended until the
date on which the Company has filed such reports, and the Company shall notify
the Holders in writing as promptly as practicable when such suspension is no
longer required.

(d)       If the Company shall take any action pursuant to clause (ii) of
Section 4.6(a) with respect to any participating Holder in a period during which
the Company shall be required to cause a Registration Statement to remain
effective under the Securities Act and the prospectus to remain current, such
period shall be extended for such Person by one (1) day beyond the end of such
period for each day that, pursuant to Section 4.6(a), the Company shall require
such Person to refrain from disposing of Registrable Securities owned by such
Person.

Section 4.7     Exchange Act Reports. The Company will use its reasonable best
efforts to timely file with the SEC such information as the SEC may require
under Section 13(a) or Section 15(d) of the Exchange Act, and the Company shall
use its reasonable best efforts to take all action as may be required as a
condition to the availability of Rule 144 or Rule 144A under the Securities Act
with respect to its Common Stock. The Company shall furnish to any holder of
Registrable Securities forthwith upon request such reports and documents as a
holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing a holder to sell any such Registrable Securities without
registration to the extent that such reports or documents are not publicly
available on the SEC’s Electronic Data Gathering, Analysis and Retrieval system
or any successor system thereto. Certificates evidencing Registrable Securities
shall not contain any legend at such time as a Holder has provided reasonable
evidence to the Company (including any customary broker’s or selling
stockholder’s letters but expressly excluding an opinion of counsel other than
with respect to clauses (d) or (e) below), that (a) there has been a sale of
such Registrable Securities pursuant to an effective registration statement,
(b) there has been a sale of such Registrable Securities pursuant to Rule 144
(assuming the transferor is not an affiliate of the Company), (c) such
Registrable Securities are then eligible for sale under Rule 144(b)(i), (d) in
connection with a sale, assignment or other transfer (other than under Rule
144), upon request of the Company, such Holder provides the Company with an
opinion of counsel to such Holder, in a reasonably acceptable form, to the
effect that such sale, assignment or transfer of the Registrable Securities may
be made without registration under the applicable requirements of the Securities
Act or (e) such legend is not required under applicable requirements of the
Securities Act (including controlling judicial interpretations and
pronouncements issued by the SEC). Following such time as restrictive legends
are not required to be placed on certificates representing Registrable
Securities pursuant to the preceding sentence, the Company will, no later than
three (3) Business Days following the delivery by a Holder to the Company or the
Company’s transfer agent of a certificate representing Registrable Securities
containing a restrictive legend and the foregoing evidence (and opinion if
applicable), deliver or cause to be delivered to such Holder a certificate
representing such Registrable Securities that is free from all restrictive and
other legends or credit the balance account of such Holder’s or such Holder’s
nominee with DTC (if DTC is then offered by the Company and its transfer agent)
with a number of shares of Common Stock equal to the number of shares of Common
Stock represented by the certificate so delivered by such Holder.

20 

 

Section 4.8     Indemnification.

(a)       Indemnification by the Company. The Company agrees, notwithstanding
the termination of this Agreement, to indemnify and hold harmless, to the
fullest extent permitted by law, each Holder and each of its managers, members,
managing members, general and limited partners, officers, directors, employees
and agents, and each Person, if any, who controls such Holder within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, together
with the managers, members, managing members, general and limited partners,
officers, directors, employees and agents of such controlling Person (each, a
“Controlling Person”), from and against any and all losses, claims, damages,
judgments, fines, penalties, charges, settlement amounts (only if the Company
consented in writing to the settlement, which consent shall not be unreasonably
withheld or delayed), liabilities, reasonable attorneys’ fees, costs and
expenses of investigating and defending any such claim (collectively, “Damages”)
and any action in respect thereof to which such Holder, its managers, members,
managing members, general and limited partners, officers, directors, employees
and agents, and any such Controlling Persons may become subject to under the
Securities Act or otherwise, but only insofar as such Damages (or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or prospectus of the Company (or any amendment or supplement thereto)
or any preliminary prospectus of the Company, or arise out of, or are based
upon, any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are based upon information furnished in writing to
the Company by such Holder or any of its managers, members, managing members,
general partners, officers, directors, employees, agents and Controlling Persons
expressly for use therein, and, consistent with and subject to the foregoing,
shall reimburse such Holder, its managers, members, managing members, general
and limited partners, officers, directors, employees and agents, and each such
Controlling Person for any legal and other expenses reasonably incurred by such
Holder, its managers, members, managing members, general and limited partners,
officers, directors, employees and agents, or any such Controlling Person in
investigating or defending or preparing to defend against any such Damages or
proceedings. In addition to the indemnity contained herein, the Company will
reimburse each Holder for its reasonable out-of-pocket legal and other expenses
(including the reasonable out-of-pocket cost of any investigation, preparation
and travel in connection therewith) as incurred in connection therewith, as
promptly as practicable after such expenses are incurred and invoiced.

(b)       Indemnification by the Holder. The Holders agree, severally and not
jointly, to indemnify and hold harmless the Company, its officers, directors,
employees and agents and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, together with the managers, members, managing members, general and limited
partners, officers, directors, employees and agents of such controlling Person,
to the same extent as the foregoing indemnity from the Company to the Holders,
to the extent, but only to the extent, that such Damages arise out of or are
based on information related to the Holders, or their plan of distribution,
furnished in writing by the Holders or any of their managers, members, managing
members, general partners, officers, directors, employees, agents and
Controlling Persons to the Company expressly for use in any Registration
Statement or prospectus, or any amendment or supplement thereto, or any
preliminary prospectus. No Holder shall be required to indemnify any Person
pursuant to this Section 4.8(b) for any amount in excess of the net proceeds
received by such Holder from the sale of the Registrable Securities sold for the
account of such Holder.

21 

 

(c)       Conduct of Indemnification Proceedings. Promptly after receipt by any
Person (an “Indemnified Party”) of notice of any claim or the commencement of
any action in respect of which indemnity may be sought pursuant to
Section 4.8(a) or Section 4.8(b), the Indemnified Party shall, if a claim in
respect thereof is to be made against the Person against whom such indemnity may
be sought (an “Indemnifying Party”), notify the Indemnifying Party in writing of
the claim or the commencement of such action; provided, that the failure to
notify the Indemnifying Party shall not relieve it from any liability that it
may have to an Indemnified Party except to the extent of any actual prejudice
resulting therefrom. If any such claim or action shall be brought against an
Indemnified Party, and it shall notify the Indemnifying Party thereof, the
Indemnifying Party shall be entitled to participate therein, and, to the extent
that it wishes, jointly with any other similarly notified Indemnifying Party, to
assume the defense thereof with counsel reasonably satisfactory to the
Indemnified Party. After notice from the Indemnifying Party to the Indemnified
Party of its election to assume the defense of such claim or action, the
Indemnifying Party shall not be liable to the Indemnified Party for any legal or
other expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof, provided, that the Indemnified Party shall have the right
to employ separate counsel to represent the Indemnified Party and its
Controlling Persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, but the fees and expenses of such counsel shall be for the
account of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of, and
reimbursement of fees for, such counsel or (ii) in the reasonable opinion of
counsel to such Indemnified Party representation of both parties by the same
counsel would be inappropriate due to actual or potential conflicts of interest
between them, it being understood, however, that the Indemnifying Party shall
not, in connection with any one such claim or action or separate but
substantially similar or related claims or actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all Indemnified Parties. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any claim or pending or threatened proceeding in
respect of which the Indemnified Party is or would reasonably have been a party
and indemnity would reasonably have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or proceeding.
Whether or not the defense of any claim or action is assumed by the Indemnifying
Party, such Indemnifying Party will not be subject to any liability for any
settlement made without its written consent, such consent not to be unreasonably
withheld, conditioned or delayed.

(d)       Contribution. To the extent any indemnification by an Indemnifying
Party is prohibited or limited by law, the Indemnifying Party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under this Section 4.8 to the fullest extent permitted by law; provided,
however, that: (i) no Person involved in the sale of Registrable Securities
which Person is guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) in connection with such sale shall be
entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (ii)
contribution by any seller of Registrable Securities shall be limited in amount
to the amount of net proceeds received by such seller from the sale of such
Registrable Securities pursuant to such Registration Statement.

22 

 

Section 4.9     No Inconsistent Agreements. The Company shall not hereafter
enter into any agreement with respect to any of its securities (including any
registration or similar agreement) which is inconsistent with or violates the
material rights granted to the Holders in this Agreement.

Section 4.10     Lock-Up Agreements. Each of the Holders and the Company agrees
that, in connection with an underwritten offering in respect of which
Registrable Securities are being sold, or in connection with any other public
offering of Common Stock by the Company, if requested by the underwriter(s), it
will enter into customary “lock-up” agreements pursuant to which it will agree
not to, directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any Common Stock or any securities convertible
or exchangeable into Common Stock (subject to customary exceptions), for a
period not to exceed one hundred eighty (180) days from the effective date of
the Registration Statement pertaining to such Registrable Securities or from
such other date as may be requested by the underwriter(s). The Company further
agrees that, in connection with an underwritten offering in respect of which
Registrable Securities are being sold, if requested by the managing
underwriter(s), it will exercise its best efforts to obtain agreements (in the
underwriters’ customary form) from its directors and executive officers not to,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, any Common Stock or any securities convertible or
exchangeable into Common Stock (subject to customary exceptions), for a period
not to exceed one hundred eighty (180) days from the effective date of the
Registration Statement pertaining to such Registrable Securities or from such
other date as may be requested by the underwriter(s). Notwithstanding anything
to the contrary set forth herein, the restrictions set forth in this Section
4.10 shall not be effective unless such restrictions are equally applicable to
all of the Holders, unless a Holder agrees otherwise.

Section 4.11     Restrictions on Transfer. Except as permitted pursuant to this
Section 4.11, prior to the date that is six months after the date the Investors
may not Transfer their shares of Common Stock without the prior written consent
of the Company, which consent may be withheld in its sole and absolute
discretion. Notwithstanding the foregoing, the restriction on Transfer shall not
apply to the following Persons (each, a “Permitted Transferee”) (a) in the case
of an Investor that is an entity, a Transfer (whether by dividend, distribution
or otherwise) by such holder to its stockholders, members, partners or other
equity holders or to any of its Affiliates (as such term is defined under the
Exchange Act) or (b) in the case of an Investor that is a natural person, upon a
Transfer by such holder made for bona fide estate planning purposes, either
during his or her lifetime or on death by will or intestacy to his or her
spouse, child (natural or adopted) or any other direct lineal descendant of such
holder (or his or her spouse), provided that such shares of Common Stock subject
to a Transfer permitted pursuant to this Section 4.11 shall at all times remain
subject to the terms and restrictions set forth in this Agreement. After the
date that in six months after the date of this Agreement, Investors may freely
Transfer their Common Stock subject to compliance with applicable securities
laws.

23 

 

ARTICLE V
COVENANTS

Section 5.1     No Conflicting Agreements. For so long as this Agreement remains
in effect, neither the Company nor the Investors shall enter into any
stockholder agreement or arrangement of any kind with any Person with respect to
any shares of Common Stock or Capital Stock or other Securities, or otherwise
act or agree to act in concert with any Person with respect to any shares of
Common Stock or Capital Stock or other Securities, to the extent such agreement,
arrangement, or concerted act would controvert, or otherwise be inconsistent in
any material respect with, the provisions of this Agreement.

Section 5.2     Further Assurances. Each of the Investors and the Company agrees
to execute and deliver all such further documents and do all acts and things
that from time to time may reasonably be required to effectively carry out or
better evidence or perfect the full intent and meaning of this Article V.

ARTICLE VI 
OWNERSHIP LIMIT WAIVER

Section 6.1     Grant of Waiver. The Company hereby grants an  exemption from
the Stock Ownership Limit (as defined in the Governing Documents), to  Investors
and their Affiliates and establishes a Stock Ownership Limit (an “Exempted
Holder Limit” as defined in the Governing Documents) for Investors and their
Affiliates equal to (but not less than the Stock Ownership Limit set forth in
the Governing Documents) a percentage that would allow Investors and their
Affiliates to own (and continue to own) the Initial Shares, the Warrants and the
Warrant Shares, together with any Capital Stock of the Company issued or
issuable hereunder or pursuant to any provisions of this Agreement or the
Warrants to Investors or their Affiliates or under any instrument issued
hereunder.

Section 6.2     Continuation of Waiver. The initial and continuing effectiveness
of the forgoing exemption is expressly conditioned on the following
representations by Investors being true in all material respects. Investors
hereby represent that to their knowledge (A) assuming  Investors and their
Affiliates would beneficially or constructively own the maximum amount of shares
of Common Stock (such Common Stock, the “Torchlight Common Stock”) described in
this Agreement (including, without limitation, upon full  exercise of the
Warrant) no person that is treated as an “individual” for purposes of Section
542(a)(2) (determined taking into account Section 856(h)(3)(A)) of the Internal
Revenue Code of 1986, as amended (the “Code”) would Beneficially Own or
Constructively Own (as such terms are defined in the Governing Documents) shares
of Capital Stock in excess of the Stock Ownership Limit solely as a result of
the ownership of the Torchlight Common Stock by Investors and their Affiliates
and (B) Investors and their Affiliates do not own an interest in a tenant of the
Company (or a tenant of any entity owned or controlled by the Company), other
than indirectly through their interest in the Company (e.g., a subsidiary of the
Company), that would cause the Company to own, actually or constructively, more
than a 9.9% interest in such tenant.

24 

 

Section 6.3     Application of Charter. Investors and their Affiliates
acknowledge that, notwithstanding the exemption from the Stock Ownership Limit,
Investors and their Affiliates shall be subject to all other terms, conditions
and restrictions on ownership of shares of Company securities set forth in
Article VII of the Company’s Second Articles of Amendment and Restatement, as
hereafter amended.

Section 6.4     Approval of Waiver. The Company represents and warrants to
Investors that the provisions of this Article VI have been approved and adopted
by all requisite action of the Board of Directors of the Company pursuant to the
resolution duly adopted and attached hereto as Exhibit A.

ARTICLE VII
MISCELLANEOUS

Section 7.1     Amendment and Waiver. This Agreement may not be amended, except
by an agreement in writing, executed by each of the Investors and the Company,
and compliance with any term of this Agreement may not be waived, except by an
agreement in writing executed on behalf of the party against whom the waiver is
intended to be effective. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of any
such provision and shall not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.

Section 7.2     Severability. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void, or
otherwise unenforceable, all other provisions of this Agreement, to the extent
permitted by Law, shall not be affected and shall remain in full force and
effect. Upon any such determination, the parties shall negotiate in good faith
in an effort to agree upon a suitable and equitable substitute provision to
effect the original intent of the parties.

Section 7.3     Entire Agreement. Except as otherwise expressly set forth
herein, this Agreement, together with the agreements and other documents and
instruments referred to herein, embody the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof, and
supersede and preempt any prior understandings, agreements, or representations
by or among the parties, written or oral, that may have related to the subject
matter hereof in any way.

Section 7.4     Successors and Assigns. Except as expressly set forth herein,
neither this Agreement nor any of the rights or obligations of any party under
this Agreement (including any rights under Article II and Article III hereof)
may be assigned, in whole or in part (except by operation of Law), by either
party without the prior written consent of the other party, and any such
transfer or attempted transfer without such consent shall be null and void;
provided, however, that the Investors shall be permitted to make any such
assignment to any of their Affiliates. This Agreement shall be binding upon and
shall inure to the benefit of, and be enforceable by, the parties hereto and
their respective successors and permitted assigns.

25 

 

Section 7.5     Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one and the same agreement.

Section 7.6     Remedies.

(a)       Each party hereto acknowledges that monetary damages would not be an
adequate remedy in the event that each and every one of the covenants or
agreements in this Agreement are not performed in accordance with their terms,
and it is therefore agreed that in addition to, and without limiting any other
remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order, or other equitable relief in any court
of competent jurisdiction enjoining any such breach and enforcing specifically
each and every one of the terms and provisions hereof. Each party hereto agrees
not to oppose the granting of such relief in the event a court determines that
such a breach has occurred, and to waive any requirement for the securing or
posting of any bond in connection with such remedy.

(b)       All rights, powers, and remedies provided under this Agreement or
otherwise available in respect hereof at Law or in equity shall be cumulative
and not alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power, or remedy by such party.

Section 7.7     Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (upon
telephonic confirmation of receipt), on the first (1st) Business Day following
the date of dispatch if delivered by a recognized next day courier service, or
on the third (3rd) Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice.

If to the Company:

Plymouth Industrial REIT, Inc.

260 Franklin Street, 6th Floor

Boston, Massachusetts 02110

Attention: Jeffrey E. Witherell     

Email: jeff.witherell@plymouthrei.com

 

With a copy to:

Winston & Strawn LLP

2501 N. Harwood Street, 17th Floor

Dallas, Texas 75201

Attention: Kenneth L. Betts

Email: kbetts@winston.com

 

 

26 

 

 

If to Investors:

DOF IV REIT Holdings, LLC/DOF IV Plymouth PM, LLC

475 Fifth Avenue

New York, New York 10017

Attention: Abbey Kosakowski and Gianluca Montalti

E-mail: akosakowski@torchlightinvestors.com

gmontalti@torchlightinvestors.com

 

With a copy to:

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention: Michael Bond

E-mail: michael.bond@weil.com

 

 

Section 7.8     Governing Law; Venue and Jurisdiction; Waiver of Jury Trial.

(a)       This Agreement shall be governed by and construed in accordance with
the Laws of the State of New York, without regard to, or otherwise giving effect
to, anybody of Law or other rule that would cause or otherwise require the
application of the Laws of any other jurisdiction.

(b)       Any action or proceeding against either the Company or Investor
relating in any way to this Agreement shall be brought exclusively in the United
States District Court for the Southern District of New York (and the appellate
courts thereto), and each of the Company and Investor irrevocably submits to the
jurisdiction of both such courts in respect of any such action or proceeding.
Any actions or proceedings to enforce a judgment issued by one of the foregoing
courts may be enforced in any jurisdiction.

(c)       TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED,
EACH OF THE COMPANY AND THE INVESTORS HEREBY WAIVE AND COVENANT THAT THEY WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE) ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION, OR
SUIT (WHETHER IN CONTRACT, TORT, OR OTHERWISE), INQUIRY, PROCEEDING, OR
INVESTIGATION ARISING OUT OF, OR BASED UPON, THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF, OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING. EACH OF THE COMPANY AND THE INVESTORS ACKNOWLEDGE THAT IT HAS BEEN
INFORMED BY THE OTHER PARTY THAT THIS SECTION 7.8(C) CONSTITUTES A MATERIAL
INDUCEMENT UPON WHICH IT IS RELYING, AND WILL RELY IN ENTERING INTO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY OR THE INVESTORS
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 7.8(C) WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT
TO TRIAL BY JURY.

27 

 

Section 7.9     Third Party Benefits. Except pursuant to the provisions in
Section 2.1(e) and Section 7.10 or expressly provided in this Agreement, none of
the provisions of this Agreement are for the benefit of, or shall be enforceable
by, any third-party beneficiary.

Section 7.10     No Recourse Against Others. All claims, causes of action
(whether in contract or in tort, in law or in equity, or granted by statute),
obligations, or liabilities that may be based upon, be in respect of, arise
under, out of or by reason of, be connected with, or relate in any manner to
this Agreement, or the negotiation, execution, performance or breach of this
Agreement (including any representation or warranty made in, in connection with,
or as an inducement to, this Agreement), may be made only against (and are those
solely of) the entities that are expressly identified as parties in the preamble
to this Agreement (the “Contracting Parties”). No Person who is not a
Contracting Party, including any and all former, current or future directors,
officers, employees, incorporators, members, general or limited partners,
controlling persons, managers, management companies, equity holders, affiliates,
agents, attorneys, or representatives of, and any and all former, current or
future financial advisors or lenders to, any Contracting Party, and any and all
former, current or future directors, officers, employees, incorporators,
members, general or limited partners, controlling persons, managers, management
companies, equity holders, affiliates, agents, attorneys, or representatives of,
and any and all former, current or future financial advisors or lenders to, any
of the foregoing, and any and all former, current or future heirs, executors,
administrators, trustees, successors or assigns of any of the foregoing (the
“Non-Recourse Parties”), shall have any liability (whether in contract or in
tort, in law or in equity, or granted by statute) for any claims, causes of
action, obligations or liabilities arising under, out of, in connection with, or
related in any manner to this Agreement, or the negotiation, execution,
performance, or breach of this Agreement; and, to the maximum extent permitted
by Law, each Contracting Party hereby waives and releases all such claims and
causes of action against any such Non-Recourse Parties. Without limiting the
foregoing, to the maximum extent permitted by Law, (a) each Contracting Party
hereby waives and releases any and all rights, claims, demands, or causes of
action that may otherwise be available at law or in equity, or granted by
statute, to avoid or disregard the entity form of a Contracting Party or
otherwise impose liability of a Contracting Party on any Non-Recourse Party,
whether granted by statute or based on theories of equity, agency, control,
instrumentality, alter ego, domination, sham, single business enterprise,
piercing the corporate, limited liability company or limited partnership veil,
unfairness, undercapitalization, or otherwise, in each case in connection with,
or related in any manner to this Agreement, or the negotiation, execution,
performance, or breach of this Agreement; and (b) each Contracting Party
disclaims any reliance upon any Non-Recourse Parties with respect to the
performance of this Agreement or any representation or warranty made in, in
connection with, or as an inducement to this Agreement.

Section 7.11     Interpretation. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

Section 7.12     Termination. Except to the extent otherwise expressly provided
herein, this Agreement, and all of the rights and obligations set forth herein,
shall terminate and be of no further force or effect in the event that the
Investors and their Affiliates cease to own any shares of Common Stock or
Convertible Securities.

28 

 

Section 7.13     Notices and Consents. Any notice required to be delivered
pursuant to this Agreement to any Investor may be delivered to the Adviser on
behalf of such Investor and any consent or approval by any Investor pursuant to
this Agreement may be delivered by the Adviser.

Section 7.14     Costs. Contemporaneously with execution of this Agreement, the
Company will reimburse Investors for all costs and expenses (including without
limitation, legal fees and expenses) incurred by Investors in connection with
the negotiation and execution of the transactions contemplated by the Company’s
S-11, this Agreement, the Warrant Agreement and all related matters.

[The remainder of this page has been intentionally left blank.]

 

 

29 

 

IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement
as of the date first written above.

 

 

PLYMOUTH INDUSTRIAL REIT, INC.,

a Maryland corporation

        By: /s/ Pendleton P. White, Jr.         Name: Pendleton P. White, Jr.  
      Title: President        

DOF IV REIT Holdings, LLC,

a Delaware limited liability company

        By: /s/ Sanford Weintraub         Name: Sanford Weintraub         Title:
Authorized Signatory        

DOF IV PLYMOUTH PM, LLC,

a Delaware limited liability company

        By: /s/ Sanford Weintraub         Name: Sanford Weintraub         Title:
Authorized Signatory

 

 

 

 

 

 

 

 

 

(Signature Page to Stockholders Agreement)

 

 

 

THE UNDERSIGNED HEREBY EXECUTE THIS AGREEMENT FOR THE SOLE PURPOSE OF
ACKNOWLEDGING AND CONSENTING TO THE TERMS OF SECTION 2.1 OF THIS AGREEMENT AND
AGREEING TO VOTE ANY SHARES OF COMMON STOCK BENEFICIARY OWNED BY THE UNDERSIGNED
IN FAVOR OF THE INVESTOR DIRECTOR NOMINEE, AND FOR THE AVOIDANCE OF DOUBT, NONE
OF THE UNDERSIGNED SHALL HAVE ANY LIABILITY HEREUNDER.

 

 

              /s/ Jeffrey Witherell      JEFFREY WITHERELL, an individual      
                /s/ Pendleton White      PENDLETON WHITE, an individual        
              /s/ Daniel Wright      DANIEL WRIGHT, an individual

 

 

EXHIBIT A

 

 

RESOLVED, in accordance with Section 7.2.7 of the Company’s Second Articles of
Amendment and Restatement (as amended, the “Charter”) and having determined that
the Board has satisfied all conditions precedent forth in such Section 7.2.7,
the Directors hereby ratify and approve Article VII of that certain Stockholders
Agreement (the “Stockholders Agreement”) by and between the Company and DOF IV
REIT Holdings, LLC, a Delaware limited liability company, and DOF IV Plymouth
PM, LLC, a Delaware limited liability company (together, the “Excepted Holders”)
(capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Excepted Holder Agreement); and

 

FURTHER RESOLVED, that the Excepted Holder Limit for the Excepted Holders as set
forth in the Stockholders Agreement is hereby ratified and approved; and

 

FURTHER RESOLVED, that if the Company, as specified in the Excepted Holder
Agreement, redeems, repurchases, or cancels shares of Capital Stock, the effect
of which would be to cause the Excepted Holders to exceed the Excepted Holders’
Excepted Holder Limit, then the Excepted Holders’ Excepted Holder Limit will be
increased so that the Excepted Holders’ then Beneficial Ownership and
Constructive Ownership are not in excess of the new limit; provided, however,
that if such increase would cause the Company to Constructively Own )as defined
in the Charter) more than a 9.9% interest (within the meaning of Section
856(d)(2)(B) of the Code) in a tenant or would cause any Person to Beneficially
Own (as defined in the Charter) or Constructively Own more than 9.8% (in value
or in number of shares, whichever is more restrictive) of the shares of Capital
Stock, then such Excepted Holder Limit shall be increased only to the extent it
would not cause the Company to have such an ownership interest in a tenant and
would not cause any Person to Beneficially Own or Constructively Own more than
9.8% of the shares of Capital Stock, as applicable; and

 

FURTHER RESOLVED, that notwithstanding any provisions of the Charter to the
contrary, the Directors of the Company agree that the Excepted Holder Limit
granted to the Excepted Holders by the Stockholders Agreement shall not be
revoked unless the Directors determine that such revocation is required for the
preservation of the Company’s qualification as a REIT.

 

 

 

 

 

 

Exhibit A-1