Document:

Exhibit 10.1

 

EXECUTION VERSION

 

PURCHASE
AND SETTLEMENT AGREEMENT

 

This PURCHASE AND SETTLEMENT AGREEMENT (this
“Agreement”) is made and entered into as of February 18, 2016 by and among Fifth Street Finance Corp., a Delaware
corporation (the “Company”), Fifth Street Holdings L.P., a Delaware limited partnership (“Holdings”),
Leonard M. Tannenbaum (“LT” and, together with Holdings, the “Buyers”), Fifth Street Asset
Management Inc., a Delaware corporation (“FSAM”), and Sellers (as defined below). As used herein: (i) “Sellers”
(and each, a “Seller”) means RiverNorth and the RiverNorth Nominees, collectively; (ii) “RiverNorth”
means RiverNorth Capital Management, LLC (“RiverNorth Capital”), RiverNorth Capital Partners, L.P., RiverNorth
Institutional Partners, L.P., RiverNorth Core Opportunity Fund and RiverNorth/DoubleLine Strategic Income Fund, collectively, and
(iii) “RiverNorth Nominees” means Randy I. Rochman, Fred G. Steingraber and Murray R. Wise, collectively.

 

WHEREAS, Sellers directly and/or beneficially
own shares of the issued and outstanding common stock, par value $0.01 per share, of the Company
(“Company Shares”);

 

WHEREAS,
Sellers desire to sell, and the Buyers desire to purchase, free and clear of any and all Liens (as defined herein) an aggregate
number of Company Shares having an aggregate purchase price of $57,628,750, as set forth herein; 

 

WHEREAS, RiverNorth possesses economic exposure
to Company Shares through certain cash settled total return swaps, which will be settled in accordance
with the terms set forth herein; 

 

WHEREAS,
the parties desire to make certain agreements with respect to the Company’s 2016 Annual Meeting (as defined below); and

 

WHEREAS,
concurrently with, and in consideration for, the execution of this Agreement, FSAM is entering into that certain Warrant Agreement
with RiverNorth Capital, substantially in the form attached hereto as Exhibit A (the “Warrant”), pursuant
to which FSAM will grant to RiverNorth Capital a warrant to purchase a number of shares of FSAM’s Class A Common Stock,
par value $0.01 per share, on the terms and subject to the conditions set forth therein.

 

NOW, THEREFORE,
in consideration of the foregoing premises and the covenants, agreements and representations and warranties contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

     

     

    

 

ARTICLE
I

PURCHASE AND SALE; ClOSING

 

Section 1.1           Purchase
and Sale. Upon the terms and subject to the conditions of this Agreement, Sellers agree to sell, convey, assign, transfer and
deliver to the Buyers, and the Buyers agree, jointly and severally, to purchase from Sellers, all of the Company Shares beneficially
owned by Sellers (the “Purchased Shares”), with each Buyer purchasing the number of Purchased Shares set forth
under such Buyer’s name on Schedule I attached hereto (it being understood that the Buyers may,
by delivery of written notice to RiverNorth Capital no later than two (2) Business Days (as defined below) prior to the Closing
Date (as defined below), amend Schedule I to reallocate the number of Purchased Shares set forth on such Schedule that each
Buyer shall purchase on the Closing Date so long as the aggregate amount of Purchased Shares remains the same and such reallocation
does not otherwise delay the timing of the Closing Date) free and clear of any and all mortgages, pledges, encumbrances, liens,
security interests, options, charges, claims, deeds of trust, deeds to secure debt, title retention agreements, rights of first
refusal or offer, limitations on voting rights, proxies, voting agreements (other than as set forth in Section 3.4(a) of this Agreement),
limitations on transfer or other agreements or claims of any kind or nature whatsoever (collectively, “Liens”).

 

Section 1.2           Per
Share Purchase Price; Escrow.

 

(a)          Per
Share Purchase Price. Upon the terms and subject to the conditions of this Agreement, in consideration of the sale, conveyance,
assignment, transfer and delivery to each Buyer of the number of Purchased Shares set forth under such Buyer’s name on Schedule
I attached hereto (as it may be amended in accordance with Section 1.1), at the Closing, each Buyer shall pay to each Seller
a cash purchase price of $6.25, without interest (the “Per Share Purchase Price”), for each Company Share purchased
by such Buyer from such Seller for an aggregate cash purchase price to be paid by the Buyers, jointly and severally, of $57,628,750,
with each such Seller receiving from the applicable Buyer the amounts set forth on Schedule
I hereto (as it may be amended in accordance with Section 1.1).

 

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(b)          Escrow.
At or promptly following the execution and delivery of this Agreement, Holdings and RiverNorth Capital shall enter into an escrow
agreement, in substantially the form attached hereto as Exhibit B (the “Escrow Agreement” and, together
with this Agreement and the Warrant, the “Transaction Documents”) and, subject to and on the terms and conditions
of this Agreement and the Escrow Agreement, Holdings shall deposit into the escrow account (the “Escrow Account”)
maintained by JPMorgan Chase Bank, N.A. (the “Escrow Agent”), as set forth in the Escrow Agreement, $10,000,000
(the “Initial Deposit”). Holdings further agrees to use reasonable best efforts to deposit into the Escrow Account,
on or prior to March 24, 2016, and as set forth in the Escrow Agreement, an additional $24,577,250 (the “Additional Deposit,”
together with the Initial Deposit, and any interest earned thereon, the “Escrow Funds”). Holdings hereby agrees
to pay fifty percent (50%) of the fees payable to the Escrow Agent, and RiverNorth Capital hereby agrees to pay fifty percent (50%)
of (i) the fees payable to the Escrow Agent and (ii) any indemnification or reimbursement due in accordance with Section 8 of the
Escrow Agreement unless, with respect to clause (ii) hereof only, such indemnification or reimbursement has been finally determined
by a Delaware Court (as defined below) to be the result of the gross negligence, willful misconduct or bad faith of either RiverNorth
or Holdings, in which case the entire amount of such indemnification or reimbursement shall be paid by such Party.

 

Section 1.3           Closing
Matters.

 

(a)          Closing.
The purchase and sale of the Purchased Shares (the “Closing”) shall take place at 10:00 a.m., local time, on
a date (the “Closing Date”) that is no later than March 31, 2016 (the “Termination Date”)
at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York, 10036, or at such other
place, date or time as the parties may agree in writing; provided, that, the Buyers shall, no later than the second
(2nd) Business Day prior to the Closing Date, notify RiverNorth Capital in writing of the Closing Date; provided, further,
that the Buyers’ and Sellers’ respective obligations under Sections 1.1, 1.2, 1.3(c) and 1.4(b), as applicable,
shall be conditioned on the satisfaction or written waiver of the following conditions: (i) no injunction or other order, judgment,
law, regulation, decree or ruling or other legal restraint or prohibition having been issued, enacted or promulgated by a court
or other governmental or regulatory authority of competent jurisdiction that would have the effect of prohibiting or preventing
the consummation of the transactions contemplated hereunder; (ii) the representations and warranties of the other party set forth
in this Agreement being true and correct as of the date of this Agreement and as of the Closing Date, the Modified Closing Date
(as defined below) or the Swap Settlement Date (as defined below), as applicable; and (iii) timely performance by the other party
in all material respects with all of its obligations under this Agreement required to be performed prior to the Closing, the Modified
Closing Date or the Swap Settlement (as defined below), as applicable (collectively, the “Closing Conditions”).

 

(b)          Escrow
Release. Subject to Section 1.3(c), at the Closing, Holdings and RiverNorth Capital shall issue a joint release instruction
to the Escrow Agent which shall instruct the Escrow Agent to release the Escrow Funds to one or more accounts designated by RiverNorth
Capital, with the amount of the Escrow Funds being fully credited against the cash payment otherwise payable by Holdings on the
Closing Date.

 

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(c)          Modified
Closing. Unless the Buyers would not be obligated to purchase the Purchased Shares by reason of the failure of any Closing
Condition to be fulfilled on the Termination Date, if on the Closing Date Buyers do not purchase
Company Shares from Sellers for an aggregate purchase price of at least $46,103,000, then, upon a written request to the Buyers
from RiverNorth Capital delivered no later than the second (2nd) Business Day following the Termination Date, Holdings and RiverNorth
Capital shall issue a joint release instruction to the Escrow Agent instructing the Escrow Agent to release the Escrow Funds to
one or more accounts designated by RiverNorth Capital (such release, the “Modified Closing” and the date on
which the Modified Closing occurs being referred to as the “Modified Closing Date”) and, in exchange for such
Escrow Funds, Sellers shall sell, convey, assign, transfer and deliver to Holdings a number of Company Shares equal to the quotient
resulting from the Modified Closing Amount (as defined below) divided by the Per Share Purchase Price. For the avoidance of doubt,
the previous sentence shall not limit any rights or remedies that the parties hereto may be entitled to exercise as a result of
the failure of the Closing to occur on or prior to the Termination Date. “Modified Closing Amount” shall mean
the Escrow Funds less $5,000,000, which $5,000,000 shall be retained by RiverNorth. The Parties acknowledge and agree that such
amount shall not constitute either a penalty or liquidated damages, and the right of RiverNorth to receive such amount, or the
receipt of such amount, shall not limit or otherwise affect RiverNorth’s rights to specific performance as provided in Section
6.4 hereof.

 

(d)          Closing
Deliveries.

 

(i)          On
the Closing Date, subject to Section 1.3(d)(iv) below and in accordance with Section 1.2(a), the Buyers shall deliver or cause
to be delivered to Sellers the cash amounts set forth on Schedule I hereto in respect of each Seller, by wire transfer of
immediately available funds to such accounts as RiverNorth Capital on behalf of Sellers has specified in writing at least two (2)
Business Days prior to the Closing Date (it being understood that, (1) with respect to Holdings, the delivery
of a release instruction to the Escrow Agent in accordance with the terms of the Escrow Agreement shall be deemed to satisfy this
requirement with respect to the Escrow Funds deposited by Holdings and (2) the amount of any dividends that the Company has declared
with a record date on or prior to the Closing Date, and which the Buyers are entitled to receive under the terms herein, shall,
to the extent the Buyers have not received such dividends as of the Closing Date, reduce the aggregate amount payable by the Buyers
to Sellers on the Closing Date; provided, however, no such offset with respect to dividends shall apply to Company
Shares not actually purchased by Buyers);

 

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(ii)         On
the Closing Date, subject to Section 1.3(d)(iv) below, Sellers shall (1) deliver or cause to be delivered to the Buyers the certificates,
if any, representing the Purchased Shares, duly and validly endorsed or accompanied by stock powers duly and validly executed in
blank, or (2) in lieu of any such certificates, Sellers may arrange for an appropriate electronic transfer (including through Deposit
and Withdrawal at Custodian (“DWAC”)) of the Purchased Shares to one or more accounts designated by the Buyers,
in the case of each of (1) and (2), in respect of the Purchased Shares to be purchased on the Closing Date as set forth on Schedule
I attached hereto (as it may be amended in accordance with Section 1.1) and sufficient to convey to the Buyers good, valid
and marketable title in and to such Purchased Shares, free and clear of any and all Liens.

 

(iii)        On
the Modified Closing Date, (1) the Buyers shall take any such action as would be required under Section 1.3(d)(i) in respect of
the Company Shares that the Buyers are obligated to purchase on the Modified Closing Date and (2) Sellers shall take any such action
as would be required under Section 1.3(d)(ii) in respect of the Company Shares that Sellers are obligated to sell on the Modified
Closing Date.

 

(iv)        Notwithstanding
anything in this Agreement to the contrary, unless the Buyers would not be obligated to purchase the Purchased Shares by reason
of the failure of any Closing Condition to be fulfilled as of the Termination Date, if on the
day prior to the Closing Date, Buyers provide written notice to RiverNorth that they will, on the Closing Date, purchase Company
Shares from Sellers for an aggregate purchase price of at least $46,103,000 but less than then $57,628,750
(which notice shall specify the amount Buyers will purchase on the Closing Date (such amount, the “Notice Amount”)),
for purposes of this Section 1.3, each amount on Schedule I hereto shall be reduced to the amount derived by multiplying
each such number by the quotient resulting from the Notice Amount divided by 57,628,750,
and Closing shall proceed in accordance with terms of this Agreement based on such modified Schedule I. For the avoidance
of doubt, nothing in this Section 1.3(d)(iv) modifies the obligation of the Buyers to purchase the Purchased Shares, subject
to the terms and conditions of this Agreement. Nothing shall prevent RiverNorth from seeking to compel specific performance of
the terms this Agreement in accordance with Section 6.4 hereof.

 

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Section 1.4           Swaps.

 

(a)          The
Sellers listed on Schedule II under the column entitled RiverNorth Swap Parties (each a “RiverNorth Swap Party”
and collectively the “RiverNorth Swap Parties”) agree not to amend, modify, waive, extend or voluntarily terminate
or settle any of the cash settled total return swaps entered into by such RiverNorth Swap Party with Goldman Sachs International
(the “Swap Counterparty”), dated as of the date and with a reference number, in each case, listed opposite such
RiverNorth Swap Party’s name on Schedule II (each such swap as in effect on the date hereof without any further changes
or modifications, a “Swap” and collectively, the “Swaps”), or to engage in any discussions
with respect thereto, in each case, unless Holdings so directs in writing. Each Swap will be valued and settled on the nearest
date practicable to such date instructed by Holdings, but in no event shall Holdings specify a date that is following the applicable
scheduled valuation date of such Swap (as specified on Schedule II). To the extent that Holdings does not instruct that
any Swap with a scheduled valuation date that is on or after December 15, 2016 be settled prior to December 15, 2016 (the “Latest
Settlement Date”), the RiverNorth Swap Parties may elect to settle such Swap on a date not earlier than the Latest Settlement
Date. Notwithstanding anything to the contrary herein, to the extent that any of the Swaps is settled, terminated or unwound on
any earlier date, other than pursuant to Holdings’ instructions pursuant to this Section 1.4 (each an “Early Settled
Swap” and collectively, the “Early Settled Swaps”), for the purposes of this Section 1.4, such Early
Settled Swap will be deemed to be valued and settled on the Latest Settlement Date or such earlier date as may be designated by
Holdings (such date, the “Deemed Swap Settlement Date”) (and this Section 1.4 shall be effective as if the Swap
Settlement Date were the Deemed Swap Settlement Date); provided, however, that, in the case of any Early Settled
Swap, for purposes of determining any Swap Cash Settlement Amount (as defined in Section 1.4(b)), payment from Buyer to RiverNorth
in respect of the Swap Settlement Date (as defined in Section 1.4(b)) in connection with such Early Settled Swap shall be increased
by an amount per Company Share underlying such Swap equal to (i) the Swap Cash Settlement Amount (as defined in Section 1.4(b)
and determined prior to giving effect to this proviso), if any, multiplied by (ii) the product of (a) 5.75% and (b) the
quotient of (x) the actual number of days elapsed from and including the date of such early settlement to, and excluding, the Deemed
Swap Settlement Date, divided by (y) 360. The RiverNorth Swap Parties further agree to provide Holdings with copies of all
notices and any other communications received with respect to the Swaps promptly upon receipt thereof, to exercise any rights and
remedies with respect thereto that have been requested by Holdings, and to take all other reasonable instructions provided by Holdings
with respect to the Swaps. 

 

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(b)          Upon
the date (the “Swap Settlement Date”) of the settlement of any Swap (a “Swap Settlement”)
pursuant to Section 1.4(a), but subject to the fulfillment of the Closing Conditions, if the final price determined pursuant to
the terms of such Swap or as otherwise mutually agreed upon by Holdings and the applicable RiverNorth Swap Party (the “Final
Price”) is less than the Per Share Purchase Price, Holdings shall deliver, by wire transfer of immediately available
funds to an account designated by RiverNorth Capital at least two (2) Business Days prior to such delivery, for each Company Share
underlying such Swap, an amount in cash equal to the excess of the Per Share Purchase Price over the Final Price (a “Swap
Cash Settlement Amount”). Upon a Swap Settlement, but subject to the fulfillment of the Closing Conditions, if the Final
Price is more than the Per Share Purchase Price, the RiverNorth Swap Parties, or RiverNorth Capital on behalf of the RiverNorth
Swap Parties, shall deliver, by wire transfer of immediately available funds to an account designated by Holdings at least two
(2) Business Days prior to such delivery, for each Company Share underlying such Swap, an amount in cash equal to the excess of
the Final Price over the Per Share Purchase Price. For the avoidance of doubt, any taxes imposed in connection with the Swaps or
the settlement thereof shall not be treated as a reduction of the Final Price for purposes of the calculations pursuant to this
clause (b). Any dividends with respect to the Company Shares underlying the Swaps with an ex-dividend date occurring during the
terms of the Swaps will be paid, pursuant to the terms of such Swap, to the applicable RiverNorth Swap Parties, but, subject to
the fulfillment of the Closing Conditions, shall be split equally, with fifty percent (50%) of such dividends in favor of such
RiverNorth Swap Parties and fifty percent (50%) of such dividends in favor of Holdings upon receipt thereof, and to the extent
such amounts are received upon settlement of any Swap, the amount of any dividends payable to Holdings as a result of such equal
split shall be deemed to be added to the Final Price for the purposes of the calculations pursuant to this clause (b). The applicable
River North Swap Party, or RiverNorth Capital on behalf of the RiverNorth Swap Party, will promptly (and in any event within one
Business Day of such RiverNorth Swap Party’s receipt thereof) pay to Holdings Holdings’ portion of such dividend.

 

ARTICLE
II

 

ANNUAL MEETING MATTERS

 

Section 2.1           RiverNorth
Proposals. Effective as of the execution and delivery of this Agreement, RiverNorth hereby irrevocably withdraws and rescinds
each proposal and each director nomination that RiverNorth has put forth for consideration at the Company’s 2016 Annual Meeting
of Stockholders (the “2016 Annual Meeting”).

 

Section 2.2           2016
Annual Meeting Record Date. The Company shall use commercially reasonable efforts to set a record date (the “Record
Date”) for the 2016 Annual Meeting for a date following the Termination Date.

 

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ARTICLE
III

COVENANTS

 

Section 3.1           Standstill.
Effective from the date of this Agreement and continuing until the later of the certification of votes for the Company 2017 Annual
Meeting of Stockholders or the certification of votes for the FSFR (as defined below) 2017 Annual Meeting of Stockholders (the
“Standstill Period”), except to the extent expressly permitted by the terms of this Agreement, none of the Sellers
shall, and Sellers shall cause their respective controlled Affiliates not to, directly or indirectly, in any manner, alone or in
concert with others:

 

(a)          solicit,
or knowingly encourage or in any way engage in any solicitation of, any proxies or consents or become a “participant”
in a “solicitation,” directly or indirectly, as such terms are defined in Regulation 14A under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) of proxies or consents (including, without limitation, any solicitation
of consents that seeks to call a special meeting of stockholders or by encouraging or participating in any “withhold”
or similar campaign), in each case, with respect to securities of the Company or Fifth Street Senior Floating Rate Corp. (“FSFR”)
or any securities convertible or exchangeable into or exercisable for any such securities (collectively, “securities of
the Companies”);

 

(b)          make
any proposal for consideration by stockholders at any annual or special meeting of the stockholders of the Company or FSFR, whether
pursuant to Rule 14a-8 under the Exchange Act, either such company’s constituent documents or otherwise;

 

(c)          knowingly
advise, encourage, support, instruct or influence any person with respect to any of the matters covered by this Section 3.1 or
with respect to the voting or disposition of any securities of the Companies at any annual or special meeting of stockholders of
the Company or FSFR, except in accordance with Section 3.4, or seek to do so;

 

(d)          agree,
attempt, seek or propose to deposit any securities of the Companies in any voting trust or similar arrangement, or subject any
securities of the Companies to any arrangement or agreement with respect to the voting thereof, except in accordance with Section
3.4;

 

(e)          knowingly
seek or encourage any person to submit nominations in furtherance of a “contested solicitation” or take other action
for the election or removal of directors with respect to the Company or FSFR, including any action that is intended to, or is reasonably
likely to result in, the replacement of the investment advisor of the Company or FSFR, or a modification to the terms or conditions
of either the Company’s or FSFR’s investment advisory agreement;

 

(f)          form,
join in or in any way participate in a partnership, limited partnership, syndicate or other group, including, without limitation,
a group as defined under Section 13(d) of the Exchange Act (except such participation related to the reasonable unwinding of any
such group currently existing as of the date of this Agreement) with any person who is not identified on Schedule I hereto
(any such person, a “Third Party”), with respect to any securities of the Companies or take any other action
that would interfere with the ability of Sellers to vote in accordance with this Agreement;

 

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(g)          make
any disclosure, communication, announcement or statement regarding any intent, purpose, plan or proposal with respect to the FSC
Board of Directors (the “Company Board”), the Company investment advisor or the terms and conditions of the
Company’s investment advisory agreement, the FSFR Board of Directors (the “FSFR Board”), the FSFR investment
advisor or the terms and conditions of FSFR’s investment advisory agreement, the Company, FSFR, or the management, policies
or affairs of either the Company or FSFR, or with respect to this Agreement, that is inconsistent with the provisions of this Agreement;

 

(h)          effect
or seek to effect, offer or propose to effect, cause or participate in, or in any way assist or facilitate any other person to
effect or seek, offer or propose to effect or participate in, any tender or exchange offer, merger, consolidation, acquisition,
scheme, arrangement, business combination, recapitalization, reorganization, sale or acquisition of assets, liquidation, dissolution,
extraordinary dividend, significant share repurchase or other extraordinary transaction involving the Company, FSFR or either of
their investment advisors, or any of their subsidiaries or joint ventures or any of their respective securities (each, an “Extraordinary
Transaction”), or make any statement or disclosure regarding any intent, purpose, plan or proposal with respect to any
Extraordinary Transaction or this Agreement that is inconsistent with the provisions of this Agreement, including any intent, purpose,
plan or proposal that is conditioned on, or would require waiver, amendment, nullification or invalidation of, any provision of
this Agreement or take any action that could require the Company or FSFR to make any public disclosure relating to any such intent,
purpose, plan, proposal or condition;

 

(i)          (i)
call or seek to call or request the calling of any meeting of stockholders at either the Company or FSFR, including by written
consent, (ii) seek, alone or in concert with others, representation on, or nominate any candidate to, the Company Board or the
FSFR Board, (iii) seek the removal of any member of the Company Board or the FSFR Board, (iv) seek, alone or in concert with others,
or support any Third Party in seeking, to replace the investment advisor of the Company or the investment advisor of FSFR, (v)
solicit consents from the Company or FSFR stockholders or otherwise act or seek to act by written consent, (vi) conduct a referendum
of the Company or FSFR stockholders or (vii) make a request for any stockholders list or any other books and records in Sellers’
capacity as a Company or FSFR stockholder;

 

(j)          purchase
or cause to be purchased or otherwise acquire or agree to acquire beneficial ownership of any securities issued by the Company
or FSFR, or any securities convertible into or exchangeable for securities issued by the Company or FSFR;

 

(k)          sell,
offer to sell, give, pledge, grant a security interest in, encumber, assign, grant any option for the sale of or otherwise transfer
or dispose of (each, a “Transfer”) any securities issued by the Company and/or any securities convertible into
or exchangeable for securities issued by the Company, unless any Buyer fails to timely perform each of its obligations under Section
1.2(b), Section 1.3(c) and/or Section 1.3(d)(i) of this Agreement;

 

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(l)          institute,
solicit or join, as a party, or knowingly assist any other person in instituting, soliciting or joining, any litigation, arbitration
or other proceeding against the Company or FSFR or any of their current or former directors or officers (including derivative actions),
other than (i) litigation to enforce the provisions of this Agreement and (ii) counterclaims with respect to any proceeding initiated
by, or on behalf of, a party to this Agreement or FSFR against Sellers;

 

(m)          enter
into or engage in any short sale or purchase, sale or grant of any option, warrant, derivative, convertible security, stock appreciation
right or other similar right (including, without limitation, any put or call option or swap transaction) with respect to or having
any measurement relating to any securities of the Companies;

 

(n)          enter
into any negotiations, arrangements, understanding or agreements (whether written or oral) with, or advise, finance, assist, seek
to knowingly persuade or encourage, any Third Party to take any action or make any statement in connection with any of the foregoing,
or make any investment in or enter into any arrangement with any other person that engages, or offers or proposes to engage, in
any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing; or

 

(o)          take
any action challenging the validity or enforceability of this Agreement, or make or in any way advance any request or proposal
that the Company, FSFR, the Company Board or the FSFR Board amend, modify or waive any provision of this Agreement.

 

Section 3.2           Mutual
Non-Disparagement.

 

(a)          Each
of FSAM, Holdings, LT and the Company (on their own behalf and on behalf of their respective directors, officers, subsidiaries
and Affiliates, if any, and each of their respective successors and assigns (collectively, the “Company Parties”))
agrees that, beginning on the date of this Agreement and continuing until the earlier of the expiration of the Standstill Period
and such time as any Seller Party (as defined below) breaches its obligations under Section 3.2(b), it shall not (whether directly
or indirectly, individually or in concert with others, publicly or privately, orally or in writing) engage in any conduct or make,
or cause to be made, any statement, observation or opinion, or communicate any information that is calculated to or is reasonably
likely to have the effect of (i) undermining, impugning, disparaging, injuring the reputation of or otherwise in any way reflecting
adversely or detrimentally upon any of Sellers or their respective partners, members, Affiliates, successors or assigns (collectively,
the “Seller Parties”) or (ii) accusing or implying that any Seller Party engaged in any wrongful, unlawful or
improper conduct. The foregoing shall not apply to any compelled testimony, either by legal process, subpoena or otherwise or to
any response to any request for information from any governmental or regulatory authority having jurisdiction over the Company;
provided, however, that in the event that any Company Party is requested pursuant to, or required by, applicable
law, regulation or legal process to testify or otherwise respond to a request for information from any governmental or regulatory
authority, the Company shall notify RiverNorth Capital promptly so that the Seller Parties may (at their own expense) seek a protective
order or other appropriate remedy. In the event that no such protective order or other remedy is timely obtained, or any Seller
Party waives compliance with the terms of this Section 3.2(a), such Company Party shall furnish only such information which it
has been advised by counsel is legally required and will exercise reasonable efforts to obtain reliable assurance that such information
will be accorded confidential treatment.

 

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(b)          Each
of the Sellers (on its or his own behalf and on behalf of the other Seller Parties) agrees that, beginning on the date of this
Agreement and continuing until the earlier of the expiration of the Standstill Period and such time as any Company Party breaches
its obligations under Section 3.2(a), it or he shall not (whether directly or indirectly, individually or in concert with others,
publicly or privately, orally or in writing) engage in any conduct or make, or cause to be made, any statement, observation or
opinion, or communicate any information, including, without limitation, to any member of the press, analyst, governmental or regulatory
authority, that is calculated to or is reasonably likely to have the effect of (i) undermining, impugning, disparaging, injuring
the reputation of or otherwise in any way reflecting adversely or detrimentally upon any Company Party or FSFR or (ii) accusing
or implying that any Company Party or FSFR engaged in any wrongful, unlawful or improper conduct; provided, however,
that in the event that a Seller Party is requested pursuant to, or required by, applicable law, regulation or legal process to
testify or otherwise respond to a request from any governmental or regulatory authority, RiverNorth Capital shall notify the Company
promptly so that the Company Parties or FSFR may (at their own expense) seek a protective order or other appropriate remedy. In
the event that no such protective order or other remedy is timely obtained, or any Company Party waives compliance with the terms
of this Section 3.2(b), such Seller Party shall furnish only such information which it has been advised by counsel is legally required
and will exercise reasonable efforts to obtain reliable assurance that such information will be accorded confidential treatment.

 

(c)          Neither
Section 3.2(a) nor Section 3.2(b) shall prevent the enforcement by or on behalf of any party of such party’s rights or remedies
in accordance with this Agreement, including any right to commence legal proceedings or make public filings in respect of such
enforcement.

 

Section 3.3           Public
Announcement; Public Filings.

 

(a)          Promptly
following the execution and delivery of this Agreement, the Company and RiverNorth shall issue a joint press substantially in the
form attached hereto as Exhibit C (the “Joint Press Release”) and FSAM shall issue a press release substantially
in the form attached hereto as Exhibit D (the “FSAM Press Release”). Promptly
(but in no event later than two (2) Business Days) following the execution and delivery of this Agreement, Sellers shall cause
the website domain located at http://www.fixfsc.com/ to be deactivated and no longer accessible.

 

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(b)          During
the Standstill Period, neither the Company nor FSAM shall make any public announcement or public statement inconsistent with or
contrary to any statement contained in the Joint Press Release or the FSAM Press Release (each, an “Inconsistent Statement”),
as applicable, except with the prior written consent of RiverNorth Capital on behalf of all Sellers or as required by applicable
law or the rules of any stock exchange on which the Company’s or FSAM’s securities are listed, and the Company and
FSAM, as the case may be, shall provide RiverNorth Capital, prior to making such Inconsistent Statement, a reasonable opportunity
to review and comment on such Inconsistent Statement, and FSAM and the Company, as applicable, shall consider any comments on such
Inconsistent Statement from RiverNorth Capital in good faith; provided, that, notwithstanding the foregoing, FSAM
and the Company may make ordinary course communications with their respective stakeholders, including employees, customers, suppliers
and investors consistent with the Joint Press Release or the FSAM Press Release, as applicable.

 

(c)          During
the Standstill Period (and, if later, in the case of RiverNorth, continuing until the earlier of the Exercise Date or the Expiration
Date (each, as defined in the Warrant)), no Seller shall (i) other than as contemplated by Section 3.3(a), issue any press release
or other public announcement regarding this Agreement or the matters contemplated hereby or (ii) make any Inconsistent Statement,
except, in each case, with the prior written consent of FSAM.

 

(d)          As
promptly as practicable following the date hereof, RiverNorth shall file with the Securities and Exchange Commission an amendment
to its Schedule 13D initially filed on November 16, 2015, as amended prior to the date hereof, disclosing, among other things,
RiverNorth’s public and irrevocable withdrawal and rescission of each proposal and each director nomination that RiverNorth
has put forth for consideration at the 2016 Annual Meeting, and prior to such filing shall provide the Company and its outside
counsel with a reasonable opportunity to review and comment upon such amendment, and RiverNorth shall consider any comments in
good faith.

 

Section 3.4           Voting
Matters.

 

(a)          If
the Record Date is set for a date that is prior to the Closing Date, then each Seller shall: (i) appear at the 2016 Annual Meeting
or otherwise cause all of the Company Shares beneficially owned or controlled in any capacity or manner by such Seller as of the
Record Date to be counted as present at the 2016 Annual Meeting for purposes of calculating a quorum; (ii) vote (or cause to be
voted) any Company Shares beneficially owned or controlled in any capacity or manner by such Seller as of the Record Date in accordance
with the recommendations of the Company Board as set forth in the definitive annual proxy statement on Schedule 14A of the Company
that is delivered to the Company’s stockholders by or on behalf of the Company in connection with the 2016 Annual Meeting
(such annual proxy statement, the “Company Proxy Statement” and such recommendations, the “Company
Recommendations”); (iii) no later than the seventh (7th) day following the date on which the Company publicly files the
Company Proxy Statement, duly complete and return the proxy card that is included in the Company’s proxy materials or voting
instruction form, in each case, consistent with such Seller’s obligations under clause (ii) of this Section 3.4(a) and (iv)
no later than the time at which such Seller returns such proxy card or voting instruction form, in each case, in accordance with
clause (iii) of this Section 3.4(a), deliver a written certificate to the Company (signed by such Seller or, if applicable, an
authorized officer of such Seller) certifying as to (1) the number of Company Shares beneficially owned or controlled in any capacity
or manner by such Seller as of the date of such certification; (2) the manner in which such Company Shares were voted; and (3)
compliance with this Section 3.4(a).

 

    	 	12	 

     

    

 

(b)          Each
Seller: (i) shall appear at the 2016 annual meeting of FSFR (the “FSFR 2016 Annual Meeting”) or otherwise cause
all of the common stock, par value $0.01 per share, of FSFR (“FSFR Shares”)
beneficially owned or controlled in any capacity or manner by such Seller as of March 2, 2016 to be counted as present at the FSFR
2016 Annual Meeting for purposes of calculating a quorum; (ii) shall vote (or cause to be voted) any FSFR Shares beneficially owned
or controlled in any capacity or manner by such Seller as of March 2, 2016 in accordance with the recommendation of FSFR Board
as set forth in the definitive annual proxy statement on Schedule 14A of FSFR that is delivered to FSFR’s stockholders by
or on behalf of FSFR in connection with the FSFR 2016 Annual Meeting (such annual proxy statement, the “FSFR Proxy Statement”);
(iii) shall, no later than the seventh day following the date on which FSFR files the FSFR Proxy Statement, duly complete and return
the proxy card that is included in FSFR’s proxy materials or voting instruction form, in each case, consistent with such
Seller’s obligations under clause (ii) of this Section 3.4(b); (iv) shall not Transfer any FSFR Shares until March 3, 2016;
and (v) shall, no later than the time at which such Seller returns such proxy card or voting instruction form, in each case, in
accordance with clause (iii) of this Section 3.4(b), deliver a written certificate to FSFR (signed by such Seller or, if applicable,
an authorized officer of such Seller) certifying as to (1) the number of FSFR Shares beneficially owned or controlled in any capacity
or manner by such Seller as of the date of such certification, (2) the manner in which such FSFR Shares were voted and (3) compliance
with this Section 3.4(b).

 

(c)          The
RiverNorth Swap Parties shall request and use their best efforts to cause the Swap Counterparty to vote any Company Shares held
by the Swap Counterparty as of the record date for any meeting of the Company’s stockholders in accordance with the recommendations
of the Company Board as set forth in the definitive proxy statement of the Company that is delivered to the Company’s stockholders
by or on behalf of the Company in connection with any such meeting. Such best efforts shall include, without limitation, enforcing
the RiverNorth Swap Parties’ rights, if any, under any such contract to the maximum extent possible under any such contract,
but Buyers and the Company acknowledge that in the absence of such rights to direct the Swap Counterparty as to such vote, such
voting decisions shall be at the discretion of such Swap Counterparty. The RiverNorth Swap Parties make no assurances or
representations related to the manner or result of the vote(s) of the Swap Counterparty.

 

    	 	13	 

     

    

 

Section 3.5           Dividends.
The Buyers shall, with respect to any regular monthly dividends having a record date on or following February 10, 2016 in respect
of any Purchased Shares actually purchased, be entitled to receive, when paid by the Company, any such regular monthly dividends.

 

Section 3.6           Release.

 

(a)          Each
Seller agrees, with effect from and after the Closing to irrevocably release from liability, and refrain from commencing any litigation
(or cooperating, assisting or aiding any person in commencing or maintaining any litigation) against the Company, FSAM, Holdings,
LT and FSFR and their respective partners, directors, officers, representatives, agents and Affiliates (and the partners, directors,
officers, representatives and agents of any such Affiliate) and each of their respective successors and assigns (collectively,
the “Released Parties”), as applicable, arising from any fact, occurrence, circumstance or matter through and
including the Closing, including with respect to the proxy contest or negotiation of this Agreement (other than with respect to
the settlement of the Swaps). Each Seller agrees, with effect from and after the settlement of the Swaps, to irrevocably release
from liability, and refrain from commencing any litigation (or cooperating, assisting or aiding any person in commencing or maintaining
any litigation) against any Released Party arising from any fact, occurrence, circumstance or matter through and including the
settlement of the Swaps.

 

(b)          Each
of the Company, FSAM, Holdings and LT agrees, with effect from and after the Closing, to irrevocably release from liability, and
refrain from commencing any litigation (or cooperating, assisting or aiding any person in commencing or maintaining any litigation)
against Sellers and their respective partners, directors, officers, representatives, agents and Affiliates (and the partners, directors,
officers, representatives and agents of any such Affiliate) and each of their respective successors and assigns (collectively,
the “Seller Released Parties”), as applicable, arising from any fact, occurrence, circumstance or matter through
and including the Closing, including with respect to the proxy contest or negotiation of this Agreement (other than with respect
to the settlement of the Swaps). Each of the Company, FSAM, Holdings and LT agrees, with effect from and after the Closing, to
irrevocably release from liability, and refrain from commencing any litigation (or cooperating, assisting or aiding any person
in commencing or maintaining any litigation) against any Seller Released Party arising from any fact, occurrence, circumstance
or matter through and including the Closing, including the settlement of the Swaps.

 

(c)          Neither
Section 3.6(a) nor Section 3.6(b) shall prevent the enforcement by or on behalf of any party of such party’s rights or remedies
in accordance with this Agreement, including any right to commence legal proceedings or make public filings in respect of such
enforcement.

 

    	 	14	 

     

    

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES OF

SELLERS

 

Each RiverNorth entity hereby, jointly and
severally with respect to each other such party, makes, and each RiverNorth Nominee hereby, severally and not jointly with RiverNorth
or any other RiverNorth Nominee, makes, the following representations and warranties to the Company, each Buyer and FSAM:

 

Section 4.1           Existence;
Authority. Each of the Sellers that is not a natural person is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization. Each of the Sellers has all requisite competence, power and authority to execute
and deliver this Agreement and the other Transaction Documents to which such Seller is or will be a party, to perform its or his
obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement and the Transaction Documents to which such Seller
is or will be a party.

 

Section 4.2           Enforceability.
This Agreement has been duly and validly executed and delivered by each of the Sellers and, concurrently with its execution and
delivery, the other Transaction Documents will be duly and validly executed and delivered by RiverNorth Capital and, assuming due
and valid authorization, execution and delivery by each Buyer and/or the Company, as applicable, this Agreement constitutes, and
the other Transaction Documents will constitute, a legal, valid and binding agreement of each of the Sellers party hereto or thereto,
enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws)
and by general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

Section 4.3           Ownership.
Each Seller is the sole record and/or beneficial owner, as applicable, of the Purchased Shares set forth opposite its name on Schedule
I hereto, free and clear of any and all Liens. Other than the Purchased Shares set forth opposite each Seller’s name
on Schedule I hereto, no Seller is the record or beneficial owner of any Company Shares. Each Seller has full power and
authority to transfer full legal ownership of its respective Purchased Shares to the Buyers, and no Seller is required to obtain
the approval of any person or governmental or regulatory authority or organization to effect the sale of the Purchased Shares.
The entire direct or indirect beneficial ownership of RiverNorth or any of their respective Affiliates in the Company is 12,766,838
Company Shares. The entire direct and indirect beneficial ownership of each of Randy I. Rochman, Fred G. Steingraber and Murray
R. Wise or any of their respective Affiliates in the Company is 215,804, 0 and 116,500 Company Shares, respectively. Schedule
I is true, correct and complete with respect to the direct and indirect beneficial ownership of each Seller set forth in the
left column thereof. The entire direct or indirect beneficial ownership of Sellers or any of their respective Affiliates in FSFR
is 1,691,619 FSFR Shares.

 

    	 	15	 

     

    

 

Section 4.4           Good
Title Conveyed. The stock certificates and stock powers, if any, executed and delivered by, or DWAC transfer in lieu of such
stock certificates made by, Sellers at the Closing or at the Modified Closing, as the case may be, will be valid and binding obligations
of Sellers, enforceable in accordance with their respective terms, and vest in each Buyer good, valid and marketable title to all
Purchased Shares purchased by such Buyer, free and clear of any and all Liens.

 

Section 4.5           No
Conflict. The execution and delivery by each Seller and the performance by each Seller of its or his obligations hereunder
and compliance by each Seller with all of the provisions hereof and the consummation by each Seller of the transactions described
herein (a) shall not conflict with, or result in a breach or violation of, or default under, any contract to which any Seller is
a party, (b) if such Seller is an entity, shall not result in any violation or breach of any provision of the organizational documents
of such Seller and (c) shall not conflict with or result in any violation of any law applicable to such Seller or any of such Seller’s
properties or assets, except with respect to each of (a) and (c), such conflicts, breaches, violations or defaults as would not
reasonably be expected to materially and adversely affect the ability of such Seller to perform its obligations under this Agreement.

 

Section 4.6           Absence
of Litigation. As of the date hereof, there is no suit, action, investigation or proceeding pending or, to the knowledge of
any Seller, threatened against such party that could impair the ability of any Seller to perform its or his obligations hereunder
or to consummate the transactions contemplated hereby to which it or he is a party, except with respect to such suits, actions,
investigations or proceedings as would not reasonably be expected to materially and adversely affect the ability of such Seller
to perform its obligations under this Agreement.

 

Section 4.7           Consents
and Approvals. No consent, approval, order, authorization, registration or qualification of or with any governmental or regulatory
authority or organization having jurisdiction over any Seller is required in connection with the execution, delivery and performance
by such Seller of this Agreement or the consummation by such Seller of any transactions contemplated hereby to which such Seller
is a party.

 

    	 	16	 

     

    

 

Section 4.8           Swaps.
Prior to the date hereof, RiverNorth has provided the Company and the Buyers with true, correct and complete copies of the documents
and agreements evidencing the Swaps and Schedule II sets forth the true, correct and complete date of entry, reference number,
valuation date and notional amount with respect to each Swap. The Swaps are valid and enforceable obligations of the RiverNorth
Swap Parties and, to the knowledge of RiverNorth, are valid and enforceable obligations of the Swap Counterparty. The RiverNorth
Swap Parties are not and, to the knowledge of RiverNorth, the Swap Counterparty is not, in breach of any of the terms of the Swaps,
and there are no facts or circumstances known to the RiverNorth Swap Parties that could result in a breach of any Swap.

 

Section 4.9           Other
Acknowledgments.

 

(a)          Each
of the Sellers hereby represents, warrants and acknowledges that it or he is a sophisticated investor and that it or he knows that
the Company, FSAM or the Buyers may have material non-public information concerning the Company and its condition (financial and
otherwise), results of operations, businesses, properties, plans and prospects and that such information could be material to Sellers’
decision to sell the Purchased Shares or otherwise materially adverse to Sellers’ interests. Each of the Sellers acknowledges
and agrees that FSAM, the Buyers and the Company shall have no obligation to disclose to it or him any such information and hereby
waives and releases, to the fullest extent permitted by applicable law, any and all claims and causes of action it or he has or
may have against Company, FSAM and the Buyers, and their respective Affiliates, officers, partners, directors, employees, agents
and representatives based upon, relating to or arising out of nondisclosure of such information or the sale of the Purchased Shares
hereunder.

 

(b)          Each
of the Sellers further represents that it or he has adequate information concerning the business and financial condition of the
Company to make an informed decision regarding the sale of the Purchased Shares and has, independently and without reliance upon
FSAM, the Buyers or the Company, made its or his own analysis and decision to sell the Purchased Shares. With respect to legal,
tax, accounting, financial and other considerations involved in the transactions contemplated by this Agreement, including the
sale of the Purchased Shares, none of the Sellers is relying on FSAM, the Buyers or the Company (or any agent or representative
thereof). Each of the Sellers has carefully considered and, to the extent it or he believes such discussion necessary, discussed
with professional legal, tax, accounting, financial and other advisors the suitability of the transactions contemplated by this
Agreement, including the sale of the Purchased Shares. Each of the Sellers acknowledges that none of FSAM, the Buyers or the Company
or any of their respective partners, directors, officers, subsidiaries or Affiliates has made or makes any representations or warranties,
whether express or implied, of any kind except as expressly set forth in this Agreement.

 

    	 	17	 

     

    

 

(c)          Sellers
are “accredited investors” as defined in Rule 501 promulgated under the Securities Act of 1933, as amended. The sale
of the Purchased Shares by Sellers (i) was privately negotiated in an independent transaction and (ii) does not violate any rules
or regulations applicable to Sellers.

 

(d)          The
Company, FSAM and the Buyers are relying on the representations, warranties and acknowledgments made by each Seller in Sections
4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8 and 4.9(a), (b) and (c), and the Company, FSAM and the Buyers would not have entered into
this Agreement in the absence of such representations, warranties and acknowledgments.

 

ARTICLE
V

REPRESENTATIONS AND WARRANTIES OF

BUYERS
AND THE COMPANY

 

Each of the Buyers hereby, jointly and severally
with respect to each other such party, makes, and FSAM hereby, severally and not jointly with any Buyer, makes, the following representations
and warranties to Sellers:

 

Section 5.1           Existence;
Authority. Holdings is a limited partnership and each of the Company and FSAM is a corporation, in each case, duly organized,
validly existing and in good standing under the laws of the State of Delaware. Each of the Company, FSAM and Holdings has all requisite
organizational power and authority (or, in the case of LT, has the requisite capacity) to execute and deliver this Agreement and
the other Transaction Documents to which it is or will be a party, to perform its and his obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby and has taken all necessary organizational action to authorize
the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is or will be a party.

 

Section 5.2           Enforceability.
This Agreement has been duly and validly executed and delivered by the Company, FSAM and the Buyers and, upon its execution and
delivery, the other Transaction Documents will be duly and validly executed and delivered by FSAM and Holdings, as applicable,
and, assuming due and valid authorization, execution and delivery by Sellers, this Agreement constitutes, and the other Transaction
Documents will constitute, a legal, valid and binding agreement of each of the Company, FSAM and each Buyer, as applicable, enforceable
in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws) and
by general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

    	 	18	 

     

    

 

Section 5.3           Absence
of Litigation. As of the date hereof, other than as described in the Company’s or FSAM’s, as applicable, public
filings with the Securities and Exchange Commission, there is no suit, action, investigation or proceeding pending or, to the knowledge
of the Company, FSAM or any Buyer, threatened against such party that could impair the ability of the Company, FSAM or any Buyer
to perform its or his obligations hereunder or to consummate the transactions contemplated hereby to which it or he is a party,
except with respect to such suits, actions, investigations or proceedings as would not reasonably be expected to materially and
adversely affect the ability of the Company, FSAM or any Buyer to perform its obligations under this Agreement.

 

Section 5.4           No
Conflict. The execution and delivery by the Company, FSAM or any Buyer and the performance by the Company, FSAM or any Buyer,
as applicable, of its or his obligations hereunder and compliance by the Company, FSAM or any Buyer with all of the provisions
hereof and the consummation by the Company, FSAM or any Buyer of the transactions described herein (a) shall not conflict with,
or result in a breach or violation of, or default under, any contract to which the Company, FSAM or any Buyer is a party, (b) shall
not result in any violation or breach of any provision of the organizational documents of the Company, FSAM or any Buyer (if such
Buyer is an entity) and (c) shall not conflict with or result in any violation of any law applicable to the Company, FSAM or any
Buyer or any of its or his properties or assets, except with respect to each of (a) and (c), such conflicts, breaches, violations
or defaults as would not reasonably be expected to materially and adversely affect the ability of the Company, FSAM or any Buyer
to perform its obligations under this Agreement.

 

Section 5.5           Consents
and Approvals. No consent, approval, order, authorization, registration or qualification of or with any governmental or regulatory
authority or organization having jurisdiction over the Company, FSAM or any Buyer is required in connection with the execution,
delivery and performance by the Company, FSAM or any Buyer of this Agreement or the consummation by the Company, FSAM or any Buyer
of any transactions contemplated hereby to which it or he is a party.

 

    	 	19	 

     

    

 

ARTICLE
VI

miscellaneous

 

Section 6.1           Survival.
Each of the representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing, Modified
Closing or Swap Settlement, as applicable. Notwithstanding any knowledge of facts determined or determinable by any party by investigation,
each party shall have the right to fully rely on the representations, warranties, covenants and agreements of the other parties
contained in this Agreement. Each representation, warranty, covenant and agreement contained in this Agreement is independent of
each other representation, warranty, covenant and agreement contained in this Agreement. Except as expressly set forth in this
Agreement, no party has made any representation, warranty, covenant or agreement and the parties expressly disclaim reliance on
any extra contractual statement or omissions.

 

Section 6.2           Notices.
All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given) by hand delivery, email, facsimile, cable, telecopy or mail (registered or certified,
postage prepaid, return receipt requested) to the respective parties hereto addressed as follows:

 

If to the Company:

 

777 West Putnam Avenue, 3rd Floor

Greenwich, Connecticut 06830

Attn: Kerry S. Acocella

Facsimile: (203) 681-3879

Email: kacocella@fifthstreetfinance.com

 

With a copy to (which shall not constitute notice):

 

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Todd E. Freed

Richard J. Grossman

Facsimile: (212) 735-2000

Email: Todd.Freed@skadden.com

Richard.Grossman@skadden.com

 

    	 	20	 

     

    

 

If to the Buyers and FSAM:

 

777 West Putnam Avenue, 3rd Floor

Greenwich, Connecticut 06830

Attn: Kerry S. Acocella

Facsimile: (203) 681-3879

Email: kacocella@fifthstreetfinance.com

 

With a copy to (which shall not constitute notice):

 

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Todd E. Freed

Richard J. Grossman

Facsimile: (212) 735-2000

Email: Todd.Freed@skadden.com

Richard.Grossman@skadden.com

 

If to any Seller:

 

c/o RiverNorth Capital Management, LLC

325 N. LaSalle St., Suite 645

Chicago, Illinois 60654

Attn: Marc L. Collins

Facsimile: (312) 832-1461

Email: MCollins@rivernorth.com

 

With a copy to (which shall not constitute notice):

 

Olshan Frome Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, NY 10022

Attn: Andrew Freedman

Facsimile: (212) 451-2222

Email: afreedman@olshanlaw.com

 

Section 6.3           Certain
Definitions. As used in this Agreement: (a) the term “Affiliate” shall have the meaning set forth in Rule
12b-2 under the Exchange Act and shall include persons who become Affiliates of any person subsequent to the date hereof; (b) the
terms “beneficial ownership” or “beneficially owned” shall have the meanings set forth in
Rule 13d-3 under the Exchange Act; (c) the term “Business Day” shall mean any day other than a Saturday, Sunday
or nationally recognized holiday; and (d) the Company, FSAM, each Buyer and each Seller will be referred to herein individually
as a “party” and collectively as “parties.”

 

    	 	21	 

     

    

 

Section 6.4           Specific
Performance. Each of the Buyers and the Company, on the one hand, and Sellers, on the other hand, acknowledge and agree that
the other would be irreparably injured by a breach of this Agreement and that money damages are an inadequate remedy for an actual
or threatened breach of this Agreement. Accordingly, the parties agree to the granting of specific performance of this Agreement
and injunctive or other equitable relief as a remedy for any such breach or threatened breach, without proof of actual damages,
and further agree to waive any requirement for the securing or posting of any bond in connection with any such remedy. Such remedy
shall not be deemed to be the exclusive remedy for a breach of this Agreement, but shall be in addition to all other remedies available
at law or equity.

 

Section 6.5           Expenses.
Except as expressly set forth in Section 1.2(b), all fees and expenses incurred by a party hereto in connection with the matters
contemplated by this Agreement shall be borne by the party incurring such fee or expense, including without limitation the fees
and expenses of any investment banks, attorneys, accountants or other experts or advisors retained by such party; provided,
that, after a final determination of Buyers’ liability by a Delaware Court, Buyers will pay the reasonable, documented,
out-of-pocket attorneys’ fees actually incurred by RiverNorth in connection with RiverNorth pursuing a remedy in accordance
with the terms of Section 6.4.

 

Section 6.6           Waiver.
Any waiver of any term or condition of this Agreement must be in writing and signed by the party to be charged. Any waiver by any
party hereto of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach
of such provision or of any breach of any other provision of this Agreement. The failure of a party hereto to insist upon strict
adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

Section 6.7           Severability.
If any term, provision, covenant or restriction of this Agreement is held by a Delaware Court to be invalid or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated by such holding.

 

    	 	22	 

     

    

 

Section 6.8           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns; provided, that, this Agreement (and any of the rights, interests or obligations of any party hereunder)
may not be assigned by any party without the prior written consent of the other parties hereto, such consent not to be unreasonably
withheld. Any purported assignment of a party’s rights under this Agreement in violation of the preceding sentence shall
be null and void.

 

Section 6.9           Entire
Agreement; Amendments; Third Party Beneficiaries. This Agreement (including the Schedules and any Exhibits hereto), the Escrow
Agreement and the Warrant constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes
all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof
and, except as expressly set forth in the following sentence, is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder. The parties hereby designate: (a) FSFR as a third party beneficiary of Sections 3.1, 3.2(b),
3.4(b) and Article VI; (b) each Released Party that is not a party to this Agreement as a third party beneficiary of Section 3.6(a)
and Article VI; and (c) each Seller Released Party that is not a party to this Agreement as a third party beneficiary of Section
3.6(b) and Article VI. This Agreement may be amended only by a written instrument duly executed by the parties hereto or their
respective permitted successors or assigns.

 

Section 6.10         Headings.
The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

Section 6.11         Governing
Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware
without regard to its choice of law principles to the extent that the application of the laws of another jurisdiction would be
required thereby.

 

    	 	23	 

     

    

 

Section 6.12         Submission
to Jurisdiction; Waiver of Jury Trial. Each party hereby irrevocably and unconditionally (a) submits, for itself and its property,
to the exclusive jurisdiction and venue of the Delaware Court of Chancery (or, only if the Delaware Court of Chancery does not
have jurisdiction over a particular matter, the Superior Court of the State of Delaware (and the Complex Commercial Litigation
Division thereof if such division has jurisdiction over the particular matter), or if the Superior Court of the State of Delaware
does not have jurisdiction, any federal court of the United States of America sitting in the State of Delaware) (as applicable,
the “Delaware Courts”), and any appellate court from any decision thereof, in any suit, action or other proceeding
with respect to the subject matter of this Agreement (each, a “Proceeding”), including the negotiation, execution
or performance of this Agreement and agrees that all claims in respect of any such Proceeding shall be heard and determined in
the Delaware Courts, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any Proceeding with respect to the subject matter of this Agreement or the negotiation,
execution or performance of this Agreement in the Delaware Courts, including any objection based on its place of incorporation
or domicile, (c) waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance
of such Proceeding in any such court and (d) agrees that a final judgment in any such Proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law. The Parties waive any
right to a trial by jury with respect to any Proceeding.

 

Section 6.13         No
Consequential Damages. To the fullest extent permitted by applicable law, each of the parties to this Agreement shall not assert,
and hereby waives, any claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its
or his favor, against any other party hereto and its respective Affiliates, members, members’ affiliates, officers, directors,
partners, trustees, employees, attorneys and agents on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) (whether or not the claim thereof is based on contract, tort or duty imposed by
any applicable legal requirement) arising out of, in connection with, or as a result of, this Agreement or of any other agreement
between them with respect to any transaction described herein.

 

Section 6.14         Counterparts;
Facsimile. This Agreement may be executed in counterparts, including by facsimile or PDF electronic transmission, each of which
shall be deemed an original, but all of which together shall constitute one and the same Agreement.

 

Section 6.15         Further
Assurances. Upon the terms and subject to the conditions of this Agreement, each of the parties hereto agrees to execute such
additional documents, to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate or
make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement.

 

Section 6.16         Interpretation.
The parties acknowledge and agree that this Agreement has been negotiated at arm’s length and among parties equally sophisticated
and knowledgeable in the matters covered hereby. Accordingly, any rule of law or legal decision that would require interpretation
of any ambiguities in this Agreement against the party that has drafted it is not applicable and is hereby waived.

 

[Signature Pages Follow]

 

    	 	24	 

     

    

 

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the day and year first written above.

 

	 	fifth street finance corp.
	 	 
	 	By:	/s/ Todd G. Owens
	 	 	Name: Todd G. Owens
	 	 	Title: Chief Executive Officer

 

	 	fifth street asset management inc.
	 	 
	 	By:	/s/ Leonard M. Tannenbaum
	 	 	Name: Leonard M. Tannenbaum
	 	 	Title: Chief Executive Officer

 

	 	Fifth Street Holdings L.P.
	 	 
	 	By:	Fifth Street Asset Management Inc., its General Partner
	 	 	
	 	 	 
	 	By:	/s/ Leonard M. Tannenbaum
	 	 	Name: Leonard M. Tannenbaum
	 	 	Title: Chief Executive Officer

 

	 	 	/s/ Leonard M. Tannenbaum
	 	 	Leonard M. Tannenbaum

 

	 	RiverNorth Capital Management, LLC
	 	
	 	By:	/s/ Marcus Collins
	 	 	Name: Marcus Collins
	 	 	Title: General Counsel

 

[Purchase and Settlement Agreement]

 

     

     

    

 

	 	RiverNorth Capital Partners, L.P.
	 	 
	 	By:	
        RiverNorth Capital Management, LLC, General Partner

	 	 	 
	 	By:	/s/ Marcus Collins
	 	 	Name: Marcus Collins
	 	 	Title: General Counsel

  

	 	RiverNorth Institutional Partners, L.P.
	 	 
	 	By:	
        RiverNorth Capital Management, LLC, General Partner

	 	 	 
	 	By:	/s/ Marcus Collins
	 	 	Name: Marcus Collins
	 	 	Title: General Counsel

 

	 	RiverNorth Core Opportunity Fund
	 	 
	 	By:	RiverNorth Capital Management, LLC, Investment Advisor
	 	 
	 	By:	/s/ Marcus Collins
	 	 	Name: Marcus Collins
	 	 	Title: General Counsel

  

	 	RiverNorth/DoubleLine Strategic Income Fund
	 	 
	 	By:	RiverNorth Capital Management, LLC, Investment Advisor
	 	 	 
	 	By:	/s/ Marcus Collins
	 	 	Name: Marcus Collins
	 	 	Title: General Counsel

 

[Purchase and Settlement Agreement]

 

     

     

    

 

	 	/s/ Randy I. Rochman
	 	Randy I. Rochman

 

	 	/s/ Fred G. Steingraber
	 	Fred G. Steingraber

 

	 	/s/ Murray R. Wise
	 	Murray R. Wise

 

[Purchase and Settlement Agreement]pld-ex1014_2948.htm

 

Exhibit 10.14

Execution Version

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of May 29, 2015, by and among Prologis, Inc., a Maryland corporation (the “Company”), Prologis, L.P., a Delaware limited partnership (the “Operating Partnership”), and the parties listed on Exhibit A hereto, including their respective successors, assigns and permitted transferees (herein referred to collectively as the “Holders” and individually as a “Holder”).

WHEREAS, the Holders, the Operating Partnership, the Company, KTR Management Services LP, a Delaware limited partnership, and KTR Capital Partners LP, a Delaware limited partnership, are parties to that certain Contribution Agreement dated as of April 17, 2015 (the “Contribution Agreement”), pursuant to the terms of which the Holders agreed to contribute directly or indirectly certain properties and assets to the Operating Partnership in exchange for the Common Units in the Operating Partnership; 

WHEREAS, the Common Units held by the Holders will be redeemable in accordance with Thirteenth Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of June 3, 2011 (such right to effect a redemption, the “Redemption Right”, and such agreement, as amended, the “OP Partnership Agreement”), and, as a result of a redemption in accordance with the Redemption Right, the Holders may receive Common Stock;

WHEREAS, the Company, the Operating Partnership and Holders agreed to execute and deliver this Agreement pursuant to the Contribution Agreement. 

NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows:

1. Definitions.  As used in this Agreement, the following capitalized defined terms shall have the following meanings:

“Common Stock” shall mean the common stock, par value $0.01 per share, of the Company. 

“Common Unit” shall have the meaning given to such term in the OP Partnership Agreement. 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

“Person” shall mean an individual, partnership, corporation, limited liability company, trust, unincorporated organization or other legal entity or a government or agency or political subdivision thereof. 

“Prospectus” shall mean the prospectus included in the Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, and in each case including all material incorporated by reference therein.

“Registrable Security” means (i) any Common Stock issued or issuable to a Holder upon redemption of the Common Units pursuant to the OP Partnership Agreement, (ii) any other securities issued by the Company in exchange for any such Common Stock and (iii) any securities issued by the Company as a dividend or distribution on account of Registrable Securities or resulting from a subdivision of the outstanding Registrable Securities into a greater or lesser number of shares of Common Stock (by reclassification, stock split or otherwise), excluding (i) Common Stock which has been disposed of under the Registration Statement or any other effective registration statement, (ii) Common Stock sold or otherwise transferred pursuant to Rule 144 under the Securities Act, (iii) Common Stock which is held by Holders who are not affiliates of the Company which is eligible for sale pursuant to Rule 144(b)(1) under the Securities Act and (iv) Common Stock which is held by each Holder who is an affiliate of the Company if all of such Common Stock is eligible for sale pursuant to Rule 144 under the Securities Act and could be sold in one transaction in accordance with the volume limitations contained in Rule 144(e)(1)(i) under the Securities Act.

“Registration Statement” shall mean a Shelf Registration Statement or an Automatic Shelf for registration of, among other securities, any Registrable Securities, and all amendments and supplements to any such Registration Statement, including post-effective amendments and also including a Shelf Registration Statement or Automatic Shelf filed to replace an existing Shelf Registration Statement or Automatic Shelf pursuant to Rule 415(a)(6) under the Securities Act, in each case including the Prospectus contained therein or related thereto, all exhibits thereto and all materials and documents incorporated by reference therein. 

“SEC” shall mean the Securities and Exchange Commission.

 

 

“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

“Selling Holder” shall mean any Holder who sells Registrable Securities pursuant to the Shelf Registration.

2. Shelf Registration Under the Securities Act.

(a) Shelf Registration.  Beginning on the first anniversary of the date hereof, any Holder may deliver to the Company a written notice requesting registration of such Holder’s Registrable Securities and the Company agrees, subject to the terms of this Agreement, to the extent that the Company does not have an effective shelf registration statement under which the Registrable Securities could be offered (an “Automatic Shelf”), to file as promptly as reasonably practical (but in no event earlier than the first anniversary of the date hereof and in no event later than sixty (60) days following the receipt by the Company of such written notice), a registration statement pursuant to Rule 415 under the Securities Act on Form S-3 (if the Company is then eligible to use such a registration) or another appropriate form (a “Shelf Registration Statement”) for the registration of the issuance by the Company of Registrable Securities issuable upon the exchange of Common Units and of the resale of all of such Registrable Securities and the Registrable Securities of each other Holder.  Each Holder agrees to provide in a timely manner information regarding any proposed distribution by such Holder of the Registrable Securities and such other information reasonably requested by the Company in connection with preparation of and for inclusion in the Registration Statement.  Subject to the other terms hereof, the Company shall use commercially reasonable efforts to effect such a registration.  The Company agrees to use commercially reasonable efforts to keep the Shelf Registration Statement or Automatic Shelf, as the case may be, with respect to the Registrable Securities continuously effective for a period expiring on the earlier of (i) the date on which ninety percent (90%) of the number of Registrable Securities covered by the Registration Statement have been sold pursuant thereto and (ii) the date on which all Registrable Securities held by Holders who are not affiliates of the Company, in the opinion of counsel for the Company, are eligible for sale pursuant to Rule 144(b)(1) under the Securities Act and all Registrable Securities held by each Holder who is an affiliate of the Company, in the opinion of counsel for the Company, are eligible for sale pursuant to Rule 144 under the Securities Act and could be sold in one transaction in accordance with the volume limitations contained in Rule 144(e)(1)(i) under the Securities Act.  The Company shall not be required to have more than one Registration Statement effective at any one time with respect to the Registrable Securities.  To the extent that the Company has an effective Automatic Shelf, beginning on the first anniversary of the date hereof, the Company will, without any request or demand by any Holder, use commercially reasonable efforts to prepare and file a prospectus supplement covering the resale of all of the Registrable Securities.  Any Holder that has requested its Registrable Securities be included in a Registration Statement pursuant to this Section 2(a) may withdraw all or a portion of its Registrable Securities from being included in such registration at any time prior to the effectiveness of such Registration Statement.

(b) The Company shall pay all expenses incident to the performance by it of its obligations under this Agreement, including (i) all stock exchange, SEC and state securities registration, listing and filing fees, (ii) all expenses incurred in connection with the preparation, printing and distribution of the Registration Statement and Prospectus and (iii) fees and disbursements of counsel for the Company and of the independent public accountants of the Company.  Each Holder shall be responsible for the payment of any brokerage and sales commission, fees and disbursement of such Holder’s counsel and any transfer taxes relating to the sale or disposition of the Common Stock being sold by such Holder.

(c) Any Holder who does not provide the information reasonably requested by the Company in connection with the Registration Statement as promptly as practicable after receipt of such request, but in no event later than ten days thereafter, shall not be entitled to have its Registrable Securities included in the Registration Statement.

(d) Neither the Company nor any Holder shall use a free writing prospectus, as such term is defined in Rule 405 promulgated under the Securities Act, in connection with the sale of the Registrable Securities hereunder.

3. Registration Procedures.  In connection with the obligations of the Company with respect to the Registration Statement contemplated by Section 2 hereof, the Company shall:

(a) prepare and file with the SEC the Registration Statement, which Registration Statement shall (i) be available for the sale of the Registrable Securities in accordance with the intended method or methods of distribution by the Selling Holders thereof and (ii) comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith;

(b) subject to the last sentence of this Section 3(b) and to Section 3(i) hereof, (i) prepare and file with the SEC such amendments or replacements to the Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period under Section 2(a) of this Agreement; (ii) cause the Prospectus to be amended or supplemented as required and to be filed as required by Rule 424 or any similar rule which may be adopted under the Securities Act; (iii) respond to any comments received from the SEC with respect to the Registration Statement or any amendment thereto; and (iv) comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Registration Statement during the applicable period in 

 

 

accordance with the intended method or methods of distribution by the Selling Holders thereof. Notwithstanding anything to the contrary contained herein, the Company shall not be required to take any of the actions described in Section 3(a), clauses (i), (ii) or (iii) in this Section 3(b), Section 3(d) or Section 3(i) with respect to any Holder of Registrable Securities for a period not to exceed ninety (90) days from the date of the Suspension Notice (as defined below) to the extent that the Company is in possession of material non-public information which the Board of Directors in good faith deems advisable not to disclose or the Company is engaged in active negotiations or planning for a merger or material transaction and, in either case, the Company delivers written notice (a “Suspension Notice”) to each such Selling Holder of Registrable Securities to the effect that it would be impractical or unadvisable to cause the Registration Statement or such filings to be made or to become effective or to amend or supplement the Registration Statement, and that such Selling Holder may not make offers or sales under the Registration Statement for a period not to exceed ninety (90) days from the date of such Suspension Notice; provided, however, that the Company may deliver only two such Suspension Notices within any twelve-month period;

(c) furnish to each Selling Holder of Registrable Securities as many copies of the Prospectus and any amendment or supplement thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities; the Company consents to the use of the Prospectus and any amendment or supplement thereto by each such Selling Holder of Registrable Securities in connection with the offering and sale of the Registrable Securities covered by the Prospectus or amendment or supplement thereto; 

(d) use its commercially reasonable efforts to (i) register or qualify the Registrable Securities by the time the Registration Statement is declared effective by the SEC under all applicable state securities or blue sky laws of such jurisdictions in the United States and its territories and possessions as any Holder of Registrable Securities covered by the Registration Statement shall reasonably request in writing, and (ii) keep each such registration or qualification effective during the period the Registration Statement is required to be kept effective under Section 2(a) of this Agreement; provided, however, that in connection therewith, the Company shall not be required to (i) qualify as a foreign corporation to do business or to register as a broker or dealer in any such jurisdiction where it would not otherwise be required to qualify or register but for this Section 3(d), (ii) subject itself to taxation in any such jurisdiction or (iii) file a general consent to service of process in any such jurisdiction;

(e) notify each Holder of Registrable Securities promptly and, if requested by such Holder, confirm in writing, (i) when the Registration Statement and any post-effective amendments thereto have become effective, (ii) when any amendment or supplement to the Prospectus has been filed with the SEC, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of the Registration Statement or any part thereof or the initiation of any proceedings for that purpose, (iv) if the Company receives any notification with respect to the suspension of the qualification of the Registrable Securities for offer or sale in any jurisdiction or the initiation of any proceeding for such purpose and (v) of the happening of any event during the period the Registration Statement is effective as a result of which (A) the Registration Statement contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading or (B) the Prospectus as then amended or supplemented contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;

(f) use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement or any part thereof as promptly as possible;

(g) furnish to each Selling Holder of Registrable Securities, without charge, at least one conformed copy of the Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested);

(h) cooperate with the Selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any Securities Act legend;

(i) subject to the last sentence of Section 3(b) hereof, upon the occurrence of any event contemplated by the last sentence of Section 3(b) or clause (v) of Section 3(e) hereof, use commercially reasonable efforts promptly to prepare and file an amendment or a supplement to the Prospectus or any document incorporated therein by reference or prepare, file and obtain effectiveness of a post-effective amendment to the Registration Statement, or file any other required document, in any such case to the extent necessary so that, as thereafter delivered to the purchasers of the Registrable Securities, the Prospectus as then amended or supplemented will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; and

(j) use commercially reasonable efforts to cause all Registrable Securities to be listed on any securities exchange on which similar securities issued by the Company are then listed.

 

 

The Company may require each Selling Holder of Registrable Securities to furnish to the Company in writing such information regarding the proposed distribution by such Selling Holder of such Registrable Securities and other information as the Company may from time to time reasonably request in writing.

In connection with and as a condition to the Company’s obligations with respect to the Registration Statement pursuant to Section 2 hereof and this Section 3, each Selling Holder covenants and agrees that (i) it will not offer or sell any Registrable Securities under the Registration Statement until it has received copies of the Prospectus as then amended or supplemented as contemplated by Section 3(c) and notice from the Company that the Registration Statement and any post-effective amendments thereto have become effective as contemplated by Section 3(e); (ii) upon receipt of any notice from the Company contemplated by Section 3(b) (in respect of the occurrence of an event contemplated by the last sentence of Section 3(b) or Section 3(e) (in respect of the occurrence of an event contemplated by clause (v) of Section 3(e)), such Selling Holder shall not offer or sell any Registrable Securities pursuant to the Registration Statement until such Selling Holder receives copies of the amended or supplemented Prospectus contemplated by Section 3(i) hereof and receives notice that any post-effective amendment has become effective, and, if so directed by the Company, such Selling Holder shall deliver to the Company all copies in its possession of the Prospectus as amended or supplemented at the time of receipt of such notice; (iii) all offers and sales by such Selling Holder under the Registration Statement must be completed within sixty days after the first date on which offers or sales can be made pursuant to clause (i) above, and upon expiration of such sixty-day period, the Selling Holder may not offer or sell any Registrable Securities under the Registration Statement until it has again complied with the provisions of clause (i) above; (iv) such Holder and any of its officers, directors or affiliates, if any, must comply with the provisions of Regulation M under the Exchange Act as applicable to them in connection with sales of Registrable Securities pursuant to the Registration Statement; and (v) such Selling Holder and any of its officers, directors or affiliates, if any, must enter into such written agreements as the Company shall reasonably request to ensure compliance with clause (iv) above.

4. Indemnification; Contribution.

Indemnification by the Company. The Company shall indemnify and hold harmless each Holder and each Person, if any, who controls such Holder (within the meaning of Section 15 of the Securities Act) (and their respective directors, officers, fiduciaries and employees) as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto) pursuant to which the Registrable Securities were registered under the Securities Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto), including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and  

(iii) against any and all expense whatsoever, as incurred (including reasonable fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, in each case whether or not a party, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above;

provided, however, that the indemnity provided pursuant to this Section 4(a) does not apply to the Holder with respect to any loss, liability, claim, damage or expense to the extent arising out of (x) any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the Holder expressly for use in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto) or (y) the Holder’s failure to deliver an amended or supplemental Prospectus that was timely delivered to the Holder by the Company if such loss, liability, claim, damage or expense would not have arisen had such delivery by the Holder occurred.

(b) Indemnification by the Holder.  In connection with the Registration Statement, each Holder shall severally and not jointly indemnify and hold harmless the Company, and each of its directors and officers (including each director and officer of the Company who signed the Registration Statement), and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, to the same extent as the indemnity contained in Section 4(a) (except that any settlement described in Section 4(a)(ii) shall be effected with the written consent of the Holder), but only insofar as such loss, liability, claim, damage or expense arises out of 

 

 

or is based upon any untrue statement or omission, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by the Holder expressly for use in such Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto); provided that such Holder shall not be liable in any such case to the extent that prior to the filing of any such offering document the Holder delivered written materials which corrected or made not misleading information previously furnished to the Company.  Notwithstanding the provisions of this Section 4(b), the Holder shall not be required to indemnify the Company with respect to any amount in excess of the amount of the total net proceeds received by the Holder from sales of the Registrable Securities under the Registration Statement.

(c) Conduct of Indemnification Proceedings.  The indemnified party shall give reasonably prompt notice to the indemnifying party of any action or proceeding commenced against it of which the indemnified party has actual knowledge and in respect of which indemnity may be sought hereunder, but failure to so notify the indemnifying party (i) shall not relieve it from any liability which it may have under the indemnity agreement provided in Section 4(a) or 4(b), unless and to the extent it did not otherwise learn of such action and the lack of notice by the indemnified party results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) shall not, in any event, relieve the indemnifying party from any obligations to the indemnified party other than the indemnification obligation provided under Section 4(a) or 4(b).  If the indemnifying party so elects within a reasonable time after receipt of such notice, the indemnifying party may assume the defense of such action or proceeding at such indemnifying party’s own expense with counsel chosen by the indemnifying party and approved by the indemnified party, which approval shall not be unreasonably withheld; provided, however, that, if the indemnified party reasonably determines that a conflict of interest exists where it is advisable for the indemnified party to be represented by separate counsel or that, upon advice of counsel, there may be legal defenses available to it which are different from or in addition to those available to the indemnifying party, then the indemnifying party shall not be entitled to assume such defense and the indemnified party shall be entitled to separate counsel at the indemnifying party’s expense.  If the indemnifying party is not entitled to assume the defense of such action or proceeding as a result of the proviso to the preceding sentence, the indemnifying party’s counsel shall be entitled to conduct the indemnifying party’s defense and counsel for the indemnified party shall be entitled to conduct the defense of the indemnified party, it being understood that both such counsel will cooperate with each other to conduct the defense of such action or proceeding as efficiently as possible; provided, however, that counsel for the indemnified party shall not be required to take any action which would prejudice the defense of the indemnified party.  If the indemnifying party is not so entitled to assume the defense of such action or does not assume such defense, after having received the notice referred to in the first sentence of this paragraph, the indemnifying party shall pay the reasonable fees and expenses of counsel for the indemnified party.  In such event, however, the indemnifying party shall not be liable for any settlement effected without the written consent of the indemnifying party.  If an indemnifying party is entitled to assume, and assumes, the defense of such action or proceeding in accordance with this paragraph, the indemnifying party shall not be liable for any fees and expenses of counsel for the indemnified party incurred thereafter in connection with such action or proceeding. 

(d) Contribution.  In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 4 is for any reason held to be unenforceable although applicable in accordance with its terms, the Company and the Holder shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by the Company and the Holder, in such proportion as is appropriate to reflect the relative fault of and benefits to the Company, on the one hand, and the Holder, on the other, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.  The relative benefits to the indemnifying party and indemnified party shall be determined by reference to, among other things, the total proceeds received by the indemnifying party and indemnified party in connection with the offering to which such losses, claims, damages, liabilities or expenses relate.  The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether the action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, the indemnifying party or the indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. 

The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 4(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this Section 4(d), the Holder shall not be required to contribute any amount in excess of the amount of the total net proceeds received by the Holder from sales of the Registrable Securities under the Registration Statement.  Notwithstanding the foregoing, 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.  For purposes of this Section 4(d), each Person, if any, who controls the Holder (within the meaning of Section 15 of the Securities Act) shall have the same rights to contribution as the Holder, and each director of the Company, each officer of the Company who signed the Registration Statement and each Person, if any, who controls the Company (within the meaning of Section 15 of the Securities Act) shall have the same rights to contribution as the Company.

 

 

5. Rule 144 Sales.

(a) Compliance. The Company covenants that, so long as it is subject to the reporting requirements of the Exchange Act, it will file the reports required to be filed by it under the Exchange Act so as to enable any Holder to sell Registrable Securities pursuant to Rule 144 under the Securities Act.

(b) Cooperation with Holders. In connection with any sale, transfer or other disposition by any Holder of any Registrable Securities pursuant to Rule 144 under the Securities Act, the Company shall cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any Securities Act legend, and enable certificates for such Registrable Securities to be for such number of shares and registered in such names as the selling Holders may reasonably request. The Company’s obligation set forth in the previous sentence shall be subject to the delivery, if requested by the Company or its transfer agent, by counsel to such Holder, in form and substance reasonably satisfactory to the Company and its transfer agent, of an opinion that such Securities Act legend need not appear on such certificate.

6. Restriction on Redemption.  Each of the Holders shall not, without the prior written consent of the Company and the Operating Partnership, exercise the redemption right afforded to it pursuant to Section 8.6 to the OP Partnership Agreement prior to one (1) year following the date hereof. 

7. Miscellaneous.

(a) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified, supplemented or waived, nor may consent to departures therefrom be given, without the written consent of the Company and the Holders of a majority of the outstanding Registrable Securities; provided, however, that no amendment, modification, supplement or waiver of, or consent to the departure from, the provisions of this Agreement, which has the purpose or effect of reducing, impairing or adversely affecting the right of any Holder, shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder of Registrable Securities.

(b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier or any courier guaranteeing overnight delivery, (i) if to a Holder, at such Holder’s registered address appearing on the share register of the Company or the Operating Partnership or (ii) if to the Company or the Operating Partnership, at 4545 Airport Way, Denver, Colorado 80239, Attn: General Counsel.  All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; or at the time delivered if delivered by an air courier guaranteeing overnight delivery. 

(c) Successors and Assigns. 

(i) This Agreement shall inure to the benefit of and be binding on the successors, assigns and permitted transferees of each of the parties, including, without limitation, subsequent Holders. If any successor, assignee or transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by all of the terms and provisions hereof.     

(ii) Each Holder agrees that in no event will it transfer, sell, assign, pledge, hypothecate or otherwise dispose of (collectively, a “Transfer”) any Common Units or shares of Common Stock issued in exchange therefore unless and until (A) with respect to a Transfer of Common Units, there is compliance with the requirements contained in this Agreement, the Contribution Agreement, the OP Partnership Agreement, and, with respect to shares of Common Stock, there is compliance with the requirements contained in this Agreement relating to compliance with securities laws, the ownership limits set forth in the Company’s Articles of Incorporation, as amended, and the Contribution Agreement; (B) with respect to a Transfer of Common Units, each Holder shall have notified the Operating Partnership of the proposed disposition and shall have furnished the Operating Partnership with a statement of the circumstances surrounding the disposition; (C) with respect to a Transfer of shares of Common Stock, other than with respect to a Transfer of shares of Common Stock pursuant to an effective registration statement, each Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the disposition in order for the Company to review compliance with securities laws; (D) other than with respect to a Transfer of shares of Common Stock pursuant to an effective registration statement, if requested by the Operating Partnership or the Company, respectively, at the expense of each Holder or its designee, it shall have furnished to the Operating Partnership or the Company, as applicable, an opinion of counsel and such other information, reasonably satisfactory to the Operating Partnership or the Company, as applicable, to the effect that such Transfer may be consummated without registration under the Securities Act; and (E) with respect to a Transfer of Common Units, the transferee executes and delivers an assumption of the terms and conditions of the 

 

 

Contribution Agreement as to the Common Units and the terms and conditions of the OP Partnership Agreement satisfactory to the Operating Partnership and with respect to a Transfer of shares of Common Stock, to the extent the transferee would be a “Holder” hereunder, such transferee executes and delivers an assumption of the terms and conditions herein.  In addition, a condition precedent to any Transfer of Common Units or shares of Common Stock issued in exchange for Common Units (other than Transfers of shares of Common Stock pursuant to an effective registration statement) shall be the execution by the transferee of investment representations and agreements reasonably acceptable to the Operating Partnership or the Company, as applicable, regarding securities limitations on such transferee’s disposition of Common Units and shares of Common Stock.  Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Holder to sell any Registrable Securities pursuant to any effective registration statement.

(iii) Each Holder shall pay all expenses incident to such Transfer by it of its Common Units, including (i) all registration, listing and filing fees and (ii) fees and disbursements of counsel, including in-house counsel, for the Company and each Holder and of the independent public accountants of the Company.

(d) 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.

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

(f) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland without giving effect to the conflicts of law provisions thereof.

(h) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of any other party under this Agreement in accordance with the terms and conditions of this Agreement in any court of the United States or any State thereof having jurisdiction.

(i) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

[Signature Page Follows]

 

 

 

 

 

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

 

	
THE COMPANY:

	
 

	
PROLOGIS, INC.

	
 

	
By:
	
 
	
 /s/ Edward S. Nekritz

	
 
	
 
	
Name: Edward S. Nekritz

	
 
	
 
	
Title: Chief Legal Officer, General Counsel and Secretary

	
 
	
 
	
 

	
THE OPERATING PARTNERSHIP:

	
 

	
PROLOGIS, L.P.

 

	
By:
	
 
	
Prologis, Inc.

	
 
	
 
	
its general partner

 

	
By:
	
 
	
 /s/ Edward S. Nekritz

	
 
	
 
	
Name: Edward S. Nekritz

	
 
	
 
	
Title: Chief Legal Officer, General Counsel and Secretary

 

[Signature Page to Registration Rights Agreement]

 

	
THE HOLDERS:

	
 

	
ROBERT SAVAGE

	
 

	
 /s/ Robert Savage

	
 

	
MADELEINE SAVAGE GST TRUST

	
 
	
 
	
 

	
By:
	
 
	
 /s/ Daniel S. Leppo

	
 
	
 
	
Name: Daniel S. Leppo

	
 
	
 
	
Title: Trustee

	
 
	
 
	
 

	
SOPHIE SAVAGE GST TRUST

	
 

	
By:
	
 
	
 /s/ Daniel S. Leppo

	
 
	
 
	
Name: Daniel S. Leppo

	
 
	
 
	
Title: Trustee

	
 
	
 
	
 

	
JEFFREY E. KELTER

	
 

	
 /s/ Jeffrey E. Kelter

	
 

	
KELTER 2013 FAMILY TRUST

	
 
	
 
	
 

	
By:
	
 
	
 /s/ Hume R. Steyer

	
 
	
 
	
Name: Hume R. Steyer

	
 
	
 
	
Title: Trustee

	
 
	
 
	
 

	
JEFFREY E. KELTER GRAT III

	
 

	
By:
	
 
	
 /s/ Jeffrey E. Kelter

	
 
	
 
	
Name: 

	
 
	
 
	
Title:

 

 

 

[Signature Page to Registration Rights Agreement]

 

Exhibit A

HOLDERS

	
 
	
1.
	
Robert Savage

	
 
	
2.
	
Madeline Savage GST Trust 

	
 
	
3.
	
Sophie Savage GST Trust

	
 
	
4.
	
Jeffrey E. Kelter

	
 
	
5.
	
Kelter 2013 Family Trust

	
 
	
6.
	
Jeffrey E. Kelter GRAT III

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