Document:

EX-10.1

 

 
 Exhibit 10.1 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [...***...], HAS BEEN 

OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF 

PUBLICLY DISCLOSED. 
  

 
 Deed of Amendment and 

Restatement 
 CSL Limited 

ASLAN Pharmaceuticals Pte Ltd 
  

Licence Agreement 
  

 
     Baker & McKenzie 

    ABN 32 266 778 912 
     Level 19 

    181 William Street 
     Melbourne VIC 3000

     Australia 
     www.bakermckenzie.com

 Table of contents 

 
  

			
	 1.        Definitions and Interpretation
	  	1
		
	 2.        Amendment and restatement
	  	1
		
	 3.        Confirmation
	  	2
		
	 4.        Notices
	  	2
		
	 5.        General
	  	2
		
	 Annexure 1
	  	5
	 Restated Form of Licence Agreement
	  	5

  

					
		 	i	  	Deed of Amendment and Restatement

			
	 Title
	  	Deed of Amendment and Restatement
		
	 Date
	  	31st May 2019
		
	 Parties
	  	CSL Limited (ABN 99 051 588 348) of 45 Poplar Road, Parkville Victoria 3052 (CSL)
		
		  	ASLAN Pharmaceuticals Pte Ltd of 83 Clemenceau Avenue, #12-03 UE Square, Singapore 239920 (ASLAN)

 Recitals 
  

	A	 CSL and ASLAN are parties to the Licence Agreement. 

 

	B	 The parties to this Deed have agreed to amend and restate the Licence Agreement in the manner set out in this
Deed. 

 Operative provisions 
  

 
  

	1.	 Definitions and Interpretation 

 

	1.1	 In this Deed: 

  

	 	(a)	 unless the contrary intention applies, a word or phrase defined in the Licence Agreement has the same meaning
in this Deed; and 

  

	 	(b)	 the following defined terms have the following meanings: 

Deed means this Deed, including Annexure 1; and 

Licence Agreement means the Licence Agreement dated 12 May 2014 between CSL and ASLAN, as amended by Amendment Agreement
No. 1 dated 18th September 2018. 
 Interpretation 

 

	1.2	 Clauses 1.1 to 1.10 of the Licence Agreement are incorporated into this Deed as if repeated in full in this
Deed with any necessary changes as the subject or context requires. 

  

	1.3	 A provision of this Deed must not be construed to the disadvantage of a party merely because that party was
responsible for the preparation of this Deed or the inclusion of the provision in this Deed. 

  

 
  

	2.	 Amendment and restatement 

Amendment and restatement 
  

	2.1	 With effect on and from the date of this Deed, the Licence Agreement is amended and restated to read as set out
in Annexure 1. 

  

					
		 	1	  	Deed of Amendment and Restatement

 Amendments not to affect validity, rights, obligations 

 

	2.2	 The amendments to the Licence Agreement do not affect the validity or enforceability of the Licence Agreement.

 Acknowledgement 
  

	2.3	 Each party acknowledges that the amendments to the Licence Agreement are made at its request and for valuable
consideration received. 

  
  

 

	3.	 Confirmation 

Confirmation of Licence Agreement 
  

	3.1	 The parties confirm that the Licence Agreement remains in full force and effect in the form set out in Annexure
1. 

 No novation 
  

	3.2	 The parties confirm that the amendments set out in this Deed do not and are not intended to constitute a
novation of any of the rights and obligations of any party to the Licence Agreement. 

 No prejudice or discharge 

 

	3.3	 Nothing in this Deed: 

 

	 	(a)	 prejudices or adversely affects any right, power, authority, discretion or remedy arising under the Licence
Agreement before the date of this Deed; or 

  

	 	(b)	 discharges, releases or otherwise affects any liability or obligation arising under the Licence Agreement
before the date of this Deed. 

  
  

 

	4.	 Notices 

  

	4.1	 Clause 18.8 of the Licence Agreement applies as if set out in full in this Deed, with any changes necessary to
give full effect to this clause. 

  
  

 

	5.	 General 

Further assurances 
  

	5.1	 At the reasonable request of another party, each party must do anything necessary (including executing
agreements and documents) to give full effect to this Deed. 

 Alterations 

 

	5.2	 This Deed may only be amended by a written document signed by each party to this Deed. 

Severability 
  

	5.3	 A term or part of a term of this Deed that is illegal or unenforceable may be severed from this Deed and the
remaining terms or parts of the term of this Deed continue in full force. 

  

					
		 	2	  	Deed of Amendment and Restatement

 Governing law and jurisdiction 
  

	5.4	 This Deed is governed by the laws of England. Each party submits to the
non-exclusive jurisdiction of courts exercising jurisdiction there in connection with matters concerning this Deed. 

Counterparts 
  

	5.5	 This Deed may be executed in any number of counterparts. All counterparts together will be taken to constitute
one instrument. 

  

					
		 	3	  	Deed of Amendment and Restatement

 Execution 

Executed as a deed. 
  

					
	 Signed by
	 		  	
	 CSL Limited
	 		  	
	 By its duly authorised representatives:
	 		  	
			
	 /s/ Andrew Cuthbertson
	 		  	 /s/ Fiona Mead

	 Signature of authorised representative
	 		  	Signature of authorised representative
			
	 Andrew Cuthbertson
	 		  	 Fiona Mead

	 Name of authorised representative (please print)
	 		  	Name of authorised representative (please print)
			
	 Signed by
	 		  	
	 ASLAN Pharmaceuticals Pte Ltd
	 		  	
	 in the presence of:
	 		  	
			
	 /s/ Hung-Chang Wei
	 		  	 /s/ Carl Firth

	 Signature of witness
	 		  	Signature of ASLAN Pharmaceuticals Pte Ltd
			
	 Hung-Chang Wei
	 		  	 Carl Firth

	 Name of witness (please print)
	 		  	Name (please print)

  

					
		 	4	  	Deed of Amendment and Restatement

 Annexure 1 
 Restated
Form of Licence Agreement 
  
  

  

					
		 	  	  	Deed of Amendment and Restatement

 LICENCE AGREEMENT 

BETWEEN 
 CSL LIMITED

 ABN 99 051 588 348 

AND 
 ASLAN
Pharmaceuticals Pte Ltd 

  

					
		 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

THIS AGREEMENT is made on 12th May 2014 

BETWEEN:- 
  

	 	(1)	 CSL Limited incorporated and registered in Australia with ABN 99 051 588 348 whose registered office is at
45 Poplar Rd, Parkville, Victoria 3052, Australia; (“CSL”) and 

  

	 	(2)	 ASLAN Pharmaceuticals Pte Ltd, incorporated and registered in Singapore with company number 201007695N,
whose registered office is at 83 Clemenceau Avenue, #12-03 UE Square, Singapore 239920 (“ASLAN”). 

WHEREAS:- 
  

	(A)	 CSL is a pharmaceutical company that is engaged in the discovery, research, development and
commercialization of compounds for treating disease in humans. CSL owns certain patent rights and technology relating to the Product. 

  

	(B)	 CSL desires to ensure that the clinical development of the Product through Clinical Proof of Concept is
achieved as promptly as possible and thereafter that the commercial potential of the Product in the Territory and within the Field is realized promptly through ASLAN and/or a suitable partner or partners. 

 

	(C)	 ASLAN possesses pharmaceutical development capabilities, and desires to secure rights from CSL for the
further development of the Product for the treatment of respiratory and inflammatory conditions and in particular atopic dermatitis as set forth in this Agreement and further desires to make the commitment and investment to conduct clinical
development of the Product through Clinical Proof of Concept and to realize promptly the therapeutic and commercial potential of the Product either itself and/or through a suitable partner or partners. 

 

	 	(D)	 In the period which has elapsed since the original Effective Date, (i) ASLAN has expanded its
capabilities so that it is now able to develop the Product beyond Clinical Proof of Concept and is planning to expand its capabilities to enable it to Commercialise the Product itself; and (ii) the gene expression system most suited for scaled-up production of the Product has been determined to be based on technology of Selexis S.A. and not of Lonza Sales AG as originally envisaged; accordingly the second amendment to this Agreement is being
entered into to provide terms more appropriate to the foregoing. 

 Now, therefore, in consideration of the premises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: 
  

	1.	 DEFINITIONS AND INTERPRETATION 

 

	1.1	 The definitions and rules of interpretation in this Section apply in this Agreement: 

“Affiliate” shall mean, with respect to a legal entity, any corporation or other entity which
directly or indirectly Controls, is Controlled by or is under common Control with, such entity. 

  

					
	7	 	  	  	Deed of Amendment and Restatement

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 “Annual Net Sales” means the total Net Sales
in the Territory in a given calendar year. 
 “ASLAN Background Intellectual Property”
shall mean ASLAN Patents and ASLAN Know-How and other Intellectual Property relating thereto, in each case owned and Controlled by ASLAN before the Effective Date, that are reasonably necessary for the Parties
to conduct their respective activities under the Development Program and to further develop, make, have made, use, import, offer for sale and sell Products in the Field and in the Territory. 

“ASLAN Know-How” shall mean proprietary confidential
information which 
  

	 	(a)	 ASLAN discloses to CSL under this Agreement or specifically in anticipation of this Agreement and

  

	 	(b)	 is within the Control of ASLAN, including Joint IP. 

“ASLAN IP” means the ASLAN Background Intellectual Property, ASLAN’s rights in
Development IP and any other IP which is Controlled by ASLAN and which is necessary or useful for the Commercialisation of Products. 

“ASLAN Patents” shall mean all Patents Controlled by ASLAN, including Joint IP. 

“Business Day” means a day that is not a Saturday, Sunday or public holiday in Singapore or
Victoria, Australia. 
 “Change in Control Event” in relation to a Party, means if such
Party: 
  

	 	(a)	 subject to paragraph (c) of this definition, the person who Controls, or group of persons who, acting
together, Control ASLAN cease to have that Control; 

  

	 	(b)	 a change or alteration occurring in the corporate structure of ASLAN which results in a person other than
the shareholders of ASLAN at the effective date of the second amendment to this Agreement: 

  

	 	(i)	 controlling the composition of the board of directors; 

 

	 	(ii)	 controlling the voting power of the board of directors or any class of shareholders or both; or

  

	 	(iii)	 holding more than [...***...] per cent of the issued share capital (either beneficially or otherwise);
or 

  

	 	(c)	 ASLAN disposes of an asset or assets (whether in a single transaction or a series of related or unrelated
transactions). 

 “Claim” means, in relation to a person, a demand,
claim, action or proceeding made or brought by or against the person, however arising. 
 “Clinical
Proof of Concept” shall mean Completion of clinical Phase 2 trials that support and immediately precede the initiation of a Phase 3 clinical trial program (if so required), 

  

					
	8	 	  	  	Deed of Amendment and Restatement

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have been carried out on sufficient numbers of patients such that it provides a preliminary determination of safety and efficacy of the Product in the target patient population over a range of
doses and dose regimens and otherwise comply with the requirements of this Agreement. 

“Completion” shall be deemed to occur, with respect to a particular clinical trial for a
Product, upon the availability of the final clinical study report. 
 “Commercialize”,
“Commercialization” and “Commercialization Activities” means all activities of using, marketing, promoting, distributing, importing, exporting, offering for sale and/or selling a pharmaceutical product that has
obtained Marketing Authorization (noting that some such activities may occur prior to the actual grant of Marketing Authorization) in the Territory. Commercialization Activities may include: 

 

	 	(a)	 the creation and implementation of: 

(i)        a product publication strategy that is compliant with applicable law; 

(ii)       a product education strategy including creation of educational materials and
initiatives; 
 (iii)      a product registration strategy, including selection and
sequencing of applications for Marketing Authorization (but not the actual preparation and filing of regulatory approvals pursuant to such strategy); 

(iv)      development of a market access strategy, including product pricing and reimbursement

 (v)       a product positioning, messaging and branding strategy; 

(vi)      a product sales and marketing strategy; 

(vii)     a product safety monitoring program, including all safety reporting and pharmacovigilance
activities associated with the products; and 
 (viii)    a product lifecycle management strategy,
including a product post-marketing clinical and label extension strategy; 
  

	 	(b)	 medical affairs activities related to the product including advisory boards, key opinion leader development,
management of investigator-initiated clinical trials; 

  

	 	(c)	 the design, creation and implementation of patient support programs and mechanisms; 

 

	 	(d)	 the administration, operation and maintenance of the sales force for promotion of product(s) in the
Territory, sales bulletins and other communications, sales meetings, specialty sales forces, consultants, call reporting and other monitoring/tracking costs, district and regional sales management, and home office personnel who support the sales
force; and 

  

					
	9	 	  	  	Deed of Amendment and Restatement

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	 	(e)	 Phase III and IV clinical trials sponsored (directly or indirectly) by the Marketing Authorization holder
and pricing studies. 

 For avoidance of doubt, (a) through (e) above sets forth
examples of activities that may constitute “Commercialization Activities” rather than a list of activities required to be performed by a party. 

“Commercialization Plan” means, with respect to a Product, a plan setting out the
Commercialization Activities and manufacturing activities that will be conducted in respect of such Product over the Term. Commercialization Plans must contain: 
  

	 	(a)	 the level of detail that is appropriate to the stage of Development or Commercialization of such Product,

  

	 	(b)	 a global focus for Commercialization Activities; 

 

	 	(c)	 the Commercialization Activities and manufacturing activities that will be conducted in respect of such
Product over the Term; 

  

	 	(d)	 an overarching strategy for launch and Commercialization of such Product including, at the appropriate time,
annual brand plans by region and globally; 

  

	 	(e)	 descriptions of Commercialization Activities, manufacturing activities, and budgets ASLAN or its Sub-Licensees propose in order to Commercialize the Products; and 

  

	 	(f)	 where a Product has been sub-licensed, information regarding the
activities of the Sub-Licensee in Commercializing the Product. 

“Confidential Information” has the meaning given to it in Section 15.1. 

“Control,” “Controls,” “Controlled” or
“Controlling” shall mean: 
  

	 	(a)	 in relation to a legal entity, the possession, directly or indirectly, of more than 50% of the issued shares
in that entity or the power to direct, or cause the direction of, the management or policies of that entity, whether through the ownership of voting securities, by contract or otherwise; and; 

 

	 	(b)	 in relation to Intellectual Property, possession of the ability to grant the licenses or sub-licenses as provided herein without violating the terms of any agreement or other arrangements with any Third Party. 

“CSL 334” means CSL’s proprietary
anti-IL13Ra1 monoclonal antibody known as CSL334 which has the [...***...] set out in Schedule 2, and [...***...] thereof, and includes any post translational modifications of such
[...***...]. References in this Agreement to ASLAN004 are to be read as references to CSL334. 

“CSL IP” means the Licensed Patents, the Licensed
Know-How and CSL’s rights in the Joint IP. 

  

					
	10	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 “CSL
In-Licensed Know-How” means all results, data, know-how, compounds, processes, discoveries, formulations, materials,
inventions, techniques or proprietary confidential information which: 
  

	 	(a)	 are necessary for researching, developing, manufacturing, applying for and obtaining marketing
authorisations or licenses in respect of, marketing or selling Products; and 

  

	 	(b)	 are licensed to CSL pursuant to the [...***...] and in respect of which, and to the extent that, CSL
is entitled to grant a sub- license of such [...***...] information. 

 “CSL
In-Licensed Patents” means patents and patent applications licensed to CSL at the date of the Agreement pursuant to the CSL Third Party Technology Agreements to the extent that CSL is entitled to
grant sub-licenses of such patents and to the extent that they relate to the Development & Commercialisation of CSL334. 

“CSL Know-How” shall mean all results, data, know-how, compounds, processes, discoveries, formulations, materials, inventions, techniques or proprietary confidential information which: 
  

	 	(a)	 are necessary for researching, developing, manufacturing, applying for and obtaining marketing
authorisations or licenses in respect of, marketing or selling Products; and 

  

	 	(b)	 are owned by CSL as at the date of this Agreement, 

and for the avoidance of doubt includes CSL’s rights in any [...***...]. 

“CSL Patents” shall mean the Patents Controlled by CSL and listed in Schedule 3. 

“CSL Royalties” is defined in Section 10.3. 

“CSL Third Party Technology Agreements” means [...***...] 

 

	 	(a)	 [...***...] 

 

	 	(b)	 [...***...]. 

“Development” shall mean the activities and obligations that ASLAN agrees to perform pursuant
to Section 3.1. 
 “Development Data” shall mean, with respect to a Product,
(i) all data from clinical trials of such Product; and (ii) all research data, preclinical data, manufacturing data and other information, in each case that are generated by or under authority of ASLAN with respect to such Product. For
such purposes, “Development Data” shall include (1) raw 

  

					
	11	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 
data, study protocols, study results, analytical methodologies, manufacturing processes, materials lists, batch records, vendor information, validation documentation, and the like,
(2) regulatory filings, documentation, correspondence and adverse event data, and (3) expert opinions, analyses, reports and the like, relating to the data, including in each case electronic information and databases embodying such data.

 “Development IP” means all Intellectual Property developed or created by or on behalf of
ASLAN during or arising from the Development or Commercialization which is necessary or useful for the Commercialization of Products, and includes rights in the Development Data and the Joint IP, but excludes any Intellectual Property created or
developed by or on behalf of CSL. 
 “Development Milestone” means a development milestone
identified as such in the Master Plan. 
 “Development Milestone Date” means the date by
which the corresponding Development Milestone must be achieved as set out in the Master Plan, as adjusted in accordance with this Agreement. 

“Development Program” shall mean the detailed program for the Development to be prepared by
ASLAN in accordance with Section 3.3. 
 “Diligent Efforts” shall mean
[...***...]. 
 “Effective Date” shall mean the date this Agreement is last signed.

 “EMA” means the European Medicines Agency or any successor entity thereto. 

“Exchange Rate” means the exchange rate agreed in writing by the Parties. 

“Field” shall mean the treatment, diagnosis or prevention of diseases or conditions in
humans. 
 “Force Majeure Event” means acts of God; fire; storm; flood; earthquake; other forces of nature;
war; rebellion; insurrection; riot; invasion; national emergencies; or strike, lockout or other work stoppage; or acts, omissions or delays in action of any government or regulatory authority which after complying with the standards required under
this Agreement could not be prevented or overcome by such Party. 

  

					
	12	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 “GST Act” means the A New Tax System (Goods
and Services Tax) Act 1999 (Cth), and Consideration, GST, GST Amount, Input Tax Credit, Tax Invoice and Taxable Supply each has the meaning given by that Act. 

“Improvement” means any improvement, development, modification or enhancement of the CSL
Patents or CSL Know-How, whether or not patentable, but excluding Development IP. 

“Indication” means a distinct condition in humans for which a separate Marketing
Authorisation is required and, for the avoidance of doubt, excludes label expansion of an existing approved indication to include additional patient segments. 

“Intellectual Property” (or “IP”) shall mean any Patents, rights to
inventions, registered designs, copyright and related rights, database rights, design rights, topography rights, trade marks, service marks, trade names and domain names, trade secrets, confidential information, rights in unpatented know-how, and any other intellectual or industrial property rights of any nature including all applications (or rights to apply) for, and renewals or extensions of such rights and all similar or equivalent rights or
forms of protection which subsist or will subsist now or in the future in any part of the world. 

“Joint IP” means any intellectual property arising from the Development prior to the Second
Amendment Effective Date or from the clinical study currently being conducted under the ClinicalTrials.gov Identifier: NCT03721263 and owned jointly by ASLAN and CSL, including any Jointly Owned Patents. 

“Jointly Owned Patents” means any Patents listed in Schedule 4, and any Patent filed on Joint
IP or on an invention resulting from the clinical study being conducted, as at the Second Amendment Effective Date, under the ClinicalTrials.gov Identifier: NCT03721263. 

“Joint Steering Committee” (or “JSC”) shall mean the committee established
under Section 4. 
 “Liabilities” means Claims, losses, liabilities, costs, expenses
or damage of any kind and however arising, including investigative costs, court costs, legal fees, penalties, fines and interest and amounts paid in settlement. 

“Licensed Know-How” means the CSL Know-How, the CSL In-Licensed Know How and CSL’s interest in (i) any Improvements which are not patented and/or (ii) any Joint IP which is not patented. 

“Licensed Patents” means the CSL Patents, the CSL
In-Licensed Patents and CSL’s interest in any patented Improvement, including CSL’s share in Jointly Owned Patents. 

“Licensed Technology” shall mean: 

 

	 	(a)	 the CSL IP; and 

  

	 	(b)	 the ASLAN IP. 

  

					
	13	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 “Loan Agreement” means the loan agreement
between ASLAN and CSL Finance Pty Ltd dated on or about the date of this Agreement. 
 “Marketing
Authorization” means any approval, certification or authorization granted by a regulatory authority that enables a Product to be marketed, imported, supplied and sold anywhere within the Territory. 

“Master Plan” shall mean the workplan with respect to the development and Commercialization
of Products within the Field as set out in Schedule 1, as the Parties may amend by mutual agreement in writing from time to time. 

“Material Safety Risk” means [...***...] 

 

	 	(a)	 [...***...] 

 

	 	(b)	 [...***...] 

 

	 	(c)	 [...***...] 

 

	 	(d)	 [...***...] 

 

	 	(e)	 [...***...] 

 

	 	(f)	 [...***...] 

“[...***...]” means [...***...]. 

“Milestone Payments” means the amounts payable under Section 10.1. 

“Net Sales” means the gross amounts received by ASLAN, its Affiliates and Sublicensees, and
their affiliates and sublicensees (as applicable, “Selling Party”), for Products sold by such Selling Party under this Agreement, in arm’s length sales to Third Parties, less: 

 

	 	(a)	 customary trade, quantity or prompt settlement discounts (including chargebacks and allowances) actually
allowed; 

  

	 	(b)	 amounts repaid or credited by reason of rejection, returns or recalls of goods; 

 

	 	(c)	 mandatory rebates and similar payments made with respect to sales paid for by any governmental or regulatory
authority; 

  

	 	(d)	 sales, excise, turnover, inventory, value-added, indirect and any other tax of a similar nature assessed on
the sale of Products, as well as customs duties, customs levies and 

  

					
	14	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

	 	 
import fees imposed on the sale, importation, use or distribution of Products; but only to the extent that such items are included in the gross invoice price of that Product and actually borne by
the Selling Party without reimbursement from any Third Party; and 

  

	 	(e)	 any other similar and customary deductions, provided that such discounts and deductions are consistent with
generally accepted international accounting principles that the Selling Party customarily apply with respect to its own portfolio of similar market potential at a similar stage in development or product life in the Field and that such discounts and
deductions given are commercially reasonable, product specific and are given in the interest of increasing overall revenues of the Products. 

For the avoidance of doubt, with respect to the deductions specified in subsections (a) through (e)
above, an amount shall be deducted only once regardless of how many categories may apply to it. 
 Without
limitation, Net Sales includes sale or disposal of Products in exchange for anything of value in lieu of cash. A sale shall be deemed to have occurred for a price assessed on the value of whatever consideration has been provided in exchange for the
supply. 
 For purposes of calculating Net Sales of Products, sales between or among ASLAN or its Affiliates
or Sub-licensees shall be excluded from the computation of Net Sales, but sales by ASLAN or its Affiliates or its Sub-licensees to Third Parties shall be included in the
computation of Net Sales. 
 “Party” shall mean a party to this Agreement. 

“Patent” shall mean (i) any issued and unexpired patent, including any extension,
registration, confirmation, reissue, continuation, divisional, continuation-in-part, re-examination or renewal thereof, including
any supplementary protection certificate or other similar form of extension; (ii) any pending application for patent; which in each case has not been held, by a court or governmental agency of competent jurisdiction, to be invalid or
unenforceable in a decision from which no appeal can be taken; and (iii) any provisional or priority filing, or any refiling of substantially the same invention, and any patent or application for patent that claims priority from such a
provisional or priority filing. 
 “Phase IIb Ready” means Completion of clinical trials
that support and immediately precede the initiation of a randomised, double blind placebo controlled study to determine the efficacy of [...***...]. 

“Product” shall mean, unless otherwise defined, any pharmaceutical or medicinal item,
substance, formulation or dosage for human use containing CSL334. 
 “Qualifying Cause of
Delay” means [...***...] 
  

	 	(a)	 [...***...] 

 

	 	(b)	 [...***...] 

  

					
	15	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

	 	(c)	 [...***...] 

 

	 	(d)	 [...***...] 

 

	 	(i)	 [...***...] 

 

	 	(ii)	 [...***...] 

 

	 	(iii)	 [...***...] 

 

	 	(iv)	 [...***...] 

 

	 	(e)	 [...***...]. 

“Regulatory Submission” means any application or dossier in support of Marketing
Authorization anywhere in the Territory. 
 “Royalty Reports” means a report setting forth
in reasonable detail the calculation of the royalties payable to CSL for a quarter identifying, by country, the Products sold by ASLAN and its Affiliates and Sub-licensees, and the calculation of Net Sales and
royalties due to CSL for a quarter. 
 “Second Amendment Effective Date” means the date
that the second amendment to this Agreement becomes effective. 
 “Selexis Agreement” means
an agreement between Selexis SA and ASLAN dated 31st May 2017 relating to ASLAN’s commercial use of Selexis cell lines to generate CSL 334. 

“Sub-license” means the grant by ASLAN of rights in
Licensed Technology in accordance with the provisions of this Agreement. 
 “Sub-licensee” means any person or entity to whom a Sub-license has been granted and for the avoidance of doubt includes any Third Party who has been granted
rights to Commercialize Licensed Technology in accordance with Section 8. 
 “Term”
shall have the meaning given to it in Section 16.1. 
 “Territory” shall mean
worldwide. 
 “Third Party” shall mean any entity other than CSL, ASLAN or any Affiliate of
CSL or ASLAN. 
 “[...***...]” means [...***...]. 

 

	1.2	 Section, Schedule and paragraph headings shall not affect the interpretation of this Agreement.

  

					
	16	 	  	  	Deed of Amendment and Restatement

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	1.3	 The Schedules form part of this Agreement and shall have effect as if set out in full in the body of this
agreement and any reference to this Agreement includes the Schedules. 

  

	1.4	 Unless the context otherwise requires, words in the singular include the plural and in the plural include
the singular. 

  

	1.5	 Unless the context otherwise requires, a reference to one gender shall include a reference to the other
genders. 

  

	1.6	 Writing or written includes faxes but not e-mail.

  

	1.7	 Any words following the terms ‘including’, ‘include’, ‘in particular’ or any
similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms. 

  

	1.8	 A ‘person’ includes a natural person, corporate or unincorporated body (whether or not having
separate legal personality), partnership, joint venture and a government or statutory body or authority. 

  

	1.9	 If a word is defined or phrase is defined its other grammatical forms have the corresponding meaning.

  

	1.10	 No rule of constructions will apply to a provision to the disadvantage of a Party merely because that Party
proposed the provision or would otherwise benefit from it. 

  

	2.	 GRANT OF LICENSES 

  

	2.1	 License to Licensed Patents. CSL hereby grants to ASLAN:

  

	 	2.1.1	 an exclusive licence, with the right to grant sub-licenses, provided
the conditions in Sections 7.2.3 to 7.2.4 are met, under CSL’s rights in the Licensed Patents to conduct and perform the Development in the Field; and 

  

	 	2.1.2	 an exclusive licence, with the right to grant sub-licenses as set
out in Section 8.2, under CSL’s rights in the Licensed Patents to Commercialize Products in the Territory in the Field; 

All rights granted in this Agreement by CSL to ASLAN shall be exercised in the Territory, during the Term and in accordance
with the terms and conditions set out in this Agreement. 
  

	2.2	 License to Licensed
Know-How. CSL hereby grants to ASLAN: 

  

	 	2.2.1	 an exclusive licence, with the right to grant sub-licenses, provided
the conditions in Sections 7.2.3 to 7.2.4 are met, under CSL’s rights in the Licensed Know-How to conduct and perform the Development of Products in the Field; 

 

	 	2.2.2	 an exclusive licence, with the right to grant sub-licenses, provided
the conditions in Section 8.2 are met, under CSL’s rights in the Licensed Know-How to Commercialize Products in the Territory in the Field; 

  

					
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 All rights granted in this Agreement by CSL to ASLAN shall be exercised in
the Territory, during the Term and in accordance with the terms and conditions set out in this Agreement. 
 For the
avoidance of doubt, CSL shall retain all rights to the Licensed Know-How other than for the Development and Commercialisation of Products. 

 

	2.3	 Patents and Patent Applications separately
licensed: Each patent and patent application within the Licensed Patents is separately licensed under this Agreement such that if a granted patent within the Licensed Patents ceases to be in force or a patent is not granted on a patent
application within the Licensed Patents (and the decision is not appealed): 

  

	 	2.3.1	 Where the relevant patent or patent application is a CSL Patent, the list of CSL Patents in Schedule 3 is
amended to remove that patent or patent application; and 

  

	 	2.3.2	 This Agreement continues as a license in respect of the remaining Licensed Patents and Licensed Know-how (and, if no patents or patent applications remain within the Licensed Patents, as a license of the Licensed Know-how only). 

 

	2.4	 ASLAN to Remain Responsible: 

 

	 	2.4.1	 ASLAN shall remain liable to CSL under this Agreement for all its Affiliates’, contractors’ and Sub-licensees’ acts and omissions under this Agreement or Sub-licenses or otherwise in relation to Products or the Licensed Technology, and all such Sub-licensees’ and Affiliates’ respective acts and omissions shall be deemed to be acts and/or omissions (as the case may be) of ASLAN. ASLAN shall procure that each
sub-license granted by ASLAN hereunder will terminate upon termination of this Agreement. 

  

	 	2.4.2	 ASLAN shall also remain responsible for payment to CSL of all fees, milestones and royalties payable in
respect of the Development and Commercialisation of Products arising as a result of the [...***...], irrespective of whether such milestones are achieved by, or sales of Products are made by ASLAN or its Affiliates, contractors or Sub-licensees. 

  

	2.5	 Retained Rights: The parties acknowledge that the grant of rights in
Section 2 is subject to the right of [...***...] (including under the [...***...]) to continue to use the CSL IP for [...***...] purposes. CSL undertakes not to carry out [...***...] without the [...***...] of
ASLAN. 

  

	2.6	 No Modification of Product without Consent. Notwithstanding any other term of this Agreement, ASLAN
must not, and must procure that any Third Party to whom it grants rights to Licensed Technology does not, change, modify or adapt CSL334 without the prior written consent of CSL. 

 

	3.	 DEVELOPMENT 

  

	3.1	 Development. Without limiting ASLAN’s obligation to Commercialise Products as set out in
Section 7, ASLAN and its Affiliates, including through Sublicensees, shall, at its/their sole 

  

					
	18	 	  	  	Deed of Amendment and Restatement

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risk and expense, undertake all activities and perform all obligations required to develop the Products. Development shall include the manufacture of Products for clinical trials.

  

	3.2	 ASLAN and its Affiliates, including through Sublicensees, shall perform the Development and its obligations
under this Agreement: 

  

	 	3.2.1	 in a proper, efficient, skilful, diligent and competent manner; 

 

	 	3.2.2	 in accordance with the Master Plan and this Agreement; 

 

	 	3.2.3	 in accordance with all applicable laws and regulations and applicable ICH Harmonised Tripartite Guidelines,
including the Guideline for Good Clinical Practice and Guideline for Good Manufacturing Practice; 

  

	 	3.2.4	 to a standard acceptable by the United States Food and Drug Administration and/or the European Medicines
Agency; 

  

	 	3.2.5	 so as to achieve the Development Milestones by the Development Milestone Dates. 

 

	 	3.2.6	 so that [...***...]. 

 

	3.3	 Within [...***...] of execution of this Agreement and at least [...***...] thereafter during the
Term, ASLAN shall prepare and submit to the JSC a reasonably detailed plan for the Development to be undertaken in the next [...***...] and a timeline for the performance of the relevant activities (“Development
Program”), under the overall framework of the Master Plan. The Development Program shall be comprehensive and shall fully describe the following: 

 

	 	3.3.1	 the proposed preclinical, clinical, research (academic or commercial), regulatory and product development
(including manufacturing) and formulation activities related to ongoing preclinical studies, clinical studies and regulatory plans; 

  

	 	3.3.2	 clinical goals and objectives and other development activities; and 

 

	 	3.3.3	 go/no-go criteria for continuing the development of Products from
one clinical trial to the next; and 

  

	 	3.3.4	 any other information as reasonably determined by the JSC. 

 

	3.4	 Within [...***...] of the Second Amendment Effective Date the Parties shall agree amendments to the
Master Plan to reflect the second amendment and the extension of ASLAN’s rights and obligations regarding Commercialization. Until such time, the Master Plan set out in Schedule 1 shall continue in full force and effect. 

 

	3.5	 ASLAN shall prepare and submit an updated Development Program within [...***...] of the effective date
of the first amendment to this Agreement, reflecting the changes to this Agreement and the Master Plan implemented by that amendment. The updated Development Program will thereafter be further updated in accordance with Section 3.3.

  

					
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	3.6	 ASLAN shall provide CSL with such information as CSL may reasonably request from time to time regarding the
progress of the Development and status of development of Products hereunder, such information to include copies of correspondence with regulatory authorities with respect to each Product. 

 

	3.7	 ASLAN shall carry out the Development substantially in accordance with the Development Program most recently
submitted to the JSC. For the avoidance of doubt, performance of the Development in accordance with a Development Program shall not relieve ASLAN of its obligations under Section 3.2. 

 

	3.8	 Prior to making a material change to a Development Program, ASLAN shall submit to the JSC an updated copy of
the Development Program incorporating the material change, for information purposes. 

  

	3.9	 Records and Reports. ASLAN shall maintain records in sufficient detail
and in a good scientific manner of all work conducted by it in connection with the Development and all Development Data resulting from such work. Such records, including any electronic files where such Development Data may also be contained, shall
reflect all work done and results achieved in the performance of the Development in sufficient detail and in a good scientific manner appropriate for regulatory purposes. ASLAN shall keep such records for the longer of [...***...] from the
occurrence of the subject matter or event which they concern, or as may be required by the terms of any CSL Third Party Technology Agreement or as required by law. In addition, ASLAN will submit and present to the JSC reports and results regarding
progress of the Development and data produced under the Master Plan, preclinical and clinical study draft reports resulting from the Development and copies of final reports. 

 

	3.10	 CSL’s involvement in the
Development. If requested by ASLAN and necessary to support the Development, CSL may provide research support services to ASLAN to [...***...] and to investigate potential biomarkers and develop or provide reagents and assays
to support clinical development. ASLAN acknowledges and agrees that the Development will be conducted under ASLAN’s exclusive control and that CSL shall have no obligation to participate, collaborate, assist or be involved in any way in the
Development. For the avoidance of doubt, a refusal by CSL to provide research support services pursuant to this Section shall not be a breach of this Agreement. Any CSL involvement in the Development requested by ASLAN shall depend upon CSL’s
sole decision and will be performed through CSL’s participation in the JSC, or through any other way to be decided by CSL on a case by case basis, and unless otherwise agreed, at CSL’s expense. CSL shall not be deemed or considered as the
sponsor of the Development. 

  

	3.11	 Delays: When it becomes evident to ASLAN that anything will materially delay the Development (that
is, [...***...] beyond the scheduled or planned date), ASLAN shall promptly notify CSL in writing with details of the delay and the cause. If ASLAN is delayed in reaching a Development Milestone by the relevant Development Milestone Date by a
Qualifying Cause of Delay, ASLAN shall be entitled to a reasonable [...***...] to the relevant Development Milestone Date. ASLAN must submit to CSL a request for a reasonable [...***...] within [...***...] of the cessation of the
Qualifying Cause of Delay or, as soon 

  

					
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	3.12	 as it is evident to ASLAN that such circumstances will materially delay the Development; and provide such
information as is reasonably requested by CSL in order to assess a reasonable [...***...]. If the parties are unable to agree on a reasonable [...***...], a reasonable [...***...] shall be determined by an expert in accordance with
Section 18.16. CSL may also grant an [...***...] for any reason in its sole discretion by notice to ASLAN. 

  

	4.	 JOINT STEERING COMMITTEE 

 

	4.1	 Joint Steering Committee. The Parties shall establish an overall committee (“Joint Steering
Committee,” or “JSC”) to oversee the Development and Commercialisation of Products and to propose solutions for the resolution of issues arising under this Agreement. 

 

	4.2	 Membership. The JSC shall be comprised of at least four (4) representatives from each of
ASLAN and CSL or such other number as the parties may otherwise agree in writing, with the members selected from senior management of each Party and in accordance with this Section 4.2. At the Effective Date, the composition of the JSC is set
out below (“Initial Representatives”): 

  

					
	  	 	  

ASLAN
  
	 	  

CSL
  

	  

Representative
  
	 	  
 [...***...]

 
	 	  

[...***...]
  

	  

Representative
  
	 	  
 [...***...]

 
	 	  

[...***...]
  

 The Parties may replace their Initial Representatives upon prior written notice to the
other, provided that any replacement has at least equivalent experience, ability and expertise. If either Party has not appointed a replacement who is reasonably acceptable to the other Party within [...***...], this shall constitute a breach
of this Agreement. 
  

	4.3	 JSC Meetings. During the Term, the JSC shall meet no less frequently than [...***...], or as
otherwise agreed by the parties, alternating between locations convenient to one Party and then convenient to the other, or by teleconference. At its meetings, the JSC will: 

 

	 	4.3.1	 consider and, if agreed, propose variations to this Agreement for approval by the Parties;

  

	 	4.3.2	 monitor the progress of the Development Program and progress towards the Development Milestones. Material
changes to the Development Program will be communicated by ASLAN to CSL via email communication to JSC members as soon as practical; 

  

	 	4.3.3	 discuss and seek to resolve any material issues which arise during the course of Development of Products;

  

	 	4.3.4	 discuss and seek to resolve any other issues arising under this Agreement; and 

  

					
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	 	4.3.5	 undertake and/or approve such other matters as are specifically provided for the JSC under this Agreement;
provided, however, that for the avoidance of doubt the JSC shall not have the authority to determine those matters described in Section 4.5. 

ASLAN shall prepare written minutes of each JSC meeting and a written record of all JSC decisions, whether made at a JSC
meeting or otherwise, and promptly circulate a copy to all JSC members. Each Party shall bear its own personnel, travel and lodging expenses relating to JSC meetings. 
  

	4.4	 Review of Development Program: Any review or comment on the Development Program by CSL, the JSC shall
not relieve ASLAN of its obligations under Section 3. 

  

	4.5	 Decisions. Decisions of the JSC shall be made by [...***...] of the Initial
Representatives. Parties shall make decisions in good faith and not unreasonably withhold or delay decisions. If the JSC cannot reach agreement on an issue, then such issue will be referred to the [...***...] of CSL and ASLAN (or their
[...***...] nominated delegates) for attempted resolution in good faith, face-to-face negotiations at a mutually agreed site. If the [...***...] cannot
resolve such issue within [...***...], then subject to this Section 4.5 [...***...] will have the right to cast the deciding vote. Notwithstanding any other term of this Agreement, [...***...] will not have the right, without
the prior written agreement of [...***...], to: 

  

	 	4.5.1	 amend or otherwise create additional obligations or Liabilities of [...***...] under this Agreement;

  

	 	4.5.2	 materially amend the provisions of the Master Plan (and, for the avoidance of doubt, by way of example and
without limitation, minor changes to the manner of delivery of agreed steps under the Master Plan or minor changes to patient recruitment criteria, shall not be deemed to be material amendments to the Master Plan requiring to be decided by the full
JSC); 

  

	 	4.5.3	 enter into any agreement with a Third Party which [...***...] and which [...***...], but which
[...***...]; or 

  

	 	4.5.4	 make any other decision that is stated to require the further approval or agreement of [...***...]
under this Agreement, 

 or [...***...] under this Agreement in relation to same. 

 

	4.6	 CSL and ASLAN shall cause each of their representatives on the JSC and their respective [...***...]
(or delegates) to [...***...], including any [...***...] by [...***...]. The Parties shall ensure that their dealings with each other and respective activities under this Agreement are performed in good faith. Where this Agreement
calls for specified officers of CSL and ASLAN to meet and resolve a particular issue, each Party shall make its respective officer reasonably available for an in-person meeting on at least three particular
dates and times within the [...***...] after the request. 

  

					
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	5.	 REGULATORY MATTERS 

  

	5.1	 ASLAN shall be responsible, directly or through Third Parties, for the preparation, filing and maintenance
of all Regulatory Submissions with respect to the Development, which shall be filed in the name of ASLAN or its designee. All clinical trial protocols and Regulatory Submissions and documents related to the Development and Commercialization shall be
subject to review and comment by the JSC prior to the initiation of such trials and prior to filing such protocols and submissions with any health regulatory agencies. 

 

	6.	 DILIGENCE 

  

	6.1	 ASLAN and/or its Affiliates shall, including through Sublicensees, use Diligent Efforts to (i) conduct
the Development, (ii) obtain marketing approvals for Products throughout the Territory, and (iii) Commercialize Products throughout the Territory after receipt of such marketing approvals in accordance with this Agreement, keeping the JSC
informed as to the progress of such negotiations. It is the intention of the parties that rights to Licensed Technology be granted in such a way so as to [...***...] for both parties. 

 

	6.2	 ASLAN shall not, during the Term, have the right to grant a license with respect to Licensed Technology to
any Third Party in the Field except in accordance with this Agreement. 

  

	7.	 COMMERCIALIZATION RIGHTS AND OBLIGATION 

 

	 	7.1.1	 ASLAN will be entitled to, and is obligated to, Commercialise Products itself and/or through Affiliates
and/or Sub-licensees in all or selected countries in the Territory, provided that where ASLAN is proposing to Commercialise Products itself and/or through Affiliates, it can demonstrate to CSL’s
satisfaction (to be approved in writing) that it has, or has the capability to put in place within a reasonable time, appropriate sales, marketing and market access capabilities in the relevant country/ies, commensurate with a product of the
commercial potential of the Product, taking into account competing products. In order to satisfy CSL of its capabilities as above, ASLAN shall present details of its plans and proposals in respect of such Commercialisation to CSL, either at a face
to face meeting at a venue to be agreed between the Parties, or via teleconference. Within 30 days of such presentation, CSL shall inform ASLAN of its determination, not to be unreasonably withheld. 

 

	 	7.1.2	 Commercialization of Products by ASLAN itself 

Where ASLAN Commercializes Products itself and/or through Affiliates, it shall be responsible for the preparation and maintenance of
Commercialization Plans as follows: 
  

	 	(i)	 Commercialization of each Product shall be conducted pursuant to a Commercialization Plan under the overall
framework of the Master Plan. 

  

	 	(ii)	 ASLAN shall be responsible for preparing a Commercialization Plan for each Product. 

  

					
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	 	(iii)	 ASLAN shall generate an initial Commercialization Plan for each Product no later than [...***...]
prior to the first planned Regulatory Submission seeking Marketing Authorization for such Product. 

  

	 	(iv)	 ASLAN shall generate a further and more detailed Commercialization Plan for each Product no later than
[...***...] prior to the first planned Regulatory Submission seeking Marketing Authorization for such Product. 

  

	 	(v)	 ASLAN shall generate a final Commercialization Plan for each Product no later than [...***...] prior
to the first planned Regulatory Submission seeking Marketing Authorization for such Product. 

  

	 	(vi)	 ASLAN shall obtain approval from the JSC for all Commercialization Plans for all Products.

  

	 	(vii)	 The Commercialization Plan for each Product shall include a level of detail that is appropriate to the stage
of Commercialization of such Product and consistent with ASLAN’s internal systems and processes. 

  

	7.2	 Commercialization of Products by Sub-licensees

 ASLAN or its Affiliates may enter into a Sub-license agreement
for the grant to a Third Party of rights in Licensed Technology to Commercialize (or, as applicable, Develop) Products in the Field provided that: 
  

	 	7.2.1	 the agreement is [...***...], or [...***...]; 

 

	 	7.2.2	 ASLAN must not [...***...]; 

 

	 	7.2.3	 the Third Party is [...***...]; 

 

	 	7.2.4	 unless otherwise agreed with CSL, the agreement contains [...***...]; 

 

	 	7.2.5	 entry into such an agreement will not relieve ASLAN of its obligations under this Agreement;

  

	 	7.2.6	 ASLAN must include within the Commercialization Plans an appropriate level of detail regarding any Sub-licensing plans it has for Products, commensurate to the stage of Commercialization of the Product; and 

  

	 	7.2.7	 the conditions in Section 9 are met (including any conditions which CSL may reasonably require pursuant
to Section 9.2). 

  

					
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	8.	 SUB-LICENSING 

 

	8.1	 Any grant of rights by ASLAN in respect of the Licensed Technology must: 

 

	 	8.1.1	 subject to the remainder of this clause, be on terms consistent with all of the terms of this Agreement,
including with respect to payments due to CSL. In relation to any confidentiality obligations in a Sub-license agreement which relate solely to information not subject to obligations of confidence under a CSL
Third Party Technology Agreement, ASLAN may agree for the duration of such obligations in the Sub-license agreement to be less than the duration specified in the first sentence of Section 15.3, provided
that such duration must in all cases be at least [...***...] from the date of disclosure of the relevant information by ASLAN; 

  

	 	8.1.2	 require the Sub-licensee to maintain all books or records and
accounts necessary to enable verification of any amount of payments due to ASLAN, including the allowance of audits of such books by ASLAN at CSL’s written request (which CSL shall be entitled to make no more than once in every year of this
Agreement); and 

  

	 	8.1.3	 deliver to CSL a copy of each executed Sub-license agreement within
10 days of execution, which agreement CSL shall be entitled to disclose to its licensors to comply with any obligations under any CSL Third Party Technology Agreement. 

 

	8.2	 Where ASLAN wishes to grant sub-licenses in respect of CSL In-Licensed Patents or CSL In-Licensed Know-How: 

 

	 	8.2.1	 ASLAN must first obtain CSL’s consent, which consent CSL shall only be entitled to be withheld where:

  

	 	(i)	 the terms of the relevant CSL Third Party Technology Agreement do not permit further sub-licensing and [...***...]; 

  

	 	(ii)	 the terms of any such sub-licensing by ASLAN are not consistent with
the terms of the relevant CSL Third Party Technology Agreement (and, for the purposes of determining whether this Section applies, ASLAN shall provide CSL with a copy of any proposed sub-license); and

  

	 	8.2.2	 in respect of rights under the [...***...], ASLAN acknowledges that such rights may [...***...].
Where ASLAN wishes such rights to be granted and the grant is reasonably necessary for the Commercialisation of Products, CSL will use reasonable efforts to [...***...]; 

 

	 	8.2.3	 any sub-licenses of rights in CSL
In-Licensed Know-How must comply with, and does not relieve ASLAN of its obligations under, Section 15. 

  

					
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	9.	 SELEXIS AGREEMENT AND CSL THIRD PARTY TECHNOLOGY AGREEMENTS 

 

	9.1	 ASLAN to be responsible for
all payments. 

  

	 	9.1.1	 ASLAN will be responsible for all financial requirements, and any payments required to be made, under the
Selexis Agreement. 

  

	 	9.1.2	 ASLAN will be responsible for all financial requirements and any payments required to be made by CSL under
the CSL Third Party Technology Agreements to the extent that such obligation relates to ASLAN’s exploitation of the rights the subject of those agreements (including any exploitation via a Sub-licensee).

  

	 	9.1.3	 ASLAN acknowledges and agrees that it has seen copies of such CSL Third Party Technology Agreements and will
use its best efforts to assist CSL in complying with any requirements under such Third Party Technology Agreements. 

  

	 	9.1.4	 Subject to CSL receiving the assistance that it requires from ASLAN in order to comply with the terms of the
CSL Third Party Technology Agreements, CSL shall remain responsible for compliance with the Third Party Technology Agreements and shall invoice ASLAN for any payments due under such Agreements. Subject to receiving an invoice from CSL, ASLAN shall
make payments to CSL required under this Section at least [...***...] in advance of the date on which the corresponding amount is due under the relevant CSL Third Party Technology Agreements. 

 

	9.2	 ASLAN to assist CSL to
comply with CSL Third Party Technology Agreements. 

  

	 	9.2.1	 ASLAN agrees to provide CSL with all information which CSL may reasonably require in order to comply with
its obligations under CSL Third Party Technology Agreements, including but not limited to: 

  

	 	(i)	 notification to CSL of any steps taken which would amount to the achievement of milestones under such
agreements; 

  

	 	(ii)	 provision of royalty statements under each agreement pursuant to which royalties are payable on sales of
Product, calculated in accordance with the provisions of the relevant agreement, together with the amount required to be paid within a timeframe that allows CSL to make the payment to its Third Party licensor within the time stipulated in the
relevant agreement; 

  

	 	(iii)	 the granting of further sub-licenses under such agreements;

  

	 	(iv)	 information regarding whether the rights the subject of any such CSL Third Party Technology Agreement is
being used by ASLAN in respect of the Commercialisation of Product(s); 

  

	 	(v)	 reporting and record keeping obligations; 

 

	 	(vi)	 auditing obligations; and 

  

					
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	 	(vii)	 improvements to the relevant licensor’s Intellectual Property the subject of such CSL Third Party
Technology Agreements, in accordance with the terms of each such agreement. 

  

	 	9.2.2	 ASLAN warrants that it and its sub-licensees will only exploit the
rights which are the subject of CSL Third Party Technology Agreements in respect of its Commercialisation of Products and in accordance with the terms of any such CSL Third Party Technology Agreement and this Agreement. 

 

	10.	 THIRD PARTY PAYMENTS 

This Section 10 sets out ASLAN’s obligations to pay the Milestone Payments and CSL Royalties to CSL. 

Milestone payments 
  

	10.1	 ASLAN must, pay to CSL the following amounts on the first achievement of the following milestone events by
ASLAN, its Affiliates or Sublicensees, within 30 (thirty) days of the occurrence of the relevant event. Each payment shall be due once and only, regardless of how many times and for how many Products the event may occur. 

 

			
	Event	 	
Milestone
Payment

(USD)

	 
	Regulatory
milestones
	 	 
	
Initiation of [...***...]
	 	$[...***...]
	 	 
	
First [...***...]
	 	$[...***...]
	 	 
	
Second [...***...]
	 	$[...***...]
	 	 
	
Third [...***...]
	 	$[...***...]
	 	 
	
First [...***...]
	 	$[...***...]
	 	 
	
Second [...***...]
	 	$[...***...]
	 	 
	
Third [...***...]
	 	$[...***...]
	 	 
	
First [...***...]
	 	$[...***...]
	 	 
	
First [...***...]
	 	$[...***...]
	 
	
Sales milestones

	 	 
	
[...***...]
	 	$[...***...]

  

					
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	Event	 	 Milestone
Payment

(USD)

	  

[...***...]
  
	 	  

$[...***...]
  

	  

[...***...]
  
	 	  

$[...***...]
  

	  

[...***...]
  
	 	  

$[...***...]
  

	  

[...***...]
  
	 	  

$[...***...]
  

	  

[...***...]
  
	 	  

$[...***...]
  

	  

[...***...]
  
	 	  

$[...***...]
  

	  

[...***...]
  
	 	  

$[...***...]
  

  

	10.2	 ASLAN must not set off any amounts owing to CSL under or in connection with this Agreement.

 Royalty payments 
  

	10.3	 ASLAN shall pay CSL quarterly, on a
country-by-country, Product-by-Product basis until the end of the Term, royalties at the
applicable rate set out below, depending on the relevant aggregate and cumulative amount(s) of Annual Net Sales of Product (based on the relevant calendar year) by ASLAN, its Affiliates and/or Sub-licensees
(“CSL Royalties”): 

  

					
	 	 	
	Annual Net Sales amount	  	    Royalty rate      	  	 
	 	 	
	  

From $0 up to US$[...***...]
  
	  	  

[...***...]%    
  
	  	
	 	 	
	  

To the extent Net Sales exceed [...***...], up to [...***...]:

 
	  	  

[...***...]%    
  
	  	
	 	 	
	  

To the extent Net Sales exceed [...***...] up to [...***...]:

 
	  	  

[...***...]%    
  
	  	
	 	 	
	  

To the extent Net Sales exceed [...***...]:

 
	  	  

[...***...]%    
  
	  	

  

	10.4	 Within [...***...] days of the end of each calendar quarter during which there are Net Sales, subject
to section 10.5, ASLAN shall make the relevant payment of CSL Royalties and provide CSL with a Royalty Report specifying: 

  

					
	28	 	  	  	Deed of Amendment and Restatement

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	 	10.4.1	 the nature of and amount of the payment received that contributes to Net Sales (including copies of any
notifications, reports or statements from the Sub-licensees relating to the contribution); 

  

	 	10.4.2	 the calculation of CSL Royalties based on such payment including details and amount of any deductions made
in calculating such revenue; 

  

	 	10.4.3	 details of any Exchange Rates used to convert any currencies; 

 

	 	10.4.4	 details of the cumulative Annual Net Sales for the relevant year as at the date of the statement; and

  

	 	10.4.5	 a statement of the amount of payment due to CSL in respect of such CSL Royalties. 

 

	10.5	 To the extent that Net Sales for the purposes of calculating CSL Royalties pursuant to Section 10.4 are
generated in a calendar quarter by a Sub-licensee, and ASLAN has not received royalties or other payments due to it from such Sublicensee in respect of such Net Sales by [...***...] from the end of the
relevant calendar quarter, then ASLAN may defer payment of the portion of the CSL Royalties derived from the Net Sales by such Sub-licensee until the earlier of (a) the time ASLAN actually receives the
royalties or other payments from the Sublicensee; or (b) [...***...] from the end of the relevant calendar quarter. 

  

	10.6	 ASLAN must remit payment to CSL to a bank account nominated by CSL. 

 

	10.7	 Currency. Payments to CSL must be in USD. 

 

	10.8	 CSL Royalties for the Convenience of the Parties. Given the worldwide scope of this Agreement and the
impracticality of establishing the relative contribution of each element of Licensed Technology to the value of Product(s), in particular at the stage in the development cycle for Product(s) at which the Parties are entering into this Agreement, it
is agreed and recognised that paying CSL Royalties on a worldwide basis at the rates and for the term set forth in this Agreement is fair and reasonable, representing a balance between the concerns and interests of both Parties and resulting in a
convenience for ASLAN. 

  

	11.	 RECORDS AND ACCOUNTS 

 

	11.1	 ASLAN must keep complete and accurate records of all matters connected with the Development and
Commercialisation of Products and must also keep proper accounts in relation to all sales and CSL Royalties and other payments payable to CSL under this Agreement containing all data necessary for the calculation of the amounts payable to CSL
pursuant to this Agreement, including amounts due under CSL Third Party Technology Agreements. ASLAN must keep those records and books of account for [...***...] following the end of the year to which they relate or as may be required by the
terms of any CSL Third Party Technology Agreement. 

  

	11.2	 Not more than once in any [...***...] period, ASLAN must permit during business hours an independent
accountant nominated by CSL to inspect the records and accounts maintained under Section 11.1 for the purpose of verifying their accuracy, and confirming 

  

					
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whether all payments payable to CSL under this Agreement have been properly calculated and paid by ASLAN. 

 

	11.3	 ASLAN must provide to the accountant such assistance as is reasonably required by that person in order to
verify the accuracy of those records and accounts and confirm whether all payments payable to CSL under this Agreement have been properly calculated and paid by ASLAN. 

 

	11.4	 If CSL’s inspection reveals that any monies are outstanding then ASLAN must, within [...***...]
after receiving notice of the amount due, pay CSL the outstanding amount. If the inspection reveals there was an overpayment then the amount of the overpayment may be credited against future payments due to CSL under this Agreement.

  

	11.5	 CSL shall bear the cost of the independent accountant appointed under this Section 11 except if the
inspection reveals that any monies are outstanding by more than [...***...]%, in which case ASLAN must pay CSL’s reasonable inspection costs. 

  

	12.	 INTELLECTUAL PROPERTY 

 

	12.1	 ASLAN shall give full disclosure to CSL of all ASLAN Background Intellectual Property and Joint IP, and CSL
shall give full disclosure to ASLAN of all CSL IP other than Joint IP. 

  

	12.2	 ASLAN Background Intellectual Property is and shall remain the property of ASLAN and CSL IP is and shall
remain the property of CSL (or, where applicable, the Third Party from whom its right to use the relevant Intellectual Property has derived) 

  

	12.3	 ASLAN must not use any CSL IP or Development IP to develop or commercialize
IL-13Ra1 monoclonal antibodies, other than CSL 334. 

  

	12.4	 Subject to any contrary provisions in any of the CSL Third Party Technology Agreements, as from the Second
Amendment Effective Date, ASLAN will own all Development IP (excluding the Joint IP). 

  

	12.5	 Neither Party shall grant any rights to Joint IP to Third Parties or otherwise encumber Joint IP other than
in accordance with this Agreement or with the prior written consent of the other Party. 

  

	12.6	 From the Second Amendment Effective Date, if any Development IP is thought to warrant the filing of an
application for a Patent or is already the subject of a Patent, then subject to any contrary provisions in any of the CSL Third Party Technology Agreements: 

  

	 	12.6.1	 ASLAN shall be responsible for the filing, prosecution, maintenance and renewal of applications for such
Patents and ASLAN shall pay the fees, including agents and lawyers’ fees in relation to such Patents; 

  

	 	12.6.2	 ASLAN in making any such Patent application shall keep CSL reasonably informed, and with respect to any
Jointly Owned Patent shall reasonably consult with CSL concerning all aspects of the drafting, filing, prosecution maintenance and renewal of such Jointly Owned Patent, including those countries in which to seek protection; 

  

					
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	 	12.6.3	 CSL shall provide all necessary assistance, information, documents and instructions as is reasonably
requested by ASLAN in connection with the filing, prosecution, maintenance and renewal of Jointly Owned Patents; 

  

	 	12.6.4	 If ASLAN, in its sole discretion, decides to abandon the preparation, filing, prosecution or maintenance of
any patent or patent application for Development IP, then ASLAN shall notify CSL in writing thereof (“Discontinue Notice”) at least [...***...] prior to any due date that requires action to avoid loss of rights in connection
with the applicable patent and/or patent application, and following the date of such notice CSL may elect to continue to prosecute or maintain at CSL’s cost and expense any of those Patents by providing notice to ASLAN in writing within
[...***...] of receipt of the Discontinue Notice. Upon receipt of such a notice from CSL, ASLAN will provide all reasonable co-operation to enable CSL to prosecute or maintain the relevant Patents, at
CSL’s expense, including but without limitation assigning relevant patent applications to CSL if requested by CSL. 

  

	12.7	 Improvements by CSL. 

 

	 	12.7.1	 If any Improvements are made by CSL or its Third Party collaborators during the Term or as a result of
CSL’s performance of research under Section 3.10, the Parties acknowledge that CSL will own such Improvements and the Intellectual Property therein. 

 

	 	12.7.2	 CSL will promptly disclose such Improvements to ASLAN and they will form part of the Licensed IP and be
licensed on the same terms (including financial terms) as CSL Patents and CSL Know-How. 

  

	12.8	 Improvements by ASLAN. 

 

	 	12.8.1	 If any improvements, developments, modifications or enhancements are made by ASLAN or its Third Party
collaborators to ASLAN IP during the Term (“ASLAN Improvements”), the Parties acknowledge that ASLAN will own such Improvements and the Intellectual Property therein. 

 

	 	12.8.2	 ASLAN will promptly disclose such ASLAN Improvements to CSL if they are necessary or useful to the
Development or Commercialisation of products. 

  

	12.9	 Improvements related to Third Party Technology Agreements. 

 

	 	12.9.1	 The parties agree to cooperate to help ensure that CSL is able to comply with the terms of the CSL Third
Party Technology Agreements with respect to any inventions, development, modification or enhancement of the CSL In-licensed Patents and/or the CSL In licensed Know-how,
in each case in accordance with the terms of the relevant CSL Third Party Technology Agreement. 

 Where CSL is entitled
to secure ownership of, or grant sub- licenses to, any invention, development, modification or enhancement of the CSL In-Licensed Patents, whether or not 

  

					
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made by a Party to this Agreement, and where such invention, development, modification or enhancement relates to the Development, manufacture or Commercialisation of a Licensed Product, CSL will
grant ASLAN a sub-license under the terms of the relevant CSL Third Party Technology Agreement and otherwise in accordance with the terms of this Agreement as they apply to CSL
In-licensed Patents and CSL In-licensed Know- How. 
  

	12.10	 Each Party shall immediately give written notice to the other Party of any actual, threatened or suspected
infringement of any Licensed Technology. The Parties shall discuss as to what action to take in respect of such infringement. 

  

	12.11	 Third Party’s claims. In the event of the institution of any suit by a Third Party against ASLAN
and/or CSL alleging infringement of any Intellectual Property relevant to this Agreement, the Party sued shall promptly notify the other Party in writing. Each Party shall have the right (but not the obligation) to defend any suit brought against it
at its own expense, but shall, at all times, take into consideration the views and technical considerations of the other Party. ASLAN and CSL shall provide reasonable assistance and cooperation to each other in any such litigation at the
other’s request and at the other’s expense. A Party shall not enter into any settlement, consent or other voluntary final disposition of any action involving alleged infringement of Intellectual Property relevant to this Agreement without
the other Party’s prior written consent, not to be unreasonably withheld or delayed. 

  

	12.12	 CSL Patents. CSL shall be responsible for prosecution and maintenance of the CSL Patents and
applications for extensions of term thereof. In the event that CSL elects to discontinue prosecution or maintenance of any of the CSL Patents, CSL shall provide written notice to ASLAN identifying the relevant CSL Patents (“Discontinue
Notice”). ASLAN may elect to continue to prosecute or maintain at ASLAN’s cost and expense any of those CSL Patents by providing notice to CSL in writing within [...***...] of receipt of the Discontinue Notice. Upon receipt of
such a notice from ASLAN, CSL will provide all reasonable co-operation to enable ASLAN to continue prosecution or maintenance of the relevant CSL Patents, at ASLAN’s expense. 

 

	12.13	 [...***...] has the right to
defend or enforce the CSL Patents. 

  

	 	12.13.1	 Subject to the rest of this Section 12.13, [...***...] shall have the [...***...], to
prosecute and control legal action in respect of any Third Party’s infringement or threatened infringement or other misuse of any rights subsisting in the CSL Patents, CSL Know-how, Joint IP or
Development IP (“Third Party Infringement”) save that it may not enter into any settlement, compromise or other disposition of any such proceeding which concerns the validity of any CSL IP or Joint IP or
ownership of, or rights to, any CSL IP or Joint IP, without the prior written consent of [...***...] (which consent [...***...] acknowledges may, in relation to certain aspects of the CSL IP or Joint IP, be dependent upon
[...***...] also obtaining the consent of [...***...] to such settlement). 

  

					
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	 	12.13.2	 In exercising its right under Sections 12.13.1, [...***...] shall reasonably consult with
[...***...] with respect to the defence of such Intellectual Property. 

  

	 	12.13.3	 Where a damages award is rendered by the presiding court in respect of a Third Party Infringement,
[...***...]: 

  

	 	(i)	 may first deduct its own expenses incurred by it in prosecuting such proceeding; 

 

	 	(ii)	 shall then ensure that [...***...] is reimbursed for all reasonable expenses incurred by it in
assisting in such proceeding (including counsel’s fees); and 

  

	 	(iii)	 any excess amount after the deductions outlined in sub- Sections (i) and (ii) above shall be treated as
Net Sales. 

  

	12.14	 [...***...] to have the right to take action where [...***...] declines. 

 

	 	12.14.1	 In the event that [...***...] fails, within [...***...], to take all reasonable steps to cause
any alleged or suspected Third Party Infringement to cease, [...***...] shall have the [...***...], to enforce the relevant CSL Patent(s), CSL Know-how or Joint IP at its own expense and to retain
for itself all awards of damages or other monetary amounts which it may be granted, save that [...***...] may not enter into any settlement, compromise or other disposition of any such proceeding which would result in [...***...] having
to make any payment to the Third Party in respect of [...***...]’s Commercialisation of Products without the prior written consent of [...***...]. 

 

	13.	 WARRANTIES 

  

	13.1	 Each of the Parties warrants that: 

 

	 	13.1.1	 it has full power and authority to enter into and observe the obligations under this Agreement and, for the
avoidance of doubt CSL warrants that the CSL Patents are either owned or Controlled by it; 

  

	 	13.1.2	 to the best of its actual knowledge as at the Effective Date, its entry into and performance under the terms
of this Agreement will not infringe the rights of any Third Party or cause it to be in breach of any obligations to a Third Party; 

  

	 	13.1.3	 all information, data and materials provided by it to the other pursuant to this Agreement will be, to the
best of its knowledge and belief, accurate and complete in all material respects. 

  

	13.2	 CSL warrants that, to the best of its actual knowledge as at the Effective Date: 

 

	 	13.2.1	 the exercise by ASLAN of the license rights granted to ASLAN under Sections 2.1 and 2.2 does not infringe
the rights of any Third Party; and 

  

	 	13.2.2	 no Third Party has threatened or, so far as it is aware, is currently threatening proceedings in respect of
infringement of any CSL IP, and none of the CSL IP is the 

  

					
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subject of any actual or, so far as it is aware, threatened challenge, opposition or revocation proceedings, except as disclosed to ASLAN prior to the Effective Date, 

and for the avoidance of doubt, the inclusion, as from the Second Amendment Effective Date, of the Joint IP in the scope of
the license rights granted to ASLAN under Sections 2.1 and 2.2 is not intended by the Parties to alter or extend the scope of the warranties given under this Section 13.2 beyond what was warranted as at the Effective Date. 

 

	13.3	 ASLAN warrants that, to the best of its actual knowledge as at the Effective Date: 

 

	 	13.3.1	 the exercise by CSL of the rights granted to ASLAN Background Intellectual Property under this Agreement
does not infringe the rights of any Third Party; 

  

	 	13.3.2	 no Third Party has threatened or, so far as it is aware, is currently threatening proceedings in respect of
infringement of any ASLAN IP, and none of the ASLAN IP is the subject of any actual or, so far as it is aware, threatened challenge, opposition or revocation proceedings, except as disclosed to CSL prior to the Effective Date. 

 

	13.4	 Any condition, warranty or other term which is not expressly set out in this Agreement which might otherwise
be implied or incorporated into this Agreement, whether by statute, common law or otherwise, is, insofar as it is lawful to do so, hereby excluded. 

  

	13.5	 Compliance with Law. Each Party covenants to the other that it
will comply with all applicable laws as amended, in carrying out its obligations pursuant to this Agreement. Each Party covenants to the other that it and any sub-contractor appointed by it currently holds or
at the relevant time will hold any and all consents, approvals, orders or authorizations necessary to comply with its obligations under this Agreement. 

  

	13.6	 Compliance with Anti-Corruption Laws. Without limiting Section 13.5, neither Party shall perform
any actions in exercising rights or complying with obligations under this Agreement that are prohibited by local and other anti-corruption laws (collectively “Anti-Corruption Laws”) that are applicable to that Party. Without
limiting the foregoing, neither Party shall make any payments, or offer or transfer anything of value, to any government official or government employee, to any political party official or candidate for political office or to any other third party
related to the transaction in a manner that would violate Anti-Corruption Laws. 

  

	13.7	 Disclaimers. 

  

	 	13.7.1	 Without prejudice to CSL’s warranties set out in Sections 13.1 and 13.2, ASLAN acknowledges that CSL
licenses the CSL IP “as is”, that is, without any warranty of any kind, express or implied, including, without limitation, warranty of its accuracy or completeness, of merchantability, fitness for a particular purpose (including but not
limited to manufacture the Product or conduct the Development), commercial value, and without any warranty of any kind, express or implied, of the inexistence of adverse effects, of the safety or other quality, efficiency,

  

					
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stability, characteristics or usefulness of, or merchantability, or fitness for a particular purpose of any Product. 

 

	 	13.7.2	 Without prejudice to ASLAN’s representation and warranties set out in Sections 13.1 and 13.3, CSL
acknowledges that ASLAN provides ASLAN Know How “as is”, that is, without any warranty of any kind, express or implied, including, without limitation, warranty of its accuracy or completeness, of merchantability, fitness for a particular
purpose (including but not limited to manufacture the Product or conduct the Development), commercial value, and without any warranty of any kind, express or implied, of the inexistence of adverse effects, of the safety or other quality, efficiency,
stability, characteristics or usefulness of, or merchantability, or fitness for a particular purpose of any Product. 

  

	14.	 LIABILITY 

  

	14.1	 ASLAN Indemnities. ASLAN shall indemnify, keep indemnified and hold harmless
CSL, its Affiliates and their directors, officers and employees (“CSL Indemnitees”) from and against all Liabilities incurred in connection with any Third Party claim (including claims against CSL made by its licensors
under any CSL Third Party Technology Agreement) arising out of or resulting from: 

  

	 	14.1.1	 breach of any term of this Agreement by ASLAN or its Affiliates, contractors or sub-licensees; 

  

	 	14.1.2	 the negligence, recklessness or wilful misconduct of ASLAN, its Affiliates or its contractors or sub-licensees; 

  

	 	14.1.3	 the Development or Commercialisation of Products by ASLAN or its Affiliates,
sub-licensees or contractors or any end-use of such Products in a manner and for a purpose authorised by any of them, except to the extent that the Liabilities arise out
of or result from, directly or indirectly, breach of any term of this Agreement, negligence, or wilful misconduct of any CSL Indemnitees. 

  

	14.2	 CSL Indemnities. CSL shall indemnify, keep indemnified and hold harmless ASLAN
and its Affiliates, directors, officers and employees (“ASLAN Indemnitees”) from and against all Liabilities incurred in connection with any Third Party claim arising out of or resulting from: 

 

	 	14.2.1	 breach of [...***...] term of this Agreement by CSL or its Affiliates, contractors or sub-licensees; 

  

	 	14.2.2	 the negligence, recklessness or wilful misconduct of CSL or its Affiliates or contractors in the performance
of its obligations under this Agreement, except to the extent that the Liabilities arise out of or result from, directly or indirectly, breach of [...***...] term of this Agreement, negligence, or wilful misconduct of any ASLAN Indemnitees.

  

	14.3	 It is a condition of indemnification under this Agreement that: 

  

					
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	 	14.3.1	 the indemnified Party gives written notice to the indemnifying Party of the Claim in respect of which
indemnification is sought promptly on becoming aware of it and does not at any time admit liability or otherwise attempt to settle or compromise such Claim without the indemnifying Party’s prior written consent; 

 

	 	14.3.2	 the indemnifying Party shall, at its cost, have sole conduct of the defence or compromise of any such Claim
and as between the indemnifying Party and the indemnified Party shall have the sole right to any costs and damages awarded as a result of any such Claim; and 

 

	 	14.3.3	 the indemnified Party provides the indemnifying Party such assistance and
co-operation as it shall reasonably require, at the indemnifying Party’s reasonable cost, in respect of the conduct of such defence or compromise. 

 

	 	14.4	 Insurance. During the Term and for a period of at least [...***...] after the last commercial sale of
a Product, ASLAN will at no cost to CSL maintain in full force and effect with a reputable and solvent insurer (being an insurer with Standard & Poors financial rating of not less than
‘A-‘), insurance, including product liability insurance and clinical trial insurance, on a claims-made basis, with levels of adequate coverage to meet ASLAN’s obligations and potential
liabilities under this Agreement from time to time, and ASLAN undertakes to regularly review and if necessary adjust its level of insurance cover as such obligations increase or change. Without limiting the foregoing, the parties agree that ASLAN
will obtain and maintain the insurance with coverage limits of not less than the greater of (i) $[...***...] per occurrence and an annual aggregate of $[...***...] (and $[...***...] per occurrence and an annual aggregate of
$[...***...] after the initiation of [...***...]) and (ii) an amount which represents the insurance required to conduct Development and Commercialization, as applicable, of Product in the Territory (or applicable part thereof). At
the request of CSL, ASLAN must produce evidence of the currency of the insurance policies referred to in this Section 14.4. 

  

	14.5	 Excluded Liabilities. Subject to this Section 14.5, the Parties agree that
with respect to any claim by one Party against the other arising out of the performance or failure of performance of the other Party under this Agreement, a Party shall be liable to the other Party for direct damages only and shall not be liable for
any indirect or consequential loss or damage whatsoever arising under or in relation to the Agreement (whether arising for breach of contract (including under any indemnity), misrepresentation (whether tortuous or statutory), tort (including
negligence), breach of statutory duty, warranty, strict liability or any other legal theory howsoever arising), even if that Party was aware of the possibility that such loss or damage might be incurred by the other, except as a result of a
Party’s wilful misconduct. Nothing in this Section 14.5 is intended to limit or restrict the rights or obligations of either Party under Sections 14.1 or 14.2 or to limit a Party’s liability in respect of wilful misconduct.

  

	15.	 CONFIDENTIALITY 

  

	15.1	 Confidentiality; Exceptions. In this Agreement, “Confidential
Information” means any information and materials disclosed or made available to one Party by or on behalf of the other Party in connection with this Agreement, whether disclosed in writing, verbally or

  

					
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by any other means and regardless of the date it was disclosed , except to the extent that it can be established by the receiving Party that such Confidential Information: 

 

	 	15.1.1	 is in the lawful knowledge or possession of the receiving Party prior to the time it was disclosed to, or
learned by, the receiving Party; 

  

	 	15.1.2	 is developed independently by the receiving Party by an employee with no knowledge of the disclosure;

  

	 	15.1.3	 was generally available to the public or otherwise part of the public domain at the time of its disclosure
to the receiving Party; 

  

	 	15.1.4	 became generally available to the public or otherwise part of the public domain after its disclosure and
other than through any act or omission of the receiving Party in breach of this Agreement; or 

  

	 	15.1.5	 is disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who
has the lawful power to disclose such information to the receiving Party. 

 Confidential Information shall be deemed to
include the terms of this Agreement. 
  

	15.2	 Authorized Use and Disclosure. Except as expressly provided otherwise in this Agreement or on
receiving the prior written consent of the other Party, each Party: 

  

	 	15.2.1	 must keep the Confidential Information of the other Party confidential; 

 

	 	15.2.2	 must not use any Confidential Information of the other Party except as reasonably necessary in carrying out
its obligations, or exercising its rights, under this Agreement (“Permitted Purpose”); 

  

	 	15.2.3	 may only disclose any Confidential Information of the other Party in accordance with the terms of applicable
[...***...] and as follows: 

  

	 	(i)	 to its Affiliates, directors, employees, permitted sub- licensees, consultants and advisors (and the
directors, employees, consultants and advisors of its Affiliates) (Representatives) to the extent necessary for the Permitted Purpose provided that the Party must ensure that any such Representative complies with the obligations of confidence
and non-use set out in this Agreement 

  

	 	(ii)	 the terms of this Agreement may be disclosed to its legal and financial advisors, who must be bound by
similar obligations of confidentiality as contained in this Agreement; 

  

	 	(iii)	 ASLAN may disclose CSL’s Confidential Information to Third Parties for the purposes of Sub-licensing on a need to know basis, and who must be bound by similar obligations of confidentiality as contained in this Agreement, provided, however, that in relation to any confidentiality obligations which
relate solely to information not subject to obligations of confidence under a CSL Third Party Technology Agreement, ASLAN may 

  

					
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agree for the duration of such obligations to be less than the duration specified in the first sentence of Section 15.3, provided further that such duration must in all cases be at least
[...***...] from the date of disclosure of the relevant information by ASLAN; 

  

	 	(iv)	 with CSL’s prior written consent (not to be unreasonably withheld), ASLAN may disclose CSL’s
Confidential Information to potential investors, or acquirers, on a need to know basis, and who must be bound by similar obligations of confidentiality as contained in this Agreement; 

 

	 	(v)	 ASLAN may disclose CSL IP to the extent such disclosure is reasonably necessary in filing or prosecuting
patent, copyright and trademark applications, prosecuting or defending litigation, complying with applicable governmental regulations, conducting preclinical or clinical trials; 

 

	 	15.2.4	 either Party may disclose Confidential Information of the other Party to the extent necessary to comply with
any applicable law, regulation or rules of any stock exchange, provided, however, that if a Party is required by law or regulation to make any such disclosure of the other Party’s Confidential Information it will, except where impracticable for
necessary disclosures, give reasonable advance notice to the other Party of such disclosure requirement and will use its reasonable efforts to avoid or minimise the extent of the disclosure and co-operate with
the other Party to preserve the confidentiality of the information being disclosed; or 

  

	 	15.2.5	 CSL may disclose Confidential Information as required to comply with the CSL Third Party Technology
Agreements. 

  

	15.3	 Term of confidentiality. The obligations of confidentiality set
out in this Section 15 apply from the Effective Date until [...***...] after the expiration or termination of this Agreement. In the case of information subject to obligations of confidence under a CSL Third Party Technology Agreement,
such information shall be treated as confidential in accordance with the terms of the relevant CSL Third Party Technology Agreement. 

  

	15.4	 Specific enforcement. Each Party acknowledges that: 

 

	 	15.4.1	 the value of the other Party’s Confidential Information, which includes any jointly owned Confidential
Information, is unique and difficult to assess in monetary terms; 

  

	 	15.4.2	 a breach by it of any of its obligations of confidentiality under this Agreement may irreparably harm the
Party disclosing such Confidential Information, and damages may not be an adequate remedy for any such breach; and 

  

	 	15.4.3	 therefore, if it actually breaches or threatens to breach the confidentiality obligations set forth in this
Agreement, the Party whose Confidential Information is the subject of such breach, or who is affected by such breach, may seek to enforce this Agreement by way of injunctive relief or specific performance as a remedy (in addition to any other
available relief) without proof of actual or special damage. 

  

					
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	15.5	 Publications. 

  

	 	15.5.1	 Each Party shall submit any proposed publication in a scientific journal and for the purpose of patent
applications (“Scientific Publication”) containing Confidential Information to the other Party at least [...***...] in advance to allow that Party to review such planned public disclosure. The reviewing Party will promptly
review such proposed Scientific Publication and make any objections that it may have to the publication of Confidential Information of the reviewing Party contained therein. Should the reviewing Party make an objection to the publication of any such
Confidential Information, then the other Party shall not be permitted to publish the reviewing Party’s Confidential Information and the Parties shall discuss the advantages and disadvantages of publishing such Confidential Information. Nothing
in this Section shall permit ASLAN to disclose Confidential Information which is subject to obligations of confidentiality under the Third Party Technology Agreement, except with CSL’s written consent. CSL and ASLAN will, from time to time, and
at the request of the other Party, discuss and agree on the general information content relating to this Agreement which may otherwise be publically disclosed. 

 

	15.6	 Application of Agreement to Confidential Information already disclosed. Without limiting the
operation of this Agreement, this Agreement applies to all Confidential Information whether or not any Confidential Information of a Party was disclosed to or accessed by the other Party before the Effective Date, and applies to information
disclosed pursuant to the Confidentiality Agreements dated 14 October 2011 and 6 September 2012. 

  

	16.	 TERM AND TERMINATION 

 

	16.1	 Term. This Agreement shall become effective as of the Effective Date and, unless earlier terminated
or adjusted under this Agreement, shall continue in full force and effect until the last to occur, in the relevant country, on a country-by-country and Product-by-Product basis, of: (a) expiry of the last valid CSL patent (including after extension), (b) [...***...] from first commercial sale of Products or
(c) lapse of regulatory, data, or market exclusivity for such Product in such country (or region to which the country is a member state) (“Term”). 

 

	16.2	 Termination For Breach. Either Party may terminate this Agreement in the event the other Party shall
have breached or defaulted in the performance of any of its material obligations hereunder, and such default shall have continued for [...***...] after written notice thereof was provided to the breaching Party by the non-breaching Party. Any termination shall become effective at the end of such [...***...] period unless the breaching Party (or any other Party on its behalf) has cured any such breach or default prior to the
expiration of the [...***...] period. In addition, CSL may immediately terminate this Agreement by notice in writing to ASLAN if there is an Event of Default (as defined under the Loan Agreement) or CSL Finance Pty Ltd otherwise becomes
entitled to terminate the Loan Agreement by reason of ASLAN’s default of such agreement. 

  

	16.3	 Either Party Notice. Either Party may terminate the Agreement at
any time in the event of a Material Safety Risk associated with the Product. 

  

					
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	16.4	 Termination for Lack of Commercial Viability. ASLAN may terminate the Agreement at any time by notice
in writing to CSL in the event that it reasonably considers that continuation of the Development Program or Commercialization of Products is no longer commercially viable. Notwithstanding any other term of this Agreement, if ASLAN terminates the
Agreement pursuant to this Section 16.4, CSL shall not be obliged to pay ASLAN any amount under Section 17.4. 

  

	16.5	 Termination on Insolvency. Either Party may terminate this Agreement by notice, if, at any time, the
other Party (i) suspends payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts or is deemed unable to pay its debts within the meaning of Section 123 of the Insolvency Act 1986; or
(ii) a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of that Party (other than for the sole purpose of a scheme for a solvent amalgamation of that Party with one or
more other companies or the solvent reorganisation of that Party); or (iii) an application is made to court, or an order is made, for the appointment of an administrator, or if an administrator is appointed over that Party; or (iv) a
receiver is appointed over all or any of the assets of that Party; or (v) a creditor or encumbrancer of that Party attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued
against, the whole or any part of the assets of that Party and such attachment or process is not discharged within [...***...]; or (vii) any similar insolvency event to any of the foregoing occurs in any jurisdiction; or (viii) that
Party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business. 

  

	17.	 EFFECT OF TERMINATION. 

 

	17.1	 Accrued Rights, Surviving Obligations. Termination
or expiration of the Agreement for any reason shall be without prejudice to any obligations which shall have accrued prior to such termination or expiration, including, without limitation, any and all damages arising from any breach hereunder.

  

	17.2	 Provisions upon early termination. Subject to
Section 17.2.5, upon any early termination of this Agreement as provided above, all rights granted by CSL under this Agreement with respect to the terminated territory will immediately revert to CSL and ASLAN undertakes: 

 

	 	17.2.1	 To the extent necessary to enable CSL, either itself or via a third party. to continue to make use of,
Develop and/or Commercialize (as applicable) any Products, upon termination: 

  

	 	(i)	 will provide to CSL all samples or Products, CSL 334 and related compounds under its possession or control
in return for the reimbursement to ASLAN of its actual costs incurred in manufacturing or obtaining such samples or Products; 

  

	 	(ii)	 will grant CSL and its Affiliates and Sub-licensees a worldwide,
royalty free (subject to Section 17.4), perpetual, exclusive, sub-licensable license to the Development IP and ASLAN’s rights in the Joint IP to enable CSL (or its nominated third party) to fully
control the Development and Commercialisation of the Products; 

  

					
	40	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

	 	(iii)	 an assignment or sub-licence (at CSL’s option) of its rights
under the Selexis Agreement to the extent they relate to CSL 334 or Product; and 

  

	 	(iv)	 transfer to CSL (or its nominated third party) at CSL’s cost any and all related rights ASLAN has in
any Regulatory Approvals and Marketing Authorizations or any other rights or permissions granted by any regulatory authority to ASLAN in respect of the Product, together with all other development, clinical and commercialization data, information
and reports and regulatory filings or other similar materials relating to the Products necessary to enable CSL to fully control Development and Commercialisation of the Products upon termination, together with rights of reference with respect to
such data and filings. In the event said transfers are not permitted under the laws of the such country or countries of the Territory, ASLAN shall renounce all such approvals and/or authorizations obtained in its own name and shall deliver to CSL,
within [...***...] from the date of termination of this Agreement, all documents and matters relating to it and which were used to obtain the approvals and/or authorizations for conducting the Development or the Commercialization of the
Product. Additionally, unless otherwise agreed by the Parties on a case by case basis, the termination of this Agreement shall entail the termination of all the agreements entered into by ASLAN for the grant of rights to Licensed Technology;

 provided that the above undertakings are given to the extent they are not contrary to the terms of any relevant
agreement with Third Parties. In such circumstances ASLAN will, at CSL’s option, either sub-licence or use reasonable efforts to negotiate a grant of the rights set out above (or as close as it is
reasonably able) in favour of CSL, its Affiliates and/or Sub-licensees, as applicable; 
  

	 	17.2.2	 to cease with the Development and Commercialisation and with any negotiation or discussions entered with
Third Parties with the purpose of granting rights to CSL IP and/or Joint IP; and 

  

	 	17.2.3	 to return or destroy (at CSL’s election) any of CSL’s Confidential Information or Product in the
possession or control of ASLAN; and 

  

	 	17.2.4	 to grant rights to CSL to any ASLAN IP to the extent not already licensed under Section 17.2.1(ii) and
Controlled by ASLAN, subject to CSL agreeing to meet any amounts payable to Third Party licensors of such Intellectual Property; 

The undertakings in Section 17.2.1 and 17.2.4 above shall not apply in the event of early termination by ASLAN under
Sections 16.2 and 16.5. 
  

	 	17.2.5	 Upon any early termination of this Agreement as provided above, CSL undertakes, if requested by ASLAN in
writing, to adhere to obligations for the licence it grants to ASLAN under this Agreement to the extent such obligations form a component of a Sub-licence granted by ASLAN to a third party in accordance with
the terms of this Agreement, subject to such Sub-licensee accepting the same or substantially the same obligations to CSL as it had to ASLAN. 

 

	17.3	 If ASLAN Commercialises Products itself or enters into an agreement with a Third Party for the
Commercialisation of Products in accordance with this Agreement, and the Term of 

  

					
	41	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

	 	 
this Agreement expires in its natural course, on a country-by-country, Product-by-Product, basis: 

  

	 	17.3.1	 the rights granted pursuant to Sections 2.1 and 2.2 shall become fully
paid-up and perpetual; and 

  

	 	17.3.2	 the obligations in Section 17.2, shall not apply. 

 

	17.4	 Effect of Certain Terminations. 

 

	 	17.4.1	 Subject to this Section, if this Agreement is terminated after the [...***...] and CSL subsequently
Commercializes Products or grants a Third Party rights to Commercialize Products, then CSL shall pay to ASLAN: 

  

	 	(i)	 if the Agreement is not terminated by ASLAN for a breach of this Agreement by CSL, either (i) if CSL
Commercializes Products itself, a royalty on the net sales of such Products worldwide at a rate of [...***...] percent ([...***...]%), or 

  

	 	(ii)	 if CSL grants a Third Party rights to Commercialize Products, [...***...] percent ([...***...]%)
of all licensing revenues received but excluding any portion of such revenues which is payable under the CSL Third Party Technology Agreements; or 

  

	 	(iii)	 if the Agreement is terminated by ASLAN for a breach of this Agreement by CSL, either (i) if CSL
Commercializes Products itself, a royalty on the net sales of such Products worldwide at a rate of [...***...] percent ([...***...]%), and [...***...] percent ([...***...]%) if such termination takes place after
[...***...], or (ii) if CSL grants a Third Party rights to Commercialize Products, [...***...] percent ([...***...]%), and [...***...] percent ([...***...]%) if such termination takes place after [...***...],
of all licensing revenues received but excluding any portion of such revenues which would be payable under the CSL Third Party Technology Agreements. 

  

	 	17.4.2	 If this Agreement is terminated before the [...***...] and such termination is for breach of this
Agreement by CSL, and CSL subsequently Commercializes Products or grants a Third Party rights to Commercialize Products, then CSL shall pay to ASLAN either (i) if CSL Commercializes Products itself, a royalty on the net sales of such Products
worldwide at a rate of [...***...] percent ([...***...]%), or (ii) if CSL grants a Third Party rights to Commercialize Products, [...***...] percent ([...***...]%) of all licensing revenues received but excluding any
portion of such revenues which is payable under the CSL Third Party Technology Agreements. 

  

	 	17.4.3	 If this Agreement is terminated due to the insolvency of CSL, CSL shall assign its interest in the CSL
Patents, CSL Know-How and Joint IP to ASLAN. 

  

					
	42	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

	17.5	 Survival. Sections 2.3, 2.4, 8.1, 8.2.1, 9, 10, 12.1 - 12.7 inclusive, 13, 14, 15, 16, 17, 18.1, 18.3,
18.4, 18.5, 18.6, 18.8, 18.12 and 18.15 inclusive shall survive the expiration and any termination of this Agreement. 

  

	18.	 GENERAL 

  

	18.1	 Publicity. Any press release concerning the terms of this Agreement shall require prior written
agreement of the other Party, not to be unreasonably withheld or delayed. The reviewing party may only request amendments to the substantive points of a press release (to be determined reasonably from the perspective of the reviewing party). If
[...***...] has passed from notification of the proposed announcement without a response, the other Party shall be deemed to have agreed; thereafter, ASLAN and CSL may each disclose to Third Parties the information contained in such agreed
press release without the need for further approval by the other. 

  

	18.2	 Assignment. This Agreement shall not be assignable by either Party to any Third Party hereto without
the written consent of the other Party hereto, not to be unreasonably withheld or delayed. If any permitted assignment would result in withholding or other similar taxes becoming due on payments from the assigning Party to the other Party under this
Agreement, the assigning Party shall be responsible for all such taxes resulting from such assignment, and the amount of such taxes shall not be withheld or otherwise deducted from any amounts payable to other Party. No assignment and transfer shall
be valid and effective unless and until the assignee/transferee agrees in writing to be bound by the provisions of this Agreement. The terms and conditions shall be binding on and inure to the benefit of the permitted successors and assigns of the
Parties. 

  

	18.3	 Further Assurances. Each party must, at its own expense, whenever reasonably requested by the other,
promptly do or arrange for others to do everything reasonably necessary to give full effect to this Agreement, including the execution of documents.  

  

	18.4	 Withholding Tax and VAT: 

 

	 	18.4.1	 Save as expressly permitted under this Section 18.4, all payments to CSL under this Agreement must be
made: 

  

	 	(i)	 free and clear of, and without any deduction or withholding for or on account of, any present or future
withholding tax, including any interest or penalties in relation to such tax, imposed or levied by or on behalf of any jurisdiction or by any governmental authority (“Withholding Taxes”); and 

 

	 	(ii)	 without set-off, counterclaim or deduction, whether on account of
any stamp duty or other tax levied or payable on any person in respect of this Agreement. 

  

	 	18.4.2	 If ASLAN is at any time required by any law or regulation to make any deduction or withholding from any
payment any amount for, or in respect of, Withholding Taxes, then ASLAN may deduct such amount from the payment otherwise due. 

  

					
	43	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 ASLAN must send to CSL proof of any such taxes, duties or other levies
withheld and paid by it for the benefit of CSL, and shall provide reasonable assistance to, and at CSL’s cost, in seeking relief from any such taxes or other levies to the extent legally permissible. 

 

	 	18.4.3	 If a goods and services tax, value added tax or similar tax applies to any supply of products or services
made by CSL under or in connection with this Agreement, CSL may, to the extent that the consideration otherwise provided for that supply is not stated to include an amount in respect of that tax on the supply, increase the consideration otherwise
provided for that supply by the amount of that tax or otherwise recover from ASLAN the amount of that tax. CSL must provide appropriate invoices, other documentation and information and do all things necessary so that a claim can be made for any
input tax credit, set off, rebate or refund for or in relation to any tax included in any payment under or in connection with this Agreement. 

  

	18.5	 Stamp duty. All stamp duty (including fines, penalties and interest) that may be
payable on or in connection with this Agreement and any instrument executed under this Agreement shall be borne [...***...] 

  

	18.6	 Interest. Where CSL does not receive payment of any sum required on or before the day on which
such payment is due, ASLAN shall pay CSL interest on the past due amount as follows: interest shall accrue thereafter on the sum due and owing to CSL at the lesser of [...***...] over the [...***...] for a [...***...] on the
[...***...] of the [...***...], or the maximum amount allowed by law, with interest to accrue on a day to day basis without prejudice to CSL’s right to receive payment on the due date. 

 

	18.7	 Change of Control: 

 

	 	18.7.1	 ASLAN must notify CSL as soon as it is aware that a Change in Control Event, other than for a corporate
restructure within ASLAN’s group, has occurred or if possible, will occur. 

  

	 	18.7.2	 ASLAN must obtain CSL’s prior written consent (not to be unreasonably withheld or delayed) in respect
of a Change in Control Event if it will, or in CSL’s reasonable opinion there is a reasonable likelihood that may, have adverse consequences on the execution of the Development, Commercialisation of Products or CSL’s reputation.

  

	18.8	 Notices. All notices, requests and communications hereunder shall be in writing and shall be
personally delivered or sent by facsimile transmission (confirmed by prepaid registered or certified mail, return receipt requested or by international express delivery service) mailed by registered or certified mail (return receipt requested),
postage prepaid, or sent by international express courier service, and shall be deemed to have been properly served to the addressee upon receipt of such written communication, to following addresses of the Parties, or such other address as may be
specified in writing to the other Party hereto: 

 If to CSL, 

  

					
	44	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 addressed to:    CSL Limited 

45 Poplar Rd, Parkville Victoria 3052, Australia 

Attention:            Executive Director Alliance Management 

Strategy and Business Development 

Fax: +613 9388 2063 

with copy to:    Company Secretary 

CSL Limited 

45 Poplar Rd, Parkville Victoria 3052, Australia  

Attention: Company Secretary Fax: +613 9387 8454 

If to ASLAN, 

addressed to:    ASLAN Pharmaceuticals Pte Ltd 

83 Clemenceau Avenue, #12-03 

UE Square, Singapore 239920 

Attention: General Counsel 

Telephone: +65 6222 4235 

Telecopy: +65 6225 2419 

With copy to:    ASLAN Pharmaceuticals Pte Ltd 

83 Clemenceau Avenue, #12-03 

UE Square, Singapore 239920 

Attention: Chief Executive Officer 

Telephone: +65 6222 4235 

Telecopy: +65 6225 2419 
  

	18.9	 Waiver. Neither Party may waive or release any of its rights or interests in this Agreement except in
writing. The failure or delay in either Party asserting a right hereunder or insisting upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any
such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term. 

 

	18.10	 Severability. If any provision hereof should be held invalid, illegal or unenforceable in any
jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the intentions of the Parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such
provision in any other jurisdiction. 

  

	18.11	 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument. 

  

	18.12	 Entire Agreement. This Agreement constitutes the entire agreement between the
Parties regarding its subject matter and supersedes and replaces any and all prior agreements, understandings or arrangements between the Parties, whether oral or in writing, with respect to the same. No representation, undertaking or promise shall
be taken to have been given 

  

					
	45	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

	 	 
or be implied from anything said or written in negotiations between the Parties prior to this Agreement except as expressly stated in this Agreement. 

 

	18.13	 Independent Contractors. Nothing herein shall be construed to create any
relationship of employer and employee, agent and principal, partnership or joint venture between the Parties. Each Party is an independent contractor. Neither Party shall assume, either directly or indirectly, any liability of or for the other
Party. Neither Party shall have the authority to bind or obligate the other Party, and neither Party shall represent that it has such authority. 

  

	18.14	 Amendments. This Agreement may only be amended in writing, signed by each Party.

  

	18.15	 Governing Law. This Agreement and any dispute arising from the performance or
breach hereof shall be governed by and construed and enforced in accordance with, the laws of England, without reference to conflicts of laws principles. The Parties expressly exclude application of the United Nations Convention for the
International Sale of Goods. 

  

	18.16	 Expert Determination. Any matter which is to be referred for expert
determination under this Agreement shall be submitted to an independent, mutually agreeable expert in accordance with, and subject to, [...***...]. If no agreement can be reached as to the identity of the expert, the expert shall be nominated
by [...***...]. 

  

	18.17	 Dispute Resolution. 

 

	 	18.17.1	 Internal Resolution. Except as otherwise expressly provided herein, in the event
of any controversy, claim or other dispute arising out of or relating to any provision of this Agreement or the interpretation, enforceability, performance, breach, termination or validity hereof (a “Dispute”), such Dispute shall be
first referred to the [...***...] of each Party or the person that each of them may delegate (such delegate being a [...***...]), for resolution, prior to proceeding under the following provisions of this Section 18.17.1. A Dispute
shall be referred to such [...***...] upon any Party providing the other Party with written notice that such Dispute exists, and such [...***...], or their designees, shall attempt to resolve such Dispute through good faith discussions.

  

	 	18.17.2	 Arbitration. If the [...***...] of each Party or their delegates are unable to reach an
agreement on any such Dispute within [...***...] of service of a notice under Section 18.17.1, then the Dispute shall be finally settled under the [...***...] conducted in London by [...***...] appointed in accordance with
such Rules. 

  

	18.18	 GST. 

  

	 	18.18.1	 All payments to CSL under the terms of this Agreement are expressed exclusive of GST, or their equivalent,
howsoever arising, and [...***...] or their equivalent, payable on or in respect of any moneys or other consideration payable to CSL on any supply made by CSL under or in respect of this Agreement at the same time as the payment in question,
or (if not previously made) at any time on demand made by CSL. 

  

					
	46	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

	 	18.18.2	 Within [...***...] of receipt of a request from ASLAN, CSL must issue a Tax Invoice in respect of any
payments due from ASLAN. 

  

	 	18.18.3	 If GST is payable on any other Taxable Supply made under or in connection with this Agreement, the party
providing the Consideration for that Taxable Supply must also pay the GST Amount as additional Consideration. This Section does not apply to the extent that the Consideration for the Taxable Supply is expressly stated to be GST inclusive.

  

	 	18.18.4	 Any reference in the calculation of Consideration or of any indemnity, reimbursement or similar amount to a
cost, expense or other liability incurred by a party, must exclude the amount of any Input Tax Credit entitlement of that party in relation to the relevant cost, expense or other liability. 

  

					
	47	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly
authorized representatives as of the date and year first above written. 
 Each person executing this Agreement on behalf of a Party represents and warrants
his / her capacity and authority to do so. 
  

			
	 CSL Limited
	  	 ASLAN Pharmaceuticals Pte Ltd

		
	By:                                     
                                         
      	  	By:                                     
                                         
      
		
	Name:                                     
                                         
  	  	Name:                                     
                                         
  
		
	Title:                                     
                                         
   	  	Title:                                     
                                         
   
		
	Date:                                     
                                         
   	  	Date:                                     
                                         
   
		
	 CSL Limited
	  	
		
	By:                                 
                                         
          	  	
		
	Name:                                
                                         
       	  	
		
	Title:                                
                                         
        	  	
		
	Date:                                
                                         
        	  	

  

					
	48	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 SCHEDULE 1 

MASTER PLAN 

[...***...] 

  

					
	49	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 [...***...] 

  

					
	50	 	  	  	Deed of Amendment and Restatement

 Schedule 2 

Product – 
 CSL334 

[...***...] 

  

					
	    	 	  	  	Deed of Amendment and Restatement

 Schedule 3 CSL Patents 

[...***...] 
  

											
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 	 	 	 	 	 	 	 	 	 
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 		 		 		 		 	 
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 		 		 		 		 	 
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 	 	 	 	 	 	 	 	 	 
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 	 	 	 	 	 	 	 	 	 
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 	 	 	 	 	 	 	 	 	 
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 	 	 	 	 	 	 	 	 	 
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 	 	 	 	 	 	 	 	 	 
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 	 	 	 	 	 	 	 	 	 
	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	 	 	 	 	 	 	 	 	 	 	 

  

	 	1.	 [...***...] 

 

	 	2.	 [...***...] 

 

	 	3.	 [...***...] 

 

	 	4.	 [...***...] 

 

	 	5.	 [...***...] 

 

	 	6.	 [...***...] 

 

	 	7.	 [...***...] 

  

					
	    	 	  	  	Deed of Amendment and Restatement

 License Agreement 
  

 Schedule 4 Jointly Owned Patents 

 

													
	Client Ref	  	 Filing

date
	  	App. No	  	Country	  	Status	  	Exp.	  	Subject
Matter
	 [...***...]
	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	 [...***...]
	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	 [...***...]
	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]

  

					
	53	 	  	  	Deed of Amendment and RestatementExhibit 10.1

 

FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

PRIAM OFFICE PROPERTIES OP LP
 (a Delaware limited partnership)

 

 

TABLE OF CONTENTS

 

	
ARTICLE I
    	
DEFINED TERMS
    	
1
    
	
ARTICLE II
    	
FORMATION OF THE   PARTNERSHIP
    	
11
    
	
2.01
    	
Formation of the   Partnership
    	
11
    
	
2.02
    	
Name
    	
11
    
	
2.03
    	
Registered Office and   Agent; Principal Office
    	
11
    
	
2.04
    	
Term and Dissolution
    	
11
    
	
2.05
    	
Filing of Certificate   and Perfection of Limited Partnership
    	
12
    
	
2.06
    	
Certificates Describing   Partnership Units
    	
12
    
	
ARTICLE III
    	
BUSINESS OF THE   PARTNERSHIP
    	
13
    
	
ARTICLE IV
    	
CAPITAL CONTRIBUTIONS   AND ACCOUNTS
    	
13
    
	
4.01
    	
Capital Contributions
    	
13
    
	
4.02
    	
Additional Capital   Contributions and Issuances of Additional Partnership Units
    	
13
    
	
4.03
    	
Additional Funding
    	
16
    
	
4.04
    	
LTIP Units
    	
16
    
	
4.05
    	
Conversion of LTIP   Units
    	
19
    
	
4.06
    	
5% Series A   Preferred Units
    	
22
    
	
4.07
    	
Capital Accounts
    	
22
    
	
4.08
    	
Percentage Interests
    	
22
    
	
4.09
    	
No Interest on   Contributions
    	
23
    
	
4.10
    	
Return of Capital   Contributions
    	
23
    
	
4.11
    	
No Third-Party   Beneficiary
    	
23
    
	
ARTICLE V
    	
PROFITS AND LOSSES;   DISTRIBUTIONS
    	
23
    
	
5.01
    	
Allocation of Profit   and Loss
    	
23
    
	
5.02
    	
Distribution of Cash
    	
27
    
	
5.03
    	
REIT Distribution   Requirements
    	
29
    
	
5.04
    	
No Right to Distributions   in Kind
    	
29
    
	
5.05
    	
Limitations on Return   of Capital Contributions
    	
29
    
	
5.06
    	
Distributions Upon   Liquidation
    	
29
    
	
5.07
    	
Substantial Economic   Effect
    	
30
    
	
ARTICLE VI
    	
RIGHTS, OBLIGATIONS AND   POWERS OF THE GENERAL PARTNER
    	
30
    
	
6.01
    	
Management of the Partnership
    	
30
    
	
6.02
    	
Delegation of Authority
    	
32
    
	
6.03
    	
Indemnification and   Exculpation of Indemnitees
    	
32
    
	
6.04
    	
Liability of the   General Partner
    	
34
    
	
6.05
    	
Partnership Obligations
    	
35
    
	
6.06
    	
Outside Activities
    	
35
    
	
6.07
    	
Employment or Retention   of Affiliates
    	
35
    
	
6.08
    	
General Partner   Activities
    	
36
    
	
6.09
    	
Title to Partnership   Assets
    	
36
    
	
ARTICLE VII
    	
CHANGES IN GENERAL   PARTNER
    	
36
    
	
7.01
    	
Transfer of the General   Partner’s Partnership Interest
    	
36
    
	
7.02
    	
Admission of a   Substitute or Additional General Partner
    	
39
    
	
7.03
    	
Effect of Bankruptcy,   Withdrawal, Death or Dissolution of General Partner
    	
39
    

 

i

 

	
7.04
    	
Removal of General   Partner
    	
40
    
	
ARTICLE VIII
    	
RIGHTS AND OBLIGATIONS   OF THE LIMITED PARTNERS
    	
41
    
	
8.01
    	
Management of the   Partnership
    	
41
    
	
8.02
    	
Power of Attorney
    	
41
    
	
8.03
    	
Limitation on Liability   of Limited Partners
    	
41
    
	
8.04
    	
Common Unit Redemption   Right
    	
41
    
	
8.05
    	
Registration
    	
44
    
	
ARTICLE IX
    	
TRANSFERS OF   PARTNERSHIP INTERESTS
    	
48
    
	
9.01
    	
Purchase for Investment
    	
48
    
	
9.02
    	
Restrictions on   Transfer of Partnership Units
    	
48
    
	
9.03
    	
Admission of Substitute   Limited Partner
    	
49
    
	
9.04
    	
Rights of Assignees of   Partnership Units
    	
50
    
	
9.05
    	
Effect of Bankruptcy,   Death, Incompetence or Termination of a Limited Partner
    	
50
    
	
9.06
    	
Joint Ownership of   Partnership Units
    	
51
    
	
ARTICLE X
    	
BOOKS AND RECORDS;   ACCOUNTING; TAX MATTERS
    	
51
    
	
10.01
    	
Books and Records
    	
51
    
	
10.02
    	
Custody of Partnership   Funds; Bank Accounts
    	
51
    
	
10.03
    	
Fiscal and Taxable Year
    	
52
    
	
10.04
    	
Annual Tax Information   and Report
    	
52
    
	
10.05
    	
Partnership   Representative; Tax Elections; Special Basis Adjustments
    	
52
    
	
ARTICLE XI
    	
AMENDMENT OF AGREEMENT;   MERGER
    	
53
    
	
11.01
    	
Amendment of Agreement
    	
53
    
	
11.02
    	
Merger of Partnership
    	
54
    
	
ARTICLE XII
    	
GENERAL PROVISIONS
    	
54
    
	
12.01
    	
Notices
    	
54
    
	
12.02
    	
Survival of Rights
    	
55
    
	
12.03
    	
Additional Documents
    	
55
    
	
12.04
    	
Severability
    	
55
    
	
12.05
    	
Entire Agreement
    	
55
    
	
12.06
    	
Pronouns and Plurals
    	
55
    
	
12.07
    	
Headings
    	
55
    
	
12.08
    	
Counterparts
    	
55
    
	
12.09
    	
Governing Law
    	
55
    

 

ii

 

ANNEXES

 

ANNEX A—Designation of the 5% Series A Preferred Units

 

EXHIBITS

 

EXHIBIT A—Partners, Capital Contributions and Percentage Interests

 

EXHIBIT B—Notice of Exercise of Common Unit Redemption Right

 

EXHIBIT C-1—Certification of Non-Foreign Status (For Redeeming Limited Partners That Are Entities)

 

EXHIBIT C-2—Certification of Non-Foreign Status (For Redeeming Limited Partners That Are Individuals)

 

EXHIBIT D—Notice of Election by Partner to Convert LTIP Units into Common Units

 

EXHIBIT E—Notice of Election by Partnership to Force Conversion of LTIP Units into Common Units

 

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FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
 OF
 PRIAM OFFICE PROPERTIES OP LP
 RECITALS

 

Priam Office Properties OP LP (the “Partnership”) was formed as a limited partnership under the laws of the State of Delaware, pursuant to a Certificate of Limited Partnership filed with the Secretary of State of the State of Delaware effective as of July 5, 2018 and an Agreement of Limited Partnership entered into as of July 5, 2018 (the “Original Agreement”), by and between Priam Properties Inc., a Maryland corporation (“Priam REIT” or the “General Partner”), and Abhishek Mathur (the “Original Limited Partner”).  This First Amended and Restated Agreement of Limited Partnership is entered into this [•] day of [•], 2019 among the General Partner and the Limited Partners set forth on Exhibit A hereto, for the purpose of amending and restating the Agreement of Limited Partnership.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing, of mutual covenants between the parties hereto, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend and restate the Original Agreement to read in its entirety as follows:

 

ARTICLE I

 

DEFINED TERMS

 

The following defined terms used in this Agreement shall have the meanings specified below:

 

“5% Series A Preferred Unit” means a Partnership Unit which is designated as a preferred Partnership Interest and which has the rights, preferences and other privileges designated in Section 4.06 hereof and Annex A attached hereto.  The allocation of 5% Series A Preferred Units among the Partners shall be set forth on Exhibit A attached hereto as it may be amended or restated from time to time.

 

“Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from time to time.

 

“Additional Funds” has the meaning set forth in Section 4.03 hereof.

 

“Additional Securities” means any:  (1) shares of capital stock of the General Partner now or hereafter authorized or reclassified that have dividend rights, or rights upon liquidation, winding up and dissolution, that are superior or prior to the REIT Shares (“Preferred Shares”), (2) REIT Shares, (3) shares of capital stock of Priam REIT now or hereafter authorized or reclassified that have dividend rights, or rights upon liquidation, winding up and dissolution, that are junior in rank to the REIT Shares (“Junior Shares”) and (4) (i) rights, options, warrants or convertible or exchangeable securities having the right to subscribe for or purchase REIT Shares, Preferred Shares or Junior Shares, or (ii) indebtedness issued by Priam REIT that provides any of the rights

 

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described in clause (4)(i) of this definition (any such securities referred to in clause (4)(i) or (ii) of this definition, “New Securities”).

 

“Adjustment Events” has the meaning set forth in Section 4.04(a)(i) hereof.

 

“Administrative Expenses” means (i) all administrative and operating costs and expenses incurred by the Partnership, (ii) administrative costs and expenses of the General Partner, including any salaries or other payments to directors, officers or employees of the General Partner, and any accounting and legal expenses of the General Partner, which expenses, the Partners hereby agree are expenses of the Partnership and not the General Partner, and (iii) to the extent not included in clauses (i) or (ii) above, REIT Expenses; provided, however, that Administrative Expenses shall not include any administrative costs and expenses incurred by the General Partner that are attributable to Properties or interests in a Subsidiary that are owned by the General Partner other than through its ownership interest in the Partnership.

 

“Affiliate” means, (i) any Person that, directly or indirectly, controls or is controlled by or is under common control with such Person, (ii) any other Person that owns, beneficially, directly or indirectly, 10% or more of the outstanding capital stock, shares or equity interests of such Person, or (iii) any officer, director, employee, partner, member, manager or trustee of such Person or any Person controlling, controlled by or under common control with such Person.  For the purposes of this definition, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities or partnership interests, contract or otherwise.

 

“Agreed Value” means the fair market value of a Partner’s non-cash Capital Contribution as of the date of contribution as agreed to by such Partner and the General Partner.  The names and addresses of the Partners, number of Partnership Units issued to each Partner, and the Agreed Value of non-cash Capital Contributions as of the date of contribution is set forth on Exhibit A hereto, as it may be amended or restated from time to time.

 

“Agreement” means this First Amended and Restated Agreement of Limited Partnership, as it may be amended, supplemented or restated from time to time.

 

“Articles” means the Articles of Amendment and Restatement of Priam REIT filed with the State Department and Assessments and Taxation of the State of Maryland, as amended, supplemented or restated from time to time.

 

“Board of Directors” means the Board of Directors of Priam REIT.

 

“Capital Account” has the meaning set forth in Section 4.07 hereof.

 

“Capital Account Limitation” has the meaning set forth in Section 4.05(b) hereof.

 

“Capital Contribution” means the total amount of cash, cash equivalents, and the Agreed Value of any Property or other asset contributed or agreed to be contributed, as the context requires, to the Partnership by each Partner pursuant to the terms of the Agreement.  Any reference

 

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to the Capital Contribution of a Partner shall include the Capital Contribution made by a predecessor holder of the Partnership Interest of such Partner.

 

“Cash Amount” means an amount of cash per Common Unit equal to the Value of the REIT Shares Amount on the Specified Redemption Date.

 

“Certificate” means any instrument or document that is required under the laws of the State of Delaware, or any other jurisdiction in which the Partnership conducts business, to be signed and sworn to by the Partners of the Partnership (either by themselves or pursuant to the power-of-attorney granted to the General Partner in Section 8.02 hereof) and filed for recording in the appropriate public offices within the State of Delaware or such other jurisdiction to perfect or maintain the Partnership as a limited partnership, to effect the admission, withdrawal or substitution of any Partner of the Partnership, or to protect the limited liability of the Limited Partners as limited partners under the laws of the State of Delaware or such other jurisdiction.

 

“Change of Control” means, as to the General Partner, the occurrence of any of the following:  (i) the sale, lease or transfer, in one or a series of related transactions, of 80% or more of the assets of the General Partner, taken as a whole, to any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than an Affiliate of the General Partner; or (ii) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than an Affiliate of the General Partner in a single transaction or in a related series of transactions, by way of merger, share exchange, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of more than 50% of the total voting power of the voting capital stock of the General Partner.

 

“Code” means the Internal Revenue Code of 1986, as amended, and as hereafter amended from time to time.  Reference to any particular provision of the Code shall mean that provision in the Code at the date hereof and any successor provision of the Code.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Common Partnership Unit Distribution” has the meaning set forth in Section 4.04(a)(ii) hereof.

 

“Common Redemption Amount” means either the Cash Amount or the REIT Shares Amount, as selected by the General Partner pursuant to Section 8.04(b) hereof.

 

“Common Unit” means a Partnership Unit which is designated as a Common Unit of the Partnership.

 

“Common Unit Economic Balance” has the meaning set forth in Section 5.01(g) hereof.

 

“Common Unit Redemption Right” has the meaning set forth in Section 8.04(a) hereof.

 

“Common Unit Transaction” has the meaning set forth in Section 4.05(f) hereof.

 

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“Constituent Person” has the meaning set forth in Section 4.05(f) hereof.

 

“Conversion Date” has the meaning set forth in Section 4.05(b) hereof.

 

“Conversion Factor” means a factor of 1.0, as such factor may be adjusted as provided in this definition and in Section 6.08.  The Conversion Factor will be adjusted in the event that Priam REIT (i) declares or pays a dividend on its outstanding REIT Shares in REIT Shares or makes a distribution to all holders of its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding REIT Shares or (iii) combines its outstanding REIT Shares into a smaller number of REIT Shares.  In each of such events, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of REIT Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time), and the denominator of which shall be the actual number of REIT Shares (determined without the above assumption) issued and outstanding on such record date and, provided further, that in the event that an entity other than an Affiliate of the General Partner shall become general partner of the Partnership pursuant to any merger, consolidation or combination of the General Partner with or into another entity (the “Successor Entity”), the Conversion Factor shall be adjusted by multiplying the Conversion Factor by the number of shares of the Successor Entity into which one REIT Share is converted pursuant to such merger, consolidation or combination, determined as of the date of such merger, consolidation or combination.  Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event.  If, however, the General Partner receives a Notice of Redemption after the record date, if any, but prior to the effective date of such event, the Conversion Factor shall be determined as if the General Partner had received the Notice of Redemption immediately prior to the record date for the event.

 

“Conversion Notice” has the meaning set forth in Section 4.05(b) hereof.

 

“Conversion Right” has the meaning set forth in Section 4.05(a) hereof.

 

“Defaulting Limited Partner” means a Limited Partner that has failed to pay any amount owed to the Partnership under a Partnership Loan within 15 days after demand for payment thereof is made by the Partnership.

 

“Distributable Amount” has the meaning set forth in Section 5.02(d) hereof.

 

“Economic Capital Account Balances” has the meaning set forth in Section 5.01(g) hereof.

 

“Equity Incentive Plan” means any equity incentive or compensation plan hereafter adopted by the Partnership or Priam REIT, including, without limitation, Priam REIT’s 2019 Equity Incentive Plan.

 

“Event of Bankruptcy” as to any Person means (i) the filing of a petition for relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978, as amended, or similar provision of law of any jurisdiction (except if such petition is contested by such Person and has been dismissed within 90 days); (ii) the insolvency or bankruptcy of such Person as finally determined by a court proceeding; (iii) the filing by such Person of a petition or application to

 

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accomplish the same or for the appointment of a receiver or a trustee for such Person or a substantial part of his assets; or (iv) the commencement of any proceedings relating to such Person as a debtor under any other reorganization, arrangement, insolvency, adjustment of debt or liquidation law of any jurisdiction, whether now in existence or hereinafter in effect, either by such Person or by another, provided that if such proceeding is commenced by another, such Person indicates his approval of such proceeding, consents thereto or acquiesces therein, or such proceeding is contested by such Person and has not been finally dismissed within 90 days.

 

“Excepted Holder Limit” has the meaning set forth in the Articles.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Forced Conversion” has the meaning set forth in Section 4.05(c) hereof.

 

“Forced Conversion Notice” has the meaning set forth in Section 4.05(c) hereof.

 

“General Partner” has the meaning set forth in the first paragraph of this Agreement.

 

“General Partner Loan” means a loan extended by the General Partner to a Defaulting Limited Partner in the form of a payment on a Partnership Loan by the General Partner to the Partnership on behalf of the Defaulting Limited Partner.

 

“General Partnership Interest” means the Partnership Interest held by the General Partner in its capacity as the general partner of the Partnership, which Partnership Interest is an interest as a general partner under the Act.  The General Partnership Interest will be a number of Common Units held by the General Partner equal to one-tenth of one percent (0.1%) of all outstanding Partnership Units other than 5% Series A Preferred Units.  All other Partnership Units owned by the General Partner and any Partnership Units owned by any Affiliate or Subsidiary of the General Partner shall be considered to constitute a Limited Partnership Interest.

 

“Indemnified Party” has the meaning set forth in Section 8.05(f) hereof.

 

“Indemnifying Party” has the meaning set forth in Section 8.05(f) hereof.

 

“Indemnitee” means (i) any Person made a party to a proceeding by reason of its status as (A) the General Partner or (B) a director of the General Partner or an officer or employee of the Partnership, the General Partner or any Subsidiary thereof, and (ii) such other Persons (including Affiliates of the General Partner or the Partnership) as the General Partner may designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion.

 

“Independent Director” means a director of Priam REIT who meets the NYSE requirements for an independent director as set forth from time to time.

 

“Junior Shares” has the meaning set forth in the definition of “Additional Securities.”

 

“Limited Partner” means any Person named as a Limited Partner on Exhibit A hereto, as it may be amended or restated from time to time, and any Person who becomes a Substitute Limited

 

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Partner or any additional Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.

 

“Limited Partnership Interest” means a Partnership Interest held by a Limited Partner at any particular time representing a fractional part of the Partnership Interest of all Limited Partners, and includes any and all benefits to which the holder of such a Limited Partnership Interest may be entitled as provided in this Agreement and in the Act, together with the obligations of such Limited Partner to comply with all the provisions of this Agreement and of the Act.  Limited Partnership Interests may be expressed as a number of Common Units, LTIP Units, 5% Series A Preferred Units or other Partnership Units.

 

“Liquidating Gains” has the meaning set forth in Section 5.01(g) hereof.

 

“LTIP Unit” means a Partnership Unit which is designated as an LTIP Unit and which has the rights, preferences and other privileges designated in Section 4.04 hereof and elsewhere in this Agreement in respect of holders of LTIP Units, including both Vested LTIP Units and Unvested LTIP Units.  The allocation of LTIP Units among the Partners shall be set forth on Exhibit A hereto as it may be amended or restated from time to time.

 

“LTIP Unitholder” means a Partner that holds LTIP Units.

 

“Loss” has the meaning set forth in Section 5.01(h) hereof.

 

“Majority in Interest” means Limited Partners who hold Partnership Units other than 5% Series A Preferred Units holding more than fifty percent (50%) of the Common Percentage Interests of the Limited Partners.

 

“New Securities” has the meaning set forth in the definition of “Additional Securities”.

 

“Notice of Redemption” means the Notice of Exercise of Common Unit Redemption Right substantially in the form attached as Exhibit B hereto.

 

“NYSE” means the New York Stock Exchange.

 

“Offer” has the meaning set forth in Section 7.01(c)(ii) hereof.

 

“Original Agreement” has the meaning set forth in the first paragraph of this Agreement.

 

“Offering” means the underwritten initial public offering of REIT Shares.

 

“Original Date” means July 5, 2018.

 

“Original Limited Partner” has the meaning set forth in the first paragraph of this Agreement.

 

“Partner” means any General Partner or Limited Partner, and “Partners” means the General Partner and the Limited Partners.

 

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“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(i).  A Partner’s share of Partner Nonrecourse Debt Minimum Gain shall be determined in accordance with Regulations Section 1.704-2(i)(5).

 

“Partnership” means Priam Office Properties OP LP, a limited partnership formed under the Act and pursuant to this Agreement, and any successor thereto.

 

“Partnership Interest” means an ownership interest in the Partnership held by a Partner, and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement.  A Partnership Interest may be expressed as a number of Common Units, LTIP Units, 5% Series A Preferred Units or other Partnership Units.

 

“Partnership Loan” means a loan from the Partnership to the Partner on the day the Partnership pays over the excess of the Withheld Amount over the Distributable Amount to a taxing authority.

 

“Partnership Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(d).  In accordance with Regulations Section 1.704-2(d), the amount of Partnership Minimum Gain is determined by first computing, for each Partnership nonrecourse liability, any gain the Partnership would realize if it disposed of the property subject to that liability for no consideration other than full satisfaction of the liability, and then aggregating the separately computed gains.  A Partner’s share of Partnership Minimum Gain shall be determined in accordance with Regulations Section 1.704-2(g)(1).

 

“Partnership Record Date” means the record date established by the General Partner for the distribution of cash pursuant to Section 5.02 hereof, which record date shall be the same as the record date established by Priam REIT for a distribution to its stockholders of some or all of its portion of such distribution.

 

“Partnership Representative” has the meaning set forth within Section 6223 of the Code.

 

“Partnership Unit” means a fractional, undivided share of the Partnership Interests of all Partners issued hereunder, and includes Common Units, LTIP Units, 5% Series A Preferred Units and any other class or series of Partnership Units that may be established after the date hereof in accordance with the terms hereof.  The number of Partnership Units outstanding and the Percentage Interests represented by such Partnership Units are set forth on Exhibit A hereto, as it may be amended or restated from time to time.

 

“Partnership Unit Designation” has the meaning set forth in Section 4.02(a)(i) hereof.

 

“Percentage Interest” means (i) with respect to the Common Units, the percentage (the “Common Percentage Interest”) determined by dividing the number of Common Units of a Partner by the aggregate number of Common Units of all Partners, treating LTIP Units, in accordance with Section 4.04(a), as Common Units for this purpose; (ii) with respect to the 5% Series A Preferred Units, the percentage determined by dividing the number of 5% Series A Preferred Units of a Partner by the aggregate number of 5% Series A Preferred Units of all Partners (the “Preferred Percentage Interest”); and (iii) with respect to all of the units of the Partnership, the percentage (the “Partnership Percentage Interest”) determined by dividing the number of units of a Partner

 

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by the aggregate number of units of all Partners, treating LTIP Units, in accordance with Section 4.04(a), as Common Units for this purpose.

 

“Person” means any individual, partnership, corporation, limited liability company, joint venture, trust or other entity.

 

“Preferred Return” means (i) with respect to the 5% Series A Preferred Units, the Series A Preferred Return Rate, and (ii) with respect to any additional preferred units issued by the Partnership, such quarterly rate of return established by an amendment to this Agreement creating such additional preferred units.

 

“Preferred Shares” has the meaning set forth in the definition of “Additional Securities”.

 

“Profit” has the meaning set forth in Section 5.01(h) hereof.

 

“Property” means any property or other investment in which the Partnership, directly or indirectly, holds an ownership interest.

 

“Redeeming Limited Partner” has the meaning set forth in Section 8.04(a) hereof.

 

“Redemption Shares” has the meaning set forth in Section 8.05(a) hereof.

 

“Regulations” means the Federal Income Tax Regulations issued under the Code, as amended and as subsequently amended from time to time.  Reference to any particular provision of the Regulations shall mean that provision of the Regulations on the date hereof and any successor provision of the Regulations.

 

“REIT” means a real estate investment trust under Sections 856 through 860 of the Code.

 

“REIT Expenses” means (i) costs and expenses relating to the formation and continuity of existence and operation of Priam REIT and any Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included within the definition of Priam REIT), including taxes, fees and assessments associated therewith, any and all costs, expenses or fees payable to any director, officer or employee of Priam REIT, (ii) costs and expenses relating to any public offering and registration, or private offering, of securities by Priam REIT, and all statements, reports, fees and expenses incidental thereto, including, without limitation, underwriting discounts and selling commissions applicable to any such offering of securities, and any costs and expenses associated with any claims made by any holders of such securities or any underwriters or placement agents thereof, (iii) costs and expenses associated with any repurchase of any securities by Priam REIT, (iv) costs and expenses associated with the preparation and filing of any periodic or other reports and communications by Priam REIT under federal, state or local laws or regulations, including filings with the Commission, (v) costs and expenses associated with compliance by Priam REIT with laws, rules and regulations promulgated by any regulatory body, including the Commission and any securities exchange, (vi) costs and expenses associated with any health, dental, vision, disability, life insurance, 401(k) plan, incentive plan, bonus plan or other plan providing for compensation or benefits for the employees of Priam REIT, (vii) costs and expenses incurred by Priam REIT relating to any issuing or redemption of Partnership Interests and (viii) all other operating or administrative costs of Priam REIT incurred in the ordinary course of its business on behalf of or related to the Partnership.

 

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“REIT Shares” means shares of common stock, $0.01 par value per share, of Priam REIT (or common stock or common shares of beneficial interest of a Successor Entity, as the case may be).

 

“REIT Shares Amount” means the number of REIT Shares equal to the product of (X) the number of Common Units offered for redemption by a Redeeming Limited Partner, multiplied by (Y) the Conversion Factor as adjusted to and including the Specified Redemption Date; provided that in the event that prior to the Specified Redemption Date, Priam REIT issues to all holders of REIT Shares rights, options, warrants or convertible or exchangeable securities entitling the holders of REIT Shares to subscribe for or purchase additional REIT Shares, or any other securities or property (collectively, the “Rights”), and such Rights have not expired at the Specified Redemption Date, then the REIT Shares Amount shall also include such Rights issuable to a holder of the REIT Shares Amount on the record date fixed for purposes of determining the holders of REIT Shares entitled to Rights.

 

“Restriction Notice” has the meaning set forth in Section 8.04(f) hereof.

 

“Rights” has the meaning set forth in the definition of “REIT Shares Amount” herein.

 

“Rule 144” has the meaning set forth in Section 8.05(c) hereof.

 

“S-3 Eligible Date” has the meaning set forth in Section 8.05(a) hereof.

 

“Safe Harbor” has the meaning set forth in Section 10.05(d) hereof.

 

“Safe Harbor Election” has the meaning set forth in Section 11.01 hereof.

 

“Safe Harbor Interests” has the meaning set forth in Section 11.01 hereof.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Service” means the Internal Revenue Service.

 

“Specified Redemption Date” means the first business day of the calendar quarter that is at least 60 calendar days after the receipt by the General Partner of a Notice of Redemption.

 

“Stock Ownership Limit” has the meaning set forth in the Articles.

 

“Subsidiary” means, with respect to any Person, any corporation or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.

 

“Subsidiary Partnership” means any partnership or limited liability company in which the General Partner, the Partnership, or a wholly owned subsidiary of the General Partner or the Partnership owns a partnership or limited liability company interest.

 

“Substitute Limited Partner” means any Person admitted to the Partnership as a Limited Partner pursuant to Section 9.03 hereof.

 

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“Successor Entity” has the meaning set forth in the definition of “Conversion Factor” herein.

 

“Survivor” has the meaning set forth in Section 7.01(d) hereof.

 

“Trading Day” means a day on which the principal national securities exchange on which a security is listed or admitted to trading is open for the transaction of business or, if a security is not listed or admitted to trading on any national securities exchange, shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

 

“Transaction” has the meaning set forth in Section 7.01(c) hereof.

 

“Transfer” has the meaning set forth in Section 9.02(a) hereof.

 

“TRS” means a taxable REIT subsidiary (as defined in Section 856(l) of the Code) of the General Partner.

 

“Unvested LTIP Units” has the meaning set forth in Section 4.04(c)(i) hereof.

 

“Value” means, with respect to any security, the average of the daily market prices of such security for the ten consecutive Trading Days immediately preceding the date of such valuation.  The market price for each such Trading Day shall be:  (i) if the security is listed or admitted to trading on the NYSE or any other national securities exchange, the last reported sale price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices, regular way, on such day, (ii) if the security is not listed or admitted to trading on the NYSE or any other national securities exchange, the last reported sale price on such day or, if no sale takes place on such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by the General Partner, or (iii) if the security is not listed or admitted to trading on the NYSE or any national securities exchange and no such last reported sale price or closing bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reliable quotation source designated by the General Partner, or if there shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as so reported, on the most recent day (not more than ten days prior to the date in question) for which prices have been so reported; provided that if there are no bid and asked prices reported during the ten days prior to the date in question, the value of the security shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate.  In the event the security includes any additional rights (including any Rights), then the value of such rights shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate.

 

“Vested LTIP Units” has the meaning set forth in Section 4.04(c)(i) hereof.

 

“Vesting Agreement” means each or any, as the context implies, agreement or instrument entered into by an LTIP Unitholder upon acceptance of an award of LTIP Units under an Equity Incentive Plan.

 

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“Withheld Amount” means any amount required to be withheld by the Partnership to pay over to any taxing authority as a result of any allocation or distribution of income to a Partner.

 

ARTICLE II

 

FORMATION OF THE PARTNERSHIP

 

2.01                        Formation of the Partnership.  The Partnership was formed as a limited partnership pursuant to the provisions of the Act and upon the terms and conditions set forth in the Original Agreement.  Concurrently with the execution of this Agreement, the Original Limited Partner is withdrawing from the Partnership and relinquishing any and all rights or interest he may have in the Partnership other than as set forth on Exhibit A hereto, and the Partnership is continued without dissolution.  Except as expressly provided herein to the contrary, the rights and obligations of the Partners and administration and termination of the Partnership shall be governed by the Act.  The Partnership Interest of each Partner shall be personal property for all purposes.

 

2.02                        Name.  The Name of the Partnership shall be “Priam Office Properties OP LP” and the Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate thereof.  The words “Limited Partnership,” “LP,” “L.P.” or “Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires.  The General Partner in its sole and absolute discretion may change the name of the Partnership at any time and from time to time and shall notify the Partners of such change in the next regular communication to the Partners; provided, however, failure to so notify the Partners shall not invalidate such change or the authority granted hereunder.

 

2.03                        Registered Office and Agent; Principal Office.  The registered office of the Partnership in the State of Delaware is located at Capitol Services, Inc., 1675 South State Street Suite B, Dover, Delaware 19901, and the registered agent for service of process on the Partnership in the State of Delaware at such registered office is Capitol Services, Inc., a Delaware corporation.  The principal office of the Partnership is located at 102 Woodmont Blvd., Suite 100 Nashville, TN 37205, or such other place as the General Partner may from time to time designate.  Upon such a change of the principal office of the Partnership, the General Partner shall notify the Partners of such change in the next regular communication to the Partners; provided, however, failure to so notify the Partners shall not invalidate such change or the authority granted hereunder.  The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems necessary or desirable.

 

2.04                        Term and Dissolution.

 

(a)                                 The term of the Partnership shall continue in full force and effect until dissolved upon the first to occur of any of the following events:

 

(i)                                     the occurrence of an Event of Bankruptcy as to a General Partner or the dissolution, death, removal or withdrawal of a General Partner unless the business of the Partnership is continued pursuant to Section 7.03(b) hereof; provided that if a General Partner is on the date of such occurrence a partnership, the dissolution of such General Partner as a result of the dissolution, death, withdrawal, removal or Event of Bankruptcy of a partner in such partnership

 

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shall not be an event of dissolution of the Partnership if the business of such General Partner is continued by the remaining partner or partners, either alone or with additional partners, and such General Partner and such partners comply with any other applicable requirements of this Agreement;

 

(ii)                                  the passage of 90 days after the sale or other disposition of all or substantially all of the assets of the Partnership (provided that if the Partnership receives an installment obligation as consideration for such sale or other disposition, the Partnership shall continue, unless sooner dissolved under the provisions of this Agreement, until such time as such installment obligations are paid in full);

 

(iii)                               the redemption of all Limited Partnership Interests (other than any Limited Partnership Interests held by the General Partner), unless the General Partner determines to continue the term of the Partnership by the admission of one or more additional Limited Partners; or

 

(iv)                              the dissolution of the Partnership upon election by the General Partner.

 

(b)                                 Upon dissolution of the Partnership (unless the business of the Partnership is continued pursuant to Section 7.03(b) hereof), the General Partner (or its trustee, receiver, successor or legal representative) shall amend or cancel the Certificate and liquidate the Partnership’s assets and apply and distribute the proceeds thereof in accordance with Section 5.06 hereof.  Notwithstanding the foregoing, the liquidating General Partner may either (i) defer liquidation of, or withhold from distribution for a reasonable time, any assets of the Partnership (including those necessary to satisfy the Partnership’s debts and obligations), or (ii) distribute the assets to the Partners in kind.

 

2.05                        Filing of Certificate and Perfection of Limited Partnership.  The General Partner shall execute, acknowledge, record and file at the expense of the Partnership the Certificate and any and all amendments thereto and all requisite fictitious name statements and notices in such places and jurisdictions as may be necessary to cause the Partnership to be treated as a limited partnership under, and otherwise to comply with, the laws of each state or other jurisdiction in which the Partnership conducts business.

 

2.06                        Certificates Describing Partnership Units.  At the request of a Limited Partner, the General Partner, at its option, may issue a certificate summarizing the terms of such Limited Partner’s interest in the Partnership, including the class or series and number of Partnership Units owned and the Percentage Interest represented by such Partnership Units as of the date of such certificate.  Any such certificate (i) shall be in form and substance as determined by the General Partner, (ii) shall not be negotiable and (iii) shall bear a legend to the following effect:

 

THIS CERTIFICATE IS NOT NEGOTIABLE.  THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY AND TRANSFERABLE ONLY IN ACCORDANCE WITH (A) THE PROVISIONS OF THE AGREEMENT OF LIMITED PARTNERSHIP OF PRIAM OFFICE PROPERTIES OP LP, AS AMENDED, SUPPLEMENTED OR RESTATED FROM TIME TO TIME, AND (B) ANY APPLICABLE FEDERAL OR STATE SECURITIES OR BLUE SKY LAWS.

 

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ARTICLE III

 

BUSINESS OF THE PARTNERSHIP

 

The purpose and nature of the business of the Partnership is (i) to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Act, provided, however, that such business shall be limited to and conducted in such a manner as to permit Priam REIT at all times to qualify as a REIT, unless Priam REIT otherwise ceases to, or the Board of Directors determines, pursuant to Section 5.7 of the Articles, that Priam REIT shall no longer qualify as a REIT, (ii) to enter into any partnership, joint venture or other similar arrangement to engage in any of the foregoing or the ownership of interests in any entity engaged in any of the foregoing and (iii) to do anything necessary or incidental to the foregoing.  In connection with the foregoing, and without limiting Priam REIT’s right in its sole and absolute discretion to cease qualifying as a REIT, the Partners acknowledge that Priam REIT intends to elect REIT status and the avoidance of income and excise taxes on Priam REIT inures to the benefit of all the Partners and not solely to Priam REIT.  Notwithstanding the foregoing, the Limited Partners agree that Priam REIT may terminate or revoke its status as a REIT under the Code at any time.  The General Partner shall also be empowered to do any and all acts and things necessary or prudent to ensure that the Partnership will not be classified as a “publicly traded partnership” taxable as a corporation for purposes of Section 7704 of the Code.

 

ARTICLE IV

 

CAPITAL CONTRIBUTIONS AND ACCOUNTS

 

4.01                        Capital Contributions.  The General Partner and each Limited Partner has made a capital contribution to the Partnership in exchange for the Partnership Units set forth opposite such Partner’s name on Exhibit A hereto, as it may be amended or restated from time to time by the General Partner to the extent necessary to reflect accurately sales, exchanges or other Transfers, redemptions, Capital Contributions, the issuance of additional Partnership Units or similar events having an effect on a Partner’s ownership of Partnership Units.

 

4.02                        Additional Capital Contributions and Issuances of Additional Partnership Units.  Except as provided in this Section 4.02 or in Section 4.03 hereof, the Partners shall have no right or obligation to make any additional Capital Contributions or loans to the Partnership.  The General Partner may contribute additional capital to the Partnership, from time to time, and receive additional Partnership Interests, in the form of Partnership Units, in respect thereof, in the manner contemplated in this Section 4.02.

 

(a)                                 Issuances of Additional Partnership Units.

 

(i)                                     General.  As of the effective date of this Agreement, the Partnership shall have authorized three classes of Partnership Units, entitled “Common Units,” “LTIP Units” and “5% Series A Preferred Units.” The General Partner is hereby authorized to cause the Partnership to issue additional Partnership Interests, in the form of Partnership Units, for any Partnership purpose at any time or from time to time to the Partners (including the General Partner) or to other Persons for such consideration and on such terms and conditions as shall be established by the General Partner in its sole and absolute discretion, all without the approval of any Limited Partners.

 

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The General Partner’s determination that consideration is adequate shall be conclusive insofar as the adequacy of consideration relates to whether the Partnership Units are validly issued and fully paid.  Any additional Partnership Units issued thereby may be issued in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to the then-outstanding Partnership Units held by the Limited Partners (subject to Section 2(b) of Annex A attached hereto), all as shall be determined by the General Partner in its sole and absolute discretion and without the approval of any Limited Partner, subject to Delaware law that cannot be preempted by the terms hereof and as set forth in a written document hereafter attached to and made an annex or exhibit to this Agreement (each, a “Partnership Unit Designation”), which document shall include, without limitation, (i) the allocations of items of Partnership income, gain, loss, deduction and credit to each such class or series of Partnership Units; (ii) the right of each such class or series of Partnership Units to share in Partnership distributions; and (iii) the rights of each such class or series of Partnership Units upon dissolution and liquidation of the Partnership; provided, however, that no additional Partnership Units shall be issued to the General Partner (or any direct or indirect wholly-owned Subsidiary of the General Partner) unless:

 

(1)                                 (A) the additional Partnership Units are issued in connection with an issuance of REIT Shares or other capital stock of, or other interests in, Priam REIT, which REIT Shares, capital stock or other interests have designations, preferences and other rights, all such that the economic interests are substantially similar to the designations, preferences and other rights of the additional Partnership Units issued to Priam REIT (or any direct or indirect wholly owned Subsidiary of Priam REIT) by the Partnership in accordance with this Section 4.02 and (B) Priam REIT (or any direct or indirect wholly owned Subsidiary of Priam REIT) shall make a Capital Contribution to the Partnership in an amount equal to the cash consideration received by Priam REIT, if any, from such grant, award or issuance of such REIT Shares, capital stock or other interests in Priam REIT;

 

(2)                                 (A) the additional Partnership Units are issued in connection with a grant award or issuance of REIT Shares or other capital stock of, or other interests in, Priam REIT pursuant to a taxable share dividend declared by Priam REIT, which REIT Shares, capital stock or interests have designations, preferences and other rights, all such that the economic interests are substantially similar to the designations, preferences and other rights of the additional Partnership Units issued to Priam REIT (or any direct or indirect wholly owned Subsidiary of Priam REIT) by the Partnership in accordance with this Section 4.02, (B) if Priam REIT allows the holders of REIT Shares to elect whether to receive such dividend in REIT Shares or other capital stock of, or other interests in, Priam REIT, or cash, the Partnership will give the Limited Partners (excluding the General Partner or any direct or indirect Subsidiary of the General Partner) the same ability to elect to receive (I) Partnership Units or cash or, (II) at the election of the General Partner, REIT Shares, capital stock or other interests in the General Partner or cash, and (C) if the Partnership issues additional Partnership Units pursuant to this Section 4.02(a)(i)(2), then an amount of income equal to the value of the Partnership Units received will be allocated to those holders of Common Units that elect to receive additional Partnership Units;

 

(3)                                 the additional Partnership Units are issued in exchange for property owned by the General Partner (or any direct or indirect wholly owned Subsidiary of the General

 

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Partner) with a fair market value, as determined by the General Partner, in good faith, equal to the value of the Partnership Units; or

 

(4)                                 Common Units are issued to all Partners owning Common Units or LTIP Units in proportion to their respective Common Percentage Interests.

 

Without limiting the foregoing, the General Partner is expressly authorized to cause the Partnership to issue Partnership Units for less than fair market value, so long as the General Partner concludes in good faith that such issuance is in the interests of the Partnership.  Upon the issuance of any additional Partnership Units, the General Partner shall amend Exhibit A hereto as appropriate to reflect such issuance.

 

(ii)                                  Upon Issuance of Additional Securities.  The General Partner shall not issue any Additional Securities (other than REIT Shares issued in connection with an exchange pursuant to Section 8.04 hereof or REIT Shares or other capital stock of or other interests in the General Partner issued in connection with a taxable stock dividend as described in Section 4.02(a)(i)(2) hereof) or Rights other than to all holders of REIT Shares, Preferred Shares, Junior Shares or New Securities, as the case may be, unless (A) the General Partner shall cause the Partnership to issue to the General Partner (or any direct or indirect wholly owned Subsidiary of the General Partner) Partnership Units or Rights having designations, preferences and other rights, all such that the economic interests are substantially similar to those of the Additional Securities, and (B) the General Partner (or any direct or indirect wholly owned Subsidiary of the General Partner) contributes the proceeds from the issuance of such Additional Securities and from any exercise of Rights contained in such Additional Securities to the Partnership; provided, however, that the General Partner is allowed to issue Additional Securities in connection with an acquisition of Property to be held directly by the General Partner, but if and only if, such direct acquisition and issuance of Additional Securities have been approved by a majority of the Independent Directors.  Without limiting the foregoing, the General Partner is expressly authorized to issue Additional Securities for less than fair market value, and the General Partner is authorized to cause the Partnership to issue to the General Partner (or any direct or indirect wholly owned Subsidiary of the General Partner) corresponding Partnership Units, so long as (x) the General Partner concludes in good faith that such issuance is in the best interests of the General Partner and the Partnership and (y) the General Partner (or any direct or indirect wholly owned Subsidiary of the General Partner) contributes all proceeds from such issuance to the Partnership, including without limitation, the issuance of REIT Shares and corresponding Partnership Units pursuant to a stock purchase plan providing for purchases of REIT Shares at a discount from fair market value or pursuant to stock awards, including stock options that have an exercise price that is less than the fair market value of the REIT Shares, either at the time of issuance or at the time of exercise, and restricted or other stock awards approved by the Board of Directors.  For example, in the event Priam REIT issues REIT Shares for a cash purchase price and the General Partner (or any direct or indirect wholly owned Subsidiary of the General Partner) contributes all of the proceeds of such issuance to the Partnership as required hereunder, the General Partner (or any direct or indirect wholly owned Subsidiary of the General Partner) shall be issued a number of additional Partnership Units equal to the product of (A) the number of such REIT Shares issued by Priam REIT, the proceeds of which were so contributed, multiplied by (B) a fraction, the numerator of which is 100%, and the denominator of which is the Conversion Factor in effect on the date of such contribution.

 

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(b)                                 Certain Contributions of Proceeds of Issuance of REIT Shares.  In connection with any and all issuances of REIT Shares, the General Partner (or any direct or indirect wholly owned Subsidiary of the General Partner) shall make Capital Contributions to the Partnership of the proceeds therefrom (if any), provided that if the proceeds actually received and contributed by the General Partner (or any direct or indirect wholly owned Subsidiary of the General Partner) are less than the gross proceeds of such issuance as a result of any underwriter’s discount, commissions, placement fees or other expenses paid or incurred in connection with such issuance, then the General Partner (or any direct or indirect wholly owned Subsidiary of the General Partner) shall be deemed to have made a Capital Contribution to the Partnership in the amount equal to the sum of the net proceeds of such issuance plus the amount of such underwriter’s discount, commissions, placement fees or other expenses paid by the General Partner, and the Partnership shall be deemed simultaneously to have reimbursed such discount, commissions, placement fees and expenses as an Administrative Expense for the benefit of the Partnership for purposes of Section 6.05(b).

 

(c)                                  Repurchases of Priam REIT Securities.  If Priam REIT shall repurchase shares of any class or series of its capital stock, the purchase price thereof and all costs incurred in connection with such repurchase shall be reimbursed to the General Partner by the Partnership pursuant to Section 6.05 hereof and the General Partner shall cause the Partnership to redeem an equivalent number of Partnership Units of the appropriate class or series held by the General Partner, or by the General Partner in its capacity as a Limited Partner (which, in the case of REIT Shares, shall be a number equal to the quotient of the number of such REIT Shares divided by the Conversion Factor).

 

4.03                        Additional Funding.  If the General Partner determines that it is in the best interests of the Partnership to provide for additional Partnership funds (“Additional Funds”) for any Partnership purpose, the General Partner may (i) cause the Partnership to obtain such funds from outside borrowings or (ii) elect to have the General Partner or any of its Affiliates provide such Additional Funds to the Partnership through loans or otherwise.

 

4.04                        LTIP Units.

 

(a)                                 Issuance of LTIP Units.  Notwithstanding anything contained herein to the contrary, the General Partner may from time to time issue LTIP Units to Persons who provide services to the Partnership or the General Partner, for such consideration as the General Partner may determine to be appropriate, and admit such Persons as Limited Partners.  Except to the extent a Capital Contribution is made with respect to an LTIP Unit, each LTIP Unit is intended to qualify as a “profits interest” in the Partnership within the meaning of the Code, the Regulations and any published guidance by the IRS with respect thereto. Subject to the following provisions of this Section 4.04 and the special provisions of Sections 4.05 and 5.01(g) hereof, LTIP Units shall be treated as Common Units, with all of the rights, privileges and obligations attendant thereto.  For purposes of computing the Partners’ Common Percentage Interests, holders of LTIP Units shall be treated as Common Unit holders and LTIP Units shall be treated as Common Units.  In particular, the Partnership shall maintain at all times a one-to-one correspondence between LTIP Units and Common Units for conversion, distribution and other purposes, including, without limitation, complying with the following procedures:

 

(i)                                     If an Adjustment Event (as defined below) occurs, then the General Partner shall make a corresponding adjustment to the LTIP Units to maintain a one-for-one conversion and

 

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economic equivalence ratio between Common Units and LTIP Units.  The following shall be “Adjustment Events”:  (A) the Partnership makes a distribution on all outstanding Common Units in the form of Partnership Units, (B) the Partnership subdivides the outstanding Common Units into a greater number of units or combines the outstanding Common Units into a smaller number of units, or (C) the Partnership issues any Partnership Units in exchange for its outstanding Common Units by way of a reclassification or recapitalization of its Common Units.  If more than one Adjustment Event occurs, the adjustment to the LTIP Units need be made only once using a single formula that takes into account each and every Adjustment Event as if all Adjustment Events occurred simultaneously.  For the avoidance of doubt, the following shall not be Adjustment Events:  (x) the issuance of Partnership Units in a financing, reorganization, acquisition or other similar business Common Unit Transaction, (y) the issuance of Partnership Units pursuant to any employee benefit or compensation plan or distribution reinvestment plan or (z) the issuance of any Partnership Units to the General Partner in respect of a capital contribution to the Partnership of proceeds from the sale of Additional Securities by the General Partner.  If the Partnership takes an action affecting the Common Units other than actions specifically described above as “Adjustment Events” and in the opinion of the General Partner such action would require an adjustment to the LTIP Units to maintain the one-to-one correspondence described above, the General Partner shall have the right to make such adjustment to the LTIP Units, to the extent permitted by law and by any Equity Incentive Plan and Vesting Agreement, in such manner and at such time as the General Partner, in its sole discretion, may determine to be appropriate under the circumstances.  If an adjustment is made to the LTIP Units, as herein provided, the Partnership shall promptly file in the books and records of the Partnership an officer’s certificate setting forth such adjustment and a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error.  Promptly after filing of such certificate, the Partnership shall deliver a notice to each LTIP Unitholder setting forth the adjustment to his or her LTIP Units and the effective date of such adjustment; provided, however, the failure to deliver such notice shall not invalidate the adjustment or the authority granted hereunder, and

 

(ii)                                  The LTIP Unitholders shall, when, as and if authorized and declared by the General Partner out of assets legally available for that purpose, be entitled to receive distributions in an amount per LTIP Unit equal to the distributions per Common Unit paid to holders of Common Units on such Partnership Record Date established by the General Partner with respect to such distribution (the “Common Partnership Unit Distribution”).  So long as any LTIP Units are outstanding, no distributions (whether in cash or in kind) shall be authorized, declared or paid on Common Units, unless equal distributions have been or contemporaneously are authorized, declared and paid on the LTIP Units.

 

(b)                                 Priority.  Subject to the provisions of this Section 4.04, the special provisions of Sections 4.05 and 5.01(g) hereof and any Vesting Agreement, the LTIP Units shall rank pari passu with the Common Units as to the payment of regular and special periodic or other distributions and distribution of assets upon liquidation, dissolution or winding up.  As to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, any class or series of Partnership Units which by its terms specifies that it shall rank junior to, on a parity with or senior to the Common Units shall also rank junior to, pari passu with or senior to, as the case may be, the LTIP Units.  Subject to the terms of any Vesting Agreement, an LTIP Unitholder shall be entitled to transfer his or her LTIP Units to the same extent, and subject to the same

 

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restrictions as holders of Common Units are entitled to transfer their Common Units pursuant to Article IX.

 

(c)                                  Special Provisions.  LTIP Units shall be subject to the following special provisions:

 

(i)                                     Vesting Agreements.  LTIP Units may, in the sole discretion of the General Partner, be issued subject to vesting, forfeiture and additional restrictions on transfer pursuant to the terms of a Vesting Agreement.  The terms of any Vesting Agreement may be modified by the General Partner from time to time in its sole discretion, subject to any restrictions on amendment imposed by the relevant Vesting Agreement or by the Equity Incentive Plan, if applicable.  LTIP Units that have vested under the terms of a Vesting Agreement are referred to as “Vested LTIP Units”; all other LTIP Units shall be treated as “Unvested LTIP Units.”

 

(ii)                                  Forfeiture.  Unless otherwise specified in the Vesting Agreement, upon the occurrence of any event specified in a Vesting Agreement resulting in either the right of the Partnership or the General Partner to repurchase LTIP Units at a specified purchase price or some other forfeiture of any LTIP Units, then if the Partnership or the General Partner exercises such right to repurchase or forfeiture occurs in accordance with the applicable Vesting Agreement, the relevant LTIP Units shall immediately, and without any further action, be treated as cancelled and no longer outstanding for any purpose.  Unless otherwise specified in the Vesting Agreement, no consideration or other payment shall be due with respect to any LTIP Units that have been forfeited, other than any distributions declared with respect to a Partnership Record Date prior to the effective date of the forfeiture.  In connection with any repurchase or forfeiture of LTIP Units, the balance of the portion of the Capital Account of the LTIP Unitholder that is attributable to all of such LTIP Unitholder’s LTIP Units shall be reduced by the amount, if any, by which it exceeds the target balance contemplated by Section 5.01(g) hereof, calculated with respect to the LTIP Unitholder’s remaining LTIP Units, if any.

 

(iii)                               Allocations.  LTIP Unitholders shall be entitled to certain special allocations of gain under Section 5.01(g) hereof.

 

(iv)                              Redemption.  The Common Unit Redemption Right provided to Limited Partners under Section 8.04 hereof shall not apply with respect to LTIP Units unless and until they are converted to Common Units as provided in clause (v) below and Section 4.05 hereof.

 

(v)                                 Conversion to Common Units.  Vested LTIP Units are eligible to be converted into Common Units in accordance with Section 4.05 hereof.

 

(d)                                 Voting.  LTIP Unitholders shall (a) have the same voting rights as the holders of Common Units, with all Vested LTIP Units and Unvested LTIP Units voting as a single class with the Common Units and having one vote per LTIP Unit; and (b) have the additional voting rights that are expressly set forth below.  So long as any LTIP Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of a majority of the LTIP Units (Vested LTIP Units and Unvested LTIP Units) outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class), amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of this Agreement applicable to LTIP Units so as to materially and adversely affect (as determined in good faith by the General Partner) any right, privilege or voting power of the LTIP Units or the LTIP Unitholders as such, unless such

 

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amendment, alteration, or repeal affects equally, ratably and proportionately the rights, privileges and voting powers of the holders of Common Units; but subject, in any event, to the following provisions:

 

(i)                                     With respect to any Common Unit Transaction (as defined in Section 4.05(f) hereof), so long as the LTIP Units are treated in accordance with Section 4.05(f) hereof, the consummation of such Common Unit Transaction shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the LTIP Units or the LTIP Unitholders as such; and

 

(ii)                                  Any creation or issuance of any Partnership Units or of any class or series of Partnership Interest including without limitation additional Common Units or LTIP Units, whether ranking senior to, junior to, or on a parity with the LTIP Units with respect to distributions and the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the LTIP Units or the LTIP Unitholders as such.

 

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding LTIP Units shall have been converted into Common Units.

 

4.05                        Conversion of LTIP Units.

 

(a)                                 Subject to the provisions of this Section 4.05, an LTIP Unitholder shall have the right (the “Conversion Right”), at such holder’s option, at any time to convert all or a portion of such holder’s Vested LTIP Units into Common Units; provided, however, that a holder may not exercise the Conversion Right for less than 1,000 Vested LTIP Units or, if such holder holds less than 1,000 Vested LTIP Units, all of the Vested LTIP Units held by such holder.  LTIP Unitholders shall not have the right to convert Unvested LTIP Units into Common Units until they become Vested LTIP Units; provided, however, that when an LTIP Unitholder is notified of the expected occurrence of an event that will cause such LTIP Unitholder’s Unvested LTIP Units to become Vested LTIP Units, such LTIP Unitholder may give the Partnership a Conversion Notice conditioned upon and effective as of the time of vesting and such Conversion Notice, unless subsequently revoked by the LTIP Unitholder, shall be accepted by the Partnership subject to such condition.  The General Partner shall have the right at any time to cause a conversion of Vested LTIP Units into Common Units.  In all cases, the conversion of any LTIP Units into Common Units shall be subject to the conditions and procedures set forth in this Section 4.05.

 

(b)                                 A holder of Vested LTIP Units may convert such LTIP Units into an equal number of fully paid and non-assessable Common Units, giving effect to all adjustments (if any) made pursuant to Section 4.04 hereof.  Notwithstanding the foregoing, in no event may a holder of Vested LTIP Units convert a number of Vested LTIP Units that exceeds (x) the Economic Capital Account Balance of such Limited Partner, to the extent attributable to its ownership of LTIP Units, divided by (y) the Common Unit Economic Balance, in each case as determined as of the effective date of conversion (the “Capital Account Limitation”).

 

In order to exercise the Conversion Right, an LTIP Unitholder shall deliver a notice (a “Conversion Notice”) in the form attached as Exhibit D hereto to the Partnership (with a copy to

 

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the General Partner) not less than ten nor more than 60 days prior to a date (the “Conversion Date”) specified in such Conversion Notice; provided, however, that if the General Partner has not given to the LTIP Unitholders notice of a proposed or upcoming Common Unit Transaction (as defined in Section 4.05(f) hereof) at least 30 days prior to the effective date of such Common Unit Transaction, then LTIP Unitholders shall have the right to deliver a Conversion Notice until the earlier of (x) the tenth (10th) day after such notice from the General Partner of a Common Unit Transaction or (y) the third Trading Day immediately preceding the effective date of such Common Unit Transaction.  A Conversion Notice shall be provided in the manner provided in Section 12.01 hereof.  Each LTIP Unitholder covenants and agrees with the Partnership that all Vested LTIP Units to be converted pursuant to this Section 4.05(b) shall be free and clear of all liens, claims and encumbrances.  Notwithstanding anything herein to the contrary, a holder of LTIP Units may deliver a Notice of Redemption pursuant to Section 8.04(a) hereof relating to those Common Units that will be issued to such holder upon conversion of such LTIP Units into Common Units in advance of the Conversion Date; provided, however, that the redemption of such Common Units by the Partnership shall in no event take place until on or after the Conversion Date.  For clarity, it is noted that the objective of this paragraph is to put an LTIP Unitholder in a position where, if such holder so wishes, the Common Units into which such holder’s Vested LTIP Units will be converted can be tendered to the Partnership for redemption simultaneously with such conversion, with the further consequence that, if the General Partner elects to assume the Partnership’s redemption obligation with respect to such Common Units under Section 8.04(b) hereof by delivering to such holder the REIT Shares Amount, then such holder can have the REIT Shares Amount issued to such holder simultaneously with the conversion of such holder’s Vested LTIP Units into Common Units.  The General Partner and LTIP Unitholder shall reasonably cooperate with each other to coordinate the timing of the events described in the foregoing sentence.

 

(c)                                  The Partnership, at any time at the election of the General Partner, may cause any number of Vested LTIP Units held by an LTIP Unitholder to be converted (a “Forced Conversion”) into an equal number of Common Units, giving effect to all adjustments (if any) made pursuant to Section 4.04 hereof; provided, however, that the Partnership may not cause Forced Conversion of any LTIP Units that would not at the time be eligible for conversion at the option of such LTIP Unitholder pursuant to Section 4.05(b) hereof.  In order to exercise its right of Forced Conversion, the Partnership shall deliver a notice (a “Forced Conversion Notice”) in the form attached as Exhibit E hereto to the applicable LTIP Unitholder not less than ten nor more than 60 days prior to the Conversion Date specified in such Forced Conversion Notice.  A Forced Conversion Notice shall be provided in the manner provided in Section 12.01 hereof and shall be revocable by the General Partner at any time prior to the Forced Conversion.

 

(d)                                 A conversion of Vested LTIP Units for which the holder thereof has given a Conversion Notice or the Partnership has given a Forced Conversion Notice shall occur automatically after the close of business on the applicable Conversion Date without any action on the part of such LTIP Unitholder, as of which time such LTIP Unitholder shall be credited on the books and records of the Partnership with the issuance as of the opening of business on the next day of the number of Common Units issuable upon such conversion.  After the conversion of LTIP Units as aforesaid, the Partnership shall deliver to such LTIP Unitholder, upon his or her written request, a certificate of the General Partner certifying the number of Common Units and remaining LTIP Units, if any, held by such person immediately after such conversion.  The Assignee of any Limited Partner pursuant to Article IX hereof may exercise the rights of such Limited Partner

 

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pursuant to this Section 4.05 and such Limited Partner shall be bound by the exercise of such rights by the Assignee.

 

(e)                                  For purposes of making future allocations under Section 5.01(g) hereof and applying the Capital Account Limitation, the portion of the Economic Capital Account Balance of the applicable LTIP Unitholder that is treated as attributable to his or her LTIP Units shall be reduced, as of the date of conversion, by the product of the number of LTIP Units converted and the Common Unit Economic Balance.

 

(f)                                   If the Partnership or the General Partner shall be a party to any Common Unit Transaction (including without limitation a merger, consolidation, unit exchange, self tender offer for all or substantially all Common Units or other business combination or reorganization, or sale of all or substantially all of the Partnership’s assets, but excluding any Common Unit Transaction which constitutes an Adjustment Event) in each case as a result of which Common Units shall be exchanged for or converted into the right, or the holders of Common Units shall otherwise be entitled, to receive cash, securities or other property or any combination thereof (each of the foregoing being referred to herein as a “Common Unit Transaction”), then the General Partner shall, subject to the terms of any applicable Equity Incentive Plan or Vesting Agreement, exercise immediately prior to the Common Unit Transaction its right to cause a Forced Conversion with respect to the maximum number of LTIP Units then eligible for conversion, taking into account any allocations that occur in connection with the Common Unit Transaction or that would occur in connection with the Common Unit Transaction if the assets of the Partnership were sold at the Common Unit Transaction price or, if applicable, at a value determined by the General Partner in good faith using the value attributed to the Partnership Units in the context of the Common Unit Transaction (in which case the Conversion Date shall be the effective date of the Common Unit Transaction).

 

In anticipation of such Forced Conversion and the consummation of the Common Unit Transaction, the Partnership shall use commercially reasonable efforts to cause each LTIP Unitholder to be afforded the right to receive in connection with such Common Unit Transaction in consideration for the Common Units into which such LTIP Unitholder’s LTIP Units will be converted the same kind and amount of cash, securities and other property (or any combination thereof) receivable upon the consummation of such Common Unit Transaction by a holder of the same number  of Common Units, assuming such holder of Common Units is not a Person with which the Partnership consolidated or into which the Partnership merged or which merged into the Partnership or to which such sale or transfer was made, as the case may be (a “Constituent Person”), or an affiliate of a Constituent Person.  In the event that holders of Common Units have the opportunity to elect the form or type of consideration to be received upon consummation of the Common Unit Transaction, prior to such Common Unit Transaction, the General Partner shall give prompt written notice to each LTIP Unitholder of such election, and shall use commercially reasonable efforts to afford the LTIP Unitholders the right to elect, by written notice to the General Partner, the form or type of consideration to be received upon conversion of each LTIP Unit held by such holder into Common Units in connection with such Common Unit Transaction.  If an LTIP Unitholder fails to make such an election, such holder (and any of its transferees) shall receive upon conversion of each LTIP Unit held by such LTIP Unitholder (or by any of such LTIP Unitholder’s transferees) the same kind and amount of consideration that a holder of a Common Unit would receive if such Common Unit holder failed to make such an election.

 

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Subject to the rights of the Partnership and the General Partner under any Vesting Agreement and any Equity Incentive Plan, the Partnership shall use commercially reasonable efforts to cause the terms of any Common Unit Transaction to be consistent with the provisions of this Section 4.05(f) and to enter into an agreement with the successor or purchasing entity, as the case may be, for the benefit of any LTIP Unitholders whose LTIP Units will not be converted into Common Units in connection with the Common Unit Transaction that will (i) contain provisions enabling the holders of LTIP Units that remain outstanding after such Common Unit Transaction to convert their LTIP Units into securities as comparable as reasonably possible under the circumstances to the Common Units and (ii) preserve as far as reasonably possible under the circumstances the distribution, special allocation, conversion, and other rights set forth in this Agreement for the benefit of the LTIP Unitholders.

 

4.06                        5% Series A Preferred Units.  Annex A attached hereto sets forth the designations, allocations, preferences and other special rights, powers and duties of the 5% Series A Preferred Units.

 

4.07                        Capital Accounts.  A separate capital account (a “Capital Account”) shall be established and maintained for each Partner in accordance with Regulations Section 1.704-1(b)(2)(iv).  If (i) a new or existing Partner acquires an additional Partnership Interest in exchange for more than a de minimis Capital Contribution, (ii) the Partnership distributes to a Partner more than a de minimis amount of Partnership property as consideration for a Partnership Interest, (iii) the Partnership is liquidated within the meaning of Regulation Section 1.704-1(b)(2)(ii)(g) or (iv) the Partnership grants a Partnership Interest (other than a de minimis Partnership Interest) as consideration for the provision of services to or for the benefit of the Partnership to an existing Partner acting in a Partner capacity, or to a new Partner acting in a Partner capacity or in anticipation of being a Partner, the General Partner shall revalue the property of the Partnership to its fair market value (as determined by the General Partner, in its sole and absolute discretion, and taking into account Section 7701(g) of the Code) in accordance with Regulations Section 1.704-1(b)(2)(iv)(f); provided that (i) the issuance of any LTIP Unit shall be deemed to require a revaluation pursuant to this Section 4.07 and (ii) the General Partner may elect not to revalue the property of the Partnership in connection with the issuance of additional Partnership Units pursuant to Section 4.02 to the extent in determines, in its sole and absolute discretion, that revaluing the property of the Partnership in not necessary or appropriate to reflect the relative economic interests of the Partners.  When the Partnership’s property is revalued by the General Partner, the Capital Accounts of the Partners shall be adjusted in accordance with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require such Capital Accounts to be adjusted to reflect the manner in which the unrealized gain or loss inherent in such property (that has not been reflected in the Capital Accounts previously) would be allocated among the Partners pursuant to Section 5.01 hereof if there were a taxable disposition of such property for its fair market value (as determined by the General Partner, in its sole and absolute discretion, and taking into account Section 7701(g) of the Code) on the date of the revaluation.

 

4.08                        Percentage Interests.  If the number of outstanding Common Units, LTIP Units or 5% Series A Preferred Units increases or decreases during a taxable year, each Partner’s Percentage Interest shall be adjusted by the General Partner effective as of the effective date of each such increase or decrease to a percentage equal to the number of Common Units, LTIP Units  or 5% Series A Preferred Units held by such Partner divided by the aggregate number of Common Units, LTIP Units and 5% Series A Preferred Units outstanding after giving effect to such increase or

 

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decrease.  If the Partners’ Percentage Interests are adjusted pursuant to this Section 4.08, the Net Profits and Net Losses for the taxable year in which the adjustment occurs shall be allocated between the part of the year ending on the day when the Partnership’s property is revalued by the General Partner and the part of the year beginning on the following day either (i) as if the taxable year had ended on the date of the adjustment or (ii) based on the number of days in each part.  The General Partner, in its sole and absolute discretion, shall determine which method shall be used to allocate  Net Profits and  Net Losses for the taxable year in which the adjustment occurs.  The allocation of Profits and Losses for the earlier part of the year shall be based on the Percentage Interests before adjustment, and the allocation of Net Profits and Net Losses for the later part shall be based on the adjusted Percentage Interests.

 

4.09                        No Interest on Contributions.  No Partner shall be entitled to interest on its Capital Contribution.

 

4.10                        Return of Capital Contributions.  No Partner shall be entitled to withdraw any part of its Capital Contribution or its Capital Account or to receive any distribution from the Partnership, except as specifically provided in this Agreement.  Except as otherwise provided herein, there shall be no obligation to return to any Partner or withdrawn Partner any part of such Partner’s Capital Contribution for so long as the Partnership continues in existence.

 

4.11                        No Third-Party Beneficiary.  No creditor or other third party having dealings with the Partnership shall have the right to enforce the right or obligation of any Partner to make Capital Contributions or loans or to pursue any other right or remedy hereunder or at law or in equity, it being understood and agreed that the provisions of this Agreement, except as provided in Section 6.03(h), shall be solely for the benefit of, and may be enforced solely by, the parties to this Agreement and their respective successors and assigns.  None of the rights or obligations of the Partners herein set forth to make Capital Contributions or loans to the Partnership shall be deemed an asset of the Partnership for any purpose by any creditor or other third party, nor may such rights or obligations be sold, transferred or assigned by the Partnership or pledged or encumbered by the Partnership to secure any debt or other obligation of the Partnership or of any of the Partners.  In addition, it is the intent of the parties hereto that no distribution to any Limited Partner shall be deemed a return of money or other property in violation of the Act.  However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Limited Partner is obligated to return such money or property, such obligation shall be the obligation of such Limited Partner and not of the General Partner.  Without limiting the generality of the foregoing, a deficit Capital Account of a Partner shall not be deemed to be a liability of such Partner nor an asset or property of the Partnership.

 

ARTICLE V

 

PROFITS AND LOSSES; DISTRIBUTIONS

 

5.01                        Allocation of Profit and Loss.

 

(a)                                 Net Profit.  Except as otherwise provided herein, Net Profit for any fiscal year or other applicable period shall be allocated in the following order and priority:

 

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(i)                                     first, to the holders of 5% Series A Preferred Units in accordance with their Percentage Interests, to the extent that Net Loss previously allocated to such Partners pursuant to Section 5.01(b)(iii) below for all prior fiscal years or other applicable periods exceeds Net Profit previously allocated to such Partners pursuant to this Section 5.01(a)(i) for all prior fiscal years or other applicable periods,

 

(ii)                                  second, to the holders of Common Units in accordance with their Percentage Interests, to the extent that Net Loss previously allocated to such Partners pursuant to Section 5.01(b)(ii) below for all prior fiscal years or other applicable periods exceeds Net Profit previously allocated to such Partners pursuant to this Section 5.01(a)(ii) for all prior fiscal years or other applicable periods,

 

(iii)                               third, to the Limited Partners holding 5% Series A Preferred Units in accordance with their Preferred Percentage Interests, until each such 5% Series A Preferred Unit has been allocated Net Profit equal to the excess of (x) the cumulative amount of preferred distributions such Limited Partners have received for all fiscal years or other applicable period or to the date of redemption, to the extent such 5% Series A Preferred Units are redeemed during such period (excluding any distributions in respect of the liquidation preference), over (y) the cumulative Net Profit allocated to such Limited Partners pursuant to this Section 5.01(a)(iii) for all prior fiscal years or other applicable periods,

 

(iv)                              fourth, to the Partners holding Common Units in accordance with their Common Percentage Interests.

 

(b)                                 Net Loss.  Except as otherwise provided herein, Net Loss for any fiscal year or other applicable period shall be allocated in the following order and priority:

 

(i)                                     first, to the Partners holding Common Units in accordance with their respective Percentage Interests to the extent of Net Profit previously allocated to such Partners pursuant to Sections 5.01(a)(iv) above for all prior fiscal years or other applicable period exceeds Net Loss previously allocated to such Partners pursuant to this Section 5.01(b)(i) for all prior fiscal years or other applicable periods,

 

(ii)                                  second, to the Partners holding Common Units in accordance with their respective Percentage Interests until the adjusted Capital Account (including for this purpose any amounts a Partner is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)) of each Partner with respect to such Common Units is reduced to zero, and

 

(iii)                               thereafter, to the Partners holding 5% Series A Preferred Units in accordance with their respective Percentage Interests until the adjusted Capital Account (including for this purpose any amounts a Partner is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)) of such Partners with respect to the 5% Series A Preferred Units is reduced to zero.

 

It is the intention of the parties hereunder that the aggregate Capital Account balance of the holders of the 5% Series A Preferred Units at any date shall not exceed the amount of the original Capital

 

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Contributions made in respect of the 5% Series A Preferred Units plus all accrued and unpaid distributions thereon, whether or not declared, to the extent not previously distributed

 

(c)                                  Notwithstanding anything to the contrary contained herein, in connection with the liquidation of the Partnership or the interest of a holder of 5% Series A Preferred Units, and prior to making any other allocations of Net Profit or Net Loss, items of income and gain or deduction and loss shall first be allocated to the Limited Partners in respect of their 5% Series A Preferred Units in such amounts as is required to cause such Limited Partners’ adjusted Capital Account Balances (taking into account any amounts such Partners are obligated to contribute to the capital of the Partnership or are deemed obligated to contribute pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)) to equal the amount such Partner is entitled to receive pursuant to the provisions of Sections 4 and 5 of Annex A to this Agreement.

 

(d)                                 Minimum Gain Chargeback.  Notwithstanding any provision to the contrary, (i) any expense of the Partnership that is a “nonrecourse deduction” within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated in accordance with the Partners’ respective Percentage Interests, (ii) any expense of the Partnership that is a “partner nonrecourse deduction” within the meaning of Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that bears the “economic risk of loss” of such deduction in accordance with Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1) for any Partnership taxable year, then, subject to the exceptions set forth in Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income shall be allocated among the Partners in accordance with Regulations Section 1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j), and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership taxable year, then,  subject to the exceptions set forth in Regulations Section 1.704(2)(g), items of gain and income shall be allocated among the Partners in accordance with Regulations Section 1.704-2(i)(4) and the ordering rules contained in Regulations Section 1.704-2(j).  The manner in which it is reasonably expected that the deductions attributable to nonrecourse liabilities will be allocated for purposes of determining a Partner’s share of the nonrecourse liabilities of the Partnership within the meaning of Regulations Section 1.752-3(a)(3) shall be in accordance with a Partner’s Percentage Interest.

 

(e)                                  Qualified Income Offset.  If a Partner receives in any taxable year an adjustment, allocation or distribution described in subparagraphs (4), (5) or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such Partner’s Capital Account that exceeds the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i), such Partner shall be allocated specially for such taxable year (and, if necessary, later taxable years) items of income and gain in an amount and manner sufficient to eliminate such deficit Capital Account balance as quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d).  After the occurrence of an allocation of income or gain to a Partner in accordance with this Section 5.01(d), to the extent permitted by Regulations Section 1.704-1(b), items of expense or loss shall be allocated to such Partner in an amount necessary to offset the income or gain previously allocated to such Partner under this Section 5.01(d).

 

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(f)                                   Capital Account Deficits.  Loss shall not be allocated to a Limited Partner to the extent that such allocation would cause a deficit in such Partner’s Capital Account (after reduction to reflect the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain.  Any Loss in excess of that limitation shall be allocated to the General Partner.  After the occurrence of an allocation of Loss to the General Partner in accordance with this Section 5.01(e), to the extent permitted by Regulations Section 1.704-1(b), Profit first shall be allocated to the General Partner in an amount necessary to offset the Loss previously allocated to the General Partner under this Section 5.01(e).

 

(g)                                  Allocations Between Transferor and Transferee.  If a Partner transfers any part or all of its Partnership Interest, the distributive shares of the various items of Profit and Loss allocable among the Partners during such fiscal year of the Partnership shall be allocated between the transferor and the transferee Partner either (i) as if the Partnership’s fiscal year had ended on the date of the transfer or (ii) based on the number of days of such fiscal year that each was a Partner without regard to the results of Partnership activities in the respective portions of such fiscal year in which the transferor and the transferee were Partners.  The General Partner, in its sole and absolute discretion, shall determine which method shall be used to allocate the distributive shares of the various items of Profit and Loss between the transferor and the transferee Partner.

 

(h)                                 Special Allocations Regarding LTIP Units.  Notwithstanding the provisions of Sections 5.01(a) and (b) hereof, Liquidating Gains shall first be allocated to the LTIP Unitholders until their Economic Capital Account Balances, to the extent attributable to their ownership of LTIP Units, are equal to (i) the Common Unit Economic Balance, multiplied by (ii) the number of their LTIP Units.  For this purpose, “Liquidating Gains” means net capital gains realized in connection with the actual or hypothetical sale of all or substantially all of the assets of the Partnership, including but not limited to net capital gain realized in connection with an adjustment to the value of Partnership assets under Section 704(b) of the Code.  The “Economic Capital Account Balances” of the LTIP Unit holders will be equal to their Capital Account balances to the extent attributable to their ownership of LTIP Units.  Similarly, the “Common Unit Economic Balance” shall mean (i) the Capital Account balance of the General Partner, plus the amount of the General Partner’s share of any Partner Nonrecourse Debt Minimum Gain or Partnership Minimum Gain, in either case to the extent attributable to the General Partner’s ownership of Common Units and computed on a hypothetical basis after taking into account all allocations through the date on which any allocation is made under this Section 5.01(g), divided by (ii) the number of the General Partner’s Common Units.  Any such allocations shall be made among the LTIP Unitholders in proportion to the amounts required to be allocated to each under this Section 5.01(g).  The parties agree that the intent of this Section 5.01(g) is to make the Capital Account balance associated with each LTIP Unit to be economically equivalent to the Capital Account balance associated with the General Partner’s Common Units (on a per-Unit basis). The Partnership and the Partners intend that each LTIP Unit qualify as a profits interest within the meaning of Revenue Procedures 93-27 and 2001-43 and all provisions of this Agreement shall be interpreted consistently with such intent as determined by the General Partner in its sole discretion; provided, however, that none of the General Partner, Priam REIT, and the Partnership shall have liability to a recipient of LTIP Units under any circumstances as a result of such LTIP Unit not so qualifying.  In accordance with the foregoing, the General Partner may in its sole discretion adjust or limit aggregate allocations of Liquidating Gains made to LTIP Units in each taxable year of the Partnership such that they are no 

 

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greater than the excess (if any) of (x) the total amount of the Partnership’s items of book income and gain (as determined for purposes of maintaining Capital Accounts) for such year, over (y) the total amount of the Partnership’s items of book loss, deduction, and expense (as determined for purposes of maintaining Capital Accounts) for such year.

 

(i)                                     Definition of Profit and Loss.  “Profit” and “Loss” and any items of income, gain, expense or loss referred to in this Agreement shall be determined in accordance with federal income tax accounting principles, as modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss shall not include items of income, gain and expense that are specially allocated pursuant to Sections 5.01(c), (d) or (e) hereof.  All allocations of income, Profit, gain, Loss and expense (and all items contained therein) for federal income tax purposes shall be identical to all allocations of such items set forth in this Section 5.01, except as otherwise required by Section 704(c) of the Code and Regulations Section 1.704-1(b)(4).  With respect to properties acquired by the Partnership, the General Partner shall have the authority to elect the method to be used by the Partnership for allocating items of income, gain and expense as required by Section 704(c) of the Code with respect to such properties, and such election shall be binding on all Partners.

 

(j)                                    Definition of Net Profit and Net Loss.  “Net Profit” means the excess of the Partnership’s Profit over the Partnership’s Loss for any fiscal year or portion thereof, and “Net Loss” means the excess of the Partnership’s Loss over the Partnership’s Profit for any fiscal year or portion thereof.

 

(k)                                 Preferred Units.  The 5% Series A Preferred Units shall be treated as equity of the Partnership for federal, state and local income tax purposes. The General Partner shall amend this agreement from time to time to reflect the allocation of Profit and Loss in connection with priority distributions on any additional preferred units of limited partnership interest issued by the Partnership.

 

5.02                        Distribution of Cash.

 

(a)                                 Subject to Sections 5.02(c), (d) and (e) hereof and to the terms of any Partnership Unit Designation (including, without limitation, the Partnership Unit Designation for the 5% Series A Preferred Units attached hereto as Annex A), the Partnership shall distribute cash at such times and in such amounts as are determined by the General Partner in its sole and absolute discretion, to the Partners who are Partners on the Partnership Record Date with respect to such quarter (or other distribution period) in proportion with their respective Common Units on the Partnership Record Date.

 

(b)                                 In accordance with the terms of Section 4.04(a)(ii), the LTIP Unitholders shall be entitled to receive distributions in an amount per LTIP Unit equal to the Common Partnership Unit Distribution; provided, however, that the General Partner may in its sole discretion adjust distributions made pursuant to this Section 5.02 as it deems necessary to ensure that the amount distributed to each LTIP Unit does not exceed the amount attributable to items of Partnership income or gain realized after the date such LTIP Unit was issued by the Partnership. The intent of the foregoing sentence is to ensure that all LTIP Units qualify as “profits interests” under Revenue Procedure 93-27,1993-2 C.B. 343 (June 9, 1993) and Revenue Procedure 2001-43, 2001-2 C.B. 191 (August 3, 2001), and this Section 5.02 shall be interpreted and applied consistently therewith; provided, however, that none of the General Partner, Priam REIT, and the Partnership shall have 

 

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liability to a recipient of LTIP Units under any circumstances as a result of such LTIP Unit not so qualifying. The General Partner at its discretion may amend this Section 5.02. to ensure that any LTIP Units will qualify as “profits interests” under Revenue Procedure 9327,19932 C.B. 343 (June 9, 1993) and Revenue Procedure 2001-43, 2001-2 C.B. 191 (August 3, 2001) (and any other similar rulings or regulations that may be in effect at such time).

 

(c)                                  If a new or existing Partner acquires additional Partnership Units in exchange for a Capital Contribution on any date other than a Partnership Record Date (other than Partnership Units acquired by the General Partner in connection with the issuance of additional REIT Shares or Additional Securities), the cash distribution attributable to such additional Partnership Units relating to the Partnership Record Date next following the issuance of such additional Partnership Units shall be reduced in the proportion to (i) the number of days that such additional Partnership Units are held by such Partner bears to (ii) the number of days between such Partnership Record Date and the immediately preceding Partnership Record Date.

 

(d)                                 Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the Code.  To the extent that the Partnership is required to withhold and pay over to any taxing authority any amount resulting from the allocation or distribution of income to a Partner or assignee (including by reason of Section 1446 of the Code), either (i) if the actual amount to be distributed to the Partner (the “Distributable Amount”) equals or exceeds the Withheld Amount, the entire Distributable Amount shall be treated as a distribution of cash to such Partner, or (ii) if the Distributable Amount is less than the Withheld Amount, the excess of the Withheld Amount over the Distributable Amount shall be treated as a Partnership Loan from the Partnership to the Partner on the day the Partnership pays over such amount to a taxing authority.  A Partnership Loan shall be repaid upon the demand of the Partnership or, alternatively, through withholding by the Partnership with respect to subsequent distributions to the applicable Partner or assignee.  In the event that a Limited Partner fails to pay any amount owed to the Partnership with respect to the Partnership Loan within 15 days after demand for payment thereof is made by the Partnership on the Limited Partner, the General Partner, in its sole and absolute discretion, may elect to make the payment to the Partnership on behalf of such Defaulting Limited Partner.  In such event, on the date of payment, the General Partner shall be deemed to have extended a General Partner Loan to the Defaulting Limited Partner in the amount of the payment made by the General Partner and shall succeed to all rights and remedies of the Partnership against the Defaulting Limited Partner as to that amount.  Without limitation, the General Partner shall have the right to receive any distributions that otherwise would be made by the Partnership to the Defaulting Limited Partner until such time as the General Partner Loan has been paid in full, and any such distributions so received by the General Partner shall be treated as having been received by the Defaulting Limited Partner and immediately paid to the General Partner.

 

Any amounts treated as a Partnership Loan or a General Partner Loan pursuant to this Section 5.02(d) shall bear interest at the lesser of (i) 300 basis points above the base rate on corporate loans at large United States money center commercial banks, as published from time to time in The Wall Street Journal or, if not so published, in any similar publication, or (ii) the maximum lawful rate of interest on such obligation, such interest to accrue from the date the 

 

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Partnership or the General Partner, as applicable, is deemed to extend the loan until such loan is repaid in full.

 

(e)                                  In no event may a Partner receive a distribution of cash with respect to a Partnership Unit if such Partner is entitled to receive a cash dividend or other distribution of cash as the holder of record of a REIT Share for which all or part of such Partnership Unit has been or will be redeemed.

 

5.03                        REIT Distribution Requirements.  The General Partner shall use commercially reasonable efforts to cause the Partnership to distribute amounts sufficient to enable Priam REIT to pay distributions to its stockholders that will allow Priam REIT to (i) meet its distribution requirement for qualification as a REIT as set forth in Section 857 of the Code and (ii) avoid any federal income or excise tax liability imposed by the Code, other than to the extent Priam REIT elects to retain and pay income tax on its net capital gain.

 

5.04                        No Right to Distributions in Kind.  No Partner shall be entitled to demand property other than cash in connection with any distributions by the Partnership.

 

5.05                        Limitations on Return of Capital Contributions.  Notwithstanding any of the provisions of this Article V, no Partner shall have the right to receive, and the General Partner shall not have the right to make, a distribution that includes a return of all or part of a Partner’s Capital Contributions, unless after giving effect to the return of a Capital Contribution, the sum of all Partnership liabilities, other than the liabilities to a Partner for the return of his Capital Contribution, does not exceed the fair market value of the Partnership’s assets.

 

5.06                        Distributions Upon Liquidation.

 

(a)                                 Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Partnership, after payment of, or adequate provision for, debts and obligations of the Partnership, including any Partner loans, and subject to the terms of any Partnership Unit Designation (including, without limitation, the Partnership Unit Designation for the 5% Series A Preferred Units attached hereto as Annex A), any remaining assets of the Partnership shall be distributed to all Partners with positive Capital Accounts in accordance with their respective positive Capital Account balances.

 

(b)                                 For purposes of Section 5.06(a) hereof, the Capital Account of each Partner  shall be determined after all adjustments made in accordance with Sections 5.01 and 5.02 hereof resulting from Partnership operations and from all sales and dispositions of all or any part of the Partnership’s assets. Notwithstanding any provision in this Article 5 to the contrary, any Profits and Losses realized in connection with such transaction and thereafter (and, if necessary, constituent items of income, gain, loss and deduction) shall be specially allocated for such fiscal year (and to the extent permitted by Section 761(c) of the Code, for the immediately preceding fiscal year) among the Partners as required so as to cause to the extent possible liquidating distributions pursuant to Section 5.06(a) hereof to be made in the same amounts and proportions as would have resulted had such distributions instead been made pursuant to Section 5.02 hereof.

 

(c)                                  Any distributions pursuant to this Section 5.06 shall be made by the end of the Partnership’s taxable year in which the liquidation occurs (or, if later, within 90 days after the date of the liquidation).  To the extent deemed advisable by the General Partner, appropriate 

 

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arrangements (including the use of a liquidating trust) may be made to assure that adequate funds are available to pay any contingent debts or obligations.

 

5.07                        Substantial Economic Effect.  It is the intent of the Partners that the allocations of Profit and Loss under this Agreement have substantial economic effect (or be consistent with the Partners’ interests in the Partnership in the case of the allocation of losses attributable to nonrecourse debt) within the meaning of Section 704(b) of the Code as interpreted by the Regulations promulgated pursuant thereto.  Article V and other relevant provisions of this Agreement shall be interpreted in a manner consistent with such intent.

 

ARTICLE VI

 

RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER

 

6.01                        Management of the Partnership.

 

(a)                                 Except as otherwise expressly provided in this Agreement, the General Partner shall have full, complete and exclusive discretion to manage and control the business of the Partnership for the purposes herein stated, and shall make all decisions affecting the business and assets of the Partnership.  Subject to the restrictions specifically contained in this Agreement, the powers of the General Partner shall include, without limitation, the authority to take the following actions on behalf of the Partnership:

 

(i)                                     acquire, purchase, own, operate, lease and, subject to Section 6 of Annex A attached hereto, dispose of any real property and any other property or assets including, but not limited to, notes and mortgages that the General Partner determines are necessary or appropriate in the business of the Partnership;

 

(ii)                                  construct buildings and make other improvements on the properties owned or leased by the Partnership;

 

(iii)                               authorize, issue, sell, redeem or otherwise purchase any Partnership Units or any securities of the Partnership (including secured and unsecured debt obligations of the Partnership, debt obligations of the Partnership convertible into any class or series of Partnership Units, or Rights relating to any class or series of Partnership Units);

 

(iv)                              borrow or lend money for the Partnership, issue or receive evidences of indebtedness in connection therewith, refinance, increase the amount of, modify, amend or change the terms of, or extend the time for the payment of, any such indebtedness, and secure indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s assets;

 

(v)                                 pay, either directly or by reimbursement, all operating costs and general administrative expenses of the Partnership to third parties or to the General Partner or its Affiliates as set forth in this Agreement;

 

(vi)                              guarantee or become a co-maker of indebtedness of any Subsidiary of the General Partner or the Partnership, refinance, increase the amount of, modify, amend or change the terms of, or extend the time for the payment of, any such guarantee or indebtedness, and secure

 

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such guarantee or indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s assets;

 

(vii)                           use assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with this Agreement, including, without limitation, payment, either directly or by reimbursement, of all operating costs and general and administrative expenses of the General Partner, the Partnership or any Subsidiary of either, to third parties or to the General Partner as set forth in this Agreement;

 

(viii)                        lease all or any portion of any of the Partnership’s assets, whether or not the terms of such leases extend beyond the termination date of the Partnership and whether or not any portion of the Partnership’s assets so leased are to be occupied by the lessee, or, in turn, subleased in whole or in part to others, for such consideration and on such terms as the General Partner may determine and to further lease property from third parties, including ground leases;

 

(ix)                              prosecute, defend, arbitrate or compromise any and all claims or liabilities in favor of or against the Partnership, on such terms and in such manner as the General Partner may determine, and similarly prosecute, settle or defend litigation with respect to the Partners, the Partnership or the Partnership’s assets;

 

(x)                                 file applications, communicate and otherwise deal with any and all governmental agencies having jurisdiction over, or in any way affecting, the Partnership’s assets or any other aspect of the Partnership’s business;

 

(xi)                              make or revoke any election permitted or required of the Partnership by any taxing authority;

 

(xii)                           maintain such insurance coverage for public liability, fire and casualty, and any and all other insurance for the protection of the Partnership, for the conservation of Partnership assets, or for any other purpose convenient or beneficial to the Partnership, in such amounts and such types, as it shall determine from time to time;

 

(xiii)                        determine whether or not to apply any insurance proceeds for any property to the restoration of such property or to distribute the same;

 

(xiv)                       establish one or more divisions of the Partnership, hire and dismiss employees of the Partnership or any division of the Partnership, and retain legal counsel, accountants, consultants, real estate brokers and such other persons as the General Partner may deem necessary or appropriate in connection with the Partnership business and pay therefor such reasonable remuneration as the General Partner may deem reasonable and proper;

 

(xv)                          retain other services of any kind or nature in connection with the Partnership’s business, and pay therefor such remuneration as the General Partner may deem reasonable and proper;

 

(xvi)                       negotiate and conclude agreements on behalf of the Partnership with respect to any of the rights, powers and authority conferred upon the General Partner;

 

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(xvii)                    maintain accurate accounting records and file all federal, state and local income tax returns on behalf of the Partnership;

 

(xviii)                 distribute Partnership cash or other Partnership assets in accordance with this Agreement;

 

(xix)                       form or acquire an interest in, and contribute property to, any further limited or general partnerships, joint ventures or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of property to, its Subsidiaries and any other Person in which it has an equity interest from time to time);

 

(xx)                          establish Partnership reserves for working capital, capital expenditures, contingent liabilities or any other valid Partnership purpose;

 

(xxi)                       merge, consolidate or combine the Partnership with or into another Person;

 

(xxii)                    enter into and perform obligations under underwriting or other agreements in connection with issuances of securities by the Partnership or the General Partner or any affiliate thereof;

 

(xxiii)                 do any and all acts and things necessary or prudent to ensure that the Partnership will not be classified as a “publicly traded partnership” taxable as a corporation under Section 7704 of the Code or an “investment company” or a subsidiary of an investment company under the Investment Company Act of 1940; and

 

(xxiv)                take such other action, execute, acknowledge, swear to or deliver such other documents and instruments, and perform any and all other acts that the General Partner deems necessary or appropriate for the formation, continuation and conduct of the business and affairs of the Partnership (including, without limitation, all actions consistent with allowing Priam REIT at all times to qualify as a REIT unless Priam REIT voluntarily terminates or revokes its REIT status) and to possess and enjoy all of the rights and powers of a general partner as provided by the Act.

 

(b)                                 Except as otherwise provided herein, to the extent the duties of the General Partner require expenditures of funds to be paid to third parties, the General Partner shall not have any obligations hereunder except to the extent that Partnership funds are reasonably available to it for the performance of such duties, and nothing herein contained shall be deemed to authorize or require the General Partner, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of the Partnership.

 

6.02                        Delegation of Authority.  The General Partner may delegate any or all of its powers, rights and obligations hereunder, and may appoint, employ, contract or otherwise deal with any Person for the transaction of the business of the Partnership, which Person may, under supervision of the General Partner, perform any acts or services for the Partnership as the General Partner may approve.

 

6.03                        Indemnification and Exculpation of Indemnitees.

 

(a)                                 The Partnership shall indemnify an Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and 

 

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expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership as set forth in this Agreement in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that:  (i) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the Indemnitee actually received an improper personal benefit in money, property or services; or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful.  The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this Section 6.03(a).  The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee acted in a manner contrary to that specified in this Section 6.03(a).  Any indemnification pursuant to this Section 6.03 shall be made only out of the assets of the Partnership.

 

(b)                                 The Partnership shall reimburse an Indemnitee for reasonable expenses incurred by an Indemnitee who is a party to a proceeding in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in this Section 6.03 has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

 

(c)                                  The indemnification provided by this Section 6.03 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled  under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity.

 

(d)                                 The Partnership may purchase and maintain insurance, as an expense of the Partnership, on behalf of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

 

(e)                                  For purposes of this Section 6.03, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by the Indemnitee of its duties to the Partnership also imposes duties on, or otherwise involves services by, the Indemnitee to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of this Section 6.03; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties for a purpose reasonably believed by the Indemnitee to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is not opposed to the best interests of the Partnership.

 

(f)                                   In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.

 

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(g)                                  An Indemnitee shall not be denied indemnification in whole or in part under this Section 6.03 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

 

(h)                                 The provisions of this Section 6.03 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

 

(i)                                     Any amendment, modification or repeal of this Section 6.03 or any provision hereof shall be prospective only and shall not in any way affect the indemnification of an Indemnitee by the Partnership under this Section 6.03 as in effect immediately prior to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.

 

6.04                        Liability of the General Partner.

 

(a)                                 Notwithstanding anything to the contrary set forth in this Agreement, neither the General Partner, nor any of its directors, officers, agents or employees shall be liable for monetary damages to the Partnership or any Partners for losses sustained or liabilities incurred as a result of errors in judgment or mistakes of fact or law or of any act or omission if any such party acted in good faith.  The General Partner shall not be in breach of any duty that the General Partner may owe to the Limited Partners or the Partnership or any other Persons under this Agreement or of any duty stated or implied by law or equity provided the General Partner, acting in good faith, abides by the terms of this Agreement.

 

(b)                                 The Limited Partners expressly acknowledge that the General Partner is acting on behalf of the Partnership, the Limited Partners and Priam REIT’s stockholders collectively, that the General Partner is under no obligation to consider the separate interests of the Limited Partners (including, without limitation, the tax consequences to Limited Partners or the tax consequences of some, but not all, of the Limited Partners) in deciding whether to cause the Partnership to take (or decline to take) any actions.  In the event of a conflict between the interests of the stockholders of Priam REIT on the one hand and the Limited Partners on the other, the General Partner shall endeavor in good faith to resolve the conflict in a manner not adverse to either the stockholders of Priam REIT or the Limited Partners; provided, however, that for so long as the General Partner owns a controlling interest in the Partnership, any such conflict that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse to either the stockholders of Priam REIT or the Limited Partners shall be resolved in favor of the stockholders of the General Partner.  The General Partner shall not be liable for monetary damages for losses sustained, liabilities incurred or benefits not derived by the Limited Partners in connection with such decisions.

 

(c)                                  Subject to its obligations and duties as General Partner set forth in Section 6.01 hereof, the General Partner may exercise any of the powers granted to it under this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents.  The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by it in good faith.

 

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(d)                                 Notwithstanding any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order (i) to protect the ability of Priam REIT to continue to qualify as a REIT or (ii) to prevent the General Partner from incurring any taxes under Section 857, Section 4981 or any other provision of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners.

 

(e)                                  Any amendment, modification or repeal of this Section 6.04 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the General Partner’s or any of its officers’, directors’, agents’ or employees’ liability to the Partnership and the Limited Partners under this Section 6.04 as in effect immediately prior to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.

 

6.05                        Partnership Obligations.

 

(a)                                 Except as provided in this Section 6.05 and elsewhere in this Agreement (including the provisions of Articles V and VI hereof regarding distributions, payments and allocations to which it may be entitled), the General Partner shall not be compensated for its services as general partner of the Partnership.

 

(b)                                 All Administrative Expenses shall be obligations of the Partnership, and the General Partner shall be entitled to reimbursement by the Partnership for any expenditure (including Administrative Expenses) incurred by it on behalf of the Partnership that shall be made other than out of the funds of the Partnership.  All reimbursements hereunder shall be characterized for federal income tax purposes as expenses of the Partnership incurred on its behalf, and not as expenses of the General Partner.

 

6.06                        Outside Activities.  Subject to Section 6.08 hereof, the Articles and any agreements entered into by the General Partner or its Affiliates with the Partnership or a Subsidiary, any officer, director, employee, agent, trustee, Affiliate or stockholder of the General Partner, the General Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities substantially similar or identical to those of the Partnership.  Neither the Partnership nor any of the Limited Partners shall have any rights by virtue of this Agreement in any such business ventures, interest or activities.  None of the Limited Partners nor any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any such business ventures, interests or activities, and the General Partner shall have no obligation pursuant to this Agreement to offer any interest in any such business ventures, interests and activities to the Partnership or any Limited Partner, even if such opportunity is of a character that, if presented to the Partnership or any Limited Partner, could be taken by such Person.

 

6.07                        Employment or Retention of Affiliates.

 

(a)                                 Any Affiliate of the General Partner may be employed or retained by the Partnership and may otherwise deal with the Partnership (whether as a buyer, lessor, lessee, manager, furnisher of goods or services, broker, agent, lender or otherwise) and may receive from the Partnership any

 

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compensation, price or other payment therefor that the General Partner determines to be fair and reasonable.

 

(b)                                 The Partnership may lend or contribute to its Subsidiaries or other Persons in which it has an equity investment, and such Persons may borrow funds from the Partnership, on terms and conditions established in the sole and absolute discretion of the General Partner.  The foregoing authority shall not create any right or benefit in favor of any Subsidiary or any other Person.

 

(c)                                  The Partnership may transfer assets to joint ventures, other partnerships, corporations or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions as the General Partner deems are consistent with this Agreement and applicable law.

 

6.08                        General Partner Activities.  The General Partner agrees that, generally, all business activities of the General Partner, including activities pertaining to the acquisition, development, ownership of or investment in real property or other property, shall be conducted through the Partnership or one or more Subsidiaries of the Partnership; provided, however, that the General Partner may make direct acquisitions or undertake business activities if such acquisitions or activities are made in connection with the issuance of Additional Securities by the General Partner or the business activity has been approved by a majority of the Independent Directors.  If, at any time, the General Partner acquires material assets (other than Partnership Units or other assets on behalf of the Partnership) without transferring such assets to the Partnership, the definition of “REIT Shares Amount” may be adjusted, as reasonably determined by the General Partner, to reflect only the fair market value of a REIT Share attributable to the General Partner’s Partnership Units and other assets held on behalf of the Partnership.

 

6.09                        Title to Partnership Assets.  Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof.  Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner may determine, including Affiliates of the General Partner.  The General Partner hereby declares and warrants that any Partnership assets for which legal title is held in the name of the General Partner or any nominee or Affiliate of the General Partner shall be held by the General Partner for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, however, that the General Partner shall use its commercially reasonable efforts to cause beneficial and record title to such assets to be vested in the Partnership as soon as reasonably practicable.  All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets is held.

 

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ARTICLE VII

 

CHANGES IN GENERAL PARTNER

 

7.01                        Transfer of the General Partner’s Partnership Interest.

 

(a)                                 The General Partner shall not transfer all or any portion of its General Partnership Interests, and the General Partner shall not withdraw as General Partner, except as provided in or in connection with a transaction contemplated by Sections 7.01(c), (d) or (e) hereof.

 

(b)                                 The General Partner agrees that its General Partnership Interest will at all times be in the aggregate at least one-tenth of one percent (0.1%).

 

(c)                                  Except as otherwise provided in Section 7.01(d) or (e) hereof, the General Partner shall not engage in any merger, consolidation or other combination with or into another Person or sale of all or substantially all of its assets (other than in connection with a change in the General Partner’s state of incorporation or organizational form), in each case which results in a Change of Control of the General Partner (a “Transaction”), unless at least one of the following conditions is met:

 

(i)                                     the consent of a Majority in Interest (excluding, for purposes of determining a Majority in Interest in this instance, Partnership Interests held by the General Partner and any Subsidiary of the General Partner) is obtained;

 

(ii)                                  as a result of such Transaction, all Limited Partners (other than the General Partner and any Subsidiary of the General Partner, and, in the case of LTIP Unitholders, subject to the terms of any applicable Equity Incentive Plan or Vesting Agreement) will receive, or have the right to receive, (A) for each Partnership Unit (other than 5% Series A Preferred Units) they hold, an amount of cash, securities or other property equal or substantially equivalent in value, as determined by the General Partner in good faith, to the product of the Conversion Factor and the greatest amount of cash, securities or other property paid in the Transaction to a holder of one REIT Share in consideration of one REIT Share and (B) for each 5% Series A Preferred Unit they hold an amount of cash, securities or other property equal or substantially equivalent in value, as determined by the General Partner in good faith, to the liquidation preference value of a 5% Series A Preferred Unit; provided that if, in connection with such Transaction, a purchase, tender or exchange offer (“Offer”) shall have been made to and accepted by the holders of more than 50% of the outstanding REIT Shares: (A) each holder of Partnership Units other than 5% Series A Preferred Units (other than the General Partner and any Subsidiary of the General Partner) shall be given the option to exchange its Partnership Units (other than 5% Series A Preferred Units) for an amount of cash, securities or other property equal or substantially equivalent in value, as determined by the General Partner in good faith, to the greatest amount of cash, securities or other property that such Limited Partner would have received had it (x) exercised its Common Unit Redemption Right pursuant to Section 8.04 hereof and (y) sold, tendered or exchanged pursuant to the Offer the REIT Shares Amount that would be receivable upon exercise of the Common Unit Redemption Right immediately prior to the expiration of the Offer and (B) each holder of 5% Series A Preferred Units shall be given the option to exchange its 5% Series A Preferred Units for an amount of cash, securities or other property equal or substantially equivalent in value, as determined by the General Partner in good faith, to the liquidation preference value of a 5% Series A Preferred Unit; or

 

(iii)                               the General Partner is the surviving entity in the Transaction and either (A) the holders of REIT Shares do not receive cash, securities or other property in the Transaction or (B) all Limited Partners (other than the General Partner or any Subsidiary of the General Partner, and, in the case of LTIP Unitholders, subject to the terms of any applicable Equity Incentive Plan

 

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or Vesting Agreement) receive: (x) for each Partnership Unit other than 5% Series A Preferred Units, an amount of cash, securities or other property equal or substantially equivalent in value, as determined by the General Partner in good faith, to the product of the Conversion Factor and the greatest amount of cash, securities or other property (expressed as an amount per REIT Share) received in the Transaction by any holder of REIT Shares in respect of such holder’s REIT Shares and (y) for each 5% Series A Preferred Unit, an amount of cash, securities or other property equal or substantially equivalent in value, as determined by the General Partner in good faith, to the liquidation preference value of a 5% Series A Preferred Unit.

 

(d)                                 Notwithstanding Section 7.01(c) hereof, the General Partner may merge with or into or consolidate with another entity if immediately after such merger or consolidation (i) substantially all of the assets of the successor or surviving entity (the “Survivor”), other than Partnership Units held by the General Partner, are contributed, directly or indirectly, to the Partnership as a Capital Contribution in exchange for Partnership Units, or for economically equivalent partnership interests issued by a Subsidiary Partnership established at the direction of the Board of Directors, with a fair market value equal to the value of the assets so contributed as determined by the Survivor in good faith and (ii) the Survivor expressly agrees to assume all obligations of the General Partner hereunder.  Upon such contribution and assumption, the Survivor shall have the right and duty to amend this Agreement as set forth in this Section 7.01(d).  The Survivor shall in good faith arrive at a new method for the calculation of the Cash Amount, the REIT Shares Amount and Conversion Factor for a Partnership Unit after any such merger or consolidation so as to approximate the existing method for such calculation as closely as reasonably possible.  Such calculation shall take into account, among other things, the kind and amount of securities, cash and other property that was receivable upon such merger or consolidation by a holder of REIT Shares or options, warrants or other rights relating thereto, and which a holder of Partnership Units could have acquired had such Partnership Units been redeemed in exchange for the REIT Shares Amount immediately prior to such merger or consolidation.  Such amendment to this Agreement shall provide for adjustment to such method of calculation, which shall be as nearly equivalent as may be practicable to the adjustments provided for with respect to the Conversion Factor.  The Survivor also shall in good faith modify the definition of REIT Shares and make such amendments to Section 8.04 hereof so as to approximate the existing rights and obligations set forth in Section 8.04 hereof as closely as reasonably possible.  The above provisions of this Section 7.01(d) shall similarly apply to successive mergers or consolidations permitted hereunder.

 

In respect of any transaction described in the preceding paragraph, the General Partner shall use its commercially reasonable efforts to seek to structure such transaction to avoid causing the Limited Partners (other than the General Partner or any Subsidiary) to recognize a gain for federal income tax purposes by virtue of the occurrence of or their participation in such transaction, provided such efforts are consistent with and subject in all respects to the exercise of the Board of Directors’ fiduciary duties to the stockholders of Priam REIT under applicable law.

 

(e)                                  Notwithstanding anything in this Article VII,

 

(i)                                     The General Partner may transfer all or any portion of its General Partnership Interest to (A) any wholly owned Subsidiary of the General Partner or (B) the owner of all of the ownership interests of the General Partner, and following a transfer of all of its General Partnership Interest, may withdraw as General Partner; and

 

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(ii)                                  the General Partner may engage in a transaction required by law or by the rules of any national securities exchange or over-the-counter interdealer quotation system on which the REIT Shares are listed or traded.

 

7.02                        Admission of a Substitute or Additional General Partner.  A Person shall be admitted as a substitute or additional General Partner of the Partnership only if the following terms and conditions are satisfied:

 

(a)                                 the Person to be admitted as a substitute or additional General Partner shall have accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a counterpart thereof and such other documents or instruments as may be required or appropriate in order to effect the admission of such Person as a General Partner, and a certificate evidencing the admission of such Person as a General Partner shall have been filed for recordation and all other actions required by Section 2.05 hereof in connection with such admission shall have been performed;

 

(b)                                 if the Person to be admitted as a substitute or additional General Partner is a corporation or a partnership, it shall have provided the Partnership with evidence satisfactory to counsel for the Partnership of such Person’s authority to become a General Partner and to be bound by the terms and provisions of this Agreement; and

 

(c)                                  counsel for the Partnership shall have rendered an opinion (relying on such opinions from other counsel as may be necessary) that the admission of the Person to be admitted as a substitute or additional General Partner is in conformity with the Act, that none of the actions taken in connection with the admission of such Person as a substitute or additional General Partner will cause (i) the Partnership to be classified other than as a partnership for federal income tax purposes, or (ii) the loss of any Limited Partner’s limited liability.

 

7.03                        Effect of Bankruptcy, Withdrawal, Death or Dissolution of General Partner.

 

(a)                                 Upon the occurrence of an Event of Bankruptcy as to the General Partner (and its removal pursuant to Section 7.04(a) hereof) or the death, withdrawal, removal or dissolution of the General Partner (except that, if the General Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership shall be deemed not to be a dissolution of the General Partner if the business of the General Partner is continued by the remaining partner or partners), the Partnership shall be dissolved and terminated unless the Partnership is continued pursuant to Section 7.03(b) hereof.  The merger of the General Partner with or into any entity that is admitted as a substitute or successor General Partner pursuant to Section 7.02 hereof shall not be deemed to be the withdrawal, dissolution or removal of the General Partner.

 

(b)                                 Following the occurrence of an Event of Bankruptcy as to the General Partner (and its removal pursuant to Section 7.04(a) hereof) or the death, withdrawal, removal or dissolution of the General Partner (except that, if the General Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership shall be deemed not to be a dissolution of the General Partner if the business of such General Partner is continued by the remaining partner or partners), the Limited Partners, within 90 days after such occurrence, may elect to continue the business of the Partnership for the

 

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balance of the term specified in Section 2.04 hereof by selecting, subject to Section 7.02 hereof and any other provisions of this Agreement, a substitute General Partner by consent of a Majority in Interest.  If the Limited Partners elect to continue the business of the Partnership and admit a substitute General Partner, the relationship with the Partners and of any Person who has acquired an interest of a Partner in the Partnership shall be governed by this Agreement.

 

7.04                        Removal of General Partner.

 

(a)                                 Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, the General Partner, the General Partner shall be deemed to be removed automatically; provided, however, that if the General Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of, a partner in such partnership shall be deemed not to be a dissolution of the General Partner if the business of the General Partner is continued by the remaining partner or partners.  The Limited Partners may not remove the General Partner, with or without cause.

 

(b)                                 If the General Partner has been removed pursuant to this Section 7.04 and the Partnership is continued pursuant to Section 7.03 hereof, the General Partner shall promptly transfer and assign its General Partnership Interest in the Partnership to the substitute General Partner approved by a Majority in Interest in accordance with Section 7.03(b) hereof and otherwise be admitted to the Partnership in accordance with Section 7.02 hereof.  At the time of assignment, the removed General Partner shall be entitled to receive from the substitute General Partner the fair market value of the General Partnership Interest of such removed General Partner.  Such fair market value shall be determined by an appraiser mutually agreed upon by the General Partner and a Majority in Interest (excluding, for purposes of determining a Majority in Interest in this instance, Partnership Interests held by the General Partner and any Subsidiary of the General Partner) within ten days following the removal of the General Partner.  In the event that the parties are unable to agree upon an appraiser, the removed General Partner and a Majority in Interest (excluding, for purposes of determining a Majority in Interest in this instance, Partnership Interests held by the General Partner and any Subsidiary of the General Partner) each shall select an appraiser.  Each such appraiser shall complete an appraisal of the fair market value of the removed General Partner’s General Partnership Interest within 30 days of the General Partner’s removal, and the fair market value of the removed General Partner’s General Partnership Interest shall be the average of the two appraisals; provided, however, that if the higher appraisal exceeds the lower appraisal by more than 20% of the amount of the lower appraisal, the two appraisers, no later than 40 days after the removal of the General Partner, shall select a third appraiser who shall complete an appraisal of the fair market value of the removed General Partner’s General Partnership Interest no later than 60 days after the removal of the General Partner.  In such case, the fair market value of the removed General Partner’s General Partnership Interest shall be the average of the two appraisals closest in dollar value.

 

(c)                                  The General Partnership Interest of a removed General Partner, during the time after default until transfer under Section 7.04(b) hereof, shall be converted to that of a special Limited Partner; provided, however, such removed General Partner shall not have any rights to participate in the management and affairs of the Partnership, and shall not be entitled to any portion of the income, expense, profit, gain or loss allocations or cash distributions allocable or payable, as the case may be, to the Limited Partners.  Instead, such removed General Partner shall receive and be entitled only to retain distributions or allocations of such items that it would have been entitled to

 

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receive in its capacity as General Partner, until the transfer is effective pursuant to Section 7.04(b) hereof.

 

(d)                                 All Partners shall have given and hereby do give such consents, shall take such actions and shall execute such documents as shall be legally necessary and  sufficient to effect all the foregoing provisions of this Section 7.04.

 

ARTICLE VIII

 

RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS

 

8.01                        Management of the Partnership.  The Limited Partners shall not participate in the management or control of Partnership business nor shall they transact any business for the Partnership, nor shall they have the power to sign for or bind the Partnership, such powers being vested solely and exclusively in the General Partner.  The Limited Partners covenant and agree not to hold themselves out in a manner that could reasonably be considered in contravention of the terms hereof by any third party.

 

8.02                        Power of Attorney.  Each Limited Partner by entry into this Agreement through execution, execution by power of attorney or other consent, hereby irrevocably appoints the General Partner its true and lawful attorney-in-fact, who may act for each Limited Partner and in its name, place and stead, and for its use and benefit, to sign, acknowledge, swear to, deliver, file or record, at the appropriate public offices, any and all documents, certificates and instruments (including, without limitation, this Agreement and all amendments or restatements thereof) as may be deemed necessary or desirable by the General Partner to carry out fully the provisions of this Agreement and the Act in accordance with their terms, which power of attorney is coupled with an interest and shall survive the death, dissolution or legal incapacity of the Limited Partner, or the transfer by the Limited Partner of any part or all of its Partnership Interest.

 

8.03                        Limitation on Liability of Limited Partners.  No Limited Partner shall be liable for any debts, liabilities, contracts or obligations of the Partnership.  A Limited Partner shall be liable to the Partnership only to make payments of its Capital Contribution, if any, as and when due hereunder.  After its Capital Contribution is fully paid, no Limited Partner shall, except as otherwise required by the Act, be required to make any further Capital Contributions or other payments or lend any funds to the Partnership.

 

8.04                        Common Unit Redemption Right.

 

(a)                                 Subject to Sections 8.04(b), (c), (d), (e) and (f) hereof, Section 3(f) of Annex A attached hereto and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Common Units (including any LTIP Units that are converted into Common Units) held by them, each Limited Partner (other than the General Partner or any Subsidiary of the General Partner, shall have the right (the “Common Unit Redemption Right”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Units held by such Limited Partner at a redemption price equal to and in the form of the Common Redemption Amount to be paid by the Partnership, provided that Common Units issued after the Original Date shall be subject to any restriction agreed to in writing between the Redeeming Limited Partner and the General Partner.  The Common Unit Redemption Right shall

 

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be exercised pursuant to a Notice of Exercise of Redemption Right in the form attached hereto as Exhibit B hereto delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Common Unit Redemption Right (the “Redeeming Limited Partner”) and such notice shall be irrevocable unless otherwise agreed upon by the General Partner.  In such event, the Partnership shall deliver the Cash Amount to the Redeeming Limited Partner.  Notwithstanding the foregoing, the Partnership shall not be obligated to satisfy such Common Unit Redemption Right if the General Partner elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section 8.04(b) hereof.  No Limited Partner may deliver more than two Notices of Redemption during any calendar year unless otherwise agreed by the General Partner.  A Limited Partner may not exercise the Common Unit Redemption Right for less than one thousand (1,000) Common Units or, if such Limited Partner holds less than one thousand (1,000) Common Units, all of the Common Units held by such Limited Partner.  The Redeeming Limited Partner shall have no right, with respect to any Common Units so redeemed, to receive any distribution paid with respect to Common Units if the record date for such distribution is on or after the Specified Redemption Date.

 

(b)                                 Notwithstanding the provisions of Section 8.04(a) hereof, if a Limited Partner exercises the Common Unit Redemption Right by delivering to the Partnership a Notice of Redemption, then the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire some or all of such Common Units by paying to the Redeeming Limited Partner either the Cash Amount or the REIT Shares Amount, as elected by the General Partner (in its sole and absolute discretion) on the Specified Redemption Date, whereupon the General Partner shall acquire the Common Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such Common Units.

 

In the event the General Partner purchases Common Units with respect to the exercise of a Common Unit Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Common Unit Redemption Right, and each of the Redeeming Limited Partner, the Partnership and the General Partner shall treat the transaction between the General Partner and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner’s Common Units to the General Partner.  Each Redeeming Limited Partner agrees to execute such documents as the General Partner may reasonably require in connection with the issuance of REIT Shares upon exercise of the Common Unit Redemption Right.

 

Each Redeeming Limited Partner covenants and agrees that all Common Units subject to a Notice of Redemption will be delivered to the Partnership or the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to such Common Units, neither the Partnership nor the General Partner shall be under any obligation to redeem or acquire such Common Units.

 

(c)                                  Notwithstanding the provisions of Sections 8.04(a) and 8.04(b) hereof, a Limited Partner shall not be entitled to exercise the Common Unit Redemption Right if the delivery of REIT Shares to such Limited Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.04(b) hereof (regardless of whether or not the General Partner would in fact purchase the Common Units pursuant to Section 8.04(b) hereof) would (i) result in such Limited Partner or any other Person (as defined in the Articles) owning, directly or indirectly, REIT Shares in excess of the Stock Ownership Limit or any Excepted Holder Limit (each as defined in the

 

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Articles) and calculated in accordance therewith, except as provided in the Articles, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in Priam REIT being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause Priam REIT to own, actually or constructively, 10% or more of the ownership interests in a tenant (other than a TRS) of Priam REIT’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause Priam REIT to fail to qualify as a REIT under the Code, or (vi) cause the acquisition of REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Units for purposes of complying with the registration provisions of the Securities Act.  The General Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.04(c).

 

(d)                                 Any Cash Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 90 days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law.  Any REIT Shares Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law.  Notwithstanding the foregoing, the General Partner agrees to use its commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably possible.

 

(e)                                  Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Common Unit Redemption Right.  If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Common Unit Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached as Exhibit C hereto and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request.  If the Partnership or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Common Unit Redemption Right and if the Common Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Common Units.  If, however, the Common Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Common Redemption Amount, the Common Redemption Amount shall be treated as an amount received by such Partner in redemption of its Common Units, and the Partner shall contribute the excess of the Withheld Amount over the Common Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.

 

(f)                                   Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on the ability of the Limited Partners to exercise their Common Unit

 

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Redemption Rights as and if deemed necessary or reasonable to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code.  If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the Partnership being treated as a “publicly traded partnership” under Section 7704 of the Code.

 

8.05                        Registration.  Subject to the terms of any agreement between the General Partner and a Limited Partner with respect to Common Units held by such Limited Partner:

 

(a)                                 Shelf Registration of the REIT Shares.  Following the date on which the General Partner becomes eligible to use a registration statement on Form S-3 for the registration of securities under the Securities Act (the “S-3 Eligible Date”), Priam REIT shall file with the Commission a shelf registration statement under Rule 415 of the Securities Act (the “Registration Statement”), or any similar rule that may be adopted by the Commission, covering (i) the issuance of REIT Shares issuable upon redemption of the Common Units held by the Limited Partners as of the date of this Agreement (“Redemption Shares”) and/or (ii) the resale by the holder of the Redemption Shares.  In connection therewith, Priam REIT will:

 

(1)                                 use commercially reasonable efforts to have such Registration Statement declared effective;

 

(2)                                 register or qualify the Redemption Shares covered by the Registration Statement under the securities or blue sky laws of such jurisdictions within the United States as required by law, and do such other reasonable acts and things as may be required of it to enable such holders to consummate the sale or other disposition in such jurisdictions of the Redemption Shares; provided, however, that Priam REIT shall not be required to (i) qualify as a foreign corporation or consent to a general or unlimited service or process in any jurisdictions in which it would not otherwise be required to be qualified or so consent or (ii) qualify as a dealer in securities; and

 

(3)                                 otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission in connection with the Registration Statement.

 

Priam REIT further agrees to supplement or make amendments to the Registration Statement, if required by the rules, regulations or instructions applicable to the registration form utilized by Priam REIT or by the Securities Act or rules and regulations thereunder for the Registration Statement.  Each Limited Partner agrees to furnish to the General Partner, upon request, such information with respect to the Limited Partner as may be required to complete and file the Registration Statement and to have the Registration Statement declared effective by the SEC.

 

In connection with and as a condition to Priam REIT’s obligations with respect to the filing of the Registration Statement pursuant to this Section 8.05, each Limited Partner agrees with the General Partner that:

 

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(w)                               it will provide in a timely manner to the General Partner such information with respect to the Limited Partner as reasonably required to complete the Registration Statement or as otherwise required to comply with applicable securities laws and regulations;

 

(x)                                 it will not offer or sell its Redemption Shares until (A) such Redemption Shares have been included in the Registration Statement and (B) it has received notice that the Registration Statement covering such Redemption Shares, or any post-effective amendment thereto, has been declared effective by the Commission, such notice to have been satisfied by the posting by the Commission on www.sec.gov of a notice of effectiveness;

 

(y)                                 if the General Partner determines in its good faith judgment, after consultation with counsel, that the use of the Registration Statement, including any pre- or post-effective amendment thereto, or the use of any prospectus contained in such Registration Statement would require the disclosure of important information that the General Partner has a bona fide business purpose for preserving as confidential or the disclosure of which, in the judgment of the General Partner, would impede the General Partner’s ability to consummate a significant transaction, upon written notice of such determination by the General Partner (which notice shall be deemed sufficient if given through the issuance of a press release or filing with the Commission and, if such notice is not publicly distributed, the Limited Partner agrees to keep the subject information confidential and acknowledges that such information may constitute material non-public information subject to the applicable restrictions under securities laws), the rights of each Limited Partner to offer, sell or distribute its Redemption Shares pursuant to such Registration Statement or prospectus or to require the General Partner to take action with respect to the registration or sale of any Redemption Shares pursuant to a Registration Statement (including any action contemplated by this Section 8.05) will be suspended until the date upon which the General Partner notifies such Limited Partner in writing (which notice shall be deemed sufficient if given through the issuance of a press release or filing with the Commission and, if such notice is not publicly distributed, the Limited Partner agrees to keep the subject information confidential and acknowledges that such information may constitute material non-public information subject to the applicable restrictions under securities laws) that suspension of such rights for the grounds set forth in this paragraph is no longer necessary; provided, however, that the General Partner may not suspend such rights for an aggregate period of more than 180 days in any 12-month period; and

 

(z)                                  in the case of the registration of any underwritten equity offering proposed by Priam REIT (other than any registration by Priam REIT on Form S-8, or a successor or substantially similar form, of an employee stock option, stock purchase or compensation plan or of securities issued or issuable pursuant to any such plan), each Limited Partner will agree, if requested in writing by the managing underwriter or underwriters administering such offering, not to effect any offer, sale or distribution of any REIT Shares or Redemption Shares (or any option or right to acquire REIT Shares or Redemption Shares) during the period commencing on the tenth (10th) day prior to the expected effective date (which date shall be stated in such notice) of the registration statement covering such underwritten primary equity offering or, if such offering shall be a “take-down” from an effective shelf registration statement, the tenth (10th) day prior to the expected commencement date (which date shall be stated in such notice) of such offering, and ending on the date specified by such managing underwriter in such written request to the Limited Partners; provided, however, that no Limited Partner shall be required to agree not to effect any offer, sale or distribution of its Redemption Shares for a period of time that is longer than the greater of 90 days or the period of time for which any senior executive of Priam REIT is required so to agree in

 

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connection with such offering.  Nothing in this paragraph shall be read to limit the ability of any Limited Partner to redeem its Common Units in accordance with the terms of this Agreement.

 

(b)                                 Listing on Securities Exchange.  If Priam REIT lists or maintains the listing of REIT Shares on any securities exchange or national market system, it shall, at its expense and as necessary to permit the registration and sale of the Redemption Shares hereunder, list thereon, maintain and, when necessary, increase such listing to include such Redemption Shares.

 

(c)                                  Registration Not Required.  Notwithstanding the foregoing, Priam REIT shall not be required to file or maintain the effectiveness of a registration statement relating to Redemption Shares after the first date upon which, in the opinion of counsel to Priam REIT, all of the Redemption Shares covered thereby could be sold by the holders thereof either (i) pursuant to Rule 144 under the Securities Act, or any successor rule thereto (“Rule 144”) without limitation as to amount or manner of sale or (ii) pursuant to Rule 144 in one transaction in accordance with the volume limitations contained in Rule 144(e) under the Securities Act.

 

(d)                                 Allocation of Expenses.  The Partnership shall pay all expenses in connection with the Registration Statement, including without limitation (i) all expenses incident to filing with the Financial Industry Regulatory Authority, Inc., (ii) registration fees, (iii) printing expenses, (iv) accounting and legal fees and expenses, except to the extent holders of Redemption Shares elect to engage accountants or attorneys in addition to the accountants and attorneys engaged by the General Partner or the Partnership, which fees and expenses for such accountants or attorneys shall be for the account of the holders of the Redemption Shares, (v) accounting expenses incident to or required by any such registration or qualification and (vi) expenses of complying with the securities or blue sky laws of any jurisdictions in connection with such registration or qualification; provided, however, neither the Partnership nor the General Partner shall be liable for, or pay (A) any discounts or commissions to any underwriter or broker attributable to the sale of Redemption Shares, or (B) any fees or expenses incurred by holders of Redemption Shares in connection with such registration that, according to the written instructions of any regulatory authority, the Partnership or the General Partner is not permitted to pay.

 

(e)                                  Indemnification.

 

(i)                                     In connection with the Registration Statement, the General Partner and the Partnership agree to indemnify each holder of Redemption Shares and each Person who controls any such holder of Redemption Shares within the meaning of Section 15 of the Securities Act, against all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) caused by any untrue, or alleged untrue, statement of a material fact contained in the Registration Statement, preliminary prospectus or prospectus (as amended or supplemented if the General Partner shall have furnished any amendments or supplements thereto) or caused by 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 such losses, claims, damages, liabilities or expenses are caused by any untrue statement, alleged untrue statement, omission, or alleged omission based upon information furnished to the General Partner by the Limited Partner or the holder for use therein.  The General Partner and each officer, director and controlling person of the General Partner and the Partnership shall be indemnified by each Limited Partner or holder of Redemption Shares covered by the Registration Statement for all such losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) caused by

 

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any untrue, or alleged untrue, statement or any omission, or alleged omission, based upon information furnished to the General Partner by the Limited Partner or the holder for use therein.

 

(ii)                                  Promptly upon receipt by a party indemnified under this Section 8.05(e) of notice of the commencement of any action against such indemnified party in respect of which indemnity or reimbursement may be sought against any indemnifying party under this Section 8.05(e), such indemnified party shall notify the indemnifying party in writing of the commencement of such action, but the failure to so notify the indemnifying party shall not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 8.05(e) unless such failure shall materially adversely affect the defense of such action.  In case notice of commencement of any such action shall be given to the indemnifying party as above provided, the indemnifying party shall be entitled to participate in and, to the extent it may wish, jointly with any other indemnifying party similarly notified, to assume the defense of such action at its own expense, with counsel chosen by it and reasonably satisfactory to such indemnified party.  The indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be paid by the indemnified party unless (i) the indemnifying party agrees to pay the same, (ii) the indemnifying party fails to assume the defense of such action with counsel reasonably satisfactory to the indemnified party or (iii) the named parties to any such action (including any impleaded parties) have been advised by such counsel that representation of such indemnified party and the indemnifying party by the same counsel would be inappropriate under applicable standards of professional conduct (in which case the indemnified party shall have the right to separate counsel and the indemnifying party shall pay the reasonable fees and expenses of such separate counsel, provided that, the indemnifying party shall not be liable for more than one separate counsel).  No indemnifying party shall be liable for any settlement of any proceeding entered into without its consent.

 

(f)                                   Contribution.

 

(i)                                     If for any reason the indemnification provisions contemplated by Section 8.05(e) hereof are either unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities referred to therein, then the party that would otherwise be required to provide indemnification or the indemnifying party (in either case, for purposes of this Section 8.05(f), the “Indemnifying Party”) in respect of such losses, claims, damages or liabilities, shall contribute to the amount paid or payable by the party that would otherwise be entitled to indemnification or the indemnified party (in either case, for purposes of this Section 8.05(f), the “Indemnified Party”) as a result of such losses, claims, damages, liabilities or expense, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified Party, as well as any other relevant equitable considerations.  The relative fault of the Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact related to information supplied by the Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party.

 

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(ii)                                  The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8.05(f) were determined by pro rata allocation (even if the holders were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph.  No person or entity determined to have committed a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

 

(iii)                               The contribution provided for in this Section 8.05(f) shall survive the termination of this Agreement and shall remain in full force and effect regardless of any investigation made by or on behalf of any Indemnified Party.

 

ARTICLE IX

 

TRANSFERS OF PARTNERSHIP INTERESTS

 

9.01                        Purchase for Investment.

 

(a)                                 Each Limited Partner, by its signature below or by its subsequent admission to the Partnership, hereby represents and warrants to the General Partner and to the Partnership that the acquisition of such Limited Partner’s Partnership Units is made for investment purposes only and not with a view to the resale or distribution of such Partnership Units.

 

(b)                                 Subject to the provisions of Section 9.02 hereof, each Limited Partner agrees that such Limited Partner will not sell, assign or otherwise transfer such Limited Partner’s Partnership Units or any fraction thereof, whether voluntarily or by operation of law or at judicial sale or otherwise, to any Person who does not make the representations and warranties to the General Partner set forth in Section 9.01(a) hereof.

 

9.02                        Restrictions on Transfer of Partnership Units.

 

(a)                                 Subject to the provisions of Sections 9.02(b) and (c) hereof, no Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise transfer all or any portion of such Limited Partner’s Partnership Units, or any of such Limited Partner’s economic rights as a Limited Partner, whether voluntarily or by operation of law or at judicial sale or otherwise (collectively, a “Transfer”) without the consent of the General Partner, which consent may be granted or withheld in its sole and absolute discretion; provided, however, that the term Transfer does not include (a) any redemption of Common Units by the Partnership or the General Partner, or acquisition of Common Units by the General Partner, pursuant to Section 8.04 or (b) any redemption of Partnership Units pursuant to any Partnership Unit Designation (including, without limitation, the Partnership Unit Designation for the 5% Series A Preferred Units attached hereto as Annex A).  The General Partner may require, as a condition of any Transfer to which it consents, that the transferor assume all costs incurred by the Partnership in connection therewith (including, but not limited to, cost of legal counsel).

 

(b)                                 No Limited Partner may withdraw from the Partnership other than as a result of a permitted Transfer (i.e., a Transfer consented to as contemplated by clause (a) above or a Transfer pursuant to Section 9.05 hereof) of all of such Limited Partner’s Partnership Units pursuant to this Article IX or pursuant to a redemption of all of such Limited Partner’s Common Units pursuant to

 

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Section 8.04 hereof.  Upon the permitted Transfer or redemption of all of a Limited Partner’s Common Units, such Limited Partner shall cease to be a Limited Partner.

 

(c)                                  No Limited Partner may effect a Transfer of its Partnership Units, in whole or in part, if, in the opinion of legal counsel for the Partnership, such proposed Transfer would require the registration of the Partnership Units under the Securities Act or would otherwise violate any applicable federal or state securities or blue sky law (including investment suitability standards).

 

(d)                                 No Transfer by a Limited Partner of its Partnership Units, in whole or in part, may be made to any Person if (i) in the opinion of legal counsel for the Partnership, such Transfer would result in the Partnership being treated as an association taxable as a corporation (other than a qualified REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the opinion of legal counsel for the Partnership, it would adversely affect the ability of Priam REIT to continue to qualify as a REIT or subject Priam REIT to any additional taxes under Section 857 or Section 4981 of the Code, (iii) the General Partner determines, in its sole and absolute discretion, that such Transfer, along or in connection with other Transfers, could cause the Partnership Units to be treated as readily tradable on an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code, or (iv) in the opinion of legal counsel for the Partnership, such Transfer is reasonably likely to cause the Partnership to fail to satisfy the 90% qualifying income test described in Section 7704(c) of the Code.

 

(e)                                  Any purported Transfer in contravention of any of the provisions of this Article IX shall be void ab initio and ineffectual and shall not be binding upon, or recognized by, the General Partner or the Partnership.

 

(f)                                   Prior to the consummation of any Transfer under this Article IX, the transferor and/or the transferee shall deliver to the General Partner such opinions, certificates and other documents as the General Partner shall request in connection with such Transfer.

 

9.03                        Admission of Substitute Limited Partner.

 

(a)                                 Subject to the other provisions of this Article IX, an assignee of the Partnership Units of a Limited Partner (which shall be understood to include any purchaser, transferee, donee or other recipient of any disposition of such Partnership Units) shall be deemed admitted as a Limited Partner of the Partnership only with the consent of the General Partner, which consent may be given or withheld by the General Partner in its sole and absolute discretion, and upon the completion of the following in a manner satisfactory to the General Partner:

 

(i)                                     The assignee shall have accepted and agreed to be bound by the terms and provisions of this Agreement by executing a counterpart or an amendment thereof, including a revised Exhibit A hereto, and such other documents or instruments as the General Partner may require in order to effect the admission of such Person as a Limited Partner.

 

(ii)                                  To the extent required, an amended Certificate evidencing the admission of such Person as a Limited Partner shall have been signed, acknowledged and filed in accordance with the Act.

 

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(iii)                               The assignee shall have delivered a letter containing the representation set forth in Section 9.01(a) hereof and the agreement set forth in Section 9.01(b) hereof.

 

(iv)                              If the assignee is a corporation, partnership, limited liability company or trust, the assignee shall have provided the General Partner with evidence satisfactory to counsel for the Partnership of the assignee’s authority to become a Limited Partner under the terms and provisions of this Agreement.

 

(v)                                 The assignee shall have executed a power of attorney containing the terms and provisions set forth in Section 8.02 hereof.

 

(vi)                              The assignee shall have paid all legal fees and other expenses of the Partnership and the General Partner and filing and publication costs in connection with its substitution as a Limited Partner.

 

(vii)                           The assignee shall have obtained the prior written consent of the General Partner to its admission as a Substitute Limited Partner, which consent may be given or denied in the exercise of the General Partner’s sole and absolute discretion.

 

(b)                                 For the purpose of allocating Profits and Losses and distributing cash received by the Partnership, a Substitute Limited Partner shall be treated as having become, and appearing in the records of the Partnership as, a Partner upon the filing of the Certificate described in Section 9.03(a)(ii) hereof or, if no such filing is required, the later of the date specified in the transfer documents or the date on which the General Partner has received all necessary instruments of transfer and substitution.

 

(c)                                  The General Partner and the Substitute Limited Partner shall cooperate with each other by preparing the documentation required by this Section 9.03 and making all required filings and publications.  The Partnership shall take all such action as promptly as practicable after the satisfaction of the conditions in this Article IX to the admission of such Person as a Limited Partner of the Partnership.

 

9.04                        Rights of Assignees of Partnership Units.

 

(a)                                 Subject to the provisions of Sections 9.01, 9.02 and 9.03 hereof, except as required by operation of law, the Partnership shall not be obligated for any purposes whatsoever to recognize the assignment by any Limited Partner of its Partnership Units until the Partnership has received notice thereof.

 

(b)                                 Any Person who is the assignee of all or any portion of a Limited Partner’s Partnership Units, but does not become a Substitute Limited Partner and desires to make a further assignment of such Partnership Units, shall be subject to all the provisions of this Article IX to the same extent and in the same manner as any Limited Partner desiring to make an assignment of its Partnership Units.

 

9.05                        Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.  The occurrence of an Event of Bankruptcy as to a Limited Partner, the death of a Limited Partner or a final adjudication that a Limited Partner is incompetent (which term shall include, but not be limited to, insanity) shall not cause the termination or dissolution of the Partnership, and the

 

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business of the Partnership shall continue if an order for relief in a bankruptcy proceeding is entered against a Limited Partner, the trustee or receiver of his estate or, if such Limited Partner dies, such Limited Partner’s executor, administrator or trustee, or, if such Limited Partner is finally adjudicated incompetent, such Limited Partner’s committee, guardian or conservator, shall have the rights of such Limited Partner for the purpose of settling or managing such Limited Partner’s estate property and such power as the bankrupt, deceased or incompetent Limited Partner possessed to assign all or any part of such Limited Partner’s Partnership Units and to join with the assignee in satisfying conditions precedent to the admission of the assignee as a Substitute Limited Partner.

 

9.06                        Joint Ownership of Partnership Units.  A Partnership Unit may be acquired by two individuals as joint tenants with right of survivorship, provided that such individuals either are married or are related and share the same home as tenants in common.  The written consent or vote of both owners of any such jointly held Partnership Unit shall be required to constitute the action of the owners of such Partnership Unit; provided, however, that the written consent of only one joint owner will be required if the Partnership has been provided with evidence satisfactory to counsel for the Partnership that the actions of a single joint owner can bind both owners under the applicable laws of the state of residence of such joint owners.  Upon the death of one owner of a Partnership Unit held in a joint tenancy with a right of survivorship, the Partnership Unit shall become owned solely by the survivor as a Limited Partner and not as an assignee.  The Partnership need not recognize the death of one of the owners of a jointly-held Partnership Unit until it shall have received certificated notice of such death.  Upon notice to the General Partner from either owner, the General Partner shall cause the Partnership Unit to be divided into two equal Partnership Units, which shall thereafter be owned separately by each of the former owners.

 

ARTICLE X

 

BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS

 

10.01                 Books and Records.  At all times during the continuance of the Partnership, the General Partner shall keep or cause to be kept at the Partnership’s specified office true and complete books of account in accordance with generally accepted accounting principles, including:  (a) a current list of the full name and last known business address of each Partner, (b) a copy of the Certificate of Limited Partnership and all certificates of amendment thereto, (c) copies of the Partnership’s federal, state and local income tax returns and reports, (d) copies of this Agreement and any financial statements of the Partnership for the three most recent years and (e) all documents and information required under the Act.  Any Partner or its duly authorized representative, upon paying the costs of collection, duplication and mailing, shall be entitled to a copy of such records if reasonably requested.

 

10.02                 Custody of Partnership Funds; Bank Accounts.

 

(a)                                 All funds of the Partnership not otherwise invested shall be deposited in one or more accounts maintained in such banking or brokerage institutions as the General Partner shall determine, and withdrawals shall be made only on such signature or signatures as the General Partner may, from time to time, determine.

 

(b)                                 All deposits and other funds not needed in the operation of the business of the Partnership may be invested by the General Partner.  The funds of the Partnership shall not be

 

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commingled with the funds of any Person other than the General Partner except for such commingling as may necessarily result from an investment in those investment companies permitted by this Section 10.02(b).

 

10.03                 Fiscal and Taxable Year.  The fiscal and taxable year of the Partnership shall be the calendar year unless otherwise required by the Code.

 

10.04                 Annual Tax Information and Report.  Within 75 days after the end of each fiscal year of the Partnership, the General Partner shall furnish to each person who was a Limited Partner at any time during such year the tax information necessary to file such Limited Partner’s individual tax returns as shall be reasonably required by law.

 

10.05                 Partnership Representative; Tax Elections; Special Basis Adjustments.

 

(a)                                 The General Partner shall designate each year a Partnership Representative of the Partnership which may be the General Partner and shall be the General Partner if no other Person is designated.  As Partnership Representative, the General Partner shall have the right and obligation to take all actions authorized and required of such position by Sections 6222 through 6241 of the Code and any Treasury Regulations thereunder and comparable provisions of state and local law (the “Partnership Audit Rules”).  The General Partner shall have the right to retain professional assistance in respect of any audit of the Partnership by the Service or to retain the services of a Partnership Representative, and all out-of-pocket expenses and fees incurred by the Partnership Representative shall constitute Partnership expenses. Any person who serves as Partnership Representative shall not be liable to the Partnership or any Partner for any action it takes or fails to take in such capacity, unless such action or failure to act constitutes bad faith, willful misconduct, gross negligence, fraud or a material breach of this Agreement.  Upon the Partnership’s request, each Partner shall provide to the Partnership within the required time frame any information that the Partnership Representative believes may be necessary or appropriate to resolve any tax issue relating to the Partnership or comply with or be eligible to invoke any aspect of the Partnership Audit Rules.  Notwithstanding any provision of this Agreement to the contrary, any taxes, penalties, and interest payable by the Partnership under the Partnership Audit Rules shall be treated as attributable to the Partners, and, to the extent possible, the Partnership Representative shall allocate the burden of any such amounts to those Partners to whom such amounts are reasonably attributable.  Any such amounts allocated to a Partner, at the option of the Partnership Representative, shall (a) be promptly paid to the Partnership by such Partner or (b) be paid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner.  The obligations of each Partner (or former Partner) under this Section 10.05(a) shall survive the Transfer by such Partner of its interest in the Partnership or the dissolution of the Partnership.  In the event of a transfer of a Partner’s Interest, the transferee and transferor shall be jointly and severally liable for any liability with respect to the obligations of the transferor Partner under the Partnership Audit Rules.  The Partnership shall indemnify Partnership Representative as provided in Section 6.03 hereof.

 

(b)                                 All elections required or permitted to be made by the Partnership under the Code or any applicable state or local tax law shall be made by the General Partner in its sole and absolute discretion.

 

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(c)                                  In the event of a transfer of all or any part of the Partnership Interest of any Partner, the Partnership, at the option of the General Partner, may elect pursuant to Section 754 of the Code to adjust the basis of the Properties.  Notwithstanding anything contained in Article V of this Agreement, any adjustments made pursuant to Section 754 shall affect only the successor in interest to the transferring Partner and in no event shall be taken into account in establishing, maintaining or computing Capital Accounts for the other Partners for any purpose under this Agreement.  Each Partner will furnish the Partnership with all information necessary to give effect to such election.

 

(d)                                 The Partners, intending to be legally bound, hereby authorize the Partnership to make an election (the “Safe Harbor Election”) to have the “liquidation value” safe harbor provided in Proposed Treasury Regulation § 1.83-3(1) and the Proposed Revenue Procedure set forth in Internal Revenue Service Notice 2005-43, as such safe harbor may be modified when such proposed guidance is issued in final form or as amended by subsequently issued guidance (the “Safe Harbor”), apply to any interest in the Partnership transferred to a service provider while the Safe Harbor Election remains effective, to the extent such interest meets the Safe Harbor requirements (collectively, such interests are referred to as “Safe Harbor Interests”).  The Partnership Representative is authorized and directed to execute and file the Safe Harbor Election on behalf of the Partnership and the Partners.  The Partnership and the Partners (including any person to whom an interest in the Partnership is transferred in connection with the performance of services) hereby agree to comply with all requirements of the Safe Harbor (including forfeiture allocations) with respect to all Safe Harbor Interests and to prepare and file all U.S. federal income tax returns reporting the tax consequences of the issuance and vesting of Safe Harbor Interests consistent with such final Safe Harbor guidance.  The Partnership is also authorized to take such actions as are necessary to achieve, under the Safe Harbor, the effect that the election and compliance with all requirements of the Safe Harbor referred to above would be intended to achieve under Proposed Treasury Regulation § 1.83-3,  including amending this Agreement.

 

(e)                                  Each Limited Partner shall be required to provide such information as reasonably requested by the Partnership in order to determine whether such Limited Partner (i) owns, directly or constructively (within the meaning of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code and Section 7704(d)(3) of the Code), five percent (5%) or more of the value of the Partnership or (ii) owns, directly or constructively (within the meaning of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code and Section 7704(d)(3) of the Code), ten percent (10%) or more of (a) the stock, by voting power or value, of a tenant (other than a “taxable REIT subsidiary” within the meaning of Section 856(d) of the Code) of the Partnership that is a corporation or (b) the assets or net profits of a tenant of the Partnership that is a noncorporate entity.

 

ARTICLE XI

 

AMENDMENT OF AGREEMENT; MERGER

 

11.01                 Amendment of Agreement.

 

The General Partner’s consent shall be required for any amendment to this Agreement.  The General Partner, without the consent of the Limited Partners, may amend this Agreement in any respect; provided, however, that the following amendments shall require the consent of a Majority

 

53

 

in Interest (excluding, for purposes of determining a Majority in Interest in this instance, Partnership Interests held by the General Partner or any Subsidiary of the General Partner):

 

(a)                                 any amendment affecting the operation of the Conversion Factor or the Common Unit Redemption Right (except as otherwise provided herein) in a manner that adversely affects the Limited Partners in any material respect;

 

(b)                                 any amendment that would adversely affect the rights of the Limited Partners to receive the distributions payable to them hereunder, other than with respect to the issuance of additional Partnership Units pursuant to Section 4.02 hereof;

 

(c)                                  any amendment that would alter the Partnership’s allocations of Profit and Loss to the Limited Partners, other than with respect to the issuance of additional Partnership Units pursuant to Section 4.02 hereof;

 

(d)                                 any amendment that would impose on the Limited Partners any obligation to make additional Capital Contributions to the Partnership; or

 

(e)                                  any amendment to this Article XI.

 

11.02                 Merger of Partnership.

 

The General Partner, without the consent of the Limited Partners, may (i) merge or consolidate the Partnership with or into any other domestic or foreign partnership, limited partnership, limited liability company or corporation or (ii) sell all or substantially all of the assets of the Partnership in a transaction pursuant to which the Limited Partners (other than the General Partner or any Subsidiary of the General Partner) receive consideration as set forth in Section 7.01(c)(ii) hereof or in a transaction that complies with the provisions of Sections 7.01(c)(iii) or 7.01(d) hereof and may amend this Agreement in connection with any such transaction consistent with the provisions of this Article XI; provided, however, that the consent of a Majority in Interest shall be required in the case of any other (a) merger or consolidation of the Partnership with or into any other domestic or foreign partnership, limited partnership, limited liability company or corporation or (b) sale of all or substantially all of the assets of the Partnership.

 

ARTICLE XII

 

GENERAL PROVISIONS

 

12.01                 Notices.  All communications required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered personally, by email, by press release, by posting on the Web site of the General Partner, or upon deposit in the United States mail, registered, first-class postage prepaid return receipt requested, or via courier to the Partners at the addresses set forth in Exhibit A hereto, as it may be amended or restated from time to time; provided, however, that any Partner may specify a different address by notifying the General Partner in writing of such different address.  Notices to the General Partner and the Partnership shall be delivered at or mailed to its principal office address set forth in Section 2.03 hereof.  The General Partner and the Partnership may specify a different address by notifying the Limited Partners in writing of such different address.

 

54

 

12.02                 Survival of Rights.  Subject to the provisions hereof limiting transfers, this Agreement shall be binding upon and inure to the benefit of the Partners and the Partnership and their permitted respective legal representatives, successors, transferees and assigns.

 

12.03                 Additional Documents.  Each Partner agrees to perform all further acts and execute, swear to, acknowledge and deliver all further documents that may be reasonable, necessary, appropriate or desirable to carry out the provisions of this Agreement or as required by the Act.

 

12.04                 Severability.  If any provision of this Agreement shall be declared illegal, invalid or unenforceable in any jurisdiction, then such provision shall be deemed to be severable from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity or unenforceability shall not affect the remainder hereof.  To the extent permitted under applicable law, the severed provision shall be interpreted or modified so as to be enforceable to the maximum extent permitted by law.

 

12.05                 Entire Agreement.  This Agreement and exhibits attached hereto constitute the entire Agreement of the Partners and supersede all prior written agreements and prior and contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof.

 

12.06                 Pronouns and Plurals.  When the context in which words are used in the Agreement indicates that such is the intent, words in the singular number shall include the plural and the masculine gender shall include the neuter or female gender as the context may require.

 

12.07                 Headings.  The Article headings or sections in this Agreement are for convenience only and shall not be used in construing the scope of this Agreement or any particular Article.

 

12.08                 Counterparts.  This Agreement may be executed by hand or by power of attorney in several counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute one and the same instrument binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart.

 

12.09                 Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

 

[Signature page follows.]

 

55

 

IN WITNESS WHEREOF, the parties hereto have hereunder affixed their signatures to this First Amended and Restated Agreement of Limited Partnership, all as of the         day of [·], 2019.

 

	
 
    	
GENERAL PARTNER:
    
	
 
    	
 
    
	
 
    	
PRIAM PROPERTIES INC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
LIMITED PARTNERS:
    
	
 
    	
 
    
	
 
    	
[·]
    
	
 
    	
 
    
	
 
    	
By:
    	
[·]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
[·]
    
	
 
    	
 
    
	
 
    	
By:
    	
[·]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
[·]
    
	
 
    	
 
    
	
 
    	
By:
    	
[·]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[·]
    
	
 
    	
 
    
	
 
    	
By:
    	
[·]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

56

 

ANNEX A

 

DESIGNATION OF THE 5% SERIES A PREFERRED UNITS

 

1.                                      Designation and Number.  A series of preferred Partnership Interests, designated the “5% Series A Preferred Units” (the “5% Series A Preferred Units”), is hereby established.  The maximum number of 5% Series A Preferred Units hereby authorized shall be 378,600.

 

2.                                      Ranking.

 

(a)                                 The 5% Series A Preferred Units shall, with respect to distribution rights and rights upon liquidation, dissolution or winding up of the Partnership, rank (a) senior to all currently existing classes or series of Partnership Units and all classes or series of Partnership Units the terms of which do not specifically provide that such units rank on a parity with or senior to the 5% Series A Preferred Units, (b) on a parity with all Partnership Units issued by the Partnership the terms of which specifically provide that such Partnership Units rank on a parity with the 5% Series A Preferred Units as to the payment of distributions and the distribution of assets in the event of any liquidation, dissolution or winding up; and (c) junior to (i) all indebtedness of the Partnership and (ii) Partnership Units issued by the Partnership the terms of which specifically provide that such Partnership Units rank senior to the 5% Series A Preferred Units as to the payment of distributions and the distribution of assets in the event of any liquidation, dissolution or winding up.

 

(b)                                 Notwithstanding (i) anything to the contrary in the Agreement or any Partnership Unit Designation (other than this Annex A) and (ii) the designations, preferences and relative, participating, optional or other special rights, powers and duties of any classes or series of Partnership Units currently existing or created or issued after the effective date of the Agreement, the 5% Series A Preferred Units shall rank senior to all classes or series of Partnership Units currently existing or created or issued after the effective date of the Agreement solely with respect to the application of the Net Sale Proceeds (as defined below) from the sale of any of the multi-tenant office properties known as Chase Corporate Center (located in Birmingham, Alabama) (“Chase Corporate Center”), 6055 Primacy II (located in Memphis, Tennessee) (“Primacy II”) or 6060 Primacy III (located in Memphis, Tennessee) (“Primacy III” and together with Chase Corporate Center and Primacy II the “Hall Capital Properties,” each of which is a “Hall Capital Property”), which Net Sale Proceeds shall be used to redeem, in whole or in part, as the case may be, any 5% Series A Preferred Units that remain outstanding in accordance with Section 5(a) of this Annex A.  For purposes of this Annex A, “Net Sale Proceeds” shall mean the sale price for the applicable Hall Capital Property, less (i) repayment of the indebtedness of Chase Corporate Center, LLC, 6055 Primacy LLC or Primacy III LLC, as the case may be, that is secured by the applicable Hall Capital Property to the extent required by the terms thereof; (ii) liens having priority over such indebtedness; (iii) a commission to a third-party broker; and (iv) costs of title insurance, transfer or conveyance taxes and tax prorations.

 

3.                                      Distributions.

 

(a)                                 Holders of the then outstanding 5% Series A Preferred Units shall be entitled to

 

Annex A-1

 

receive, when and as authorized and declared by the Partnership, out of funds legally available for the payment of distributions, cumulative cash distributions at the rate of 5% per year for all periods ending on or prior to May 1, 2023 and 18% per year for all periods ending after May 1, 2023 (the “Series A Preferred Return Rate”) of the $50.00 liquidation preference (equivalent to a fixed annual amount of (i) $2.50 per unit with respect to distributions at the rate of 5% per year and (ii) $9.00 per unit with respect to distributions at the rate of 18% per year). Distributions on the 5% Series A Preferred Units are payable quarterly in arrears on January 15, April 15, July 15, and October 15 of each year and, if such day is not a business day, the next succeeding business day, commencing on [         ] (each, a “Distribution Payment Date”). The quarterly period beginning on, and including, each Distribution Payment Date and ending on, but excluding, the next succeeding Distribution Payment Date is referred to in this Annex A as a “distribution period” and the distribution which shall accrue in respect of any full distribution period shall be calculated on the basis of a 360-day year consisting of twelve 30-day months regardless of the actual number of days in such full distribution period.  The first distribution will be for less than a full quarter and will cover the period from, and including, [      ] to, but excluding, [        ]. Such distribution and any distribution payable on the 5% Series A Preferred Units for any partial distribution period will accrue pro rata and be computed on the basis of a 360-day year consisting of twelve 30-day months and the actual number of days elapsed. Distributions will be payable to holders of record as they appear in the books and records of the Partnership at the close of business on the applicable record date, which shall be the first day of the calendar month in which the applicable Distribution Payment Date falls or on such other date designated by the Partnership as the record date for the payment of distributions on the 5% Series A Preferred Units that is not more than 30 nor less than 10 days prior to such Distribution Payment Date (each, a “Distribution Record Date”).  The Distribution Record Date shall be the same date as the related Partnership Record Date for such distribution period.

 

(b)                                 Accrued but unpaid distributions on the 5% Series A Preferred Units will accumulate as of the Distribution Payment Date on which they first become payable.  No distributions on 5% Series A Preferred Units shall be authorized or declared by the Partnership or paid or set apart for payment by the Partnership at such time as the terms and provisions of any agreement of the Partnership, including any agreement relating to its indebtedness, (i) prohibits such authorization, declaration, payment or setting apart for payment of distributions or (ii) provides that such authorization, declaration, payment or setting apart for payment of distributions would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

 

(c)                                  Notwithstanding the foregoing, distributions on the Preferred Units shall accrue whether or not the terms and provisions set forth in Section 3(b) of this Annex A at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are declared.

 

(d)                                 Notwithstanding the foregoing, any distribution that is not paid on or before the Distribution Payment Date on which it first becomes payable shall be increased by $0.25 per 5% Series A Preferred Unit, and the Series A Preferred Return Rate shall increase by 200 basis points

 

Annex A-2

 

from the date on which such distribution first became due but was not paid in full until all accrued and unpaid distributions with respect to the 5% Series A Preferred Units are paid in full.

 

(e)                                  When distributions are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the 5% Series A Preferred Units and the units of any other class or series of Partnership Units ranking on a parity as to distributions with the 5% Series A Preferred Units, all distributions declared upon the 5% Series A Preferred Units and any other class or series of Partnership Units ranking on a parity as to distributions with the 5% Series A Preferred Units shall be declared pro rata so that the amount of distributions declared per unit of 5% Series A Preferred Units and such other class or series of Partnership Units shall in all cases bear to each other the same ratio that accrued distributions per unit on the 5% Series A Preferred Units and such other class or series of Partnership Units (which shall not include any accrual in respect of unpaid distributions for prior distribution periods if such Partnership Units do not have a cumulative distribution) bear to each other.

 

(f)                                   Except as provided in the immediately preceding paragraph, unless full cumulative distributions on the 5% Series A Preferred Units have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past distribution periods, no distributions (other than distributions paid in Common Units or any other class or series of Partnership Units ranking junior to the 5% Series A Preferred Units as to distributions and upon liquidation) shall be declared or paid or set aside for payment, nor shall any other distribution be declared or made, upon the Common Units or any other class or series of Partnership Units ranking junior to or on a parity with the 5% Series A Preferred Units as to distributions or upon liquidation, nor shall any Common Units, or any other class or series of Partnership Units ranking junior to or on a parity with the 5% Series A Preferred Units as to distributions or upon liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such units) by the Partnership (except by conversion into or exchange for any other class or series of Partnership Units ranking junior to the 5% Series A Preferred Units as to distributions and upon liquidation) and except in connection with the redemption of Partnership Units in connection with a redemption of “Capital Stock” transferred to a “Charitable Trust” under the Articles of Amendment and Restatement of Priam REIT, which is intended to assist the General Partner in qualifying as a real estate investment trust for federal income tax purposes.

 

(g)                                  Holders of the 5% Series A Preferred Units shall not be entitled to any distribution, whether payable in cash, property or Partnership Units in excess of full cumulative distributions on the 5% Series A Preferred Units as provided above. Any distribution payment made on 5% Series A Preferred Units shall first be credited against the earliest accrued but unpaid distribution due with respect to such units which remains payable.

 

4.                                      Liquidation Preference.

 

(a)                                 Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of  the Partnership after payment of, or adequate provision for, debts and obligations of the Partnership, the holders of 5% Series A Preferred Units then outstanding are entitled to be paid out of the assets of the Partnership legally available for distribution to its partners a liquidation

 

Annex A-3

 

preference of $50.00 per 5% Series A Preferred Unit (the “Liquidation Preference”), plus an amount equal to any accrued and unpaid distributions to the date of payment, before any distribution of assets is made to holders of any other Partnership Units that rank junior to the 5% Series A Preferred Units.  After payment of the full liquidating distributions to which they are entitled, the holders of the 5% Series A Preferred Units will have no rights or claim to any of the remaining assets of the Partnership.

 

(b)                                 In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the available assets of the Partnership are insufficient to pay the amount of the liquidating distributions on all outstanding 5% Series A Preferred Units and the corresponding amounts payable on all Partnership Units of other classes or series of Partnership Units ranking on a parity with the 5% Series A Preferred Units in the distribution of assets upon liquidation, then the holders of the 5% Series A Preferred Units and all other such classes or series of Partnership Units ranking on a parity with the 5% Series A Preferred Units in the distribution of assets upon liquidation shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

 

(c)                                  Written notice of any such liquidation, dissolution or winding up of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the 5% Series A Preferred Units at the respective addresses of such holders as the same shall appear in the books and records of the Partnership.

 

(d)                                 The consolidation, conversion, combination or merger of the Partnership with or into any other corporation, partnership or entity or consolidation, conversion or merger of any other corporation with or into the Partnership, or any statutory share exchange, shall not be deemed to constitute a liquidation, dissolution or winding up of the Partnership.

 

(e)                                  Any distributions pursuant to this Section 4 shall be made by the end of the Partnership’s taxable year in which the liquidation occurs (or, if later, within 90 days after the date of the liquidation).  To the extent deemed advisable by the General Partner, appropriate arrangements (including the use of a liquidating trust) may be made to assure that adequate funds are available to pay any contingent debts or obligations.

 

5.                                      Redemption.

 

(a)                                 Redemption in Connection with Asset Sale.  As soon as practicable following, and in any event within ten business days following, the date on which any Hall Capital Property has been sold for cash, the Partnership shall apply a value equal to the Net Sale Proceeds from the sale of such Hall Capital Property to redeem, in whole or in part, as the case may be, any 5% Series A Preferred Units that remain outstanding.  The redemption price per 5% Series A Preferred Unit shall be $50.00 per 5% Series A Preferred Unit, plus an amount equal to all accrued and unpaid distributions thereon to the date fixed for redemption (except as provided in Section 5(e) of this Annex A), without interest (other than the Series A Preferred Return Rate), payable as provided in Section 5(d) of this Annex A. If less than all of the outstanding 5% Series

 

Annex A-4

 

A Preferred Units are to be redeemed, the 5% Series A Preferred Units to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional units) or by lot.

 

(b)           Mandatory Redemption.  On May 1, 2023, the Partnership shall redeem any outstanding 5% Series A Preferred Units in whole at a redemption price of $50.00 per Unit, plus an amount equal to all accrued and unpaid distributions thereon to the date fixed for redemption (except as provided in Section 5(e) of this Annex A), without interest (other than the Series A Preferred Return Rate), payable as provided for in Section 5(d) of this Annex A.  If the 5% Series A Preferred Units are not redeemed in full by May 1, 2023, the Series A Preferred Return Rate shall increase with respect to the then-outstanding 5% Series A Preferred Units as provided in Section 3(a) of this Annex A.

 

(c)           Call Right.  The Partnership, at its option and upon not less than 30 nor more than 60 days’ written notice, may redeem any outstanding 5% Series A Preferred Units, in whole or in part, at any time or from time to time, at a redemption price of $50.00 per Unit, plus an amount equal to all accrued and unpaid distributions thereon to the date fixed for redemption (except as provided in Section 5(e) of this Annex A), without interest (other than the Series A Preferred Return Rate), payable as provided in Section 5(d) of this Annex A. If less than all of the outstanding 5% Series A Preferred Units are to be redeemed, the 5% Series A Preferred Units to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional units) or by lot.

 

(d)           Payment in Cash.  Any redemption by the Partnership as provided in this Section 5 shall be paid in cash.

 

(e)           Payment of Distributions in Connection with Redemption.  Immediately prior to any redemption of 5% Series A Preferred Units, the Partnership shall pay, in cash, any accumulated and unpaid distributions through the redemption date, unless a redemption date falls after a Distribution Record Date and prior to the corresponding Distribution Payment Date, in which case each holder of 5% Series A Preferred Units at the close of business on such Distribution Record Date shall be entitled to the distribution payable on such units on the corresponding Distribution Payment Date notwithstanding the redemption of such units before such Distribution Payment Date.  Except as provided above, the Partnership will make no payment or allowance for unpaid distributions, whether or not in arrears, on 5% Series A Preferred Units that are redeemed.

 

6.             Mandatory Asset Sale upon Certain Events.  Upon the earliest of (a) any Determination Date on which the ratio of the aggregate indebtedness of the Partnership to the aggregate Fair Market Value (as defined below) of the Properties exceeds sixty percent (60%), (b) the date on which Abhishek Mathur (i) ceases to be the Chief Executive Officer of the General Partner or (ii) is otherwise unable or unwilling to dedicate a reasonable amount of his business time to the management of the General Partner, and (c) May 1, 2024, Hall Capital III, LP (with respect to Chase Corporate Center and Primacy II) and Hall Capital, LLC (with respect to Primacy III), may, by written notice to the Partnership (the “Sale Notice”), require the Partnership, to the extent permitted and subject to the terms of the loan documents

 

Annex A-5

 

governing the indebtedness of one or more of the Hall Capital Properties, to offer one or more Hall Capital Properties for sale using a leading broker to market and manage the sale process in a commercially reasonable time period.  If Hall Capital III, LP or Hall Capital, LLC exercises such option, the Partnership will, to the extent permitted and subject to the terms of the loan documents governing the indebtedness of such Hall Capital Property, use commercially reasonable efforts to sell the applicable Hall Capital Properties no later than twelve (12) months after the date of delivery of such Sale Notice.

 

Notwithstanding the foregoing, any offer or sale of a Hall Capital Property shall be subject in all cases to the express terms of the loan documents governing the indebtedness of the Hall Capital Properties and the Partnership shall not be required to offer or sell the applicable Hall Capital Property if an event of default (as described in such loan documents) has occurred and is continuing or such sale would trigger an event of default (as described in such loan documents).

 

For purposes of this Section 6, the following definitions apply:

 

“Determination Date” means the last date of each calendar quarter.

 

“Fair Market Value” means, as of any Determination Date, the sum of (a) an amount equal to (i) with respect to all Consolidated Properties (without duplication from the assets in clauses (b) through (e) below) owned by Priam REIT or any of its Subsidiaries for more than twelve (12) months as of such date, aggregate Adjusted NOI for the fiscal quarter most recently ended, annualized, divided by (ii) 8.0%, plus (b) the acquisition cost plus capitalized expenditures of each Consolidated Property owned for twelve (12) months or less as of such date, plus (c) unrestricted cash and cash equivalents on such date, plus (d) the book value calculated in accordance with GAAP of Construction in Progress, unimproved land, any other tangible assets of Priam REIT or any of its Subsidiaries, including mortgage receivables, and allocations of property purchase prices pursuant to ASC 805, plus the allowance for accumulated depreciation for such assets, plus (e) the share of Priam REIT or any of its Subsidiaries of the foregoing items and components attributable to each Unconsolidated Joint Venture.

 

“Adjusted NOI” means, with respect to any Consolidated Property and for any period, an amount equal to (a) the aggregate gross revenues from the operations of such Consolidated Property during such period, minus (b) the sum of (i) all expenses paid (excluding interest but including an appropriate accrual for property taxes and insurance) related to the ownership, operation or maintenance of such Consolidated Property, including but not limited to property taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred in connection with such Consolidated Property, but specifically excluding general overhead expenses of the Partnership or any of its Subsidiaries and, subject to clause (ii) below, any property management fees) and (ii) property management fees paid during such period with respect to such Consolidated Property.  Adjusted NOI shall be reduced by the amount of any revenues from the lease of any Consolidated Property as to which the tenant is then subject to a continuing voluntary or involuntary bankruptcy.  If for any given period the Adjusted NOI derived from the foregoing

 

Annex A-6

 

calculation for a Consolidated Property is a negative number, Adjusted NOI for such Consolidated Property shall be deemed to be zero for such period.

 

“Consolidated Property” means any Property or other investment owned, directly or indirectly, by a Person in which Priam REIT has a direct or indirect equity interest and whose financial results would be consolidated under GAAP with the financial results of Priam REIT on the consolidated financial statements of Priam REIT.

 

“Construction in Progress” means each Consolidated Property that is either (a) new ground up construction or (b) under renovation in which (i) greater than thirty percent (30%) of the square footage of such Property is unavailable for occupancy due to renovation and (ii) no rents are being paid on such square footage.  A Consolidated Property will cease to be classified as “Construction in Progress” on the earlier to occur of (A) the time that such Consolidated Property has an occupancy rate of greater than seventy percent (70%), or (B) one hundred eighty (180) days after completion of construction or renovation of such Property, as applicable.

 

“Unconsolidated Joint Venture” means any Person in whom Priam REIT or any of its Subsidiaries holds an equity investment, which equity investment is accounted for in the financial statements of Priam REIT on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of Priam REIT.

 

7.             Put Right.  In the event that a Sale Notice covering all of the Hall Capital Properties is delivered to the Partnership in accordance with Section 6 of this Annex A and one or more of the Hall Capital Properties have not been sold within twelve (12) months after the date of delivery of such Sale Notice, then the holder of the 5% Series A Preferred Units, at its option and upon not less than thirty (30) nor more than sixty (60) days’ written notice to the Partnership, may require the Partnership to redeem all outstanding 5% Series A Preferred Units then held by such Person, at a redemption price of $50.00 per Unit, plus an amount equal to all accrued and unpaid distributions thereon to the date fixed for redemption (except as provided in Section 5(e) of this Annex A), without interest (other than the Series A Preferred Return Rate), payable as provided in Section 5(d) of this Annex A.

 

8.             Voting Rights.  Except as provided by law, the 5% Series A Preferred Units, shall not be entitled to vote for any purpose or otherwise participate in any action taken by the Partnership or the Partners.

 

9.             No Amendment to This Annex A.  Notwithstanding anything to the contrary in this Annex A or the Agreement, in no event shall this Annex A be amended without the prior written consent of each holder of 5% Series A Preferred Units, which consent may be withheld in such holder’s sole and absolute discretion.

 

10.          Conflict. In the event of any conflict between the provisions of this Annex A and the provisions of the Agreement, the provisions of this Annex A shall control.

 

Annex A-7

 

EXHIBIT A

 

(As of [·], 2019)

 

	
Partner
    	
 
    	
Agreed Value of
   Capital
   Contribution
    	
 
    	
Common
   Units
    	
 
    	
Common
   Percentage
   Interest
    	
 
    	
5% Series A
   Preferred
   Units
    	
 
    	
Preferred
   Percentage
   Interest
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
General   Partner:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Priam Properties   Inc.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[0.10
    	
]%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Limited   Partners:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
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Hall Capital   III, LP (a Delaware limited partnership)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Hall Capital,   LLC (an Oklahoma limited liability company)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTALS
    	
 
    	
 
    	
 
    	
 
    	
 
    	
100.0
    	
%
    	
 
    	
 
    	
 
    	
 
    

 

Exhibit A-1

 

EXHIBIT B

 

NOTICE OF EXERCISE OF REDEMPTION RIGHT

 

In accordance with Section 8.04 of the First Amended and Restated Agreement of Limited Partnership (the “Agreement”) of Priam Office Properties OP LP, the undersigned hereby irrevocably (i) presents for redemption           Common Units of Priam Office Properties OP LP in accordance with the terms of the Agreement, as amended, and the Common Unit Redemption Right referred to in Section 8.04 thereof, (ii) surrenders such Common Units and all right, title and interest therein and (iii) directs that the Cash Amount or REIT Shares Amount (as defined in the Agreement) as determined by the General Partner deliverable upon exercise of the Common Unit Redemption Right be delivered to the address specified below, and if REIT Shares (as defined in the Agreement) are to be delivered, such REIT Shares be registered or placed in the name(s) and at the address(es) specified below.  The undersigned hereby represents, warrants and certifies that the undersigned (a) has title to such Common Units, free and clear of the rights and interests of any person or entity other than the Partnership or the General Partner; (b) has the full right, power and authority to cause the redemption of the Common Units as provided herein; and (c) has obtained the approval of all persons or entities, if any, having the right to consent to or approve the Common Units for redemption.

 

Dated:             ,

 

Name of Limited Partner:

 

(Signature of Limited Partner or Authorized Representative)

 

(Mailing Address)

 

	
(City)
    	
 
    	
(State)
    	
 
    	
(Zip Code)
    

 

Signature Guaranteed by:

 

 

If REIT Shares are to be issued, issue to:

 

Name:

 

Please insert Social Security or Identifying Number:

 

Exhibit B-1

 

EXHIBIT C-1

 

CERTIFICATION OF NON-FOREIGN STATUS
 (FOR REDEEMING LIMITED PARTNERS THAT ARE ENTITIES)

 

Under Sections 1445(e) and 1446(f) of the Internal Revenue Code of 1986, as amended (the “Code”), in the event of a disposition by a non-U.S. person of certain partnership interests, the transferee will be required to withhold 10% of the amount realized by the non-U.S. person upon the disposition.  To inform Priam Properties Inc. (the “General Partner”) and Priam Office Properties OP LP (the “Partnership”) that no withholding is required with respect to the redemption by                (“Partner”) of its Common Units in the Partnership, the undersigned hereby certifies the following on behalf of Partner:

 

1.     Partner is not a foreign corporation, foreign partnership, foreign trust, or foreign estate, as those terms are defined in the Code and the Treasury regulations thereunder.

 

2.     Partner is not a disregarded entity as defined in Treasury Regulation Section 1.1445-2(b)(2)(iii).

 

3.     The U.S. employer identification number of Partner is          .

 

4.     The principal business address of Partner is:          ,           and Partner’s place of incorporation is                   .

 

5.     Partner agrees to inform the General Partner if it becomes a foreign person at any time during the three-year period immediately following the date of this notice.

 

6.     Partner understands that this certification may be disclosed to the Internal Revenue Service by the General Partner and that any false statement contained herein could be punished by fine, imprisonment, or both.

 

PARTNER:

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

Under penalties of perjury, I declare that I have examined this certification and, to the best of my knowledge and belief, it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Partner.

 

Date:

 

	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit C-1-1

 

EXHIBIT C-2

 

CERTIFICATION OF NON-FOREIGN STATUS 
 (FOR REDEEMING LIMITED PARTNERS THAT ARE INDIVIDUALS)

 

Under Sections 1445(e) and 1446(f) of the Internal Revenue Code of 1986, as amended (the “Code”), in the event of a disposition by a non-U.S. person of certain partnership interests, the transferee will be required to withhold 10% of the amount realized by the non-U.S. person upon the disposition.  To inform Priam Properties Inc. (the “General Partner”) and Priam Office Properties OP LP (the “Partnership”) that no withholding is required with respect to my redemption of my Common Units in the Partnership, I,                      , hereby certify the following:

 

1.             I am not a nonresident alien for purposes of U.S. income taxation.

 

2.             My U.S. taxpayer identification number (social security number) is              .

 

3.             My home address is:                                      .

 

4.             I agree to inform the General Partner promptly if I become a nonresident alien at any time during the three-year period immediately following the date of this notice.

 

5.             I understand that this certification may be disclosed to the Internal Revenue Service by the General Partner and that any false statement contained herein could be punished by fine, imprisonment, or both.

 

Name:                                     .

 

Under penalties of perjury, I declare that I have examined this certification and, to the best of my knowledge and belief, it is true, correct, and complete.

 

Date:                 , 20    .

 

	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit C-2-1

 

EXHIBIT D

 

NOTICE OF ELECTION BY PARTNER TO CONVERT 
 LTIP UNITS INTO COMMON UNITS

 

The undersigned holder of LTIP Units hereby irrevocably (i) elects to convert the number of LTIP Units of Priam Office Properties OP LP (the “Partnership”) set forth below into Common Units in accordance with the terms of the First Amended and Restated Agreement of Limited Partnership (the “Agreement”); and (ii) directs that any cash in lieu of Common Units that may be deliverable upon such conversion be delivered to the address specified below.  The undersigned hereby represents, warrants and certifies that the undersigned (a) has title to such LTIP Units, free and clear of the rights or interests of any other person or entity other than the Partnership or the General Partner; (b) has the full right, power, and authority to cause the conversion of such LTIP Units as provided herein; and (c) has obtained the consent to or approval of all persons or entities, if any, having the right to consent to or approve such conversion.

 

Name of Holder:

 

(Please Print: Exact Name as Registered with Partnership)

 

Number of LTIP Units to be Converted:

 

Date of this Notice:

 

(Signature of Holder: Sign Exact Name as Registered with Partnership)

 

(Street Address)

 

	
(City)
    	
 
    	
(State)
    	
 
    	
(Zip Code)
    

 

Signature Guaranteed by:

 

Exhibit D-1

 

EXHIBIT E

 

NOTICE OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION 
 OF LTIP UNITS INTO COMMON UNITS

 

Priam Office Properties OP LP (the “Partnership”) hereby elects to cause the number of LTIP Units held by the holder of LTIP Units set forth below to be converted into Common Units in accordance with the terms of the First Amended and Restated Agreement of Limited Partnership (the “Agreement”), effective as of                    (the “Conversion Date”).

 

Name of Holder:

 

(Please Print: Exact Name as Registered with Partnership)

 

Number of LTIP Units to be Converted:

 

Date of this Notice:

 

Exhibit E-1

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