Document:

EX-4.2

 Exhibit 4.2 

EXECUTION VERSION 
  

 
 $300,000,000 

QUALITYTECH, LP 
 5.875%
SENIOR NOTES DUE 2022 
 REGISTRATION RIGHTS AGREEMENT 

July 23, 2014 
 Deutsche Bank Securities Inc.

 KeyBanc Capital Markets Inc. 
 Merrill Lynch, Pierce,
Fenner & Smith 
       Incorporated 

Goldman, Sachs & Co. 
 Jefferies LLC 

J.P. Morgan Securities LLC 
 Morgan Stanley & Co. LLC

 PNC Capital Markets LLC 
 RBS Securities Inc. 

Regions Securities LLC 
 Stifel, Nicolaus & Company 

TD Securities (USA) LLC 
  

			
	c/o	 	 Deutsche Bank Securities Inc.
 60 Wall
Street
 New York, New York 10005

 Ladies and Gentlemen: 

QualityTech, LP, a Delaware limited partnership (the “Operating Partnership”), and QTS Finance Corporation, a Delaware
corporation (the “Co-Issuer” and, together with the Operating Partnership, the “Issuers”), are selling, upon the terms and conditions set forth in the Purchase Agreement (the “Purchase
Agreement”) dated as of July 17, 2014 by and among the Issuers, QTS Realty Trust, Inc., a Maryland corporation (the “Company”), the Guarantors (as defined below) and the Initial Purchasers listed on Schedule
I hereto (the “Initial Purchasers”), $300,000,000 in aggregate principal amount of the Issuers’ 5.875% Senior Notes due 2022 (the “Notes”). The Notes will be fully and unconditionally guaranteed
as to payment of the principal thereof, and premium, if any, and interest thereon (the “Guarantees”) by the guarantors listed on Schedule II hereto (together the “Guarantors”). In certain limited
circumstances, as set forth in the Indenture (as defined below), the Company may be required to guarantee the Notes as to payment of the principal thereof, and premium, if any, and interest thereon (the “Company Note
Guarantee”). As used herein, the term “Notes” shall include the Guarantees and the Company Note Guarantee unless the context otherwise requires. As an inducement to the Initial Purchasers to enter into the Purchase Agreement,
the Issuers, the Company and the Guarantors agree with the Initial Purchasers, for the benefit of the Holders (as defined below) of the Notes (including, without limitation, the Initial Purchasers), as follows: 

 

	1.	Definitions 

 Capitalized terms that are used herein without definition and are
defined in the Purchase Agreement shall have the respective meanings ascribed to them in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 

Additional Guarantor: Any subsidiary of the Operating Partnership that executes a Guarantee of the Notes after the date of this
Agreement. 

 Additional Interest: See Section 4(a). 

Advice: See Section 5(t). 

Agreement: This Registration Rights Agreement, dated as of the Closing Date, among the Issuers, the Company, the Guarantors and the
Initial Purchasers. 
 Applicable Period: See Section 2(e). 

Business Day: A day that is not a Saturday, a Sunday or a day on which banking institutions in the City of New York are authorized or
required by law or executive order to be closed. 
 Closing Date: July 23, 2014. 

Company: See the introductory paragraph to this Agreement. 

Effectiveness Date: The 270th calendar day after the Closing Date. 

Effectiveness Period: See Section 3(a). 

Event Date: See Section 4(b). 

Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. 

Exchange Notes: 5.875% Senior Notes due 2022 of the Issuers, identical to the Notes, including the Guarantees endorsed thereon, except
that the Exchange Notes will not have legends restricting transfer or terms with respect to Additional Interest. As used herein, the term “Exchange Notes” shall include the guarantees of the Exchange Notes by the Guarantors (the
“Exchange Note Guarantees”) and, if the Company guarantees the Exchange Notes, the Company’s guarantee of the Exchange Notes (the “Company Exchange Note Guarantee”). 

Exchange Offer: See Section 2(a). 

Exchange Registration Statement: See Section 2(a). 

FINRA: Financial Industry Regulatory Authority. 

Guarantees: See the introductory paragraph to this Agreement. 

Guarantors: See the introductory paragraph to this Agreement. 

Holder: Any beneficial holder of Notes. 

Indemnified Party: See Section 7(c). 

Indemnifying Party: See Section 7(c). 

Indenture: The Indenture, dated as of the Closing Date, among the Issuers, the Company, the Guarantors and Deutsche Bank Trust Company
Americas, as trustee, pursuant to which the Notes are being issued, as amended or supplemented from time to time in accordance with the terms hereof. 

Initial Purchasers: See the introductory paragraph to this Agreement. 

Initial Shelf Registration: See Section 3(a). 

Inspectors: See Section 5(n). 

 Issuers: See the introductory paragraph to this Agreement. 

Losses: See Section 7(a). 

Managing Underwriters: The investment banker(s) and managing underwriter(s) that will administer any Underwritten Registration or
Underwritten Offering, as the case may be, who shall be selected by the Holders of a majority in aggregate principal amount of the Registrable Notes included in such registration or offering; provided, however, that such Managing
Underwriters are reasonably satisfactory to the Operating Partnership. 
 Notes: See the introductory paragraph to this Agreement.

 Operating Partnership: See the introductory paragraph to this Agreement. 

Participating Broker-Dealer: See Section 2(e). 

Person: An individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated
association, business association, firm, government or agency or political subdivision thereof, or other legal entity. 
 Prospectus:
The prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Notes covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 

Purchase Agreement: See the introductory paragraph to this Agreement. 

Records: See Section 5(n). 

Registrable Notes: Notes that are not freely tradeable, without restriction, under federal or state securities laws. 

Registration Default: See Section 4(a). 

Registration Statement: Any registration statement of the Issuers, the Guarantors and, if the Company Note Guarantee is in effect, or
if, upon issuance of Exchange Notes, the Company Exchange Note Guarantee will be in effect, the Company, filed with the SEC under the Securities Act (including, but not limited to, the Exchange Registration Statement, the Shelf Registration and any
subsequent Shelf Registration) that covers any of the Registrable Notes pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all
exhibits, all material deemed to be included therein or part thereof pursuant to Rule 430A or Rule 430B and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. 

Rule 144: Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than
Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such securities being free of
the registration and prospectus delivery requirements of the Securities Act. 
 Rule 144A: Rule 144A promulgated under the Securities
Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC. 

Rule 415: Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC. 
 Rule 430A: Rule 430A promulgated under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the SEC. 
 Rule 430B: Rule 430B promulgated under the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. 

SEC: The Securities and Exchange Commission. 

 Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of
the SEC promulgated thereunder. 
 Shelf Notice: See Section 2(i). 

Shelf Registration: See Section 3(b). 

Subsequent Shelf Registration: See Section 3(b). 

TIA: The Trust Indenture Act of 1939, as amended. 

Trustee: The trustee under the Indenture and, if existent, the trustee under any indenture governing the Exchange Notes. 

Underwritten Registration or Underwritten Offering: A registration in which securities of the Issuers are sold to an underwriter for
reoffering to the public. 
  

	2.	Exchange Offer 

  

	 	(a)	Unless the Exchange Offer would not be permitted by applicable laws or applicable interpretations of the staff of the SEC, the Issuers, the Company and the Guarantors shall use their commercially reasonable efforts to
(i) prepare and file with the SEC a registration statement (the “Exchange Registration Statement”) on an appropriate form under the Securities Act with respect to an offer (the “Exchange Offer”)
to the Holders of Notes to issue and deliver to such Holders, in exchange for the Notes, a like principal amount of Exchange Notes (which shall be guaranteed by the Guarantors and, if required pursuant to the Indenture, the Company), (ii) cause
the Exchange Registration Statement to become effective on or before the Effectiveness Date, (iii) keep the Exchange Registration Statement effective until the consummation of the Exchange Offer in accordance with its terms, and
(iv) commence the Exchange Offer and issue on or before the 30th Business Day after the date on which the Exchange Registration Statement is declared effective, Exchange Notes (which shall be guaranteed by the Guarantors and, if required
pursuant to the Indenture, the Company) in exchange for all Notes validly tendered prior thereto in the Exchange Offer. Other than as set forth in this Agreement, including in Section 2(d) hereto, the Exchange Offer shall not be subject to any
conditions. 

  

	 	(b)	The Exchange Notes shall be issued under, and entitled to the benefits of the Indenture. 

  

	 	(c)	Interest on the Exchange Notes will accrue from the last interest payment due date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on the Notes, from the date of
original issue of the Notes. 

  

	 	(d)	The Issuers may require each Holder as a condition to participation in the Exchange Offer to represent (i) that any Exchange Notes received by it will be acquired in the ordinary course of its business,
(ii) that at the time of the commencement and consummation of the Exchange Offer such Holder has no arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes
in violation of the provisions of the Securities Act, (iii) that it is not an “affiliate” of the Issuers (within the meaning of Rule 405 of the Securities Act), (iv) if such Holder is not a broker-dealer, that it is not engaged
in, and does not intend to engage in, the distribution of the Notes and (v) if such Holder is a Participating Broker-Dealer, that it will deliver a Prospectus in connection with any resale of the Exchange Notes. 

 

	 	(e)	The Issuer, the Company and the Guarantors shall include within the Prospectus contained in the Exchange Registration Statement a section entitled “Plan of Distribution” reasonably acceptable to the Initial
Purchasers which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential “underwriter” status of any broker-dealer that is the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer for its own account in exchange for Notes that were acquired by it as a result of market-making or other trading activity (a
“Participating Broker-Dealer”). Such “Plan of Distribution” section shall also allow, to the extent permitted by applicable policies and regulations of the SEC, the use of the Prospectus by all Persons subject to
the prospectus delivery requirements of the Securities Act, including, to the extent so permitted, all Participating Broker-Dealers, and include a statement describing the manner in which Participating Broker-Dealers may resell the Exchange Notes.
The Issuers, the Company and the Guarantors shall use their commercially reasonable efforts to keep the Exchange Registration Statement effective and to amend and supplement the Prospectus contained therein, in order to keep such Prospectus current
during the period described in Section 4(a)(3) of the Securities Act and Rule 174 thereunder that is applicable to transactions by brokers or dealers with respect to Notes or Exchange Notes (the “Applicable Period”).

	 	(f)	In connection with the Exchange Offer, the Issuers, the Company and the Guarantors shall: 

  

	 	(i)	mail to each Holder a copy of the Prospectus forming part of the Exchange Registration Statement, together with an appropriate letter of transmittal that is an exhibit to the Exchange Registration Statement, and any
related documents; 

  

	 	(ii)	keep the Exchange Offer open for not less than 20 Business Days after the date notice thereof is mailed to the Holders (or longer if required by applicable law) and until the Issuers have accepted all Notes validly
tendered in accordance with the terms of the Exchange Offer; 

  

	 	(iii)	utilize the services of a depository for the Exchange Offer with an address in the Borough of Manhattan, the City of New York, which may be the Trustee or an affiliate thereof; 

 

	 	(iv)	permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the last Business Day on which the Exchange Offer shall remain open; and 

 

	 	(v)	otherwise comply in all material respects with all applicable laws. 

  

	 	(g)	As soon as practicable after the close of the Exchange Offer, the Issuers, the Company and the Guarantors shall: 

  

	 	(i)	accept for exchange all Notes validly tendered pursuant to the Exchange Offer and not validly withdrawn; 

  

	 	(ii)	deliver to the Trustee for cancellation all Notes so accepted for exchange; and 

  

	 	(iii)	cause the Trustee to authenticate and deliver promptly to each Holder tendering such Notes, Exchange Notes equal in principal amount to the Notes of such Holder so accepted for exchange. 

 

	 	(h)	The Exchange Notes shall be issued under the Indenture, which will include provisions to the effect that the Exchange Notes will not be subject to the transfer restrictions set forth in the Indenture and that the
Exchange Notes and the Notes, if any, will be deemed one class of security (subject to the provisions of the Indenture) and entitled to participate in any Note Guarantee (as such term is defined in the Indenture) on an equal and ratable basis.

  

	 	(i)	If: 

  

	 	(1)	the Issuers, the Company and the Guarantors determine that applicable laws or applicable interpretations of the staff of the SEC would not permit the consummation of the Exchange Offer on or prior to the 30th Business
Day following the Effectiveness Date; 

  

	 	(2)	the Exchange Offer is not consummated on or prior to the 90th Business Day following the Effectiveness Date (provided that this shall not affect the obligations of the Issuers to pay Additional Interest after the 30th
such Business Day pursuant to Section 4(a)); or 

  

	 	(3)	in the case of any Initial Purchaser representing that, on advice of counsel, it holds Registrable Notes that are or were ineligible to be exchanged in the Exchange Offer and such Initial Purchaser notifies the Issuer
within six months of consummation of the Exchange Offer. 

 then, the Issuers, the Company and the Guarantors shall use their
commercially reasonable efforts to promptly deliver to the Holders (in the case of clauses (1) and (2) above), the applicable Initial Purchaser (in the case of clause (3) above) and the Trustee notice thereof (the “Shelf
Notice”) and of their intent to file the Initial Shelf Registration and shall use their commercially reasonable efforts to cause the Initial Shelf Registration described in Section 3 to be declared effective by the SEC on or before
the date specified in Section 3(a). 

	3.	Shelf Registration 

 If a Shelf Notice is delivered pursuant to
Section 2(i)(1) or (2), then this Section 3 shall apply to all Registrable Notes. Otherwise, upon consummation of the Exchange Offer in accordance with Section 2, the provisions of Section 3 shall apply solely with respect to
Notes held by an Initial Purchaser as contemplated by Section 2(i)(3) hereof, provided, in each case, that the relevant Initial Purchaser has duly notified the Issuers within six months of the Exchange Offer as required by
Section 2(i)(3) above. 
  

	 	(a)	Initial Shelf Registration. The Issuers, the Company and the Guarantors shall use their commercially reasonable efforts to file with the SEC a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Registrable Notes (the “Initial Shelf Registration”). If the Issuers, the Company and the Guarantors have not yet filed an Exchange Registration Statement, upon receipt of a
written notice described in Section 2(i), the Issuers, the Company and the Guarantors shall file with the SEC the Initial Shelf Registration and shall use their commercially reasonable efforts to cause such Initial Shelf Registration to be
declared effective under the Securities Act on or prior to the Effectiveness Date. Otherwise, the Issuers, the Company and the Guarantors shall use their commercially reasonable efforts to file with the SEC the Initial Shelf Registration and to
cause such Initial Shelf Registration to be declared effective by the SEC on or prior to the 90th day following the written request described in Section 2(i) above; provided that in no event shall the Issuers be required to cause such
Initial Shelf Registration to be declared effective before the earliest of (i) the Effectiveness Date and (ii) the 45th day following the consummation of the Exchange Offer. The Initial
Shelf Registration shall be on the appropriate form permitting registration of such Registrable Notes for resale by Holders in the manner or manners reasonably designated by them (including, without limitation, one or more underwritten offerings).
The Issuers, the Company and the Guarantors shall use their commercially reasonable efforts to keep the Initial Shelf Registration effective under the Securities Act until the date which is the earliest of (i) the one year anniversary of the
effective date of the Initial Shelf Registration, (ii) the date when all of the Notes have been sold under the Shelf Registration Statement and (iii) the date when Holders, other than Holders that are “affiliates” (as defined in
Rule 144) of either Issuer, the Company or any Guarantor, are able to sell such Notes without restriction, and without reliance as to the availability of current public information, pursuant to Rule 144 (the “Effectiveness
Period”). 

  

	 	(b)	Subsequent Shelf Registrations. If the Initial Shelf Registration or any Subsequent Shelf Registration (as defined below) ceases to be effective for any reason at any time during the Effectiveness Period, the
Issuers, the Company and the Guarantors shall use their commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within 60 days of such cessation of effectiveness amend
such Shelf Registration in a manner to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional “shelf” Registration Statement pursuant to Rule 415 covering all of the Registrable Notes (a
“Subsequent Shelf Registration”). If a Subsequent Shelf Registration is filed, the Issuers, the Company and the Guarantors shall use their commercially reasonable to cause the Subsequent Shelf Registration to be declared
effective as soon as practicable after such filing and to keep such Subsequent Shelf Registration continuously effective for the remainder of the Effectiveness Period (except that clause (ii) of the definition of Effectiveness Period for such
purposes shall mean the date when all of the Notes have been sold under a Shelf Registration Statement). As used herein the term “Shelf Registration” means the Initial Shelf Registration and any Subsequent Shelf
Registrations. 

  

	 	(c)	Supplements and Amendments. The Issuers, the Company and the Guarantors shall promptly supplement and amend any Shelf Registration if required by the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested in writing by the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Shelf Registration or by
the Managing Underwriters of any such Registrable Notes. 

  

	 	(d)	Provision of Information. No Holder of Registrable Notes shall be entitled to include any of its Registrable Notes in any Shelf Registration pursuant to this Agreement unless such Holder furnishes to the Issuers
or the Company in writing, within 20 days after receipt of a written request therefor, such information as the Issuers, or the Company (after conferring with counsel with regard to information relating to Holders that would be required by the SEC to
be included in such Shelf Registration or Prospectus included therein) may reasonably request for inclusion in any Shelf Registration or Prospectus included therein, and no such Holder shall be entitled to Additional Interest pursuant to
Section 4 hereof unless and until such Holder shall have provided such information. 

  

	4.	Additional Interest 

  

	 	(a)	The Issuers, the Company and the Guarantors acknowledge and agree that the Holders will suffer damages if the Issuers, the Company or the Guarantors fail to fulfill their material obligations under Section 2 or
Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if: 

  

	 	(i)	(A) neither the Exchange Registration Statement nor a Shelf Registration is declared effective by the SEC on or prior to the Effectiveness Date or (B) notwithstanding that the Issuers have consummated or will
consummate an Exchange Offer, the Issuers, the Company and the Guarantors are required to file a Shelf Registration and such Shelf Registration is not declared effective by the SEC on or prior to the 90th day following the date such Shelf
Registration was filed; or 

	 	(ii)	(A) the Issuers have not exchanged all Notes validly tendered in accordance with the terms of the Exchange Offer for Exchange Notes on or prior to the 30th Business Day after the date on which the Exchange Registration
Statement was declared effective or (B) if applicable, the Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time during the Effectiveness Period; provided that the Issuers, the
Company and the Guarantors will be permitted to suspend the use of the prospectus that is part of the Shelf Registration if management of the Operating Partnership or the Company determines to do so for valid business reasons, including
circumstances relating to pending corporate developments and similar events or filings with the SEC, for a period not to exceed 45 days in any three-month period and not to exceed an aggregate of 90 days in any twelve-month period and without
specifying the nature of the event giving rise to a suspension in any notice of suspension provided to the Holders (each such event referred to in clause (i) above and this clause (ii) being hereinafter called a “Registration
Default”), 

 then additional interest (“Additional Interest”) shall accrue on the
principal amount of the Notes at a rate of 0.25% per annum for the first 90 days commencing on the day following the Registration Default, and increasing to 1.00% thereafter, to but excluding the day on which the Registration Default has been
cured. Additional Interest will be paid semi-annually in arrears, with the payment of Additional Interest due on the first interest payment date following the date on which such Additional Interest begins to accrue, and will be payable to the
Persons in whose names the Notes are registered as of the close of business on the applicable record dates (except that accrued and unpaid Additional Interest on any Note exchanged for an Exchange Note but not paid or payable to the holder
of such Note because such Note was exchanged prior to the applicable record date shall instead be payable to the person who is the holder of record of such Exchange Note on the applicable record date); provided, however, that
(a) Additional Interest on the Notes may not accrue under more than one of the foregoing clauses (i) and (ii) at any one time and in no event will Additional Interest accrue after the Effectiveness Period, (b) if a Holder is not
able to or does not provide the representations and information required in connection with a Shelf Registration in a timely manner and is therefore not named as a selling security holder in a Shelf Registration, the Holder will not be entitled to
receive any Additional Interest with respect to its Notes as a result of a Registration Default relating to such Shelf Registration; and (c) the Issuers, the Company and the Guarantors will have no other liabilities with respect to any
Registration Default. 
  

	 	(b)	The Issuers shall notify the Trustee within 5 Business Days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an “Event Date”).
Any amounts of Additional Interest due pursuant to clause (a)(i) or (a)(ii) of this Section 4 will be payable in cash and on the dates and in the manner provided in the Indenture, commencing with the first such semi-annual date occurring after
any such Additional Interest commences to accrue. 

  

	 	(c)	If the payment of principal of, premium, if any, and interest on the Notes is accelerated pursuant to the Indenture, then the payment of accrued Additional Interest, if any, shall also be accelerated, and if any such
acceleration of principal of, premium, if any, and interest on the Notes is rescinded pursuant to the Indenture, then the acceleration of the accrued Additional Interest, if any, shall also be rescinded. 

 

	5.	Registration Procedures 

 In connection with the filing of any Registration
Statement pursuant to Sections 2 or 3 hereof, the Issuers, the Company and the Guarantors shall effect such registrations to permit the sale of such securities covered thereby in accordance with the intended method or methods of disposition thereof,
and pursuant thereto and in connection with any Registration Statement filed by the Issuers, the Company and the Guarantors hereunder, the Issuers, the Company and the Guarantors shall: 

 

	 	(a)	 Prepare and file with the SEC, the Exchange Registration Statement or if the Exchange Registration Statement is not filed because of the circumstances
contemplated by Section 2(i), a Shelf Registration as prescribed by Section 3, and shall use their commercially reasonable efforts to cause such Registration Statement to become effective, as the case may be, and remain effective as
provided herein. The Issuers, the Company and the Guarantors shall not file any such Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Holders must provide information for the inclusion therein
(i) without the Holders being afforded a reasonable 

	 	
opportunity to review such documentation with respect to such Holders’ information or (ii) if a Holder, the Managing Underwriters, if any, or any of their respective counsel shall
reasonably object in writing on a timely basis to the information with respect to such Holders. An aforementioned party shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein not misleading or fails to comply with the applicable requirements of the Securities
Act in each case with respect to the information concerning such Holders. 

  

	 	(b)	Cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement; and in connection therewith, to effect such changes to such Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and execute, and use their commercially reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable such Indenture to be so qualified in a timely manner. 

  

	 	(c)	Prepare and file with the SEC such pre-effective amendments and post-effective amendments to each Shelf Registration or Exchange Registration Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the Applicable Period, as the case may be and, in the case of the Exchange Registration Statement, continuously effective through the consummation of the Exchange Offer; cause the
related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; and comply with
the provisions of the Securities Act and the Exchange Act applicable to them with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus. 

  

	 	(d)	During the Effectiveness Period or the Applicable Period, as the case may be, furnish to such selling Holders and Participating Broker-Dealers who so request in writing (i) upon the Issuers’ receipt, a copy of
the order of the SEC declaring such Registration Statement and any post-effective amendment thereto effective, (ii) such reasonable number of copies of such Registration Statement and of each amendment and supplement thereto (in each case
including any documents incorporated therein by reference and all exhibits, other than any such documents and exhibits that are otherwise publicly available), (iii) such reasonable number of copies of the Prospectus included in such
Registration Statement (including each preliminary Prospectus) and each amendment and supplement thereto, and such reasonable number of copies of the final Prospectus as filed by the Issuers, the Company and the Guarantors pursuant to Rule 424(b)
under the Securities Act, in conformity with the requirements of the Securities Act and each amendment and supplement thereto, and (iv) such other documents (including any amendments required to be filed pursuant to clause (c) of this
Section), as any such Person may reasonably request in writing. The Issuers, the Company and the Guarantors hereby consent to the use of the Prospectus by each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as
the case may be, and the underwriters or agents, if any, and dealers, if any, in connection with the offering and sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such
Prospectus and any amendment or supplement thereto. 

  

	 	(e)	 During the Effectiveness Period or the Applicable Period, as the case may be, if (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Participating Broker-Dealer notifies the Operating Partnership that a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes, the Issuers shall notify in writing the selling Holders of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, the Managing Underwriters, if any, and each of their
respective counsel promptly (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective
(including in such notice a written statement that any Holder may, upon request, obtain, without charge, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any Prospectus
or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes or the Exchange Notes the representations and
warranties of the Issuers, the Company and the Guarantors contained in any agreement (including any underwriting agreement) contemplated by Section 5(m) hereof cease to be true and correct in all material respects (or, if such
representations and warranties are otherwise qualified by materiality, in any respect), (iv) of the receipt by the Issuers, the Company and the Guarantors of any notification with respect to the suspension of the qualification or

	 	
exemption from qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction,
or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition or any information becoming known that makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in, or amendments or supplements to, such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement and the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, (vi) of any reasonable determination by the Issuers, the Company or the Guarantors that a post-effective amendment to a Registration Statement would be
appropriate, (vii) of any request by the SEC for amendments to the Registration Statement or supplements to the Prospectus (in each case including any documents incorporated by reference therein) or for additional information relating thereto,
and (viii) when management of the Company or the Operating Partnership shall have determined in good faith that the Issuers, the Company and the Guarantors have valid business reasons to suspend the use of the Prospectus that is part of a Shelf
Registration, including circumstances relating to pending corporate developments and similar events or filings with the SEC. 

  

	 	(f)	During the Effectiveness Period or the Applicable Period and during the period commencing on the effective date of the Exchange Registration Statement through and including the consummation of the Exchange Offer, as the
case may be, use their commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or
exemption from qualification) of any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, to use their commercially reasonable efforts to obtain
the withdrawal of any such order at the earliest practicable date. 

  

	 	(g)	During the Effectiveness Period or the Applicable Period, as the case may be, if (A) a Shelf Registration is filed pursuant to Section 3, (B) a Participating Broker-Dealer notifies the Operating
Partnership that a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes or
(C) reasonably requested in writing by the Managing Underwriters, if any, or the Holders of a majority in aggregate principal amount of the Registrable Notes being sold in connection with an underwritten offering, (i) promptly incorporate
in a Prospectus supplement or post-effective amendment such information or revisions to information therein relating to such underwriters or selling Holders as the Managing Underwriters, if any, or such Holders or any of their respective counsel
reasonably request in writing to be included or made therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Issuer has received notification of the matters to
be incorporated in such Prospectus supplements or post-effective amendment. 

  

	 	(h)	Prior to any public offering of Registrable Notes, any delivery of a Prospectus contained in the Exchange Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period or where Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, use their commercially reasonable efforts to register or qualify, and to cooperate with the selling
Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, the Managing Underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes or Exchange Notes, as the case may be, for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer or any
Managing Underwriter, if any, reasonably request in writing; provided that none of the Issuers, the Company or any Guarantor shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified,
(B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in any such jurisdiction where it is not then so subject. 

 

	 	(i)	During the Effectiveness Period or the Applicable Period, as the case may be, if (A) a Shelf Registration is filed pursuant to Section 3 or (B) a Participating Broker-Dealer notifies the Issuer that a
Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is requested to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes, cooperate with the selling Holders
of Registrable Notes and the Managing Underwriter, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes or Exchange Notes to be sold, which certificates shall not bear any restrictive legends and
shall be in a form eligible for deposit with The Depository Trust Company, and enable such Registrable Notes or Exchange Notes to be in such denominations as provided under the Indenture and registered in such names as the Managing Underwriter, if
any, or Holders may reasonably request. 

	 	(j)	Use their commercially reasonable efforts to cause the Registrable Notes or Exchange Notes covered by any Registration Statement to be registered with or approved by such governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriters, if any, to consummate the disposition of such Registrable Notes or the Exchange Notes, as the case may be, except as may be required solely as a consequence of the nature of such
selling Holder’s business, in which case the Issuers, the Company and the Guarantors shall cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals; provided that none of the
Issuers, the Company or any Guarantor shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any
jurisdiction where it is not then so subject or (C) subject itself to taxation in any such jurisdiction where it is not then so subject. 

  

	 	(k)	During the Effectiveness Period or the Applicable Period, as the case may be, if (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Participating Broker-Dealer notifies the Operating
Partnership that a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes, upon the
occurrence of any event contemplated by paragraph 5(e)(v) or 5(e)(vi) hereof, as promptly as practicable, prepare and file with the SEC, at the expense of the Issuers, the Company and the Guarantors, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the
Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, such Prospectus will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and, if SEC review is required, use their commercially reasonable efforts to cause
such post-effective amendment to be declared effective as soon as practicable. 

  

	 	(l)	Prior to the initial issuance of the Exchange Notes, (i) provide the Trustee with one or more certificates for the Exchange Notes or the Registrable Notes in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Exchange Notes. 

  

	 	(m)	If a Shelf Registration is filed pursuant to Section 3, enter into such agreements (including an underwriting agreement and associated documentation (including, without limitation, customary opinions, comfort
letters and other closing documentation) in form, scope and substance as is customary in underwritten offerings of debt securities similar to the Notes, as may be appropriate in the circumstances) and take all such other reasonably necessary actions
in connection therewith (including those reasonably requested in writing by the Managing Underwriters, if any, or the Holders of a majority in aggregate principal amount of the Registrable Notes being sold) in order to expedite or facilitate the
registration or the disposition of such Registrable Notes. 

  

	 	(n)	 During the Effectiveness Period or the Applicable Period, as the case may be, if (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Participating Broker-Dealer notifies the Issuer that a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes, make available for inspection by any selling Holder of such Registrable Notes being sold, or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of
Registrable Notes, if any, and any attorney, accountant or other agent retained by any such selling Holder or any such Participating Broker-Dealer, as the case may be, or underwriter (collectively, the “Inspectors”), at the
offices where normally kept, during reasonable business hours, all material financial and other records and pertinent material corporate documents of the Operating Partnership and the Company and their respective subsidiaries (collectively, the
“Records”) as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Operating Partnership and the Company and their
respective subsidiaries to supply all information reasonably requested in writing by any such Inspector in connection with such Registration Statement. Each Inspector shall agree in writing that it will keep the Records confidential and not disclose
any of the Records unless (i) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (ii) the information in such Records is public or has been made generally available to the
public other than as a result of a disclosure or failure to safeguard by such Inspector or (iii) disclosure of such information is, based on the reasonable advice of counsel to any Inspector, necessary or desirable, in connection with any
action, claim, suit or proceeding, directly or indirectly, involving such Inspector and arising out of, based upon, related to, or involving this Agreement, or any transaction contemplated hereby or arising hereunder. Each selling Holder of such
Registrable Notes and each such Participating Broker-Dealer will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential (subject to the exceptions set forth in the immediately preceding

	 	
sentence) and, notwithstanding such exceptions shall not be used by it as the basis for any market transactions in the securities of the Operating Partnership or the Company unless and until such
is made generally available to the public. Each Inspector, each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to further agree that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give prior written notice to the Operating Partnership and, to the extent practicable, use their commercially reasonable efforts to allow the Operating Partnership, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential. 

  

	 	(o)	[Reserved] 

  

	 	(p)	If the Exchange Offer is to be consummated, upon delivery of the Notes by the Holders to the Issuers (or to such other Person as directed by the Operating Partnership) in exchange for the Exchange Notes, the Issuers,
the Company and the Guarantors shall mark, or caused to be marked, on such Notes that the Exchange Notes are being issued as substitute evidence of the indebtedness originally evidenced by the Notes; provided that in no event shall such Notes be
marked as paid or otherwise satisfied. 

  

	 	(q)	Reasonably cooperate with each seller of Registrable Notes covered by any Shelf Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Notes and their respective
counsel in connection with any filings required to be made with FINRA. 

  

	 	(r)	Use their commercially reasonable efforts to take all other steps reasonably necessary to effect the registration of the Registrable Notes or the Exchange Notes covered by a Registration Statement contemplated hereby.

  

	 	(s)	The Issuers may require each seller of Registrable Notes or Participating Broker-Dealer as to which any registration is being effected to furnish to the Issuers such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Notes or Exchange Notes as the Issuers may, from time to time, reasonably request in writing. The Issuers may exclude from such registration the Registrable Notes or Exchange Notes of any seller
who fails to furnish such information within a reasonable time (which time in no event shall exceed 20 days, subject to Section 3(d)) hereof) after receiving such request. Each seller of Registrable Notes or Participating Broker-Dealer as to
which any registration is being effected agrees to furnish promptly to the Issuers all information required to be disclosed in order to make the information previously furnished by such seller not materially misleading. 

 

	 	(t)	Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, that, upon
receipt of any notice from the Issuers of the happening of any event of the kind described in Section 5(e)(ii), 5(e)(iv), 5(e)(v), 5(e)(vi), 5(e)(vii) or 5(e)(viii), such Holder will forthwith discontinue disposition of such Registrable Notes
covered by a Registration Statement and such Participating Broker-Dealer will forthwith discontinue disposition of such Exchange Notes pursuant to any Prospectus and, in each case, forthwith discontinue dissemination of such Prospectus until such
Holder’s or Participating Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k), or until it is advised in writing (the “Advice”) by the Operating
Partnership or the Company that the use of the applicable Prospectus may be resumed, and, if so directed by the Operating Partnership or the Company, such Holder or Participating Broker-Dealer, as the case may be, will deliver to the Operating
Partnership all copies, other than permanent file copies, then in such Holder’s or Participating Broker-Dealer’s possession, of the Prospectus covering such Registrable Notes current at the time of the receipt of such notice. In the event
the Operating Partnership or the Company shall give any such notice, the Applicable Period and the Effectiveness Period shall each be extended by the number of days during such periods from and including the date of the giving of such notice to and
including the date when each Holder of Registrable Notes and each Participating Broker-Dealer shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) or (y) the Advice.

  

	6.	Registration Expenses 

 Except as set forth in Section 9, all fees and
expenses incident to the performance of or compliance with this Agreement by the Issuers, the Company and the Guarantors shall be borne by the Issuers, the Company and the Guarantors, whether or not the Exchange Registration Statement or a Shelf
Registration is filed or becomes effective, including, without limitation, (i) all registration and filing fees, including, without limitation, (A) fees with respect to filings required to be made with FINRA in connection with any
underwritten offering and (B) fees and expenses of the registration or qualification of the Registrable Notes or the Exchange Notes for offer and sale under the state securities or Blue Sky laws as provided in Section 5(h) hereof
(including, without limitation, reasonable 

 
fees and disbursements of counsel in connection with such registration or qualification), (ii) printing expenses, including, without limitation, expenses of printing Prospectuses if the
printing of Prospectuses is reasonably requested by the Managing Underwriter, if any, or otherwise as determined by the Issuers in their sole discretion, (iii) fees and disbursements of counsel for the Issuers, the Company and the Guarantors,
(iv) fees and disbursements of the Company’s and the Operating Partnership’s independent certified public accountants (including, without limitation, the expenses of any special audit and “cold comfort” letters required by
or incident to such performance), (v) rating agency fees, (vi) Securities Act liability insurance, if the Issuers, the Company and the Guarantors desire such insurance, (vii) fees and expenses of all other Persons retained by the
Issuers, the Company and the Guarantors, (viii) the fees and expenses of the Trustee, (ix) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agreements, securities sales
agreements, indentures and any other documents necessary in order to comply with this Agreement and (x) in the event of a Shelf Registration, reasonable fees and disbursements of one firm of counsel designated by the Holders of a majority in
principal amount of the Registrable Notes covered thereby to act as counsel for the Holders of the Registrable Notes in connection therewith. 
  

	7.	Indemnification 

  

	 	(a)	Indemnification by the Issuers, the Company and the Guarantors. The Issuers, the Company and the Guarantors, jointly and severally, agree to indemnify and hold harmless each Holder of Registrable Notes or
Exchange Notes, each Participating Broker-Dealer selling Exchange Notes during the Applicable Period, and each Person, if any, who controls any such Holder or Participating Broker-Dealer (within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act), from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable attorneys’ fees and reasonable expenses incurred in connection with investigating or
defending any of the foregoing as provided in this Section 7) (collectively, “Losses”), as incurred, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue or alleged
untrue statement of a material fact contained in any Registration Statement, Prospectus or form of prospectus, or in any amendment or supplement thereto, or in any preliminary prospectus or free writing prospectus (in each case including any
documents incorporated or deemed to be incorporated by reference therein), 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, in light of the
circumstances under which they were made, not misleading, except insofar as such Losses are caused by such untrue statement or omission or alleged untrue statement or omission based upon any information relating to such Holder or Participating
Broker-Dealer furnished to the Operating Partnership or the Company in writing by such Holder or Participating Broker-Dealer or their counsel expressly for use therein. 

 

	 	(b)	Indemnification by Holder. In connection with any Registration Statement, Prospectus or form of prospectus, any amendment or supplement thereto, or any preliminary prospectus in which a Holder is participating,
such Holder shall furnish to the Operating Partnership or the Company in writing such information relating to such Holder as the Operating Partnership or the Company reasonably request for use in connection with any Registration Statement,
Prospectus or form of prospectus, any amendment or supplement thereto, or any preliminary prospectus and shall indemnify and hold harmless the Issuers, the Company, the Guarantors, their respective directors and officers and each Person, if any, who
controls the Issuers, the Company and the Guarantors (within the meaning of Section 15 of the Securities Act and Section 20(a) of the Exchange Act), from and against all Losses arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, Prospectus or form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading to the extent, but only to the extent, that such Losses are caused by an untrue statement or
alleged untrue statement of a material fact or omission or alleged omission of a material fact contained in or omitted from any information so furnished in writing by such Holder to the Operating Partnership and the Company expressly for use
therein. Notwithstanding the foregoing, in no event shall the liability of any selling Holder be greater in amount than such Holder’s Maximum Contribution Amount (as defined below). 

 

	 	(c)	Conduct of Indemnification Proceedings. If any proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party
shall promptly notify the party or parties from which such indemnity is sought (the “Indemnifying Party” or “Indemnifying Parties”, as applicable) in writing; provided, that the failure to so
notify the Indemnifying Parties shall not (i) relieve any such Indemnifying Party from any obligation or liability unless and only to the extent it is materially prejudiced as a result thereof and (ii) will not, in any event, relieve any
Indemnifying Party from any obligations to any Indemnified Party other than the indemnification obligation provided in Section 8(a) or 8(b), as the case may be, above. 

The Indemnifying Party shall, upon the request of the Indemnified Party, retain counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party and any others the Indemnifying Party may designate in 

 
such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless: (1) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (2) the named parties
to any such proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the Indemnifying Party shall not, in respect of the legal expenses of any Indemnified Party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such Indemnified Parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by a majority of the Holders of
the Registrable Notes or Exchange Notes, in the case of parties indemnified pursuant to Section 7(a), and by the Operating Partnership, in the case of parties indemnified pursuant to Section 7(b). The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and against any loss
or liability by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party
is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of
such proceeding and does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party. 
  

	 	(d)	Contribution. If the indemnification provided for in Section 7(a) or 7(b) is unavailable to an Indemnified Party or is insufficient in respect of any Losses referred to therein, then each Indemnifying Party
under such paragraph, in lieu of indemnifying such Indemnified Party thereunder, shall contribute the amount paid or payable by such Indemnified Party as a result of such Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Party, on the one hand, and the Indemnified Party, on the other hand or (ii) if the allocation provided by clause 7(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 7(d)(i) above but also the relative fault of the Indemnifying Party, on the one hand, and of the Indemnified Party, on the other hand, in connection with the statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations. The relative benefits received by the Issuers, the Company and the Guarantors on the one hand and any Holder on the other shall be deemed to be in the same proportion
that the total net proceeds from the offering (before deducting expenses) of the Notes received by the Issuers bears to the dollar amount of the proceeds received by such Holder from the sale of any Registrable Notes (after deducting any fees,
discounts and commissions applicable thereto). The relative fault of the Indemnifying Party, on the one hand, and the Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. 

 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation or by other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7(d), a selling Holder shall not be required to contribute, in the aggregate, any amount in excess of such Holder’s Maximum Contribution Amount. A selling Holder’s “Maximum
Contribution Amount” shall equal the excess of (i) the aggregate proceeds received by such Holder pursuant to the sale of its Registrable Notes or Exchange Notes pursuant to the applicable Registration Statement over (ii) the
aggregate amount of damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 7(d) are several in
proportion to the respective principal amount of Registrable Notes held by each Holder hereunder and not joint. The Issuers’, the Company’s and the Guarantors’ obligations to contribute pursuant to this Section 7(d) are joint and
several. 
 The indemnity and contribution agreements contained in this Section 7 are in addition to any liability that the
Indemnifying Parties may have to the Indemnified Parties. 

	8.	Rules 144 and 144A 

 The Issuer, the Company and the Guarantors covenant that they
shall (a) file the reports required to be filed by them (if so required) under the Securities Act and the Exchange Act in a timely manner and, if at any time the Issuers, the Company or the Guarantors are not required to file such reports, they
will, upon the written request of any Holder of Registrable Notes, make publicly available other information necessary to permit sales pursuant to Rule 144 and 144A and (b) take such further action as any Holder may reasonably request in
writing, all to the extent required from time to time to enable such Holder to sell Registrable Notes without registration under the Securities Act pursuant to the exemptions provided by Rule 144 and Rule 144A. Upon the request of any Holder, the
Issuers, the Company and the Guarantors shall deliver to such Holder a written statement as to whether they have complied with such information and requirements. 
  

	9.	Underwritten Registrations of Registrable Notes 

 The Holders of Registrable Notes
who hold at least 25% in aggregate principal amount of such Registrable Notes covered by any Shelf Registration Statement who desire to do so may sell such Registrable Notes in an underwritten offering; provided that each Holder shall bear
such Holder’s proportionate share (based on the total number of Registrable Notes sold in such registration) of all discounts and commissions payable to the underwriters or brokers and all transfer taxes and transfer fees in connection with a
registration of Registrable Notes pursuant to this Agreement. If any of the Registrable Notes covered by any Shelf Registration is to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Issuers and the Company. 
 No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 

 

	10.	Miscellaneous 

  

	 	(a)	No Inconsistent Agreements. The Issuers, the Company and each of the Guarantors have not entered, as of the date hereof, and the Issuers, the Company and each of the Guarantors shall not enter, after the date of
this Agreement, into any agreement with respect to the Notes that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The Issuers, the Company and each of the Guarantors have
not entered and will not enter into any agreement with respect to any of its securities that will grant to any Person piggy-back rights with respect to a Registration Statement. 

 

	 	(b)	Adjustments Affecting Registrable Notes. The Issuers, the Company and the Guarantors shall not, directly or indirectly, take any action with respect to the Registrable Notes as a class that would adversely affect
the ability of the Holders to include such Registrable Notes in a registration undertaken pursuant to this Agreement. 

  

	 	(c)	Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the
prior written consent of the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Notes in circumstances that would adversely affect any Holders of Registrable Notes; provided, however,
that Section 7 and this Section 10(c) may not be amended, modified or supplemented, and no waiver or consent to departures from the provisions thereof will be effective, without the prior written consent of each Holder, and no amendment,
modification, supplement, consent or waiver that reduces the rate or amount of Additional Interest or changes the time of payment thereof shall be effective without the prior written consent of each Holder. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being tendered pursuant to the Exchange Offer or sold pursuant to a Notes Registration
Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being
tendered or being sold by such Holders pursuant to such Notes Registration Statement. 

	 	(d)	Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, next-day air courier or telecopier: 

 

	 	(i)	if to a Holder of Notes or to any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the registrar of the Notes, with
a copy in like manner to the Initial Purchasers as follows: 

 Deutsche Bank Securities Inc. 

60 Wall Street, Second Floor 

New York, NY 10005 
 Facsimile
No.: (212) 797-4877 
 Attention: Leveraged Debt Capital Markets with a copy to: 

with a copy to: 
 Deutsche Bank
Securities Inc. 
 60 Wall Street, Second Floor 

New York, NY 10005 
 Facsimile
No.: (212) 797-4561 
 Attention: General Counsel 
  

	 	(ii)	if to the Initial Purchasers, at the address specified in Section 10(d)(1); 

  

	 	(iii)	if to the Issuers, the Company or any Guarantor, as follows: 

 QTS Realty Trust Inc. 

12851 Foster Street 
 Overland
Park, KS 66213 
 Attention: Corporate Secretary 

with a copy to: 
 Hogan Lovells
US LLP 
 555 Thirteenth Street NW 

Washington, DC 20004 

Attention: Eve Howard 
 All such
notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the United States mail, postage prepaid, if mailed; one business day after being timely
delivered to a next-day air courier guaranteeing overnight delivery; and when receipt is acknowledged by the addressee, if telecopied. 

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee under
the Indenture at the address specified in such Indenture. 
  

	 	(e)	Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, including, without limitation and without the need for an express
assignment, subsequent Holders of Notes. 

  

	 	(f)	Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. 

  

	 	(g)	Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 

 

	 	(h)	 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAW. EACH OF THE ISSUERS, THE COMPANY AND EACH OF THE GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITS AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. EACH OF THE ISSUERS, THE COMPANY AND EACH OF THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE ISSUERS, THE COMPANY
AND EACH OF THE GUARANTORS IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO 

	 	
UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE ISSUERS, THE COMPANY OR THE GUARANTORS AT THEIR SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUERS, THE COMPANY OR ANY GUARANTOR IN ANY OTHER JURISDICTION. 

  

	 	(i)	Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 

  

	 	(j)	Registrable Notes and Exchange Notes Held by the Issuers or their Respective Affiliates. Whenever the consent or approval of Holders of a specified percentage of Notes or Exchange Notes is required hereunder,
Notes and Exchange Notes held by any of the Issuers, the Company, the Guarantors or their respective affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was
given by the Holders of such required percentage. 

  

	 	(k)	Third Party Beneficiaries. Holders and Participating Broker-Dealers are intended third party beneficiaries of this Agreement and this Agreement may be enforced by such Persons. 

 

	 	(l)	Entire Agreement. This Agreement, together with the Purchase Agreement and the Indenture, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein and any and all prior oral or written agreements, representations, or warranties, contracts, understanding, correspondence, conversations and memoranda between the Initial Purchasers on the
one hand and the Issuers, the Company and the Guarantors on the other, or between or among any agents, representatives, parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof
and thereof are merged herein and replaced hereby. 

  

	 	(m)	Additional Guarantors. So long as any Registrable Notes remain outstanding, the Issuers, the Company and the Guarantors will cause each Additional Guarantor to execute a counterpart to this Agreement in the form
attached hereto as Annex A and to deliver such counterpart to the Initial Purchasers no later than five Business Days following the execution thereof. 

 SIGNATURES 

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

 

					
	QUALITYTECH, LP
		
	By:	 	QualityTech GP, LLC, a Delaware limited liability company, its general partner
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QTS FINANCE CORPORATION
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QTS REALTY TRUST, INC.
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QUALITY INVESTMENT PROPERTIES METRO, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QUALITY INVESTMENT PROPERTIES, SUWANEE, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QUALITY TECHNOLOGY SERVICES METRO II, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer

 
					
	QUALITY TECHNOLOGY SERVICES, SUWANEE II, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QLD INVESTMENT PROPERTIES WICHITA TECHNOLOGY GROUP, L.L.C., a Kansas limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QUALITY TECHNOLOGY SERVICES WICHITA II, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QUALITY INVESTMENT PROPERTIES SACRAMENTO, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QUALITY TECHNOLOGY SERVICES SACRAMENTO II, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QUALITY INVESTMENT PROPERTIES MIAMI, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QUALITY TECHNOLOGY SERVICES MIAMI II, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer

 
					
	QUALITY INVESTMENT PROPERTIES SANTA CLARA, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer
	
	QUALITY TECHNOLOGY SERVICES SANTA CLARA II, LLC, a Delaware limited liability company
		
	By:	 	 /s/ William H. Schafer

		 	Name:	 	William H. Schafer
		 	Title:	 	Chief Financial Officer

  

					
	ACCEPTED AND AGREED TO:
	Initial Purchasers listed in Schedule I hereto
	
	DEUTSCHE BANK SECURITIES INC.
		
	By:	 	 /s/ Alexandra Barth

		 	Name:	 	Alexandra Barth
		 	Title:	 	Managing Director
		
	By:	 	 /s/ William Wiltshire

		 	Name:	 	William Wiltshire
		 	Title:	 	Managing Director
	
	KEYBANC CAPITAL MARKETS INC.
		
	By:	 	 /s/ Eric Peiffer

		 	Name:	 	Eric Peiffer
		 	Title:	 	Managing Director
	
	 MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

		
	By:	 	 /s/ Scott Tolchin

		 	Name:	 	Scott Tolchin
		 	Title:	 	Managing Director

 SCHEDULE I 

INITIAL PURCHASERS 
 Deutsche Bank
Securities Inc. 
 KeyBanc Capital Markets, Inc. 
 Merrill
Lynch, Pierce, Fenner & Smith Incorporated 
 Goldman, Sachs & Co. 

Jefferies LLC 
 J.P. Morgan Securities LLC 

Morgan Stanley & Co. LLC 
 PNC Capital Markets LLC 

RBS Securities Inc. 
 Regions Securities LLC 

Stifel, Nicolaus & Company 
 TD Securities (USA) LLC 

 SCHEDULE II 

GUARANTORS 
 1. QUALITY INVESTMENT
PROPERTIES METRO, LLC, a Delaware limited liability company 
 2. QUALITY INVESTMENT PROPERTIES MIAMI, LLC, a Delaware limited liability company

 3. QUALITY INVESTMENT PROPERTIES SACRAMENTO, LLC, a Delaware limited liability company 

4. QUALITY INVESTMENT PROPERTIES SANTA CLARA, a Delaware limited liability company 

5. QUALITY INVESTMENT PROPERTIES, SUWANEE, LLC, a Delaware limited liability company 

6. QUALITY TECHNOLOGY SERVICES METRO II, LLC, a Delaware limited liability company 

7. QUALITY TECHNOLOGY SERVICES MIAMI II, LLC, a Delaware limited liability company 

8. QUALITY TECHNOLOGY SERVICES SACRAMENTO II, LLC, a Delaware limited liability company 

9. QUALITY TECHNOLOGY SERVICES SANTA CLARA II, LLC, a Delaware limited liability company 

10. QUALITY TECHNOLOGY SERVICES, SUWANEE II, LLC, a Delaware limited liability company 

11. QUALITY TECHNOLOGY SERVICES WICHITA II, LLC, a Delaware limited liability company 

12. QLD INVESTMENT PROPERTIES WICHITA TECHNOLOGY GROUP, L.L.C., a Kansas limited liability company 

 Annex A 

Counterpart to Registration Rights Agreement 

The undersigned hereby absolutely, unconditionally and irrevocably agrees as a Guarantor (as defined in the Registration Rights Agreement,
dated as of July 23, 2014 by and among QualityTech, LP, QTS Finance Corporation, QTS Realty Trust, Inc., the Guarantors party thereto and the Initial Purchasers listed in Schedule I thereto) to be bound by the terms and provisions of such
Registration Rights Agreement. 
 IN WITNESS WHEREOF, the undersigned has executed this counterpart as of 

 

			
	[NAME]
		
	By:	 	  

	Name:	 	
	Title:Exhibit 10.1

 

FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT

 

This First Amendment to Asset Purchase Agreement (this “First Amendment”) is made and entered into this 25th day of July, 2014 by and among Vapor Corp., a Delaware corporation (“Parent”), IVGI Acquisition, Inc., a Delaware corporation (“Buyer”), and Nicolas Molina, David Epstein and David Herrera, each a Florida resident and in his capacity as one of the Sellers’ Representatives.  All capitalized terms used herein, but not otherwise defined herein, shall have the meanings ascribed to them in Asset Purchase Agreement (as defined below).

 

RECITALS

 

WHEREAS, the parties hereto have entered into that certain Asset Purchase Agreement dated May 14, 2014 (the “Asset Purchase Agreement”) by and among Parent, Buyer, the Sellers and the Owners (of which the Sellers’ Representatives are part) pursuant to which Buyer desires to purchase and assume from Sellers, and Sellers desire to sell and assign to Buyer, the Acquired Assets and the Assumed Liabilities;

 

WHEREAS, Section 10.5 of the Asset Purchase Agreement provides that the Asset Purchase Agreement may be amended by a written instrument signed by Parent, Buyer and the  Sellers’ Representatives on behalf of the Sellers and the Owners; and

 

WHEREAS, the parties hereto desire to amend the Asset Purchase Agreement as set forth in this First Amendment.

 

NOW, THEREFORE, in accordance with Section 10.5 of the Asset Purchase Agreement and in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.           Amendment to Section 1.1.2 of the Asset Purchase Agreement.  Section 1.1.2 of the Asset Purchase Agreement is hereby amended by inserting the following clauses at the end of such section:

 

“(n) the trademark “VAPOR ZONE,” the domain names containing “VAPORZONE” and the trade names “VaporZone”, all of the foregoing as set forth on Schedule 2.14 (collectively, the “Discontinued Brand”);

 

(o) all Contractual Obligations of the Sellers specifically pertaining to Inventory bearing the Discontinued Brand and/or the development or promotion of the Discontinued Brand; and

 

(p) all Inventory bearing the Discontinued Brand (the “Retained Inventory”).”

 

and deleting the word “and” after clause (l).

  

    	  

    	 

    
 

 

2.           Amendment to Section 1.1.4 of the Asset Purchase Agreement.   Section 1.1.4 of the Asset Purchase Agreement is hereby amended by inserting the following clauses at the end of such section:

 

“(k)  to the extent not included in the Net Working Capital calculation set forth in Section 1.2.5, all Liabilities for the actual out of pocket costs incurred by International Vapor prior to the Closing pursuant to and as limited by Section 4.10 for rebranding with the New Brand (i) the Acquired Assets which are branded with the Discontinued Brand and (ii) any and all aspects of the Business that use the Discontinued Brand as of the date of this Agreement (the “Pre-Closing Rebranding Costs”);

 

  (l) all Liabilities arising from or specifically relating to that Finder’s Fee Agreement entered into as of January 26, 2013 by and between International Vapor and Allan Rothstein (the “Rothstein Agreement”); and

 

(m)         all Liabilities arising from or specifically relating to any DB Third Party Claim.”

 

and deleting the word “and” after clause (i).

 

3.           Amendment to Section 1.2.2 of the Asset Purchase Agreement.  Section 1.2.2 of the Asset Purchase Agreement is hereby amended by deleting the clause “$19,100,000 (the “Fixed Stock Purchase Price” and, together with the Cash Purchase Price, the “Fixed Purchase Price”) with such Cash Purchase Price being subject to adjustment as provided in Section 1.2.5.” and inserting the following new clause in place thereof:

 

“$19,100,000 (the “Fixed Stock Purchase Price” and, together with the Cash Purchase Price, the “Fixed Purchase Price”) with such Cash Purchase Price and Fixed Stock Purchase Price being subject to adjustment as provided in Section 1.2.5  and Section 1.2.6, respectively.”

 

4.           Amendment to Section 1.2.4 of the Asset Purchase Agreement.  Section 1.2.4 of the Asset Purchase Agreement is hereby amended by deleting paragraph (a) of such section in its entirety and inserting the following new paragraph (a):

 

“(a)        At the Closing, Buyer shall, out of the Fixed Stock Purchase Price to be paid to International Vapor on behalf of the Sellers, deposit in the Escrow Account on behalf of International Vapor on behalf of the Sellers pursuant Section 1.3 (such deposit, the “Escrow Fund”), Two Million Seven Hundred Twenty-Four Thousand Dollars ($2,724,000) worth of the Shares (calculated in accordance with Section 1.2.2) (such Shares, the “Escrow Shares”).  The Escrow Shares shall be specifically allocated to satisfy the Sellers’ and Owners’ reimbursement obligations under Section 1.2.6 and their indemnity obligations pursuant to Article 7 as follows:  (i) $100,000 worth of the Escrow Shares for purposes of Section 1.2.6 (the “Rebranding Escrow Shares” and the deposit thereof pursuant to Section 1.3, the “Rebranding Escrow Fund”), (ii) $624,000 worth of the Escrow Shares for purposes of Section 7.17 (along with any additional Escrow Shares deposited pursuant to Section 1.7.7, the “Special Escrow Shares” and the deposit thereof pursuant to Section 1.3 and Section 1.7.7, the “Special Escrow Fund”)) and (iii)  $2,000,000 of the Escrow Shares for purposes of Article 7 other than Section 7.17 and Section 7.18 (the “General Escrow Shares” and the deposit thereof pursuant to Section 1.3, the “General Escrow Fund”).”

 

    	2

    	 

    
 

5.           Amendment to Section 1.2.5 of the Asset Purchase Agreement.  Section 1.2.5 of the Asset Purchase Agreement is hereby amended by deleting the last sentence of paragraph (a) of such section in its entirety and replacing it with the following sentence:

 

“ “Target Net Working Capital” means negative Fifty Thousand Dollars (-$50,000).”

 

6.           Amendment to Section 1.2 of the Asset Purchase Agreement.  Section 1.2 of the Asset Purchase Agreement is hereby amended by inserting the following new Section 1.2.6 after Section 1.2.5:

 

“Section 1.2.6. Rebranding Adjustment.

 

(a)           On or prior to the date that is one hundred twenty (120) days following the Closing Date, Buyer shall prepare, or cause to be prepared, and deliver to Sellers’ Representatives a certificate executed by the Chief Financial Officer of Buyer setting forth the Post-Closing Rebranding Costs and the calculation thereof.  “Post-Closing Rebranding Costs” means the actual, required and essential out of pocket costs incurred by Buyer, with the approval of International Vapor, which approval shall not be unreasonably withheld, delayed or conditioned, after the Closing and prior to the date of such certificate, to complete the rebranding of the Acquired Assets and any and all aspects of the Business with the New Brand to the extent International Vapor does not do so to prior to the Closing in accordance with Section 4.10; provided that Post-Closing Rebranding Costs shall not include (x) advertising or brand marketing costs related to the New Brand to the extent that the aggregate amount of such costs, when added to the New Brand Marketing Expense, would exceed $50,000, (y) costs to replace inventory or packaging bearing the Discontinued Brand, or (z) costs included in the Net Working Capital calculation set forth in Section 1.2.5.

 

(b)           Sellers’ Representatives shall complete their review of the Post-Closing Rebranding Costs within thirty (30) days after delivery thereof by Buyer.  During such review period, Buyer shall provide Sellers’ Representatives with access to all books and records reasonably requested by Sellers’ Representatives to review the Post-Closing Rebranding Costs, and Buyer shall make reasonably available its representatives responsible for the preparation of the Post-Closing Rebranding Costs in order to respond to the inquiries of Sellers’ Representatives.  If Sellers’ Representatives object to the Post-Closing Rebranding Costs for any reason (including, without limitation, that any such costs were not required for and essential to the rebranding), they shall, on or before the last day of such 30-day period, so inform Buyer in writing (an “IVG Objection”), setting forth a specific description of the basis of Sellers’ Representatives’ determination and the adjustments to the Post-Closing Rebranding Costs that Sellers’ Representatives believe should be made.  To the extent any disagreement therewith is not described in an IVG Objection received by Buyer on or before the last day of such 30-day period, then the Post-Closing Rebranding Costs set forth on the certificate delivered by Buyer to Sellers’ Representative pursuant to Section 1.2.6(a) shall be deemed agreed, final and binding on the parties.

 

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(c)           On the date that is one hundred twenty (120) days following the Closing Date or a date that is not less than five (5) Business Days prior to such 120th day, Sellers’ Representatives shall prepare, or cause to be prepared, and deliver to Buyer a certificate executed by the Sellers’ Representatives setting forth the value (determined by reference to the actual cost paid by Sellers for such Retained Inventory) of the Retained Inventory owned by International Vapor as of the end of the one hundred twentieth (120th) day after the Closing Date and the calculation thereof (the lesser of (x) such value and (y) Two Hundred Fifty Thousand Dollars ($250,000), the “Retained Inventory Value”).

 

(d)           Buyer shall complete its review of the Retained Inventory Value within thirty (30) days after delivery thereof by Sellers’ Representatives.  During such review period, International Vapor shall provide Buyer with the opportunity to view the Retained Inventory and access to all books and records reasonably requested by Buyer to review the Retained Inventory Value, and International Vapor shall make reasonably available its representatives responsible for the preparation of the Retained Inventory Value in order to respond to the inquiries of Buyer.  If Buyer objects to the Retained Inventory Value for any reason, it shall, on or before the last day of such 30-day period, so inform the Sellers’ Representatives in writing (a “Buyer Objection”), setting forth a specific description of the basis of Buyer’s determination and the adjustments to the Retained Inventory Value that Buyer believes should be made.  To the extent any disagreement therewith is not described in a Buyer Objection received by the Sellers’ Representatives on or before the last day of such 30-day period, then the Retained Inventory Value set forth on the certificate delivered by the Sellers’ Representatives to Buyer pursuant to Section 1.2.6(c) shall be deemed agreed, final and binding on the parties.

 

(e)           If Sellers’ Representatives timely deliver an IVG Objection to Buyer and/or Buyer timely delivers a Buyer Objection to Sellers’ Representatives, and Sellers’ Representatives and Buyer are unable to resolve all of their disagreements with respect to the proposed adjustments set forth in the IVG Objection and/or the Buyer Objection within thirty (30) days after the later of the date that Buyer receives the IVG Objection and the date that the Sellers’ Representatives receive the Buyer Objection, then any such unresolved disagreement shall be submitted for resolution by arbitration in Fort Lauderdale, Florida before one arbitrator, which arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules notwithstanding anything to the contrary set forth in Section 10.14.   The arbitrator shall be selected by mutual agreement of Buyer and the Sellers’ Representatives or, if the parties cannot agree, then by striking from a list of arbitrators supplied by JAMS.  The arbitrator shall issue a written opinion determining the definitive amount of the Post-Closing Rebranding Costs and/or the Retained Inventory Value at issue in the arbitration, which determination shall be final and binding upon the parties.  Each of Buyer and the Sellers’ Representatives, as a single party on behalf of the Sellers and Owners, shall be responsible for fifty percent (50%) of the arbitrator’s fees and expenses and each such party shall be responsible for its own attorneys’ fees and expenses for the arbitration.

 

    	4

    	 

    
 

 

(f)           To the extent that the Post-Closing Rebranding Costs, as finally determined in accordance with paragraphs (b) and (e), as applicable, of this Section 1.2.6, exceed the Retained Inventory Value, as finally determined in accordance with paragraphs (d) and (e), as applicable, of this Section 1.2.6, then on or prior to the fifth (5th) Business Day following the date when the Post-Closing Rebranding Costs and the Retained Inventory Value have both been finally determined, International Vapor and Owners shall reimburse Parent for the positive difference between the Post-Closing Rebranding Costs and the Retained Inventory Value (the “Rebranding Cost Surplus”), first, from the Rebranding Escrow Shares and  second, to the extent that the Rebranding Escrow Shares shall be insufficient to reimburse Parent in full for the Rebranding Cost Surplus,  the Buyer will have a right of offset against any earned but unpaid portion of the Earn-Out; provided, however, if no such earned but unpaid portion of the Earn-Out Payments shall be available to satisfy such remaining Rebranding Cost Surplus or no portion of the Earn-Out Payments is then earned, the Sellers and Owners shall satisfy such reimbursement claim by, at the Sellers’ and/or Owners’ sole option, either a tender of Shares or Earn-Out Shares or a cash payment to Parent.  For the avoidance of doubt and ambiguity, the Sellers and the Owners may, at their sole option, satisfy any Rebranding Cost Surplus with cash, and shall satisfy any such Rebranding Cost Surplus with a cash payment to the extent the Rebranding Escrow Shares, the Shares and Earn-Out Shares then owned by them (or earned as an Earn-Out Payment but not yet issued to them) are not sufficient to do so in full.  The value ascribed to the Rebranding Escrow Shares, the Earn-Out Shares or the Shares offset or tendered (as applicable) for purposes of satisfaction of the Rebranding Cost Surplus shall be equal to the quotient of the amount of the Rebranding Cost Surplus required to be paid divided by the greater of (A) the 30-trading day weighted average closing price per share of the Parent’s common stock, as reported on the primary exchange on which the Parent’s common stock is traded or quoted, preceding the date of when the reimbursement claim is required to be paid, or (B) the Volume Weighted Average Closing Price.

 

(g)           To the extent that the Retained Inventory Value, as finally determined in accordance with paragraphs (d) and (e), as applicable, of this Section 1.2.6, exceeds the Post-Closing Rebranding Costs, as finally determined in accordance with paragraphs (b) and (e), as applicable, of this Section 1.2.6, then on or prior to the fifth (5th) Business Day following the date when the Post-Closing Rebranding Costs and the Retained Inventory Value have both been finally determined, Parent shall issue to International Vapor, for distribution to the Owners pro rata based on each Owner’s Percentage Ownership, newly issued unregistered shares of the Parent’s common stock, the number of which would be equal to the quotient of (x) the positive difference between the Retained Inventory Value and the Post-Closing Rebranding Costs divided by (y) the Volume Weighted Average Closing Price.”

  

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7.           Amendment to Section 1.3 of the Asset Purchase Agreement.  Section 1.3 of the Asset Purchase Agreement is hereby amended by deleting such section in its entirety and inserting the following new section:

 

 “Section 1.3  Escrow.  To provide for an escrow account or accounts to secure and to serve as a fund in respect of the indemnification obligations of the Sellers and Owners under this Agreement, Buyer, the Sellers’ Representatives and the Escrow Agent at Closing shall enter into an Escrow Agreement substantially in the form of Exhibit B (the “Escrow Agreement”).  At Closing, the Buyer shall deposit the Escrow Shares with the Escrow Agent to be held in an account or accounts (the “Escrow Account”) pursuant to the terms of the Escrow Agreement.  All Rebranding Escrow Shares remaining in the Escrow Account after the Rebranding Cost Reimbursement shall be distributed to the Owners in accordance with the Escrow Agreement on the third Business Day after the Rebranding Cost Reimbursement. Except with respect to Special Escrow Shares retained to fund Buyer Indemnified Persons’ indemnity claims made in accordance with Article 7 on or before the twenty-seventh (27th) month anniversary following the Closing Date (the “Escrow Period”), all Special Escrow Shares then remaining in the Escrow Account shall be distributed to the Owners in accordance with the Escrow Agreement on the third Business Day after the earlier of (a) the final resolution, by settlement, litigation or otherwise, of the dispute between International Vapor and Allan Rothstein regarding the Rothstein Agreement (the “Rothstein Resolution”) and (b) the expiration of the Escrow Period; provided that, the portion of the Special Escrow Shares deposited in the Escrow Account pursuant to Section 1.7.7 shall be distributed to the Owners in accordance with the proportions set forth in Section 1.7.7.  Except with respect to General Escrow Shares retained to fund Buyer Indemnified Persons’ indemnity claims made in accordance with Article 7 prior to the expiration of the Escrow Period, all General Escrow Shares in the Escrow Account shall be distributed to the Owners in accordance with the Escrow Agreement on the third Business Day after the expiration of the Escrow Period. With respect to any pending claim, promptly following resolution of such pending claim, the Special Escrow Shares or the General Escrow Shares, as applicable and if any, retained to fund such pending claim which have not been paid, which are not payable to any Buyer Indemnified Person pursuant to Article 7 in connection with such resolution, and which are not required to remain in the Escrow Account to satisfy other pending claims, shall be distributed to the Owners.”

 

8.           Amendment to Section 1.7.7 of the Asset Purchase Agreement.  Section 1.7.7 of the Asset Purchase Agreement is hereby amended by deleting such section in its entirety and inserting the following new section:

 

“ 1.7.7  Manner of Payment. The Earn-Out, if any, shall be payable to the Owners, in part as stockholders of International Vapor and in part, as to Molina and Epstein, as employees of the Buyer, in newly issued unregistered shares of the Parent’s common stock (“Earn-Out Shares”), the number of which would be equal to the quotient of such earned portion of the Earn-Out Payment divided by the Volume Weighted Average Closing Price.  The Earn-Out, if any, shall be paid directly to the Owners by Buyer. 43.17% of the Earn-Out shall be paid to the Owners pro rata based upon their respective Ownership Percentages (the aggregate of all such payments, the “Equity Earn-Out”), 40.28% of the Earn-Out shall be paid to Molina pursuant to the terms of his Employment Agreement and 16.55% of the Earn-Out shall be paid to Epstein pursuant to the terms of his Employment Agreement (the aggregate portion of the Earn-Out payable to Epstein and Molina pursuant to their respective Employment Agreements, the “Employment Earn-Out”), provided that prior to the Rothstein Resolution, 3% of the aggregate number of Earn-Out Shares constituting each Earn-Out Payment that would otherwise be paid by Buyer to the Owners shall instead be deposited by the Buyer in the Escrow Account as Special Escrow Shares. Subject to Section 1.7.10, Section 1.7.11 and Section 1.7.12, any Earn-Out Payments made by Buyer pursuant to this Section 1.7 shall be apportioned among the Owners as set forth in the preceding sentence. Any payments owed by an Owner to the Buyer pursuant to Sections 1.7.6(a) or 1.7.6(c) shall be paid to the Buyer from the Shares and/or Earn-Out Shares received by such Owner prior to the date thereof, the number of which would be equal to the quotient of such payment divided by the Volume Weighted Average Closing Price.”

 

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9.           Amendment of Section 4.8.2 of the Asset Purchase Agreement.  Section 4.8.2 of the Asset Purchase Agreement is hereby amended by deleting the first and second sentences of such section and inserting the following new sentences in place thereof:

 

“If International Vapor presents Parent with a valid invoice for expenses incurred for (i) new E-Cig Products comprising Inventory other than with the Discontinued Brand, (ii) attendance at trade shows or (iii) capital expenditures for the Retail Operations and Parent approves such invoice in whole or in part, which approval shall not be unreasonably withheld, delayed or conditioned, Parent shall pay such approved portion of such invoice and such payment shall be deemed to be a loan from Parent to International Vapor (each, a “Capex Loan”).  Capex Loans may not exceed $500,000 in the aggregate, provided that no more than $200,000 of the Capex Loans shall be for expenses incurred under clauses (ii) and (iii) of the preceding sentence.”

 

10.         Amendment of Section 4 of the Asset Purchase Agreement. Article 4 of the Asset Purchase Agreement is hereby amended by inserting the following new Sections 4.10 and 4.11 after Section 4.9:

 

“4.10     Rebranding.

 

International Vapor shall use commercially reasonable efforts to resolve, through settlement, litigation or otherwise, any and all third party claims filed in court and still prosecutable (whether or not pending before any such court) against any Seller at or prior to the Closing arising from a claim that the Business’ use of the Discontinued Brand infringes on or is likely to cause confusion with another’s mark or trade name (each a “DB Third Party Claim”), at International Vapor’s sole cost and expense, provided that any such settlement of a DB Third Party Claim that does not include a full and general release of all Buyer Indemnified Persons from all Liabilities arising or relating to, or in connection with, each such DB Third Party Claim shall be subject to Parent’s prior written approval, which shall not be unreasonably withheld or delayed. Subject to the last sentence of this Section 4.10, Sellers and Owners agree that International Vapor shall use commercially reasonable efforts to cease using the Discontinued Brand as soon as reasonably practicable and, at its sole cost and expense, shall rebrand (i) the Acquired Assets which are branded with the Discontinued Brand (including, without limitation, Vapor Zone Franchising) and (ii) any and all aspects of the Business (including, without limitation, the company-owned and franchised retail store line of business) using the Discontinued Brand as of the date of this Agreement with one or more new brands, which shall be mutually agreed upon by Parent and the Sellers’ Representatives in writing no later than August 15, 2014 (collectively, the “New Brand”), provided that International Vapor shall not implement any aspect of such rebranding of the Acquired Assets and the Business prior to the Closing without the prior written approval of Parent, which approval shall not be unreasonably delayed, conditioned or withheld, and provided, further, that, prior to Closing, International Vapor shall be obligated, at its sole cost and expense, to advertise and brand market the New Brand in the  ordinary course of business consistent with its past practice of advertising and brand marketing the Discontinued Brand, and in addition to such ordinary course advertising and brand marketing, International Vapor shall be obligated, at its sole cost and expense, to actively advertise and brand market the New Brand by incurring costs and expenses up to, but not in excess of, $50,000 (such costs, in excess of the ordinary course advertising and brand marketing expenses, the “New Brand Marketing Expense”). For the avoidance of doubt, International Vapor shall be permitted to continue to sell, prior to Closing, Inventory bearing the Discontinued Brand, provided that any such sale will be independent of, and shall not involve, Parent, Buyer or their respective businesses and/or operations. International Vapor shall be responsible for all the Pre-Closing Rebranding Costs and such Pre-Closing Rebranding Costs shall be included as current liabilities, to the extent required to be accrued pursuant to GAAP at Closing, of the Companies on a consolidated basis, and any Inventory bearing the Discontinued Brand shall not be included as current assets of the Companies on a consolidated basis,  in the determination of Net Working Capital as of the Closing Date notwithstanding anything to the contrary set forth in Section 1.2.5.  From and after the time, as contemplated under this Section 4.10, that International Vapor ceases to use the Discontinued Brand, the Sellers and Owners, severally and not jointly, hereby acknowledge and agree that no Seller or Owner will ever use or allow the use of, directly or indirectly, the Discontinued Brand in connection with any Competitive Business except that (x) the Sellers and Owners may allow the use of the Discontinued Brand by any third party with which none of them have an affiliation as a part of the settlement of a DB Third Party Claim in accordance with the first sentence of this Section 4.10 and (y) during the period beginning on the Closing Date and ending one hundred and twenty (120) days thereafter, International Vapor may, in its sole discretion, sell any Retained Inventory, provided that any such sale will be independent of, and shall not involve, Parent, Buyer or their respective businesses and/or operations.

 

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4.11           Leases.  If not later than ten (10) Business Days prior to the Closing International Vapor presents Parent with a real estate lease for a new retail store on terms and conditions reasonably satisfactory to Parent then Parent shall, directly or indirectly, enter into such real estate lease subject to the counterparty landlord’s consent and fund all associated lease security deposits and expenses for the build out and opening of such store, provided, however, that prior to the Closing (a) Parent shall not be required enter into more than ten (10) such real estate leases (each a “Store Lease”)  and fund more than $41,000 per Store Lease for the associated security deposits and expenses for the build out of the applicable store and (b) Parent shall make no expenditure pursuant to this sentence without the prior approval of International Vapor, which approval shall not be unreasonably withheld, delayed or conditioned. Should the Closing occur, any Store Lease then in effect shall be included in the Acquired Assets and Assumed Liabilities, and notwithstanding any language in the Agreement to the contrary, each store for which a Store Lease is then in effect shall be deemed a Retail Store opened during the Measurement Period for purposes of the calculation of the Retail Earn-Out whether opened before or after the Closing Date.  In the event this Agreement is terminated for any reason then Parent shall retain each such Store Lease then in effect and operate the retail store thereunder, in its sole and absolute discretion, either as (x) a franchised store of International Vapor pursuant to the franchise agreement then in use by International Vapor or (y) a non-franchised store, independent from International Vapor and which store shall not use the Discontinued Brand or the New Brand, and in any manner Parent deems appropriate in its sole and absolute discretion subject to the permitted use specified in the applicable Store Lease.”

 

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11.           Amendment to Section 6.7 of the Asset Purchase Agreement.  Section 6.7 of the Asset Purchase Agreement is hereby amended by deleting such section in its entirety and inserting the following new section:

 

“6.7         Use
of Name.  The Sellers and the Owners, severally and not jointly, hereby acknowledge and agree that, upon the consummation of
the Contemplated Transactions, the Buyer shall have the sole right to use the names “International Vapor”, “South
Beach Smoke”, “Beach Wellness”, the New Brand or any service marks, trademarks, trade names, identifying symbols,
logos, emblems, signs or insignia related thereto or containing or comprising the foregoing, including any name or mark confusingly
similar thereto.  Following the Closing, no Seller or any Owner or any of their Affiliates will use the names “International
Vapor”, “South Beach Smoke”, “Beach Wellness”, the New Brand or any confusingly similar names and
each Seller shall at Closing terminate such names or assumed names by making all necessary filings with the appropriate Governmental
Authorities.  In addition, no Seller or Owner will ever use or allow the use of, directly or indirectly, the names “International
Vapor”, “South Beach Smoke”, “Beach Wellness”, or the New Brand  in connection with any
Competitive Business.”

 

12.           Amendment to Section 7.1.1 of the Asset Purchase Agreement.

 

	
a.  

	
Section 7.1.1 of the Asset Purchase Agreement is hereby amended by deleting clauses (b), (c) and (d) of such section in its entirety and inserting the following new clauses (b), (c), (d) and (e):

 

“(b) any breach or violation of any covenant or agreement of any Seller and/or Owner contained in this Agreement or any Company Agreement (other than the Employment Agreements) that is to be performed either prior to, on or after Closing other than as specified in clause (e) of this Section 7.1.1;

 

(c)  any Retained Liabilities other than the Retained Liabilities specified in Section 1.1.4 (l) (which shall be subject to the indemnity obligations of the Sellers and Owners set forth in Section 7.17) and the Retained Liabilities specified in Section 1.1.4 (m) (which shall be subject to the indemnity obligations of the Sellers and Owners set forth in Section 7.18);

 

(d) any Liabilities associated with the (x) pre-Closing operations of Vapor Zone Franchising that are not Retained Liabilities under Section 1.1.4(k), (y) the pre and post-Closing operations of Nutricigs and/or (z) the pre-Closing actions of any Seller or Owner under Section 4.10 that are not Retained Liabilities under Section 1.1.4(m); or

 

(e)   any breach or violation of any covenant or agreement of any Seller or Owner under Section 4.10 (for the avoidance of doubt, any Liabilities relating to any DB Third Party Claim shall be subject to the indemnity obligations of the Sellers and Owners set forth in Section 7.18).”

 

b.           Section 7.1.1 of the Asset Purchase Agreement is hereby amended by adding the following sentence:

 

“Notwithstanding anything to the contrary contained in this Agreement, International Vapor and the Owners shall have no indemnification obligation with respect to the Post-Closing Rebranding Costs other than with respect to the breach of a covenant or agreement of Sellers and/or Owners under Section 1.2.6.”

 

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13.            Amendment to Section 7.1.2 of the Asset Purchase Agreement.  Section 7.1.2 of the Asset Purchase Agreement is hereby amended by inserting at the end of the last sentence of such section the following phrase:

 

“and Section 7.1.1(e);”

 

14.           Amendment to Section 7.1.3 of the Asset Purchase Agreement.  Section 7.1.3 of the Asset Purchase Agreement is hereby amended by inserting at the end of the last sentence of such section the following:

 

“and Section 7.1.1(e);”

 

15.           Amendment to Section 7.7.1 of the Asset Purchase Agreement.   Section 7.7.1 of the Asset Purchase Agreement is hereby amended by inserting the phrases “General Escrow Fund” and “General Escrow Shares” in place of the phrases “Escrow Fund” and “Escrow Shares”, respectively, throughout such section.

 

16.           Amendment to Article 7 of the Asset Purchase Agreement.  Article 7 of the Asset Purchase Agreement is hereby amended by inserting the following new Sections 7.17 and 7.18 after Section 7.16:

 

“7.17  Special Indemnification.

 

7.17.1          From and after Closing, International Vapor and the Owners will indemnify and hold harmless the Buyer Indemnified Persons from, against and in respect of any and all Losses incurred or suffered by Buyer Indemnified Persons or any of them (including any Losses sustained or incurred after the end of the survival period specified in Section 7.17.2, provided that a claim is made in writing to Sellers’ Representatives prior to the end of the survival period in accordance with the terms of this Agreement) as a result of, arising out of or directly or indirectly relating to all Liabilities arising from or relating to the Rothstein Agreement.

 

7.17.2          International Vapor’s and the Owners’ aggregate indemnification obligation pursuant to Section 7.17.1 shall be uncapped and their indemnification obligations pursuant to Section 7.17.1 shall survive until expiration of the applicable statute of limitations for Losses under Section 7.17.1.  Section 7.4.3, Section 7.5, and Section 7.8 through Section 7.16 shall apply to this Section 7.17.   For the avoidance of doubt, Sections 7.1, 7.3, 7.4 (other than 7.4.3), 7.6, and 7.7 shall not apply to this Section 7.17.

 

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7.17.3  Notwithstanding anything to the contrary contained herein, all of Sellers’ and Owners’ indemnification obligations (including attorneys’ fees and costs) pursuant to this Section 7.17 will be satisfied, first, from the Special Escrow Shares except to the extent that a Seller and/or Owner shall elect, at his/its sole option, to satisfy their respective portion with cash.  To the extent that the Special Escrow Shares shall have been fully exhausted and, therefore, shall be insufficient to satisfy a properly asserted indemnification claim the Buyer would have (except to the extent that any Seller and/or Owner shall elect to satisfy the same with cash) a right of offset against any earned but unpaid portion of the Earn-Out, however, if no such earned but unpaid portion of the Earn-Out Payments shall be available to satisfy such claim  or no portion of the Earn-Out Payments is then earned, the Sellers and Owners shall satisfy such indemnification claim by, at the Sellers’ and/or Owners’ sole option, either a tender of Shares or Earn-Out Shares or a cash payment to the Buyer.  For the avoidance of doubt and ambiguity, the Sellers and the Owners shall satisfy any indemnity claim with a cash payment to the extent the Shares and Earn-Out Shares then owned by them (or earned as an Earn-Out Payment but not yet issued to them) are not sufficient to do so in full.  The value ascribed to the Special Escrow Shares, the Earn-Out Shares or the Shares to be released from the Special Escrow Fund, offset or tendered (as applicable) for purposes of satisfaction of any Buyer Indemnified Person’s indemnification claim under this Section 7.17 shall be equal to the quotient of the amount of the claims required to be paid divided by the greater of (A) the 30-trading day weighted average closing price per share of the Parent’s common stock, as reported on the primary exchange on which the Parent’s common stock is traded or quoted, preceding the date of when the claim is required to be paid, or (B) the Volume Weighted Average Closing Price.  For the avoidance of doubt, in the event that a Seller or Owner is obligated to pay legal fees, costs and expenses, whether of the Sellers and/or Owners or any Buyer Indemnified Person, pursuant to the Sellers’ or Owners’ indemnification obligations as set forth in this Section 7.17, then upon the request of the Sellers’ Representative, a sufficient number of Special Escrow Shares then in the Special Escrow Fund shall be released to such Sellers and/or Owners to fund the amount of such obligation based on the value ascribed to such Special Escrow Shares as set forth in the preceding sentence; provided, however, that not more than an aggregate of 50% of the Special Escrow Shares held in the Special Escrow Fund on the Closing Date shall be released to fund such obligations. Further, in the event that International Vapor enters into a settlement agreement with Allan Rothstein regarding the Rothstein Agreement that involves a payment to Allan Rothstein of Shares, a sufficient number of Special Escrow Shares then in the Special Escrow Fund shall be released to International Vapor to fund the amount of such obligation based on the value ascribed to such Special Escrow Shares as set forth two sentences above. Buyer consents to Kozyak Tropin & Throckmorton serving as counsel to International Vapor with respect to the Rothstein Resolution, and consents to International Vapor and Owners assuming the defense of, and engaging Kozyak Tropin & Throckmorton to serve as counsel to the Buyer Indemnified Persons with respect to, any third party claim against which International Vapor and the Owners are obligated to indemnify the Buyer Indemnified Persons pursuant to Section 7.17.1; provided, however,  the Buyer Indemnified Persons shall be entitled to separate counsel, at the expense of the Sellers and Owners, in the event a conflict of interest arises by virtue of such joint legal representation under the Florida Rules of Professional Conduct and Buyer’s foregoing consent for Kozyak Tropin & Throckmorton to serve as joint counsel shall not be deemed to constitute a waiver by it or any other Buyer Indemnified Person of any such conflict of interest.”

 

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“7.18  DB Third Party Claim Indemnification.

 

7.18.1          From and after Closing, International Vapor and the Owners will indemnify and hold harmless the Buyer Indemnified Persons from, against and in respect of any and all Losses incurred or suffered by Buyer Indemnified Persons or any of them (including any Losses sustained or incurred after the end of the survival period specified in Section 7.18.2, provided that a claim is made in writing to Sellers’ Representatives prior to the end of the survival period in accordance with the terms of this Agreement) as a result of, arising out of or directly or indirectly relating to all Liabilities arising from or relating to any DB Third Party Claim.

 

7.18.2          International Vapor’s and the Owners’ aggregate indemnification obligation pursuant to Section 7.18.1 shall be uncapped and their indemnification obligations pursuant to Section 7.18.1 shall survive until expiration of the applicable statute of limitations for Losses under Section 7.18.1.  Section 7.4.3, Section 7.5, and Section 7.8 through Section 7.16 shall apply to this Section 7.17.   For the avoidance of doubt, Sections 7.1, 7.3, 7.4 (other than 7.4.3), 7.6, and 7.7 shall not apply to this Section 7.18.

 

7.18.3          Buyer consents to Gallivan, White & Boyd P.A. serving as counsel to International Vapor with respect to any DB Third Party Claim, and consents to International Vapor and Owners assuming the defense of, and engaging Gallivan, White & Boyd P.A. to serve as counsel to the Buyer Indemnified Persons with respect to, any DB Third Party Claim against which International Vapor and the Owners are obligated to indemnify the Buyer Indemnified Persons pursuant to Section 7.18.1; provided, however,  the Buyer Indemnified Persons shall be entitled to separate counsel, at the expense of the Sellers and Owners, in the event a conflict of interest arises by virtue of such joint legal representation under the Florida Rules of Professional Conduct or the South Carolina Rules of Professional Conduct and Buyer’s foregoing consent for Gallivan, White & Boyd P.A. to serve as joint counsel shall not be deemed to constitute a waiver by it or any other Buyer Indemnified Person of any such conflict of interest. Notwithstanding anything to the contrary contained herein, all of Sellers’ and Owners’ indemnification obligations (including attorneys’ fees and costs) pursuant to this Section 7.18 will be satisfied with cash payments.”

 

17.           Amendment of Section 9.1.2 of the Asset Purchase Agreement.  Section 9.1.2 of the Asset Purchase Agreement is hereby amended by deleting the date “July 31, 2014” contained in such section with the following new date:

 

“September 30, 2014;”

 

18.           Joint and Several Obligations. All payment and indemnification obligations of Owners set forth in this First Amendment shall be several (but not joint), pro rata based on the formula set forth in the last paragraph of Section 7.1.1.

 

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19.           Amendment to Section 11.2 of the Asset Purchase Agreement.  Section 11.2 of the Asset Purchase Agreement is hereby amended by inserting the following new defined terms in the correct alphabetical order within Section 11.2:

 

	

Term

	 	

Location

	 	 	 
	
“Buyer Objection”

	 	
Section 1.2.6(d)

	
“DB Third Party Claim”

	 	
Section 4.10

	
“Discontinued Brand”

	 	
Section 1.1.2

	
“General Escrow Shares”

	 	
Section 1.2.4(a)

	
“General Escrow Fund”

	 	
Section 1.2.4(a)

	
“IVG Objection”

	 	
Section 1.2.6(b)

	
“New Brand”

	 	
Section 4.10

	
“New Brand Marketing Expense”

	 	
Section 4.10

	
“Pre-Closing Rebranding Costs”

	 	
Section 1.1.4(k)

	
“Post-Closing Rebranding Costs”

	 	
Section 1.2.6(a)

	
“Rebranding Cost Reimbursement”

	 	
Section 1.2.6(d)

	
“Rebranding Cost Surplus”

	 	
Section 1.2.6(f)

	
“Rebranding Escrow Shares”

	 	
Section 1.2.4(a)

	
“Rebranding Escrow Fund”

	 	
Section 1.2.4(a)

	
“Retained Inventory”

	 	
Section 1.1.2

	
“Retained Inventory Value”

	 	
Section 1.2.6(d)

	
“Rothstein Agreement”

	 	
Section 1.1.4(l)

	
“Rothstein Resolution”

	 	
Section 1.3

	
“Special Escrow Shares”

	 	
Section 1.2.4(a)

	
“Special Escrow Fund”

	 	
Section 1.2.4(a)

	
“Store Lease”

	 	
Section 4.11

 

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20. Consent to Transfer. Each of Parent and Buyer consents to the transfer by Molina prior to the Closing Date of all of the Equity Securities of International Vapor held by Molina as of the date of the Agreement to Pegasus Real Estate Investment Group, LLC, a Florida limited liability company (“Pegasus”), which is owned in its entirety by the 2009 Pegasus Trust dated 2/25/2009 and the Nicolas Molina Revocable Trust dated 11/13/2009 (as amended from time to time). Each of Parent and Buyer acknowledges that Pegasus is not an “accredited investor” as such term is defined in Regulation D of the 1933 Act. From and after the completion of such transfer (the “Transfer Effective Date”), for purposes of the Agreement, “Owner” shall be deemed to refer to Pegasus rather than Molina and Molina shall be deemed an “Affiliate” of Pegasus,  and on or prior to the Transfer Effective Date Pegasus shall deliver to Buyer and Parent a letter wherein, as an “Owner”, it shall make as of the Transfer Effective Date the representations and warranties set forth in Section 2.2.2,  Section 2.2.5, Section 2.3, Section 2.4, Section 2.5, Section 2.15.4, Section 2.20, Section 2.25.1, Section 2.29 and Section 2.32 (other than Section 2.32.8) (provided, for the avoidance of doubt, that Pegasus shall make only the representations and warranties in such sections that specifically relate to itself as an “Owner”) and agree to perform the covenants and agreements set forth in the Agreement that an “Owner” is required to perform before and after the Closing and such letter shall be deemed a part of and incorporated by reference into the Agreement as if fully set forth therein; provided, however, that the representations and warranties made by Molina in the Agreement as an “Owner” shall be deemed to survive and continue  in full force and effect notwithstanding the transfer of his Equity Securities of International Vapor to Pegasus in accordance herewith; and provided, further, that Molina and Pegasus shall be jointly and severally liable with respect to any indemnification obligations of Pegasus as an “Owner” pursuant to Article 7 (and, for the avoidance of doubt, the transfer of Molina’s Equity Securities of International Vapor to Pegasus in accordance herewith shall not relieve Molina of his obligations to perform the covenants and agreements set forth in the Agreement that apply to him in a capacity other than as an “Owner”, including those set forth in Section 4.8.2 and Section 6.2).

 

21.           Transfer of Earn-Out Payments. Each of Parent and Buyer consents to the transfer by Molina to Pegasus of Molina’s right, pursuant to Section 1.7.7, to receive 40.28% of the Earn-Out in accordance with the terms of his Employment Agreement. Each of Parent, Buyer and Molina acknowledges and agrees that from and after the Transfer Effective Date, any Earn-Out Payment that would otherwise have been paid to Molina pursuant to Section 1.7.7 shall instead be paid directly to Pegasus. For the avoidance of doubt, from and after the Transfer Effective Date, the portion of the 43.17% of the Earn-Out that would otherwise have been paid to Molina as an “Owner” pursuant to Section 1.7.7 shall also be paid directly to Pegasus in its capacity as an “Owner.”

 

22.           No Breach, No Delay. No claim, event, matter or occurrence, the existence of which is directly or indirectly addressed in this First Amendment shall be deemed a breach of the Agreement or a basis by any party to terminate the Agreement under Section 9.1 after the entering into of this First Amendment, nor shall such claim, event, matter or occurrence, or the action or inaction of any affected party in connection therewith, be deemed to have been the cause of, or resulted in, the failure of the Closing to occur on or before the date set forth in Section 9.1.2.

 

23.           Effect of First Amendment. This First Amendment is not and shall not be construed as an amendment, modification or waiver of any provision of the Asset Purchase Agreement except as expressly provided herein, and in all other respects the Asset Purchase Agreement remains in full force and effect in accordance with its terms as of the date hereof.  To the extent that any term or provision of this First Amendment conflicts with any term or provision of the Asset Purchase Agreement or any of the Company Agreements, such term or provision of this First Amendment shall govern.

 

24.           Entire Agreement. This First Amendment constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral or written understandings and agreements between the parties hereto with respect to the subject matter hereof.

 

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25.           Counterparts; General. This First Amendment may be executed and delivered (by facsimile, e-mail or other electronic transmission) in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Sections 10.10 (Severability), 10.11 (Headings), Section 10.12 (Construction), 10.13 (Governing Law), 10.14 (Jurisdiction; Venue; Service of Process) and 10.15 (Wavier of Jury Trial) of the Asset Purchase Agreement are hereby incorporated by reference herein and made a part hereof as if fully set forth herein.

 

[Intentionally Left Blank; Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned have executed and delivered this First Amendment as of the date first above written.

 

	 	 	 	 	 
	
PARENT

	 	 
	 	 	 
	
Vapor Corp.

	 	 
	 	 	 
	By: 	  /s/ Harlan Press	 	 
	Name:	 Harlan Press	 	 
	
Title:

	 Chief Financial Officer	 	 
	
 

	 	 	
 

	 
	 	 	 	 	 
	BUYER	 	 
	 	 	 
	IVGI Acquisition, Inc.	 	 
	 	 	 	 	 
	By:	  /s/ Harlan Press	 	 
	
Name:

	 Harlan Press	
 

	 
	Title:	 President	 	 

 

 

	 	 	 
	 	SELLERS’ REPRESENTATIVES

	 	 	 
	 	 	 
	 	  /s/ David Epstein	 
	 	DAVID EPSTEIN	 
	 	 	 
	 	 	 
	 	  /s/ David Herrera	 
	 	DAVID HERRERA	 
	 	 	 
	 	 	 
	 	 /s/ Nicolas Molina	 
	 	NICOLAS MOLINA	 

 

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