Document:

a50948766_ex101.htm

Exhibit 10.1

 

 

Execution Version

 

 

 

 

MASTER AGREEMENT

 

 

by and between

 

 

 

 

CONTANGO ORE, INC.

 

 

and

 

 

ROYAL GOLD, INC.

 

 

 

dated as of

 

September 29, 2014

 

  

  

  

 

	  	
TABLE OF CONTENTS

	  
	  
	  	  	
Page

	  
	
Article I       The Closing

	
1

	
Section 1.01

	
Closing

	
1

	
Article II      Representations and Warranties of the Company

	
2

	
Section 2.01

	
Organization; Standing and Power

	
2

	
Section 2.02

	
Authority; Non-contravention; Governmental Consents

	
2

	
Section 2.03

	
Legal Actions; Orders

	
4

	
Section 2.04

	
Absence of Certain Changes or Events

	
4

	
Section 2.05

	
Brokers' and Finders' Fees

	
4

	
Section 2.06

	
Proxy Statement

	
4

	
Section 2.07

	
Joint Venture Agreement Representations and Warranties

	
5

	
Article III     Representations and Warranties of Royal Gold

	
5

	
Section 3.01

	
Organization

	
5

	
Section 3.02

	
Authority; Non-contravention; Governmental Consents

	
5

	
Section 3.03

	
Proxy Statement

	
6

	
Section 3.04

	
Legal Actions; Orders

	
6

	
Article IV     Covenants

	
6

	
Section 4.01

	
Conduct of Business of the Company

	
6

	
Section 4.02

	
Conduct

	
8

	
Section 4.03

	
Access to Information; Confidentiality

	
8

	
Section 4.04

	
No Solicitation

	
8

	
Section 4.05

	
Stockholders Meeting; Preparation of Proxy Materials

	
11

	
Section 4.06

	
Notices of Certain Events

	
12

	
Section 4.07

	
Reasonable Best Efforts

	
12

	
Section 4.08

	
Public Announcements

	
13

	
Section 4.09

	
Formation of the Joint Venture

	
13

	
Article V      Conditions

	
13

	
Section 5.01

	
Conditions to Each Party's Obligation to Effect the Transactions

	
13

	
Section 5.02

	
Conditions to Obligations of Royal Gold

	
14

	
Section 5.03

	
Conditions to Obligation of the Company

	
15

 

  

  

  

 

Execution Version

 

 

	
Article VI     Termination, Amendment and Waiver

	
16

	
Section 6.01

	
Termination By Mutual Consent

	
16

	
Section 6.02

	
Termination By Either Royal Gold or the Company

	
16

	
Section 6.03

	
Termination By Royal Gold

	
17

	
Section 6.04

	
Termination By the Company

	
17

	
Section 6.05

	
Notice of Termination; Effect of Termination

	
18

	
Section 6.06

	
Fees and Expenses Following Termination

	
18

	
Section 6.07

	
Amendment

	
19

	
Section 6.08

	
Extension; Waiver

	
19

	
Article VII    Miscellaneous

	
19

	
Section 7.01

	
Definitions

	
19

	
Section 7.02

	
Interpretation; Construction

	
25

	
Section 7.03

	
Survival

	
25

	
Section 7.04

	
Governing Law

	
26

	
Section 7.05

	
Submission to Jurisdiction

	
26

	
Section 7.06

	
Waiver of Jury Trial

	
26

	
Section 7.07

	
Notices

	
27

	
Section 7.08

	
Entire Agreement

	
27

	
Section 7.09

	
No Third Party Beneficiaries

	
28

	
Section 7.10

	
Severability

	
28

	
Section 7.11

	
Assignment

	
28

	
Section 7.12

	
Remedies

	
28

	
Section 7.13

	
Specific Performance

	
28

	
Section 7.14

	
Counterparts; Effectiveness

	
29

  

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Execution Version

 

 

Exhibits

 

	
Exhibit A

	Form of Voting Agreement
	Exhibit B 	Form of Assignment Agreements 
	Exhibit C 	Form of Joint Venture Agreement 
	Exhibit D 	Form of Joint Venture Certificate 
	Exhibit E 	Form of Tetlin Estoppel and Agreement 
	Exhibit F 	Form of Tetlin Stability Agreement 
	Exhibit G 	Tetlin Resolution (Council) 
	Exhibit H 	Tetlin Resolution (Tribe) 
	Exhibit I 	Tetlin Ordinance 

 

  

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MASTER AGREEMENT

 

This Master Agreement (this “Agreement”), is entered into as of September 29, 2014, by and between CONTANGO ORE, INC., a Delaware corporation (the “Company”) and ROYAL GOLD, INC. a Delaware corporation (“Royal Gold”). Capitalized terms used herein (including in the immediately preceding sentence) and not otherwise defined herein shall have the meanings set forth in Section 7.01 hereof.

 

RECITALS

 

 WHEREAS, the parties intend that the Company and Royal Gold enter into the Joint Venture Agreement (directly or through their Affiliates) on the terms and subject to the conditions set forth herein;

 

 WHEREAS, the Board of Directors of the Company (the “Company Board”) has unanimously (a) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into this Agreement and the other Transaction Agreements, in each case with Royal Gold or the other counterparties thereto, (b) approved the execution, delivery and performance of this Agreement and the other Transaction Agreements and the consummation of the Transactions, and (c) resolved, subject to the terms and conditions set forth in this Agreement, to recommend the approval of the Transactions by the stockholders of the Company;

 

 WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to Royal Gold to enter into this Agreement, certain Company stockholders representing thirty-nine and one tenth percent (39.1%) of the outstanding Company Common Stock have entered into voting agreements, in substantially the form set forth on Exhibit A hereto, pursuant to which, among other things, each of such Company stockholders has agreed to vote his, her or its Company Common Stock in favor of the Transactions (the “Voting Agreement”); and

 

 WHEREAS, the parties desire to make certain representations, warranties, covenants and agreements in connection with the transactions contemplated by this Agreement and also to prescribe certain conditions to the Transactions.

 

 NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants and agreements contained in this Agreement, the parties, intending to be legally bound, agree as follows:

 

ARTICLE I

The Closing

 

Section 1.01 Closing.  Upon the terms and subject to the conditions set forth herein, the closing of the Transactions (the “Closing”) will take place at 10 am, mountain time, as soon as practicable (and, in any event, within one (1) Business Day) after satisfaction or, to the extent permitted hereunder, waiver of all conditions to the Transactions set forth in Article V (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted hereunder, waiver of all such conditions), unless this Agreement has been terminated pursuant to its terms or unless another time or date is agreed to in writing by the parties hereto. The actual date of the Closing is hereinafter referred to as the “Closing Date”.

 

  

  

  

 

Execution Version

 

 

ARTICLE II

Representations and Warranties of the Company

 

Except as set forth in the correspondingly numbered Section of the disclosure letter, dated the date of this Agreement and delivered by the Company to Royal Gold prior to the execution of this Agreement (the “Company Disclosure Letter”), the Company hereby represents and warrants to Royal Gold as follows:

 

Section 2.01 Organization; Standing and Power.  The Company and each of its Subsidiaries is a corporation, limited liability company or other legal entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of its respective jurisdiction of organization, and has the requisite corporate, limited liability company or other organizational, as applicable, power and authority to own, lease and operate its assets and to carry on its business as now conducted. Each of the Company and its Subsidiaries is duly qualified or licensed to do business as a foreign corporation, limited liability company or other legal entity and is in good standing (with respect to jurisdictions that recognize the concept of good standing) in each jurisdiction where the character of the assets and properties owned, leased or operated by it or the nature of its business makes such qualification or license necessary, except where the failure to be so qualified or licensed or to be in good standing, would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

Section 2.02 Authority; Non-contravention; Governmental Consents.

 

(a) Authority.  The Company has all requisite corporate power and authority to enter into and to perform its obligations under this Agreement and the other Transaction Agreements to which it is a party and, subject to, in the case of the consummation of the Transactions, approval of the Transactions by the affirmative vote or consent of the holders of a majority of the outstanding shares of Company Common Stock (the “Requisite Company Vote”), to consummate the Transactions to which it is a party. The execution and delivery of this Agreement and the other Transaction Agreements by the Company and the consummation by the Company of the Transactions has been duly authorized by all necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement or the other Transaction Agreements or to consummate the Transactions, subject only, in the case of consummation of the Transactions, to the receipt of the Requisite Company Vote. The Requisite Company Vote is the only vote or consent of the holders of any class or series of the Company’s capital stock necessary to approve and adopt this Agreement and consummate the Transactions. This Agreement has been duly executed and delivered by the Company and, assuming due execution and delivery by Royal Gold, constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar Laws affecting creditors rights generally and by general principles of equity.

 

  

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(b) Non-contravention.  The execution, delivery and performance of this Agreement and the other Transaction Agreements by the Company, and the consummation by the Company of the Transactions, do not and will not: (i) contravene or conflict with, or result in any violation or breach of, the certificate of incorporation or bylaws of the Company or any of its Subsidiaries; (ii) subject to compliance with the requirements set forth in clauses (i) and (ii) of Section 2.02(c) and, in the case of the consummation of the Transactions, obtaining the Requisite Company Vote, conflict with or violate any Law applicable to the Company, any of its Subsidiaries or any of their respective properties or assets; (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation, or require any Consent under, any Contract to which the Company or any of its Subsidiaries is a party or otherwise bound as of the date hereof; or (iv) result in the creation of a Lien (other than Permitted Liens) on any of the properties or assets of the Company or any of its Subsidiaries (including the Contributed Assets), except, with respect to clause (iv) any such Liens which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

(c) Governmental Consents.  No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to (any of the foregoing being a “Consent”), any supranational, national, state, municipal, local or foreign government, any instrumentality, subdivision, court, administrative agency or commission or other governmental authority, or any quasi-governmental or private body exercising any regulatory or other governmental or quasi-governmental authority (a “Governmental Entity”) is required to be obtained or made by the Company in connection with the execution, delivery and performance by the Company of this Agreement or the other Transaction Agreements or the consummation by the Company of the Transactions, except for: (i) the filing of the Company Proxy Statement with the Securities and Exchange Commission (“SEC”) in accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such reports under the Exchange Act as may be required in connection with this Agreement and the Transactions; and (ii) the other Consents, if any, of Governmental Entities listed in Section 2.02(c) of the Company Disclosure Letter, and except those that the failure to make or obtain would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

(d) Board Approval.  The Company Board, by resolutions duly adopted by unanimous vote at a meeting of all directors of the Company duly called and held and, as of the date hereof, not subsequently rescinded or modified in any way, has, as of the date hereof (i) determined that this Agreement, the other Transaction Agreements and the Transactions are fair to, and in the best interests of, the Company’s stockholders, (ii) approved and declared advisable this Agreement, the other Transaction Agreements and the Transactions, in accordance with the DGCL, (iii) directed that the Transactions be submitted to Company’s stockholders for approval, and (iv) resolved to recommend that Company stockholders approve the Transactions (collectively, the “Company Board Recommendation”) and directed that such matter be submitted for consideration of the stockholders of the Company at the Company Stockholders Meeting.

 

  

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Section 2.03 Legal Actions; Orders.  As of the date hereof, there is no material claim, action, suit, arbitration, proceeding or, to the Knowledge of the Company, governmental investigation (each, a Legal Action”), in each case, with respect to the Contributed Assets, pending, or to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries or any of their respective properties or assets, by or before any Governmental Entity.  None of the Company or any of its Subsidiaries is subject to any material order, writ, assessment, decision, injunction, decree, ruling or judgment of a Governmental Entity (‘Order”), in each case, with respect to the Contributed Assets, whether temporary, preliminary or permanent.

 

Section 2.04 Absence of Certain Changes or Events.  Since June 30, 2014, except in connection with the execution and delivery of this Agreement and the other Transaction Agreements and the consummation of the Transactions, the business of the Company and each of its Subsidiaries has been conducted in the ordinary course of business and there has not been or occurred:

 

(a) any Company Material Adverse Effect or any event, condition, change or effect that could reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; or

 

(b) any event, condition, action or effect that, if taken during the period from the date of this Agreement through the Closing, would constitute a breach of Section 4.01.

 

Section 2.05 Brokers’ and Finders’ Fees. Except for fees payable to Company Financial Advisor pursuant to the Engagement Letter, a correct and complete copy of which has been provided to Royal Gold, the Company has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement, the other Transaction Agreements or the Transactions.

 

Section 2.06 Proxy Statement.  None of the information included or incorporated by reference in the letter to the stockholders, notice of meeting, proxy statement and forms of proxy (collectively, the “Company Proxy Statement”), to be filed with the SEC in connection with the Transactions, will, at the date it is first mailed to the Company’s stockholders or at the time of the Company Stockholders Meeting or at the time of any amendment or supplement thereof, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, no representation or warranty is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by Royal Gold expressly for inclusion or incorporation by reference in the Company Proxy Statement. The Company Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act.

 

  

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Execution Version

 

 

Section 2.07 Joint Venture Agreement Representations and Warranties.  The representations and warranties of Company or its wholly-owned subsidiary set forth in Section 2.2 of the Joint Venture Agreement are hereby incorporated by reference into this Agreement as if made by Company for all purposes of this Agreement.

 

ARTICLE III

Representations and Warranties of Royal Gold

 

Royal Gold hereby represents and warrants to the Company as follows:

 

Section 3.01 Organization.  Royal Gold is a corporation duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation.

 

Section 3.02 Authority; Non-contravention; Governmental Consents.

 

(a) Authority. Royal Gold has all requisite corporate power and authority to enter into and to perform its obligations under this Agreement and the other Transaction Agreements to which it is a party and to consummate the Transactions. The execution and delivery of this Agreement and the other Transaction Agreements to which it is a party by Royal Gold and the consummation by Royal Gold of the Transactions have been duly authorized by all necessary corporate action on the part of Royal Gold and no other corporate proceedings on the part of Royal Gold are necessary to authorize the execution and delivery of this Agreement or the other Transaction Agreements to which it is a party or to consummate the Transactions. This Agreement has been duly executed and delivered by Royal Gold and, assuming due execution and delivery by the Company, constitutes the valid and binding obligation of Royal Gold, enforceable against Royal Gold in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar Laws affecting creditors rights generally and by general principles of equity.

 

(b) Non-contravention.  The execution, delivery and performance of this Agreement and the other Transaction Agreements to which it is a party by Royal Gold and the consummation by Royal Gold of the Transactions, do not and will not: (i) contravene or conflict with, or result in any violation or breach of, the certificate of incorporation or by-laws of Royal Gold; (ii) subject to compliance with the requirements set forth in Section 3.02(c), conflict with or violate any Law applicable to Royal Gold or any of its properties or assets; (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation, or require any Consent under any Contract to which Royal Gold or its Subsidiaries are a party or otherwise bound; or (iv) result in the creation of any Lien (other than Permitted Liens) on any of the properties or assets of Royal Gold, except, with respect to clause (iv) any such Liens which would not reasonably be expected to have, individually or in the aggregate, a Royal Gold Material Adverse Effect.

 

  

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Execution Version

 

 

(c) Governmental Consents. No Consent of any Governmental Entity is required to be obtained or made by Royal Gold in connection with the execution, delivery and performance by Royal Gold of this Agreement or the other Transaction Agreements or the consummation by Royal Gold of the Transactions, except for the filing of the Company Proxy Statement with the SEC in accordance with the Exchange Act, and such reports under the Exchange Act as may be required in connection with this Agreement, the other Transaction Agreements and the Transactions, and except those that the failure to make or obtain would not reasonably be expected to have, individually or in the aggregate, a Royal Gold Material Adverse Effect.

 

Section 3.03 Proxy Statement.  None of the information with respect to Royal Gold that Royal Gold or any of its Representatives furnishes in writing to the Company expressly for use in the Company Proxy Statement, will, at the date such Proxy Statement is first mailed to the Company’s stockholders or at the time of the Company Stockholders Meeting or at the time of any amendment or supplement thereof, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, no representation or warranty is made by Royal Gold with respect to statements made or incorporated by reference therein supplied by the Company or its Representatives expressly for inclusion or incorporation by reference in the Company Proxy Statement.

 

Section 3.04 Legal Actions; Orders.  As of the date hereof, there is no material Legal Action pending, or to the Knowledge of Royal Gold, threatened against Royal Gold or any of its Subsidiaries or any of their respective properties or assets, in each case by or before any Governmental Entity. None of Royal Gold or any of its Subsidiaries is subject to any material Order, whether temporary, preliminary or permanent.

 

ARTICLE IV

Covenants

 

Section 4.01 Conduct of Business of the Company.  The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the Closing, except as expressly contemplated by this Agreement or as required by applicable Law or with the prior written consent of Royal Gold, conduct its business in the ordinary course of business consistent with past practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve substantially intact the Contributed Assets (including maintaining the Tetlin Lease and all claims; it being understood that Company or its Affiliate shall timely pay any amounts due and owing under the Tetlin Lease and in order to maintain the claims) and its and its Subsidiaries’ business organization. Without limiting the generality of the foregoing, between the date of this Agreement and the earlier of the termination of this Agreement and the Closing, except as otherwise expressly contemplated by this Agreement, including pursuant to Section 4.04, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Royal Gold:

 

  

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(a) Enter into, create, incur or assume (i) any borrowings under capital leases relating to the Contributed Assets or (ii) any obligations which would have a Company Material Adverse Effect;

 

(b) Sell, transfer, lease, or permit the incurrence of any Lien (other than any Permitted Lien) on, any of the Contributed Assets or, with respect to the Contributed Assets;

 

(c) Enter into any agreements or commitments relating to the Contributed Assets with another Person, except on commercially reasonable terms in the ordinary course of business;

 

(d) Violate in any material respect any Law applicable the Contributed Assets;

 

(e) Violate in any material respect any Contract or Governmental Consent applicable to the Contributed Assets;

 

(f) Terminate or amend the Tetlin Lease;

 

(g) Commence a Legal Action which would affect in any adverse manner the Contributed Assets;

 

(h) Purchase, lease, or otherwise acquire any assets relating to the Contributed Assets, except for supplies, materials, services and equipment purchased, leased, or acquired by the Company in the ordinary course of business consistent with past practice;

 

(i) Enter into any royalty, streaming, financing, joint venture or partnership agreement relating to the Contributed Assets;

 

(j) With respect to the Contributed Assets, other than in the ordinary course of business, (i)  make any changes in capital expenditures or deferrals of capital expenditures; or (ii) change any of its business policies;

 

(k) Amend the terms of its certificate of incorporation or bylaws in any manner that would be reasonably likely to materially impede or delay the consummation of the Transactions;

 

(l) With respect to the Contributed Assets, make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any amendment to a Tax return, enter into any closing agreement with a Governmental Entity relating to Taxes, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material Taxes if any of the foregoing could reasonably be expected to adversely and materially impact the Company or Royal Gold;

 

(m) Intentionally take any other action or fail to exercise commercially reasonable efforts to take any action that would cause a Company Material Adverse Effect; or

 

(n) Enter into any Contract or agree, in writing or otherwise, to take any of the actions described in Section 4.01(a) through Section 4.01(m) above.

 

  

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Execution Version

 

 

Section 4.02 Conduct.  From the date of this Agreement until the earlier to occur of the Closing or the termination of this Agreement in accordance with the terms set forth in Article VI, the Company and Royal Gold shall not, and shall not permit any of their respective Subsidiaries to, take, or agree or commit to take, any action that would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Transaction.

 

Section 4.03 Access to Information; Confidentiality.

 

(a) From the date of this Agreement until the earlier to occur of the Closing or the termination of this Agreement in accordance with the terms set forth in Article VI, the Company shall, and shall cause its Subsidiaries to, afford to Royal Gold’s Representatives reasonable access, at reasonable times and in a manner as shall not unreasonably interfere with the business or operations of the Company or any Subsidiary thereof, to the officers, employees, accountants, agents, properties, offices and other facilities and to all books, records, contracts and other assets of the Company and its Subsidiaries (including the Contributed Assets), and the Company shall, and shall cause its Subsidiaries to, furnish promptly to Royal Gold such information concerning the business and properties of the Company and its Subsidiaries as Royal Gold may reasonably request from time to time. Neither the Company nor any of its Subsidiaries shall be required to provide access to or disclose information where such access or disclosure would jeopardize the protection of attorney-client privilege or contravene any Law. No investigation shall affect the Company’s representations and warranties contained herein, or limit or otherwise affect the remedies available to Royal Gold pursuant to this Agreement.

 

(b) Royal Gold and the Company shall comply with, and shall cause their respective Representatives to comply with, all of their respective obligations under the Confidentiality Agreement, dated March 6, 2014, between Royal Gold and the Company (the “Confidentiality Agreement”), which shall survive the termination of this Agreement in accordance with the terms set forth therein.

 

Section 4.04 No Solicitation.

 

(a) The Company shall not, and shall cause its Subsidiaries not to, and shall not authorize its and its Subsidiaries’ directors, officers, employees, advisors and investment bankers (with respect to any Person, the foregoing Persons are referred to herein as such Person’s “Representatives”) to solicit, initiate or knowingly take any action to encourage the submission of any Alternative Proposal or the making of any proposal that could reasonably be expected to lead to any Alternative Proposal, or, subject to Section 4.04(b), (i) conduct or engage in any discussions or negotiations with, disclose any non-public information relating to the Company or any of its Subsidiaries to, afford access to the business, properties, assets, books or records of the Company or any of its Subsidiaries to, or knowingly assist, participate in, facilitate or knowingly encourage any effort by, any third party that is seeking to make, or has made, any Alternative Proposal, (ii) (A) amend or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its Subsidiaries or (B) approve any transaction under, or any third party becoming an “interested stockholder” under, Section 203 of the DGCL, or (iii) enter into any agreement in principle, letter of intent, memorandum of understanding, term sheet, acquisition agreement, merger agreement, option agreement, or other Contract relating to any Alternative Proposal (each, a “Alternative Transaction Agreement”). Subject to Section 4.04(b), neither the Company Board nor any committee thereof shall fail to make, withdraw, amend, modify or materially qualify, in a manner adverse to Royal Gold, the Company Board Recommendation, or recommend an Alternative Proposal, fail to recommend against acceptance of any tender offer or exchange offer for the shares of Company Common Stock within ten (10) Business Days after the commencement of such offer, or make any public statement inconsistent with the Company Board Recommendation, or resolve or agree to take any of the foregoing actions (any of the foregoing, a “Company Adverse Recommendation Change”). The Company shall, and shall cause its Subsidiaries to cease immediately and cause to be terminated, and shall not authorize of its or their Representatives to continue, any and all existing activities, discussions or negotiations, if any, with any third party conducted prior to the date hereof with respect to any Alternative Proposal and shall enforce any obligation of any such third party (and its agents and advisors) under any confidentiality or similar agreement with any such third party (or its agents or advisors) in possession of non-public information in respect of the Company or any of its Subsidiaries that was furnished by or on behalf of the Company and its Subsidiaries to return or destroy (and confirm destruction of) all such information.

 

  

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(b) Notwithstanding Section 4.04(a), prior to the receipt of the Company Requisite Vote, the Company Board may, and may authorize its Representatives to, subject to Section 4.04(c), (i) participate in negotiations or discussions with any third party that has made (and not withdrawn) a bona fide, unsolicited Alternative Proposal in writing that the Company Board believes in good faith, after consultation with outside legal counsel and the Company Financial Advisor, constitutes or would reasonably be expected to result in a Superior Proposal, (ii) thereafter furnish to such third party non-public information relating to the Company or any of its Subsidiaries pursuant to an executed confidentiality agreement that constitutes an Acceptable Confidentiality Agreement, (iii) following receipt of and on account of a Superior Proposal, make a Company Adverse Recommendation Change, and/or (iv) take any action that any court of competent jurisdiction orders the Company to take (which order remains unstayed), but in each case referred to in the foregoing clauses (i) through (iv), only if the Company Board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably be expected to cause the Company Board to be in breach of its fiduciary duties under applicable Law.

 

(c) The Company Board shall not take any of the actions referred to in clauses (i) through (iv) of Section 4.04(b) unless the Company shall have delivered to Royal Gold a prior written notice advising Royal Gold that it intends to take such action. The Company shall notify Royal Gold promptly (but in no event later than forty-eight (48) hours) after it or any of its Representatives receives any Alternative Proposal, any inquiry that would reasonably be expected to lead to an Alternative Proposal, any request for non-public information relating to the Company or any of its Subsidiaries or for access to the business, properties, assets, books or records of the Company or any of its Subsidiaries by any third party.  In such notice, the Company shall identify the third party making, and the material terms and conditions of, any such Alternative Proposal, indication or request. The Company shall keep Royal Gold reasonably informed, on a current basis, of the status and material terms of any such Alternative Proposal, indication or request, including any material amendments or proposed amendments as to price and other material terms thereof.  The Company shall provide Royal Gold with at least forty-eight (48) hours prior notice of any meeting of the Company Board (or such lesser notice as is provided to the members of the Company Board) at which the Company Board is reasonably expected to consider any Alternative Proposal.  The Company shall promptly provide Royal Gold with a list of any non-public information concerning the Company’s business, present or future performance, financial condition or results of operations, provided to any third party, and, to the extent such information has not been previously provided to Royal Gold, copies of such information.  The Company shall ensure that any Acceptable Confidentiality Agreement to which it is a party shall permit the Company to comply with its obligations set forth in this Section 4.04(c).

 

  

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(d) Except as set forth in this Section 4.04(d), the Company Board shall not make any Company Adverse Recommendation Change or enter into (or permit any Subsidiary to enter into) an Alternative Transaction Agreement. Notwithstanding the foregoing, at any time prior to the receipt of the Company Requisite Vote, the Company Board may make a Company Adverse Recommendation Change or enter into (or permit any Subsidiary to enter into) an Alternative Transaction Agreement, if: (i) the Company promptly notifies Royal Gold, in writing, at least three (3) Business Days (the “Notice Period”) before making a Company Adverse Recommendation Change or entering into (or causing a Subsidiary to enter into) an Alternative Transaction Agreement, of its intention to take such action with respect to a Superior Proposal, which notice shall state that the Company has received an Alternative Proposal that the Company Board intends to declare a Superior Proposal and that the Company Board intends to make a Company Adverse Recommendation Change and/or the Company intends to enter into an Alternative Transaction Agreement; (ii) the Company attaches to such notice the most current version of the proposed agreement, if any (which version shall be updated on a prompt basis) and the identity of the third party making such Superior Proposal; (iii) the Company shall, and shall cause its Subsidiaries to, and shall use its commercially reasonable efforts to cause its and its Subsidiaries’ Representatives to, during the Notice Period, negotiate with Royal Gold in good faith to make such adjustments in the terms and conditions of this Agreement and the other Transaction Agreements so that such Alternative Proposal ceases to constitute a Superior Proposal, if Royal Gold, in its discretion, proposes to make such adjustments (it being agreed that in the event that, after commencement of the Notice Period, there is any material revision to the terms of a Superior Proposal, including, any revision in price, the Notice Period shall be extended, if applicable, to ensure that at least three (3) Business Days remains in the Notice Period subsequent to the time the Company notifies Royal Gold of any such material revision (it being understood that there may be multiple extensions in the event there are multiple revisions to the terms of a Superior Proposal)); and (iv) the Company Board determines in good faith, after consulting with outside legal counsel and its Company Financial Advisor, that such Alternative Proposal continues to constitute a Superior Proposal after taking into account any adjustments made by Royal Gold during the Notice Period in the terms and conditions of the Transaction Agreements.

 

  

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Section 4.05 Stockholders Meeting; Preparation of Proxy Materials.

 

(a) The Company shall take all action necessary to duly call, give notice of, convene and hold the Company Stockholders Meeting as soon as reasonably practicable after the date of this Agreement, and, in connection therewith, the Company shall mail the Company Proxy Statement to the holders of Company Common Stock in advance of such meeting. Except to the extent that the Company Board shall have effected a Company Adverse Recommendation Change as permitted by Section 4.04(b) hereof, the Company Proxy Statement shall include the Company Board Recommendation. Subject to Section 4.04(d) hereof, the Company shall use reasonable best efforts to (i) solicit from the holders of Company Common Stock proxies in favor of the approval of the Transactions and (ii) take all other actions necessary or advisable to secure the vote or consent of the holders of Company Common Stock required by applicable Law to obtain such approval. The Company shall keep Royal Gold updated with respect to proxy solicitation results as requested Royal Gold. The Company shall not postpone or adjourn the Company Stockholders Meeting without the consent of Royal Gold (other than in order to obtain a quorum of its stockholders). Nothing herein shall be deemed to relieve the Company of its obligation to submit the Transactions to its stockholders for a vote on the approval thereof.  The Company agrees that, unless this Agreement shall have been terminated in accordance with Article VI, its obligations to hold the Company Stockholders Meeting pursuant to this Section 4.05 shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Superior Proposal or by any Company Adverse Recommendation Change.

 

(b) In connection with the Company Stockholders Meeting, as soon as reasonably practicable following the date of this Agreement the Company shall prepare and file the Company Proxy Statement with the SEC. Royal Gold and the Company will cooperate and consult with each other in the preparation of the Company Proxy Statement. Without limiting the generality of the foregoing, Royal Gold will furnish to the Company the information relating to it required by the Exchange Act and the rules and regulations promulgated thereunder to be set forth in the Company Proxy Statement. The Company shall not file the Company Proxy Statement, or any amendment or supplement thereto, without providing Royal Gold a reasonable opportunity to review and comment thereon (which comments shall be reasonably considered by the Company). The Company shall use its reasonable best efforts to resolve, and each party agrees to consult and cooperate with the other party in resolving, all SEC comments with respect to the Company Proxy Statement as promptly as practicable after receipt thereof and to cause the Company Proxy Statement in definitive form to be cleared by the SEC and mailed to the Company’s stockholders as promptly as reasonably practicable following filing with the SEC. The Company agrees to consult with Royal Gold prior to responding to SEC comments with respect to the preliminary Company Proxy Statement. Each of Royal Gold and the Company agree to correct any information provided by it for use in the Company Proxy Statement which shall have become false or misleading and the Company shall promptly prepare and mail to its stockholders an amendment or supplement setting forth any such correction. The Company shall as soon as reasonably practicable (i) notify Royal Gold of the receipt of any comments from the SEC with respect to the Company Proxy Statement and any request by the SEC for any amendment to the Company Proxy Statement or for additional information and (ii) provide Royal Gold with copies of all written correspondence between the Company and its Representatives, on the one hand, and the SEC, on the other hand, with respect to the Company Proxy Statement.

 

  

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Section 4.06 Notices of Certain Events.  The Company shall notify Royal Gold, and Royal Gold shall notify the Company, promptly of (i) any notice from any Person alleging that the consent of such Person is or may be required in connection with the Transactions, (ii) any notice from any Governmental Entity in connection with the Transactions, (iii) any Legal Actions commenced, or to such party’s Knowledge, threatened, against the Company or any of its Subsidiaries or Royal Gold or its Subsidiaries, as applicable, that are related to the Transactions, and (iv) any event, change or effect between the date of this Agreement and the Closing which causes or is reasonably likely to cause the failure of the conditions set forth in Section 5.02 of this Agreement (in the case of the Company and its Subsidiaries) or Section 5.03 of this Agreement (in the case of Royal Gold), to be satisfied. In no event shall (x) the delivery of any notice by a party pursuant to this Section 4.06 limit or otherwise affect the respective rights, obligations, representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement, or (y) disclosure by the Company or Royal Gold be deemed to amend or supplement the Company Disclosure Letter or constitute an exception to any representation or warranty. This Section 4.06 shall not constitute a covenant or agreement for purposes of Section 5.02(b) or Section 5.03(b).

 

Section 4.07 Reasonable Best Efforts.

 

(a) Upon the terms and subject to the conditions set forth in this Agreement (including those contained in this Section 4.07), each of the parties hereto shall, and shall cause its Subsidiaries to, use its reasonable best 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 and make effective, and to satisfy all conditions to, in the most expeditious manner practicable, the Transactions, including (i) the obtaining of all necessary permits, waivers, Consents, approvals and actions or nonactions from Governmental Entities and the making of all necessary registrations and filings (including filings with Governmental Entities) and the taking of all steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entities, (ii) the obtaining of all necessary consents or waivers from third parties, and (iii) the execution and delivery of any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of this Agreement and the other Transaction Agreements. The Company and Royal Gold shall, subject to applicable Law, promptly (x) cooperate and coordinate with the other in the taking of the actions contemplated by clauses (i), (ii) and (iii) immediately above and (y) supply the other with any information that may be reasonably required in order to effectuate the taking of such actions. Each party hereto shall promptly inform the other party or parties hereto, as the case may be, of any notice from any Governmental Entity regarding any of the Transactions. If the Company or Royal Gold receives a request for additional information or documentary material from any Governmental Entity with respect to the Transactions, then it shall use reasonable best efforts to make, or cause to be made, as soon as reasonably practicable and after consultation with the other party, an appropriate response in compliance with such request, and, if permitted by applicable Law and by any applicable Governmental Entity, provide the other party’s counsel with advance notice and the opportunity to attend and participate in any meeting with any Governmental Entity in respect of any filing made thereto in connection with the Transactions.

 

  

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(b) In the event that any administrative or judicial action or proceeding is instituted (or threatened to be instituted) by a Governmental Entity or private party challenging the Transactions or any Transaction Agreement, the Company shall cooperate in all respects with Royal Gold and shall use its reasonable best efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any Order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Transactions. Notwithstanding anything in this Agreement to the contrary, none of Royal Gold or any of its Affiliates shall be required to defend, contest or resist any action or proceeding, whether judicial or administrative, or to take any action to have vacated, lifted, reversed or overturned any Order, in connection with the Transactions.

 

Section 4.08 Public Announcements.  The initial press release with respect to this Agreement and the Transactions shall be a release mutually agreed to by the Company and Royal Gold. Thereafter, each of the Company and Royal Gold agrees that no public release or announcement concerning the Transactions shall be issued by any party without the prior written consent of the Company and Royal Gold (which consent shall not be unreasonably withheld, conditioned or delayed), except as such release or announcement may be permitted by Section 4.04 or required by applicable Law or the rules or regulations of any applicable United States securities exchange or Governmental Entity to which the relevant party is subject, wherever situated, in which case the party required to make the release or announcement shall consult with the other party about, and allow the other party reasonable time to comment on such release or announcement in advance of such issuance.

 

Section 4.09 Formation of the Joint Venture.  Prior to the Closing, the parties, directly or through their respective wholly-owned subsidiaries, will cause the Joint Venture to be duly formed by filing the Joint Venture Certificate with the Secretary of State of the State of Delaware and paying all Expenses associated therewith (which Expenses shall be paid by Royal Gold and chargeable to the Joint Venture).

 

ARTICLE V

Conditions

 

Section 5.01 Conditions to Each Party’s Obligation to Effect the Transactions.  The respective obligations of each party to this Agreement to effect the Transactions is subject to the satisfaction or waiver on or prior to the Closing Date of each of the following conditions:

 

(a) Company Stockholder Approval.  The Transactions will have been duly approved by the Requisite Company Vote.

 

  

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(b) No Injunctions, Restraints or Illegality.  No Governmental Entity having jurisdiction over any party hereto shall have enacted, issued, promulgated, enforced or entered any Laws or Orders, whether temporary, preliminary or permanent, that make illegal, enjoin or otherwise prohibit consummation of the Transactions.

 

(c) Governmental Consents.  All consents, approvals and other authorizations of any Governmental Entity or other Person set forth in Section 5.01 of the Company Disclosure Letter and required to consummate the Transaction shall have been obtained, and shall remain in full force and effect.

 

Section 5.02 Conditions to Obligations of Royal Gold.  The obligations of Royal Gold to effect the Transaction are also subject to the satisfaction or waiver by Royal Gold on or prior to the Closing Date of the following conditions:

 

(a) Representations and Warranties.  (i) The representations and warranties of the Company (other than in Section 2.01, Section 2.02(a), Section 2.02(d), Section 2.04(a) and Section 2.05) set forth in Article II of this Agreement shall be true and correct in all respects (without giving effect to any limitation indicated by the words “Company Material Adverse Effect,” “in all material respects,” “in any material respect,” “material” or “materially”) as of the date of this Agreement and as of immediately prior to the Closing, as if made at and as of such time (except those representations and warranties that address matters only as of a particular date, which shall be true and correct in all respects as of that date), except where the failure of such representations and warranties to be so true and correct would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and (ii) the representations and warranties contained in Section 2.01, Section 2.02(a), Section 2.02(d), Section 2.04(a) and Section 2.05 shall be true and correct in all respects as of the date of this Agreement and as of immediately prior to the Closing, as if made at and as of such time (except those representations and warranties that address matters only as of a particular date, which shall be true and correct in all respects as of that date).

 

(b) Performance of Covenants.  The Company shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, required to be performed by or complied with by it hereunder.

 

(c) Officers Certificate.  Royal Gold will have received a certificate, signed by the chief executive officer or chief financial officer of the Company, certifying as to the matters set forth in Section 5.02(a) and Section 5.02(b) hereof.

 

(d) Joint Venture Agreement.  Royal Gold will have received the Joint Venture agreement, duly executed by the Company.

 

(e) Tetlin Estoppel.  Royal Gold will have received the Tetlin Estoppel, duly executed by the Company and Tetlin.

 

(f) Tetlin Stability Agreement.  Royal Gold will have received the Tetlin Stability Agreement, duly executed by the Company and Tetlin.

 

  

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(g) Tetlin Resolution (Council).  Royal Gold will have received a copy of the Tetlin Resolution (Council), duly certified by Tetlin.

 

(h) Tetlin Resolution (Tribe).  Royal Gold will have received a copy the Tetlin Resolution (Tribe), duly certified by Tetlin.

 

(i) Tetlin Ordinance.  Royal Gold will have received a copy of the Tetlin Ordinance in the form enacted.

 

(j) Tetlin Legal Opinion.  Royal Gold will have received a copy of a legal opinion addressed to CORE upon which the Joint Venture may rely from Sonosky, Chambers, Sachse, Endreson & Perry, LLP, legal counsel to Tetlin, with regard to (i) the validity of all actions taken by the Tetlin Village Council and the tribal members of Tetlin to enact the Tetlin Resolution (Council), the Tetlin Resolution (Tribe) and the Tetlin Ordinance and (ii) the validity and enforceability of the Tetlin Estoppel and Tetlin Stability Agreement, in form and substance reasonably satisfactory to Royal Gold.

 

(k) Assignment Agreements.  Royal Gold will have received the Assignment Agreements, duly executed by the Company and the Joint Venture.

 

(l) Termination of Agreements.  Royal Gold will have received evidence to its reasonable satisfaction that all of the Subject Agreements have been terminated and that all obligations of the Company and its Affiliates thereunder have been satisfied in full.

 

(m) Obligations under Engagement Letter.  All obligations of the Company to the Company Financial Advisor pursuant to the Engagement Letter as of the Closing will have been satisfied in full.

 

Section 5.03 Conditions to Obligation of the Company.  The obligation of the Company to effect the Transactions is also subject to the satisfaction or waiver by the Company on or prior to the Closing Date of the following conditions:

 

(a) Representations and Warranties.  (i) The representations and warranties of Royal Gold (other than Section 3.01 and Section 3.02(a)) set forth in Article III of this Agreement shall be true and correct in all respects (without giving effect to any limitation indicated by the words “Royal Gold Material Adverse Effect,” “in all material respects,” “in any material respect,” “material” or “materially”) as of the date of this Agreement and as of immediately prior to the Closing, as if made at and as of such time (except those representations and warranties that address matters only as of a particular date, which shall be true and correct in all respects as of that date), except where the failure of such representations and warranties to be so true and correct would not reasonably be expected to have, individually or in the aggregate, a Royal Gold Material Adverse Effect on Royal Gold’s ability to consummate the Transactions and (ii) the representations and warranties contained in Section 3.01 and Section 3.02(a) shall be true and correct in all respects as of the date of this Agreement and as of immediately prior to the Closing, as if made at and as of such time (except those representations and warranties that address matters only as of a particular date, which shall be true and correct in all respects as of that date).

 

  

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(b) Performance of Covenants.  Royal Gold shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, required to be performed by or complied with by them hereunder.

 

(c) Officers Certificate.  The Company will have received a certificate, signed by an officer of Royal Gold, certifying as to the matters set forth in Section 5.03(a) and Section 5.03(b).

 

(d) Joint Venture Agreement.  The Company will have received the Joint Venture agreement, duly executed by Royal Gold.

 

(e) Payment.  Contemporaneously with the Closing, Royal Gold will pay (i) an amount equal to $5,000,000 to the Business Account, which shall constitute the Royal Initial Contribution and (ii) an amount equal to $750,000 to the Company by wire transfer of immediately available funds to an account or accounts designated by the Company in writing at least two (2) Business Days prior to the Closing.

 

ARTICLE VI

Termination, Amendment and Waiver

 

Section 6.01 Termination By Mutual Consent.  This Agreement may be terminated at any time prior to the Closing (notwithstanding any approval of the Transactions by the stockholders of the Company) by mutual written consent of Royal Gold and the Company.

 

Section 6.02 Termination By Either Royal Gold or the Company.  This Agreement may be terminated by either Royal Gold or the Company at any time prior to the Closing (notwithstanding any approval of the Transactions by the stockholders of the Company):

 

(a) if the Transaction has not been consummated on or before January 31, 2015 (the “End Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 6.02(a) shall not be available to any party whose breach of any representation, warranty, covenant or agreement set forth in this Agreement has been the cause of, or resulted in, the failure of the Transactions to be consummated on or before the End Date;

 

(b) if any Governmental Entity of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law or Order making illegal, permanently enjoining or otherwise permanently prohibiting the consummation of the Transactions, and such Law or Order shall have become final and nonappealable; provided, however, that the right to terminate this Agreement pursuant to this Section 6.02(b) shall not be available to any party whose breach of any representation, warranty, covenant or agreement set forth in this Agreement has been the cause of, or resulted in, the issuance, promulgation, enforcement or entry of any such Law or Order; or

 

  

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(c) if this Agreement has been submitted to the stockholders of the Company for adoption at a duly convened Company Stockholders Meeting and the Requisite Company Vote shall not have been obtained at such meeting (including any adjournment or postponement thereof).

 

Section 6.03 Termination By Royal Gold.  This Agreement may be terminated by Royal Gold at any time prior to the Closing (notwithstanding any approval of the Transactions by the stockholders of the Company):

 

(a) if (i) a Company Adverse Recommendation Change shall have occurred, (ii) the Company shall have entered into, or publicly announced its intention to enter into, an Alternative Transaction Agreement (other than an Acceptable Confidentiality Agreement), (iii) the Company shall have breached or failed to perform in any material respect any of the covenants and agreements set forth in Section 4.04, (iv) the Company Board fails to reaffirm the Company Board Recommendation (and recommend against such Alternative Proposal) within ten (10) Business Days after the date any Alternative Proposal (or material modification thereto) is first publicly disclosed by the Company or publicly disclosed or commenced by the Person making such Alternative Proposal, (v) a tender offer or exchange offer relating to Company Common Stock shall have been commenced by a Person unaffiliated with Royal Gold and the Company shall not have sent to its stockholders pursuant to Rule 14e-2 under the Securities Act, within ten (10) Business Days after such tender offer or exchange offer is first published, sent or given, a statement reaffirming the Company Board Recommendation and recommending that stockholders reject such tender or exchange offer, or (vi) the Company or the Company Board (or any committee thereof) shall publicly announce its intentions to do any of actions specified in this Section 6.03(a); or

 

(b) if there shall have been a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement such that the conditions to the Closing of the Transactions would not be satisfied and, in either such case, such breach is incapable of being cured by the End Date; provided that Royal Gold shall have given the Company at least three (3) days written notice prior to such termination stating Royal Gold’s intention to terminate this Agreement pursuant to this Section 6.03(b).

 

Section 6.04 Termination By the Company.  This Agreement may be terminated by the Company at any time prior to the Closing (notwithstanding, in the case of Section 6.04(b) immediately below, any approval of the Transactions by the stockholders of the Company):

 

(a) if prior to the receipt of the Requisite Company Vote at the Company Stockholders Meeting, the Company Board authorizes the Company, in full compliance with the terms of this Agreement, including Section 4.04(b) and Section 4.04(d) hereof, to enter into an Alternative Transaction Agreement (other than an Acceptable Confidentiality Agreement) in respect of a Superior Proposal; provided that the Company shall have paid any amounts due pursuant to Section 6.06 hereof in accordance with the terms, and at the times, specified therein; and provided further that in the event of such termination, the Company substantially concurrently enters into such Alternative Transaction Agreement; or

 

  

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(b) if there shall have been a breach of any representation, warranty, covenant or agreement on the part of Royal Gold set forth in this Agreement such that the conditions to the Closing of the Transactions set forth in Section 5.03(a) or Section 5.03(b), as applicable, would not be satisfied and, in either such case, such breach is incapable of being cured by the End Date; provided that the Company shall have given Royal Gold at least three (3) days written notice prior to such termination stating the Company’s intention to terminate this Agreement pursuant to this Section 6.04(b).

 

Section 6.05 Notice of Termination; Effect of Termination.  The party desiring to terminate this Agreement pursuant to this Article VI (other than pursuant to Section 6.01) shall deliver written notice of such termination to each other party hereto specifying with particularity the reason for such termination, and any such termination in accordance with Section 6.05 shall be effective immediately upon delivery of such written notice to the other party. If this Agreement is terminated pursuant to this Article VI, it will become void and of no further force and effect, with no liability on the part of any party to this Agreement (or any stockholder, director, officer, employee, agent or Representative of such party) to any other party hereto, except (i) with respect to Section 4.03(b), this Section 6.05, Section 6.06 and Article VII (and any related definitions contained in any such Sections or Article), which shall remain in full force and effect and (ii) with respect to any liabilities or damages incurred or suffered by a party, to the extent such liabilities or damages were the result of fraud or the breach by another party of any of its representations, warranties, covenants or other agreements set forth in this Agreement.

 

Section 6.06 Fees and Expenses Following Termination.

 

(a) If this Agreement is terminated by Royal Gold pursuant to Section 6.03(a) or Section 6.03(b), or by the Company pursuant to Section 6.04(a), then the Company shall pay to Royal Gold (by wire transfer of immediately available funds) a fee in an amount equal to the Termination Fee, as the sole and exclusive remedy for any such termination, within (i) two (2) Business Days after such termination (in the case of a termination in accordance with Section 6.03(a) or Section 6.03(b)) and (ii) at or prior to such termination (in the case of a termination in accordance with Section 6.04(a)).

 

(b) If (i) this Agreement is terminated by either Royal Gold or the Company pursuant to Section 6.02(a) provided that the Requisite Company Vote shall not have been obtained at the Company Stockholders Meeting (including any adjournment or postponement thereof) and, prior to such termination, an Alternative Proposal shall have been publicly disclosed or otherwise made or communicated to the Company or the Company Board, and not withdrawn, and (ii) within twelve (12) months following the date of such termination of this Agreement the Company shall have entered into a definitive agreement with respect to such Alternative Proposal, or such Alternative Proposal shall have been consummated, then in any such event the Company shall pay to Royal Gold (by wire transfer of immediately available funds), immediately prior to and as a condition to consummating such transaction, the Termination Fee as the sole and exclusive remedy for such termination. If a Person (other than Royal Gold) makes an Alternative Proposal that has been publicly disclosed and subsequently withdrawn prior to such termination and, within twelve (12) months following the date of the termination of this Agreement, such Person or any of its Affiliates makes an Alternative Proposal that is publicly disclosed, such initial Alternative Proposal shall be deemed to have been “not withdrawn” for purposes of this paragraph (d).

 

  

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(c) The Company acknowledges and hereby agrees that the provisions of this Section 6.06 are an integral part of the transactions contemplated by this Agreement (including the Transaction), and that, without such provisions, Royal Gold would not have entered into this Agreement. If the Company shall fail to pay in a timely manner the amounts due pursuant to this Section 6.06, and, in order to obtain such payment, Royal Gold makes a claim against the Company that results in a judgment against the Company, the Company shall pay to Royal Gold the reasonable costs and expenses of Royal Gold (including its reasonable attorneys’ fees and expenses) incurred or accrued in connection with such suit, together with interest on the amounts set forth in this Section 6.06 at the prime lending rate prevailing during such period as published in The Wall Street Journal. Any interest payable hereunder shall be calculated on a daily basis from the date such amounts were required to be paid until (but excluding) the date of actual payment, and on the basis of a 360-day year. The parties acknowledge and agree that in no event shall the Company be obligated to pay the Termination Fee on more than one occasion.

 

(d) Except as expressly set forth in this Section 6.06, all Expenses incurred in connection with this Agreement and the Transactions will be paid by the party incurring such Expenses.

 

Section 6.07 Amendment.  At any time prior to the Closing, this Agreement may be amended or supplemented in any and all respects, whether before or after receipt of the Requisite Company Vote, by written agreement signed by each of the parties hereto; provided, however, that following the receipt of the Requisite Company Vote, there shall be no amendment or supplement to the provisions of this Agreement which by Law or in accordance with the rules of any relevant self regulatory organization would require further approval by the holders of Company Common Stock without such approval.

 

Section 6.08 Extension; Waiver.  At any time prior to the Closing, Royal Gold or the Company may (a) extend the time for the performance of any of the obligations of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered under this Agreement, or (c) unless prohibited by applicable Law, waive compliance with any of the covenants, agreements or conditions contained in this Agreement. Any agreement on the part of a party to any extension or waiver will be valid only if set forth in an instrument in writing signed by such party. The failure of any party to assert any of its rights under this Agreement or otherwise will not constitute a waiver of such rights.

 

ARTICLE VII

Miscellaneous

 

Section 7.01 Definitions.  For purposes of this Agreement, the following terms will have the following meanings when used herein with initial capital letters:

 

  

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“Acceptable Confidentiality Agreement” means a confidentiality and standstill agreement that contains confidentiality and standstill provisions that are no less favorable to the Company than those contained in the Confidentiality Agreement.

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, such first Person. For the purposes of this definition, “control” (including, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by Contract or otherwise.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Alternative Proposal” means a proposal or offer from, or indication of interest in making a proposal or offer by, any Person (other than Royal Gold and its Subsidiaries, including Royal Gold) relating to any (a) direct or indirect acquisition of all or substantially all of the Contributed Assets, (b) direct or indirect acquisition of twenty percent (20%) or more of voting equity interests of the Company, (c) any tender offer or exchange offer for any securities of the Company, merger, consolidation, other business combination or similar transaction involving the Company or any of its Subsidiaries, or liquidation or dissolution (or the adoption of a plan of liquidation or dissolution) of the Company or the declaration or payment of an extraordinary dividend (whether in cash or other property) by the Company.

 

“Alternative Transaction Agreement” has the meaning set forth in Section 4.04(a).

 

“Assignment Agreement(s)” means one or more agreements by and between the Company or its wholly-owned subsidiary and the Joint Venture in respect of the assignment and conveyance of the Contributed Assets substantially in the form of Exhibit B attached hereto.

 

“Business Day” means any day, other than Saturday, Sunday or any day on which banking institutions located in Denver, Colorado, Wilmington, Delaware and New York, New York are authorized or required by Law or other governmental action to close.

 

“Business Account” has the meaning set forth in the Joint Venture Agreement.

 

“Closing” has the meaning set forth in Section 1.01.

 

“Closing Date” has the meaning set forth in Section 1.01.

 

“Company” has the meaning set forth in the Preamble.

 

“Company Adverse Recommendation Change” has the meaning set forth in Section 4.04(a).

 

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

 

“Company Board Recommendation” has the meaning set forth in Section 2.02(d).

 

  

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

 

“Company Disclosure Letter” has the meaning set forth in the introductory language in Article II.

 

“Company Financial Advisor” means Petrie Partners, LLC.

 

“Company Material Adverse Effect” means any event, occurrence, fact, condition or change that is, individually or in the aggregate, materially adverse to (i) the business, condition (financial or otherwise), liabilities or assets comprising the Contributed Assets or (ii) the ability of the Company to consummate the Transaction on a timely basis; provided, however, a Company Material Adverse Effect shall not be deemed to include events, occurrences, facts, conditions or changes arising out of, relating to or resulting from: (a) changes generally affecting the economy, financial or securities markets; (b) any natural disaster or any outbreak or escalation of war or any act of terrorism; (c) changes in Laws; (d) changes or developments in prices for gold or other commodities; or (e) general conditions in the industry in which the Company and its Subsidiaries operate; provided further, however, that any event, change and effect referred to in clauses (a) through (e) immediately above shall be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur to the extent that such event, change or effect has a disproportionate effect on the Contributed Assets, compared to other participants in the gold mining and exploration industry.

 

“Company Proxy Statement” has the meaning set forth in Section 2.06.

 

“Company Stockholders Meeting” means the 2014 annual meeting or any special meeting of the Stockholders of the Company to be held to, among other items, consider the approval of the Transactions.

 

“Confidentiality Agreement” has the meaning set forth in Section 4.03.

 

“Consent” has the meaning set forth in Section 2.02(c).

 

“Contracts” means any contracts, agreements, licenses, notes, bonds, mortgages, indentures, leases or other binding instruments or binding commitments, whether written or oral.

 

“Contributed Assets” has the meaning set forth in the Joint Venture Agreement.

 

“DGCL” means the Delaware General Corporation Law.

 

“End Date” has the meaning set forth in Section 6.02(a).

 

“Engagement Letter” means that certain engagement letter by and between the Company and the Company Financial Advisor dated as of January 25, 2014.

 

“Exchange Act” has the meaning set forth in Section 2.02(c).

 

  

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“Expenses”  means, with respect to any Person, all reasonable and documented out-of-pocket fees and expenses (including all fees and expenses of counsel, accountants, financial advisors and investment bankers of such Person and its Affiliates), incurred by such Person or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement, the other Transaction Agreements and the Transactions, any litigation with respect thereto, the preparation, printing, filing and mailing of the Proxy Statement, the filing of any required notices in connection with other regulatory approvals, and all other matters related to the Transaction.

 

“GAAP” means United States generally accepted accounting principles.

 

“Governmental Entity” has the meaning set forth in Section 2.02(c).

 

“Joint Venture” means Tanana Gold, LLC, a Delaware limited liability company.

 

“Joint Venture Agreement” means that certain Limited Liability Company Agreement of the Joint Venture by and between the Company and Royal Gold (or their Affiliates) in the form attached as Exhibit C hereto.

 

“Joint Venture Certificate” means that certain Certificate of Formation of the Joint Venture in the form attached as Exhibit D hereto.

 

“Knowledge” has the meaning set forth in the Joint Venture Agreement.

 

“Laws” means any domestic or foreign laws, common law, statutes, ordinances, rules, regulations, codes, Orders or legally enforceable requirements enacted, issued, adopted, promulgated, enforced, ordered or applied by any Governmental Entity.

 

“Legal Action” has the meaning set forth in Section 2.03.

 

“Liens” means, with respect to any property or asset, all pledges, liens, mortgages, charges, encumbrances, hypothecations, options, rights of first refusal, rights of first offer and security interests of any kind or nature whatsoever.

 

“Material Contract” has the meaning set forth in the Joint Venture Agreement.

 

“Notice Period” has the meaning set forth in Section 4.04(d).

 

“Order” has the meaning set forth in Section 2.03.

 

“Permitted Liens” means (a) statutory Liens for current Taxes or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith (provided appropriate reserves required pursuant to GAAP have been made in respect thereof), (b) mechanics’, carriers’, workers’, repairers’ and similar statutory Liens arising or incurred in the ordinary course of business for amounts which are not delinquent or which are being contested by appropriate proceedings (provided appropriate reserves required pursuant to GAAP have been made in respect thereof), (c) zoning, entitlement, building and other land use regulations imposed by Governmental Entities having jurisdiction over such Person’s owned or leased real property, which are not violated by the current use and operation of such real property, (d) covenants, conditions, restrictions, easements and other similar non-monetary matters of record affecting title to such Person’s owned or leased real property, which do not materially impair the occupancy or use of such real property for the purposes for which it is currently used in connection with such Person’s businesses, (e) any right of way or easement related to public roads and highways, which do not materially impair the occupancy or use of such real property for the purposes for which it is currently used in connection with such Person’s businesses, (f) Liens arising under workers’ compensation, unemployment insurance, social security, retirement and similar legislation and (g) with respect to the Contributed Assets, such Liens as would reasonably be expected to be shown on a title report, including those Liens set forth on Section 7.01(a) of the Company Disclosure Letter.

 

  

22

  

 

Execution Version

 

 

“Person” means any individual, corporation, limited or general partnership, limited liability company, limited liability partnership, trust, association, joint venture, Governmental Entity and other entity and group (which term will include a “group” as such term is defined in Section 13(d)(3) of the Exchange Act).

 

“Properties” has the meaning set forth in the Joint Venture Agreement.

 

“Representatives” has the meaning set forth in Section 4.04(a).

 

“Requisite Company Vote” has the meaning set forth in Section 2.02(a).

 

“Royal Gold” has the meaning set forth in the Preamble.

 

“Royal Gold Material Adverse Effect” means any event, occurrence, fact, condition or change that is, individually or in the aggregate, materially adverse to the ability of Royal Gold to consummate the Transaction on a timely basis; provided, however, a Royal Gold Material Adverse Effect shall not be deemed to include events, occurrences, facts, conditions or changes arising out of, relating to or resulting from: (a) changes generally affecting the economy, financial or securities markets; (b) any natural disaster or any outbreak or escalation of war or any act of terrorism; (c) changes in Laws; (d) changes or developments in prices for gold or other commodities; or (e) general conditions in the industry in which Royal Gold and its Subsidiaries operate; provided further, however, that any event, change and effect referred to in clauses (a) through (e) immediately above shall be taken into account in determining whether a Royal Gold Material Adverse Effect has occurred or would reasonably be expected to occur to the extent that such event, change or effect has a disproportionate effect on Royal Gold, compared to other participants in the gold mining and exploration industry.

 

“Royal Initial Contribution” has the meaning set forth in the Joint Venture Agreement.

 

“SEC” has the meaning set forth in Section 2.02(c).

 

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

 

  

23

  

 

Execution Version

 

 

“Subject Agreements” means (i) the Amended and Restated Professional Services Agreement, dated as of November 1, 2010 between Avalon Development Corporation and the Company, and (ii) the Consulting Agreement dated as of October 15, 2010 between Mr. Donald Adams and the Company.

 

“Subsidiary” means, when used with respect to any party, any corporation or other organization, whether incorporated or unincorporated, a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or by any one or more of its subsidiaries, or by such party and one or more of its subsidiaries.

 

“Superior Proposal” means a bona fide written Alternative Proposal involving the direct or indirect acquisition of all or substantially all of the Contributed Assets or a merger, consolidation or other business combination, tender offer or exchange offer for a majority of the outstanding Company Common Stock, that the Company Board determines in good faith (after consultation with outside legal counsel and the Company Financial Advisor) is more favorable to the holders of Company Common Stock than the transactions contemplated by this Agreement, taking into account (a) all financial considerations, (b) the identity and reliability of the third party making such Alternative Proposal, (c) the anticipated timing, conditions (including any financing or other condition or the reliability of any debt or equity funding commitments) and prospects for prompt completion of such Alternative Proposal, (d) the other terms and conditions of such Alternative Proposal and the implications thereof on the Company and the development of the Properties, including relevant legal, regulatory and other aspects of such Alternative Proposal deemed relevant by the Company Board and (e) any revisions to the terms of this Agreement and the Transaction agreed to by Royal Gold during the Notice Period set forth in Section 4.04(d).

 

“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

 

“Termination Fee” means $1,000,000.

 

“Tetlin” has the meaning set forth in the Joint Venture Agreement.

 

“Tetlin Estoppel” means that certain Estoppel and Agreement, in substantially the form attached as Exhibit E hereto.

 

“Tetlin Lease” has the meaning set forth in the Joint Venture Agreement.

 

  

24

  

 

Execution Version

 

 

“Tetlin Ordinance” means that certain Tetlin ordinance on Limitation on Application of Tetlin Law to Existing Mineral Lease in substantially the form attached as Exhibit I hereto.

 

“Tetlin Resolution (Council)” means that certain Resolution of the Tetlin Village Council in substantially the form of Exhibit G hereto.

 

“Tetlin Resolution (Tribe)” means that certain Resolution of the tribal members of Tetlin in substantially the form of Exhibit H hereto.

 

“Tetlin Stability Agreement” means that certain agreement by and between the Company and Tetlin in substantially the form attached as Exhibit F hereto.

 

“Transaction” means, collectively, the transactions contemplated by the Transaction Agreements.

 

“Transaction Agreements” means, collectively, (i) this Agreement, (ii) the Assignment Agreements, (iii) the Joint Venture Agreement, (iv) the Joint Venture Certificate, (v) the Tetlin Estoppel Certificate and (vi) the Tetlin Stability Agreement.

 

“Voting Agreement” has the meaning set forth in the Recitals.

 

Section 7.02 Interpretation; Construction.

 

(a) The table of contents and headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. Where a reference in this Agreement is made to a Section, Exhibit or Schedule, such reference shall be to a Section of, Exhibit to or Schedule of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” A reference in this Agreement to $ or dollars is to U.S. dollars. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to “this Agreement” shall include the Company Disclosure Letter.

 

(b) The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

Section 7.03 Survival.  None of the representations and warranties contained in this Agreement or in any instrument delivered under this Agreement will survive the Closing; provided that the foregoing shall not affect the survival of representations and warranties contained in any other Transaction Agreement. This Section 7.03 does not limit any covenant of the parties to this Agreement which, by its terms, contemplates performance after the Closing. The Confidentiality Agreement will survive termination of this Agreement in accordance with its terms.

 

  

25

  

 

Execution Version

 

 

Section 7.04 Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than those of the State of Delaware.

 

Section 7.05 Submission to Jurisdiction.  Each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by any other party hereto or its successors or assigns shall be brought and determined exclusively in the Delaware Chancery Court or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in the any federal court located in the State of Delaware. Each of the parties hereto agrees that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 7.07 or in such other manner as may be permitted by applicable Laws, will be valid and sufficient service thereof. Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court or tribunal other than the aforesaid courts.

 

Section 7.06 Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.06.

 

  

26

  

 

Execution Version

 

 

Section 7.07 Notices.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt), (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested), (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient, or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7.07):

 

 

	
If to Royal Gold, to:

	  	
Royal Gold, Inc.

1660 Wynkoop Street,

Denver, CO  80202

Attention:  General Counsel

Facsimile:  (303) 595-9385

	 	 	 
	
with a copy (which will

not constitute notice to

Royal Gold) to:

	  	
Hogan Lovells US LLP

One Tabor Center

1200 17th St., Suite 1500

Denver, CO 80202

Facsimile: (303) 899-7333

Attention:  Paul Hilton

	 	 	 
	
If to the Company, to:

	  	
Contango Ore, Inc.

3700 Buffalo Speedway, Ste. 925

Houston, TX

Facsimile: 713.621.7329

Attention: Brad Juneau

	 	 	 
	
with a copy (which will

not constitute notice to

the Company) to:

	  	
Morgan, Lewis & Bockius LLP

300 S. Grand Ave, 22nd Fl.

Los Angeles, CA  90071

Facsimile: (213) 612-2501

Attention: Richard A. Shortz

 

or to such other Persons, addresses or facsimile numbers as may be designated in writing by the Person entitled to receive such communication as provided above.

 

Section 7.08 Entire Agreement.  This Agreement (including the Exhibits to this Agreement), the Company Disclosure Letter and the Confidentiality Agreement constitute the entire agreement among the parties with respect to the subject matter of this Agreement and supersede all other prior agreements and understandings, both written and oral, among the parties to this Agreement with respect to the subject matter of this Agreement. In the event of any inconsistency between the statements in the body of this Agreement, the Confidentiality Agreement and the Company Disclosure Letter (other than an exception expressly set forth as such in the Company Disclosure Letter), the statements in the body of this Agreement will control.

 

  

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Execution Version

 

 

Section 7.09 No Third Party Beneficiaries.  This Agreement is for the sole benefit of the parties hereto and their permitted assigns and respective successors and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 7.10 Severability.  If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

Section 7.11 Assignment.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that prior to the Closing, Royal Gold may, without the prior written consent of the Company, assign all or any portion of its rights under this Agreement one or more of its direct or indirect wholly-owned subsidiaries. No assignment shall relieve the assigning party of any of its obligations or liability hereunder.

 

Section 7.12 Remedies.  Except as otherwise provided in this Agreement, any and all remedies expressly conferred upon a party to this Agreement will be cumulative with, and not exclusive of, any other remedy contained in this Agreement, at Law or in equity. The exercise by a party to this Agreement of any one remedy will not preclude the exercise by it of any other remedy.

 

Section 7.13 Specific Performance.  The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any federal court located in the State of Delaware or any Delaware state court, in addition to any other remedy to which they are entitled at Law or in equity.

 

  

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Execution Version

 

 

Section 7.14 Counterparts; Effectiveness.  This Agreement may be executed in any number of counterparts, all of which will be one and the same agreement. This Agreement will become effective when each party to this Agreement will have received counterparts signed by all of the other parties.

 

 

 

 

[SIGNATURE PAGE FOLLOWS]

 

  

29

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

	  	
CONTANGO ORE, INC.

	 
	  	  	 
	  	  	 
	  	
By:

	
/s/ John B. Juneau

	 
	  	Name: John B. Juneau
	  	Title:   President and Chief Executive Officer

 

 

	  	

ROYAL GOLD, INC.

	 
	  	  	 
	  	  	 
	  	
By:

	
/s/ Tony A. Jensen

	 
	  	Name: Tony A. Jensen
	  	Title:   President and Chief Executive OfficerNew Patriot Transportation Holding, Inc. 10-12B/A 

 

Exhibit 10.1

 

TAX MATTERS AGREEMENT

 

by and between

 

FRP HOLDINGS, INC. 

 

and

 

PATRIOT TRANSPORTATION HOLDING, INC. 

 

Dated as of [ * ], 2014 

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	 	Page
	 	 	 	 
	 	 	 	 
	Section 1.	Definitions.	 	1
	 	 	 	 
	Section 2.	Sole Tax Sharing Agreement.	 	5
	 	 	 	 
	Section 3.	Federal Income Taxes.	 	5
	 	 	 	 
	Section 4.	State and Local Income Taxes.	 	7
	 	 	 	 
	Section 5.	Foreign Income Tax.	 	8
	 	 	 	 
	Section 6.	Estimated Tax Payments.	 	8
	 	 	 	 
	Section 7.	Settlement; Certain Other Tax Sharing Provisions.	 	9
	 	 	 	 
	Section 8.	Other Taxes.	 	10
	 	 	 	 
	Section 9.	Certain Representations and Covenants.	 	10
	 	 	 	 
	Section 10.	Indemnities.	 	13
	 	 	 	 
	Section 11.	Guarantees.	 	14
	 	 	 	 
	Section 12.	Communication and Cooperation.	 	15
	 	 	 	 
	Section 13.	Audits and Contest.	 	15
	 	 	 	 
	Section 14.	Payments.	 	16
	 	 	 	 
	Section 15.	Notices.	 	17
	 	 	 	 
	Section 16.	Costs and Expenses.	 	17
	 	 	 	 
	Section 17.	Effectiveness; Termination and Survival.	 	18
	 	 	 	 
	Section 18.	Section Headings.	 	18
	 	 	 	 
	Section 19.	Entire Agreement; Amendments and Waivers.	 	18
	 	 	 	 
	Section 20.	Governing Law and Interpretation.	 	18
	 	 	 	 
	Section 21.	Dispute Resolution.	 	18
	 	 	 	 
	Section 22.	Counterparts.	 	18
	 	 	 	 
	Section 23.	Assignments; Third Party Beneficiaries.	 	18
	 	 	 	 
	Section 24.	Authorization, Etc.	 	19

 

    	i

    	 

    

 

TAX MATTERS AGREEMENT

 

THIS TAX MATTERS AGREEMENT
is entered into as of the [*] day of [*], 2014, between FRP HOLDINGS, INC. (“FRP”), a Florida corporation, on behalf
of itself and the members of the FRP Group, as defined below, and PATRIOT TRANSPORTATION HOLDING, INC. (“Patriot”),
a Florida corporation, on behalf of itself and the members of the Patriot Group, as defined below.

 

RECITALS

 

WHEREAS, pursuant to
the tax laws of various jurisdictions, certain members of the Patriot Group presently file certain tax returns on an affiliated,
consolidated, combined, unitary, fiscal unity or other, group basis (including as permitted by Section 1501 of the Internal
Revenue Code of 1986, as amended (the “Code”)) with certain members of the FRP Group;

 

WHEREAS, FRP and Patriot
have entered into a Separation and Distribution Agreement, dated as of [*], 2014 (the “Separation Agreement”), providing
for the separation of the Real Estate Businesses from the Transportation Business, pursuant to which (a) FRP will own, directly
and through its subsidiaries, the Real Estate Business, and Patriot will own, directly and through its subsidiaries, the Transportation
Business (the “Restructuring”), and (b) FRP will distribute to its shareholders of all of the common stock of Patriot
that is held by FRP (the “Distribution”) and certain other matters;

 

WHEREAS, for U.S. federal
income Tax purposes, it is intended that the Restructuring and the Distribution, taken together, shall qualify as a tax-free transaction
under Sections 355(a) and 368(a)(1)(D) of the Code;

 

WHEREAS, FRP and Patriot
desire to set forth their agreement on the rights and obligations of FRP, Patriot and the members of the FRP Group and the Patriot
Group, respectively, with respect to (A) the allocation between the parties of liabilities for Taxes, as defined below, incurred
in taxable periods beginning prior to, as a result of, and subsequent to the Distribution Date, as defined below, and (B) provide
for and agree upon various other tax matters;

 

NOW, THEREFORE, in
consideration of the mutual covenants and agreements hereinafter set forth, the parties agree as follows:

 

Section 1.          Definitions.

 

(a)          As used in this
Agreement:

 

“Active Business”
shall mean an active trade or business relied upon to satisfy the requirements of Section 355 of the Code as set forth in
the opinion being delivered by counsel in connection with the Distribution.

 

    	1

    	 

    

 

“After-Tax
Amount” shall mean an additional amount necessary to reflect the hypothetical Tax consequences of the receipt or accrual
of any payment, using the maximum statutory rate (or rates, in the case of an item that affects more than one Tax) applicable to
the recipient of such payment for the relevant Taxable year, reflecting, for example, the effect of the deductions available for
interest paid or accrued and for Taxes, such as state and local income Taxes.

 

“AMT”
shall mean the alternative minimum tax, within the meaning of Section 55 of the Code.

 

“Closing of
the Books Method” shall mean the apportionment of items between portions of a Taxable period based on a closing of the
books and records on the Distribution Date (as if the Distribution Date were the end of the Taxable period), provided that any
items not susceptible to such apportionment shall be apportioned on the basis of elapsed days during the relevant portion of the
Taxable period.

 

“Code”
shall have the meaning ascribed thereto in the recitals.

 

“Combined
Apportionment Factor” shall mean the apportionment factor reflected on the applicable consolidated, combined or unitary
state or local income Tax return and utilized in computing the combined, consolidated or unitary state or local income Tax liability.

 

“Consolidated
Federal Return” shall mean a Pre-Deconsolidation Period Return filed in respect of federal income Taxes by a Consolidated
Group.

 

“Consolidated
Group” shall mean any group consisting of (i) at least one member of the FRP Group that filed (or will file) any
Pre-Deconsolidation Period Return that reflects the income, assets or operations of any member of the Patriot Group or (ii) at
least one member of the Patriot Group that filed (or will file) any Pre-Deconsolidation Period Return that reflects the income,
assets or operations of any member of the FRP Group.

 

“Consolidated
State Return” shall mean a Pre-Deconsolidation Period Return filed in respect of state or local income Taxes by a Consolidated
Group, including, for the avoidance of doubt, any combined state income tax return.

 

“Deconsolidation
Date” shall mean with respect to a Return the date on which any member of the Patriot Group is no longer consolidated,
combined or in a unitary relationship (as the case may be) with any member of the FRP Group in filing such Return.

 

“Distribution”
shall have the meaning ascribed thereto in the recitals.

 

“Distribution
Date” shall mean the date on which the Distribution occurs.

 

“Equity Securities”
shall mean any stock or other securities treated as equity for tax purposes, options, warrants, rights, convertible debt, or any
other instrument or security that affords any Person the right, whether conditional or otherwise, to acquire stock or to be paid
an amount determined by reference to the value of stock.

 

    	2

    	 

    

 

“Final Determination”
shall mean (i) with respect to federal income Taxes, (A) a “determination” as defined in Section 1313(a)
of the Code, or (B) execution of an IRS Form 870-AD (or any successor form thereto), as a final resolution of Tax liability
for any Taxable period, except that a Form 870-AD (or successor form thereto) that reserves the right of the taxpayer to file a
claim for Refund or the right of the IRS to assert a further deficiency shall not constitute a Final Determination with respect
to the item or items so reserved; (ii) with respect to Taxes other than federal income Taxes, any final determination of liability
in respect of a Tax that, under applicable law, is not subject to further appeal, review or modification through proceedings or
otherwise; (iii) with respect to any Tax, any final disposition by reason of the expiration of the applicable statute of limitations;
or (iv) with respect to any Tax, the payment of Tax by any member of the FRP Group or the Patriot Group, whichever is responsible
for payment of such Tax under applicable law, with respect to any item disallowed or adjusted by a Taxing Authority, provided that
the provisions of Section 13 hereof have been complied with, or, if such section is inapplicable, that the party responsible
under the terms of this Agreement for such Tax is notified by the party paying such Tax that it has determined that no action should
be taken to recoup such disallowed item, and the other party agrees with such determination.

 

“FRP”
shall have the meaning ascribed thereto in the recital.

 

“FRP Assumed
Liability Payment” means a payment by any member of the FRP Group in respect of a FRP Liability, as defined in the Separation
Agreement.

 

“FRP Group”
shall mean FRP and each of its direct and indirect Subsidiaries other than those entities comprising the Patriot Group.

 

“Group”
shall mean the Patriot Group or the FRP Group, as appropriate.

 

“IRS”
shall mean the Internal Revenue Service.

 

“Patriot”
shall have the meaning ascribed thereto in the recitals.

 

“Patriot Group”
shall mean shall mean Patriot and each of its direct and indirect Subsidiaries immediately after the Distribution, including any
predecessors thereto.

 

“Person”
shall have the meaning ascribed to it in Section 7701(a)(1) of the Code.

 

“Post-Deconsolidation
Period” shall mean any Taxable period (or portion thereof) beginning after the Deconsolidation Date.

 

“Pre-Deconsolidation
Period” shall mean any Taxable period (or portion thereof) ending on or before the Deconsolidation Date.

 

    	3

    	 

    

 

“Refund”
shall mean any refund of Taxes, including any reduction in Taxes by means of a credit, offset or otherwise.

 

“Return”
shall mean any Tax return, statement, report, form, election, claim or surrender (including estimated Tax returns and reports,
extension requests and forms, and information returns and reports) required to be filed with any Taxing Authority.

 

“Separate
Group Tax Liability” shall mean (i) with respect to federal income Taxes, the product of a Group’s Separate
Group Taxable Income, computed for federal income Tax purposes, and the highest federal income Tax rate imposed under the Code
on the Taxable income of a corporation for the relevant Taxable period (or portion thereof), reduced by any Tax credits that the
Group would be able to use if it were calculating its federal income Tax liability on a stand-alone basis and (ii) with respect
to the Taxes of a particular state or locality, the product of the Group’s Separate Group Taxable Income and the Combined
Apportionment Factor and the State Tax Rate, reduced by any applicable Tax credits that the Group would be able to use if it were
calculating its Tax liability on a stand-alone basis.

 

“Separate
Group Taxable Income” shall mean, with respect to a Group, such Group’s Taxable income computed as if such Group
were a separate consolidated, combined or unitary group, and applying the Tax principles, including limitations and carryovers
(excluding limits for charitable contributions and dividends received deduction, and accounting for deferred intercompany transactions
consistent with the deferral and recognition rules of Treasury Regulations Section 1.1502-13 (or any successor rule) or analogous
state or local rule), that would have been applicable to such Group had such Group never been part of the Consolidated Group or
any other consolidated, combined or unitary group. In the context of state and local Tax, Separate Group Taxable Income shall be
computed prior to the application of any apportionment formula.

 

“Separate
Group Taxable Loss” shall mean, with respect to a Group, such Group’s Taxable loss computed as if such Group were
a separate consolidated, combined or unitary group, and applying the Tax principles, including limitations and carryovers (excluding
limits for charitable contributions and dividends received deduction, and accounting for deferred intercompany transactions consistent
with the deferral and recognition rules of Treasury Regulations Section 1.1502-13 (or any successor rule) or analogous state
or local rule), that would have been applicable to such Group had such Group never been part of the Consolidated Group or any other
consolidated, combined or unitary group. In the context of state and local Tax, Separate Group Taxable Loss shall be computed prior
to the application of any apportionment formula.

 

“Separation
Agreement” shall have the meaning ascribed thereto in the recitals.

 

“State Tax
Rate” shall mean, with respect to a particular state or locality, the highest applicable Tax rate imposed under applicable
law on the Separate Group Taxable Income of the Group for the relevant Taxable period (or portion thereof).

 

    	4

    	 

    

 

“Subsidiary”
of any Person shall mean any corporation, partnership or other entity directly or indirectly owned more than 50 percent (by vote
or value) by such Person.

 

“Tax”
(and the correlative meaning, “Taxes,” “Taxing” and “Taxable”) shall mean
(A) any tax imposed under Subtitle A of the Code, or any net income, gross income, gross receipts, alternative or add-on minimum,
sales, use, business and occupation, value-added, trade, goods and services, ad valorem, franchise, profits, license, business
royalty, withholding, payroll, employment, capital, excise, transfer, recording, severance, stamp, occupation, premium, property,
asset, real estate acquisition, environmental, custom duty, or other tax, governmental fee or other like assessment or charge of
any kind whatsoever, together with any interest and any penalty, addition to tax or additional amount imposed by a Taxing Authority;
or (B) any liability of a member of the FRP Group or the Patriot Group for the payment of any amounts described in clause
(A) as a result of any express or implied obligation to indemnify any other Person.

 

“Tax Proceeding”
shall mean any Tax audit, dispute or proceeding (whether administrative, judicial or contractual).

 

“Taxing Authority”
shall mean any governmental authority (domestic or foreign), including, without limitation, any state, municipality, political
subdivision or governmental agency, responsible for the imposition of any Tax.

 

(b)          All capitalized
terms used but not defined herein shall have the same meanings as in the Separation Agreement. Any term used in this Agreement
which is not defined in this Agreement or the Separation Agreement shall, to the extent the context requires, have the meaning
assigned to it in the Code or the applicable Treasury regulations thereunder (as interpreted in administrative pronouncements and
judicial decisions), or in comparable provisions of applicable law.

 

Section
2.          Sole Tax Sharing Agreement. Any and all existing Tax
sharing agreements or arrangements, written or unwritten, between any member of the FRP Group, on the one hand, and any
member of the Patriot Group, on the other hand, shall be or shall have been terminated on or before the Distribution Date.
Following the Distribution, neither the members of the Patriot Group nor the members of the FRP Group shall have any further
rights or liabilities thereunder, and this Agreement shall be the sole Tax sharing agreements between the members of the
Patriot Group, on the one hand, and the members of the FRP Group, on the other hand. FRP and Patriot shall act in good faith
in the performance of this Agreement.

 

Section 3.          Federal
Income Taxes.

 

(a)          Return Filing.

 

(i)          FRP
shall have the exclusive obligation and right to prepare and file, or cause to be prepared and filed, Consolidated Federal Returns
for which the Consolidated Group is required or permitted to file a Consolidated Federal Return for any Pre-Deconsolidation Period,
using, inter alia, information previously provided by Patriot. Patriot shall maintain all necessary information to file a Consolidated
Federal Return and shall provide FRP with all such necessary information in accordance with past practice and in no event later
than 45 days before such return is due. Each member of the Consolidated Group shall execute and file such consents, elections and
other documents as may be required or appropriate for the filing of such Consolidated Federal Returns.

 

    	5

    	 

    

 

(ii)          To
the extent that Patriot or any member of the Patriot Group is included in any Consolidated Federal Return for a Taxable period
that includes the Distribution Date, FRP shall include in such Consolidated Federal Return the results of Patriot or of the member
of the Patriot Group on the basis of the Closing of the Books Method.

 

(iii)          Subject
to the provisions of Sections 3(b), 6 and 7, FRP shall pay, or cause to be paid, any and all federal income Taxes due or required
to be paid with respect to, or required to be reported on, any such Consolidated Federal Return filed in accordance with Section 3(a)(i).

 

(b)          Allocated
Tax Charge.

 

(i)          FRP
shall be responsible for calculating the Separate Group Taxable Income or Separate Group Taxable Loss, as the case may be, for
each Group included in a Consolidated Federal Return. Each Group included in a Consolidated Federal Return shall bear its Separate
Group Tax Liability, if any. For purposes of such calculation, the deduction for state and local Taxes to which each Group is entitled
will be determined in a manner consistent with Section 4 of this Agreement.

 

(ii)          If
the Patriot Group included in the Consolidated Federal Return incurs a Separate Group Taxable Loss, FRP shall pay to the Patriot
Group (A) the amount, if any, by which the federal income Taxes payable with respect to the Consolidated Federal Return are
reduced by reason of the Patriot Group’s Separate Group Taxable Loss and (B) any Refund of federal income Taxes or other
federal income Tax benefit attributable to such Separate Group Taxable Loss that is actually realized, in each case as determined
by FRP in its sole discretion. To the extent the Patriot Group receives a payment from FRP in respect of a Separate Company Taxable
Loss pursuant to this Section 3(b)(ii), such loss shall not be carried forward or carried back by the Patriot Group for purposes
of determining Separate Group Taxable Income or Separate Group Taxable Loss in any other Taxable period (or portion thereof). To
the extent the Patriot Group does not receive a payment from FRP in respect of a Separate Group Taxable Loss pursuant to this Section 3(b)(ii),
such loss may be carried forward or carried back, subject to any applicable limitation with respect to carry forward or carry back
losses, by the Patriot Group for purposes of determining Separate Group Taxable Income or Separate Group Taxable Loss in another
Taxable period (or portion thereof).

 

(iii)          In
the event a Consolidated Group incurs an AMT liability with respect to any Taxable period (or portion thereof), FRP shall be solely
responsible for such liability. Any Tax benefit arising from the utilization of a consolidated federal AMT credit shall be for
the sole benefit of FRP.

 

    	6

    	 

    

 

Section 4.          State
and Local Income Taxes.

 

(a)          Return Filing.

 

(i)          FRP
shall prepare and file, or cause to be prepared and filed, Consolidated State Returns for which the Consolidated Group is required
or permitted to file a Consolidated State Return using, inter alia, information previously provided by Patriot. Patriot shall maintain
all necessary information to file a Consolidated State Return and shall provide FRP with all such necessary information in accordance
with past practice and in no event later than 45 days before such return is due. Each member of the Consolidated Group shall execute
and file such consents, elections and other documents as may be required or appropriate for the filing of such Consolidated State
Returns.

 

(ii)          To
the extent that Patriot or any member of the Patriot Group is included in any Consolidated State Return for a Taxable period that
includes the Distribution Date, FRP shall include in such Consolidated State Return the results of Patriot or of the member of
the Patriot Group on the basis of the Closing of the Books Method.

 

(iii)          Subject
to the provisions of Sections 4(b), 6 and 7, FRP shall pay, or cause to be paid, any and all income Taxes due or required to be
paid with respect to, or required to be reported on, any such Consolidated State Return filed in accordance with Section 4(a)(i).

 

(iv)          In
the event a Consolidated State Return is not filed, each relevant member of the FRP Group and Patriot Group shall be responsible
for (A) filing its own Return as a separate entity in respect of state and local income Taxes, or its own Return in respect
of state and local income Taxes relating to a group consisting solely of members of the FRP Group or members of the Patriot Group,
as the case may be, on behalf of the separate group, in each case including requests for extension, as if this Agreement were not
in effect and (B) making Tax payments (including estimated Tax payments, if necessary). Each such member filing a Return as
a separate entity pursuant to this Section 4(a)(iv) shall be entitled to any Tax benefit and shall be liable for any Tax burden
resulting from the filing of such separate Return.

 

(b)          Allocated
Tax Charge.

 

(i)          FRP
shall be responsible for calculating the Separate Group Taxable Income or Separate Group Taxable Loss, as the case may be, for
each Group included in a Consolidated State Return. Each Group included in a Consolidated State Return shall bear its Separate
Group Tax Liability, if any.

 

    	7

    	 

    

 

(ii)          If
the Patriot Group included in a Consolidated State Return incurs a Separate Group Taxable Loss, FRP shall pay, or shall cause to
be paid, to the Patriot Group (A) the amount, if any, by which the state or local income Taxes reflected on such Return are
reduced by reason of the Patriot Group’s Separate Group Taxable Loss and (B) any Refund of state or local income Taxes
or other state or local income Tax benefit attributable to such Separate Group Taxable Loss that is actually realized, in each
case as determined by FRP in its sole discretion. To the extent the Patriot Group receives a payment from FRP in respect of a Separate
Group Taxable Loss pursuant to this Section 4(b)(ii), such loss shall not be carried forward or carried back by the Patriot
Group for purposes of determining Separate Group Taxable Income or Separate Group Taxable Loss in any other Taxable period (or
portion thereof). To the extent the Patriot Group does not receive a payment from FRP in respect of a Separate Group Taxable Loss
pursuant to this Section 4(b)(ii), such loss may be carried forward or carried back, subject to any applicable limitation
with respect to carry forward or carry back losses, by the Patriot Group for purposes of determining Separate Group Taxable Income
or Separate Group Taxable Loss in another Taxable period (or portion thereof).

 

Section
5.          Foreign Income Tax. With respect to the calculation
of each Group’s Tax liability for foreign Taxes, the principles set forth in Section 4 shall apply mutatis
mutandis.

 

Section 6.          Estimated
Tax Payments.

 

(a)          If estimated
Tax payments are required with respect to a Consolidated Group for a Pre-Deconsolidation Period, FRP shall pay, or cause to be
paid, to the IRS, and/or to each relevant state, local and foreign Taxing Authority, on behalf of the members of such Consolidated
Group, those estimated Tax payments that are due on the relevant dates prescribed by applicable law. On December 15 (or the
proper due date under applicable law) of the year following the current Tax year, FRP shall pay to the IRS, and to each relevant
state, local and foreign Taxing Authority, on behalf of the members of any Consolidated Group, the payment, if any, required to
be made with a request for an extension of time in which to file a Consolidated Federal Return or a Consolidated State Return,
as the case may be. Each Group’s share of such estimated Tax payments, and payments required to be made with a request for
an extension of time in which to file a Consolidated Federal Return or a Consolidated State Return, shall be determined in a manner
consistent with the methods set forth in Sections 3, 4 and 5 of this Agreement. Reimbursement to FRP of the Patriot Group’s
share of any quarterly estimated tax payments or any payment made with a request for an extension of time in which to file a Consolidated
Federal Return or a Consolidated State Return, shall be made in immediately available funds within 20 business days after receiving
notice of such liability from FRP.

 

(b)          Notwithstanding
the provisions of Section 6(a), if FRP requests in writing an advance reimbursement from the Patriot Group of the Patriot
Group’s share of a quarterly estimated Tax payment or any payment required to be made with a request for an extension of
time in which to file a Consolidated Federal Return or a Consolidated State Return, which request shall be not more than 10 business
days and not less than 5 business days prior to the due date of such payment, the Patriot Group shall reimburse FRP not later than
the due date of such estimated Tax payment.

 

    	8

    	 

    

 

Section 7.          Settlement;
Certain Other Tax Sharing Provisions.

 

(a)          FRP shall calculate
settlement of the final federal, state, local and foreign Tax liability for all Pre-Deconsolidation Periods, and notify the Patriot
Group of such settlement. Subject to Section 21 of this Agreement (relating to dispute resolution procedures), the Patriot
Group shall pay to FRP its share of such Tax liability, as determined under Sections 3, 4 and 5 of this Agreement, within 20 business
days after receiving notice of such Tax liability from FRP. Any amounts paid by any member of the Patriot Group pursuant to Section 6
and any amounts receivable by the Patriot Group in respect of a Separate Group Taxable Loss or Tax credit shall be included in
determining the payments due from the Patriot Group. If the sum of any payments by the Patriot Group pursuant to Section 6,
and any amounts receivable by the Patriot Group in respect of a Separate Group Taxable Loss or Tax credit exceed its Tax liability,
such excess shall be refunded to the Patriot Group. Interest will be due on any underpayment or overpayment of Tax, computed from
the date on which a final Return is filed at the rate equal to the “prime” rate as published in the Wall Street Journal,
Eastern Edition on such date.

 

(b)          If a portion
or all of an unused loss or Tax credit is allocated to a member of the Consolidated Group, pursuant to Treasury Regulations Section 1.1502-21(b)
or Treasury Regulations Section 1.1502-79, and is carried back or forward to a Taxable year in which such member filed a separate
Return or consolidated, combined or unitary Return with an affiliated group that is not a Consolidated Group, any Refund or reduction
in Tax liability arising from such carry back or carryover shall be retained by such member, subject to future audit adjustments.
Notwithstanding the foregoing, FRP, in its sole discretion, (i) shall determine whether an election shall be made to relinquish
the entire carry back period with respect to part or all of a consolidated net operating loss for any Pre-Deconsolidation Period
in accordance with Treasury Regulations Section 1.1502-21(b)(3) and (ii) may require Patriot to make an election to relinquish
the entire carry back period with respect to all net operating losses and consolidated net operating losses attributable to Patriot
in accordance with Proposed Treasury Regulations Section 1.1502-72(e)(1) (or any final, amended or successor version thereof
that is substantively comparable).

 

(c)          Notwithstanding
Section 7(b) above, no member of the Patriot Group shall make any election to carry back any Tax item from a Post-Deconsolidation
Period to a Pre-Deconsolidation Period without FRP’s consent. In the event that FRP consents to the carry back of any Tax
item by a member of the Patriot Group from a Post-Deconsolidation Period to a Pre-Deconsolidation Period or in the event that a
member of the Patriot Group is required by applicable law to carry back a Tax item from a Post-Deconsolidation Period to a Pre-Deconsolidation
Period, FRP shall currently compensate the Patriot Group only for a Tax item that is carried back which does not result in the
loss or deferral of any Tax attribute of any member of the FRP Group. In the event that such item of a member of the FRP Group
is only deferred, FRP shall make a payment to the Patriot Group in respect of such deferred item at the time the FRP Group actually
realizes the deferred Tax attribute. To the extent the FRP Group suffers a permanent loss of such Tax attribute, no payment shall
be made to the Patriot Group.

 

(d)          In the event
that the Patriot Group is entitled to a Tax benefit by reason of a FRP Assumed Liability Payment, Patriot shall pay to FRP (A) the
amount, if any, by which any Taxes payable by the Patriot Group are reduced by reason of the FRP Assumed Liability Payment and
(B) any Refund of Taxes or other Tax benefit attributable thereto that is actually realized, in each case as determined by
Patriot in consultation with FRP.

 

    	9

    	 

    

 

(e)          Patriot and
FRP hereby acknowledge and agree that Sections 6 and 7(a) are applicable only with respect to Pre-Deconsolidation Periods for which
a final Return is filed after the date hereof.

 

(f)          Deductions
and Reporting for Certain Equity-Based Awards.

 

(i)       The entity issuing
the equity awards and other incentive compensation described in Section 3.3 of the Employee Matters Agreement shall be entitled
to claim any Tax deduction in respect of such equity awards and other incentive compensation on its respective Tax Return associated
with such event.

 

(ii)       If, by reason of
a subsequent Final Determination as to the treatment of any Tax deduction related to the equity awards and other incentive compensation
referred to in subsection (f)(i) above, a Taxing Authority determines that (A) FRP or a member of the FRP Group is entitled to
a deduction to which Patriot or a member of the Patriot Group is entitled pursuant to subsection (f)(i), then FRP shall, and shall
cause the FRP Group to, pay to Patriot the amount of any resulting Tax benefits within 30 days of demand therefor, or (B) Patriot
or a member of the Patriot Group is entitled to a deduction to which FRP or a member of the FRP Group is entitled pursuant to subsection
(f)(i), then Patriot shall, and shall cause the Patriot Group to, pay to FRP the amount of any resulting Tax benefits within 30
days of demand therefor.

 

(g)          Except as specifically
provided herein, with respect to any Tax Return that FRP has the obligation and right to file for any Pre-Deconsolidation Periods,
such Tax Return shall be prepared in accordance with past practices, accounting methods, elections, or conventions (“Past
Practices”) used by the Consolidated Group with respect to the Tax Return in question (unless there is no reasonable basis
for the use of such Past Practices), and to the extent any items are not covered by Past Practices (or in the event that there
is no reasonable basis for the use of such Past Practices), in accordance with reasonable Tax accounting practices. Neither FRP
nor Patriot shall take a position on any Tax Return that is reasonably expected to cause a Tax Detriment to the other party without
the written consent of such party, such consent not to be unreasonably withheld or delayed.

 

Section
8.          Other Taxes. All federal, state, local, foreign and
other Taxes that are (i) not otherwise expressly dealt with herein or (ii) determined on a single-entity basis
(including any federal excise Taxes and any franchise Taxes), and the filing of any Returns with respect to such Taxes, shall
be the responsibility of the Person who is liable for such Taxes or is responsible for filing such Returns under applicable
law.

 

Section 9.          Certain
Representations and Covenants.

 

(a)          Patriot Representations.
Patriot and each member of the Patriot Group represents that as of the date hereof, and covenants that on the Distribution Date,
there is no plan or intention:

 

(i)          to
liquidate Patriot or to merge or consolidate Patriot, or any member of the Patriot Group, with any other Person subsequent to the
Distribution;

 

    	10

    	 

    

 

(ii)          to
sell or otherwise dispose of any material asset of Patriot or any member of the Patriot Group subsequent to the Distribution, except
in the ordinary course of business;

 

(iii)          to
take any action inconsistent with the written information and representations furnished to counsel in connection with any opinion
being delivered by counsel with respect to the Distribution, regardless of whether such information and representations were included
in the opinion of counsel;

 

(iv)          to
repurchase stock of Patriot other than in a manner that satisfies the requirements of IRS Revenue Procedure 96-30, as modified
by IRS Revenue Procedure 2003-48;

 

(v)          to
take any action that management of Patriot knows, or should have known, is reasonably likely to contravene any agreement with a
Taxing Authority entered into prior to the Distribution Date to which any member of the Patriot Group or the FRP Group is a party;
or

 

(vi)          to
enter into any negotiations, agreements, or arrangements with respect to transactions or events (including stock issuances, pursuant
to the exercise of options or otherwise, option grants, the adoption of, or authorization of shares under, a stock option plan,
capital contributions, or acquisitions, but not including the Distribution) that could reasonably be expected to cause the Distribution
to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly Patriot stock representing
a “50-percent or greater interest” within the meaning of Section 355(d)(4) of the Code.

 

(b)          Patriot Covenants.
Patriot covenants to FRP that, without the prior written consent of FRP,

 

(i)          during
the two-year period following the Distribution Date, (A) neither Patriot, nor any member of the Patriot Group conducting an Active
Business, will, or will agree to, discontinue such business or dissolve, liquidate or engage in any transaction involving a merger,
consolidation or other reorganization, and (B) none of Patriot or any other member of the Patriot Group will, or will agree to,
sell, exchange, distribute or otherwise dispose of any asset of any member of the Patriot Group, except in the ordinary course
of business or as set forth on Schedule 9(b)(i);

 

(ii)          Patriot
will not, nor will it permit any member of the Patriot Group to, take any action inconsistent with the information and representations
furnished to counsel in connection with any opinion being delivered by counsel with respect to the Distribution, regardless of
whether such information and representations were included in the opinion of counsel;

 

(iii)          Patriot
will not, nor will it permit any member of the Patriot Group to, take any action that management of Patriot knows, or should have
known, is reasonably likely to contravene any agreement with a Taxing Authority entered into prior to the Distribution Date to
which any member of the Patriot Group or the FRP Group is a party;

 

    	11

    	 

    

 

(iv)          during
the two-year period following the Distribution Date, Patriot will not repurchase stock of Patriot in a manner contrary to the requirements
of IRS Revenue Procedure 96-30, as modified by IRS Revenue Procedure 2003-48, or in a manner contrary to the representations made
to counsel in connection with the opinion of counsel;

 

(v)          on
or after the Distribution Date, Patriot will not, nor will it permit any member of the Patriot Group to, make or change any accounting
method, amend any Return or take any Tax position on any Return, take any other action or enter into any transaction that results
in any increased Tax liability or reduction of any Tax asset of the FRP Group or any member thereof in respect of any Pre-Deconsolidation
Period;

 

(vi)          during
the two-year period following the Distribution Date, none of Patriot or any other member of the Patriot Group will, or will agree
to, sell or otherwise issue to any Person, or redeem or otherwise acquire from any Person, any Equity Securities of Patriot or
any other member of the Patriot Group; provided, however, that Patriot may repurchase stock of Patriot as permitted by Section 9(b)(iv)
hereof and may issue such Equity Securities to the extent such issuances satisfy Safe Harbor VIII (relating to acquisitions in
connection with a person’s performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an
employer) of Treasury Regulation Section 1.355-7(d); and

 

(vii)          during
the two-year period following the Distribution Date, none of Patriot or any other member of the Patriot Group will (A) solicit
any Person to make a tender offer for, or otherwise acquire or sell, the Equity Securities of Patriot, (B) participate in or support
any unsolicited tender offer for, or other acquisition, issuance or disposition of, the Equity Securities of Patriot or (C) approve
or otherwise permit any proposed business combination or any transaction which, in the case of clauses (A) or (B), individually
or in the aggregate, together with any transaction occurring within the four-year period beginning on the date which is two years
before the Distribution Date and any other transaction which is part of a plan or series of related transactions (within the meaning
of Section 355(e) of the Code) that includes the Distribution, could result in one or more Persons acquiring (except for acquisitions
that otherwise satisfy Safe Harbor VIII (relating to acquisitions in connection with a person’s performance of services)
or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355–7(d))
directly or indirectly stock representing a 40% or greater interest, by vote or value, in Patriot (or any successor thereto).

 

(c)          Patriot Covenants
Exceptions. Notwithstanding the foregoing, Patriot and the members of Patriot Group may take actions inconsistent with the
covenants contained in Section 9(b) above, if:

 

    	12

    	 

    

 

(i)          In
the case of any disposition of assets that could otherwise be subject to Section 9(b)(i) or (ii), the aggregate book value
of such assets does not exceed 5 percent of total assets; or

 

(ii)          In
the case of any other action: (A) Patriot notifies FRP of its proposal to take such action and Patriot and FRP obtain a ruling
from the IRS to the effect that such actions will not result in the Distribution being taxable to FRP or its shareholders, provided
that Patriot agrees in writing to bear any expenses associated with obtaining such a ruling and, provided further, that Patriot
shall not be relieved of any liability under Section 10(a) of this Agreement by reason of seeking or having obtained such
a ruling; or (B) Patriot notifies FRP of its proposal to take such action and obtains an opinion of counsel recognized as
an expert in federal income tax matters and acceptable to FRP to the same effect as in Section 9(c)(ii)(A) , provided that
such opinion is acceptable to FRP in its sole discretion; provided further, that Patriot shall not be relieved of any liability
under Section 10(a) of this Agreement by reason of having obtained such an opinion.

 

Section 10.          Indemnities.

 

(a)          Patriot Indemnity.
Patriot and each member of the Patriot Group will jointly and severally indemnify FRP and the members of the FRP Group against,
and hold them harmless from:

 

(i)          any
Tax liability of the Patriot Group as determined in accordance with this Agreement;

 

(ii)          any
liability or damage resulting from a breach by Patriot or any member of the Patriot Group of any representation or covenant made
by Patriot herein;

 

(iii)          any
Tax liability of FRP that is attributable to any action of Patriot or any member of the Patriot Group, other than any action required
by the Separation Agreement without regard to whether FRP has consented to such action; and

 

(iv)          all
liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys’ fees and
expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion
of any Tax liability or damage described in (i), (ii), or (iii), including those incurred in the contest in good faith in appropriate
proceedings relating to the imposition, assessment or assertion of any such Tax, liability or damage.

 

(b)          FRP Indemnity.
FRP and each member of the FRP Group will jointly and severally indemnify Patriot and the members of the Patriot Group against,
and hold them harmless from:

 

(i)          any
Tax liability of the Consolidated Group, other than any such liabilities described in Section 10(a);

 

    	13

    	 

    

 

(ii)          any
Taxes imposed on Patriot or any member of the Patriot Group under Treasury Regulation 1.1502-6 (or similar provision of state,
local or foreign law) solely as a result of Patriot or any such member being or having been a member of a Consolidated Group; and

 

(iii)          all
liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys’ fees and
expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion
of any income Tax liability or damage described in (i) or (ii) including those incurred in the contest in good faith
in appropriate proceedings relating to the imposition, assessment or assertion of any such income Tax, liability or damage.

 

(c)          Discharge
of Indemnity. Patriot, FRP and the members of the Patriot Group and FRP Group, respectively, shall discharge their obligations
under Sections 10(a) and 10(b) hereof, respectively, by paying the relevant amount within 30 days of demand therefor. Any such
demand shall include a statement showing the amount due under Section 10(a) or 10(b), as the case may be. Items described
in Sections 10(a)(i) and 10(b)(i) shall be calculated as set forth in Sections 3, 4 and 5. Notwithstanding the foregoing, if either
Patriot, FRP or any member of the Patriot Group or FRP Group disputes in good faith the fact or the amount of its obligation under
Section 10(a) or Section 10(b), then no payment of the amount in dispute shall be required until any such good faith
dispute is resolved in accordance with Section 21 hereof; provided, however, that any amount not paid within 30 days of demand
therefor shall bear interest as provided in Section 14.

 

(d)          Tax Benefits.
If an indemnification obligation of any member of the FRP Group or any member of the Patriot Group, as the case may be, under this
Section 10 with respect to a Consolidated Group arises in respect of an adjustment that makes allowable to a member of the
Patriot Group or a member of the FRP Group, respectively, any Tax benefit which would not, but for such adjustment, be allowable,
then any payment by any member of the FRP Group or any member of the Patriot Group, respectively, pursuant to this Section 10
shall be an amount equal to (x) the amount otherwise due but for this subsection (d), minus (y) the present value of
the product of the Tax benefit multiplied (i) by the maximum applicable federal, foreign, state or local, as the case may
be, corporate Tax rate in effect at the time such Tax benefit becomes allowable to a member of the Patriot Group or a member of
the FRP Group (as the case may be) or (ii) in the case of a credit, by 100 percent. The present value of such product shall
be determined by discounting such product from the time the Tax benefit becomes allowable at the rate equal to the “prime”
rate as published in the Wall Street Journal, Eastern Edition on the date of such determination.

 

Section
11.          Guarantees. FRP or Patriot, as the case may be,
shall guarantee or otherwise perform the obligations of each member of the FRP Group or the Patriot Group, respectively,
under this Agreement.

 

    	14

    	 

    

 

Section 12.          Communication
and Cooperation.

 

(a)          Consult and
Cooperate. Patriot and FRP shall consult and cooperate (and shall cause each member of the Patriot Group or the FRP Group,
respectively, to cooperate) fully at such time and to the extent reasonably requested by the other party in connection with all
matters subject to this Agreement. Such cooperation shall include, without limitation,

 

(i)          the
retention, and provision on reasonable request, of any and all information including all books, records, documentation or other
information pertaining to Tax matters relating to the FRP Group and the Patriot Group, any necessary explanations of information,
and access to personnel, until one year after the expiration of the applicable statute of limitation (giving effect to any extension,
waiver, or mitigation thereof);

 

(ii)          the
execution of any document that may be necessary (including to give effect to Section 13) or helpful in connection with any
required Return or in connection with any audit, proceeding, suit or action; and

 

(iii)          the
use of the parties’ best efforts to obtain any documentation from a governmental authority or a third party that may be necessary
or helpful in connection with the foregoing.

 

(b)          Provide Information.
FRP and Patriot shall keep each other fully informed with respect to any material development relating to the matters subject to
this Agreement.

 

(c)          Tax Attribute
Matters. FRP and Patriot shall promptly advise each other with respect to any proposed Tax adjustments relating to a Consolidated
Group, which are the subject of an audit or investigation, or are the subject of any proceeding or litigation, and which may affect
any Tax liability or any Tax attribute of FRP, Patriot, the FRP Group, the Patriot Group or any member of the Patriot Group or
the FRP Group (including, but not limited to, basis in an asset or the amount of earnings and profits).

 

Section 13.          Audits
and Contest.

 

(a)          Notice.
FRP or Patriot shall promptly notify the other in writing upon the receipt of any notice of Tax Proceeding from the relevant Taxing
Authority; provided, that a party’s right to indemnification under this Agreement shall not be limited in any way by a failure
to so notify, except to the extent that the indemnifying party is materially prejudiced by such failure.

 

(b)          FRP Control.
Notwithstanding anything in this Agreement to the contrary, except to the extent provided in paragraphs (c), (d) and (e) below,
FRP shall have the right to control all matters relating to any Tax Return or any Tax Proceeding with respect to any Tax matters
of a Consolidated Group or any member of a Consolidated Group. FRP shall have absolute discretion with respect to any decisions
to be made, or the nature of any action to be taken, with respect to any Tax matter described in the preceding sentence; provided,
however, that FRP shall keep Patriot informed of all material developments and events relating to such matters to the extent they
affect the Separate Group Tax Liability of the Patriot Group or may give rise to a claim for indemnity by FRP against Patriot under
Section 10(a) of this Agreement; and at its own cost and expense, Patriot shall have the right to participate in (but not
to control) the defense of any such tax claim.

 

    	15

    	 

    

 

(c)          Patriot Assumption
of Control; Non-Section 355 Matters. If FRP determines that the resolution of any matter relating to a Tax Return or Tax
Proceeding (other than a Tax Proceeding relating to the qualification of the Distribution under Sections 355 and 368(a)(1)(D) of
the Code) is reasonably likely to have an adverse effect on Patriot Group with respect to any Post-Deconsolidation Period, FRP
may permit Patriot to elect to assume control over disposition of such matter at Patriot’s sole cost and expense; provided,
however, that if Patriot so elects, it will (i) be responsible for the payment of any liability arising from the disposition
of such matter notwithstanding any other provision of this Agreement to the contrary and (ii) indemnify the FRP Group for
any increase in a liability and any reduction of a Tax asset of the FRP Group arising from such matter.

 

(d)          Patriot Assumption
of Control; Section 355 Matters. In the event of a Tax Proceeding relating to the qualification of the Distribution under
Sections 355 and 368(a)(1)(D) of the Code, FRP shall have the right to control the defense of the matter in all proceedings before
the IRS, provided that FRP shall keep Patriot fully informed of all material developments and shall permit Patriot a reasonable
opportunity to participate in the defense of the matter.

 

(e)          Patriot Control.
Patriot shall have full control over all matters relating to any Tax Proceeding with respect to Returns of Patriot Group relating
to any Post-Deconsolidation Period.

 

Section 14.          Payments.

 

(a)          Timing, After-Tax
Amounts. All payments to be made hereunder shall be made in immediately available funds. Except as otherwise provided, all
payments required to be made pursuant to this Agreement will be due 30 days after the receipt of notice of such payment or, where
no notice is required, 30 days after the fixing of liability or the resolution of a dispute. Payments shall be deemed made when
received. Any payment that is not made when due shall bear interest at the rate equal to the “prime” rate as published
on such date in the Wall Street Journal, Eastern Edition. If, pursuant to a Final Determination, any amount paid by FRP or the
members of the FRP Group or Patriot or the members of the Patriot Group, as the case may be, pursuant to this Agreement results
in any increased Tax liability or reduction of any Tax asset of Patriot or any member of the Patriot Group or FRP or any member
of the FRP Group, respectively, then FRP or Patriot, as appropriate, shall indemnify the other party and hold it harmless from
any interest or penalty attributable to such increased Tax liability or the reduction of such Tax asset and shall pay to the other
party, in addition to amounts otherwise owed, the After-Tax Amount. With respect to any payment required to be made or received
under this Agreement, FRP has the right to designate, by written notice to Patriot, which member of the FRP Group will make or
receive such payment.

 

    	16

    	 

    

 

(b)          Netting of
Payments. If, on the day payment is due under this Agreement, each of FRP and Patriot (each, a “Party”) owes an
amount to the other Party pursuant to this Agreement and any other agreement between the Parties, including, without limitation,
the Separation Agreement and any Ancillary Agreement, as defined in the Separation Agreement, the Parties shall satisfy their respective
obligations to each other by netting the aggregate amounts due to one Party against the aggregate amounts due to the other Party,
with the Party, if any, owning the greater aggregate amount paying the other Party the difference between the amounts owed. Such
net payment shall be made pursuant to the provision of Section 14(a).

 

Section 15.          Notices. Any
notice, demand, claim, or other communication under this Agreement shall be in writing and shall be deemed to have been given
upon the delivery or mailing, thereof, as the case may be, if delivered personally or sent by certified mail, return receipt requested,
postage prepaid, to the parties at the following addresses (or at such other address as a party may specify by notice to the other):

 

If to FRP or the FRP
Group, to:

 

FRP Holdings, Inc.

Attn: President

200 W. Forsyth
Street, 7th Floor

Jacksonville, Florida
32202

 

If to Patriot or the
Patriot Group, to:

 

Patriot Transportation Holding,
Inc.

Attn: President

200 W. Forsyth Street, 7th
Floor

Jacksonville, Florida 32202

 

Section 16.          Costs
and Expenses.

 

(a)          Except as expressly
set forth in this Agreement, each party shall bear its own costs and expenses incurred pursuant to this Agreement. For purposes
of this Agreement, costs and expenses shall include, but not be limited to, reasonable attorneys’ fees, accountant fees and
other related professional fees and disbursements. Notwithstanding anything to the contrary in this Agreement, each of the Patriot
Group and the FRP Group will be responsible for its allocable portion, as determined by FRP, of (i) all costs and expenses
attributable to filing any Return that reflects the income, assets or operations of the Patriot Group or the FRP Group, respectively
and (ii) all costs and expenses incurred by FRP or Patriot, respectively, in complying with the provisions of Section 12
of this Agreement.

 

(b)          With respect
to all Tax Proceedings, including any pending litigation with any Taxing Authority, costs shall be allocated in good faith by FRP.
Each party hereto shall be liable for its allocable portion of such costs as provided in Section 10.

 

    	17

    	 

    

 

Section
17.          Effectiveness; Termination and Survival. This
Agreement shall become effective upon the consummation of the Distribution. All rights and obligations arising hereunder
shall survive until they are fully effectuated or performed; provided, further, that notwithstanding anything in this
Agreement to the contrary, this Agreement shall remain in effect and its provisions shall survive for one year after the full
period of all applicable statutes of limitation (giving effect to any extension, waiver or mitigation thereof) and, with
respect to any claim hereunder initiated prior to the end of such period, until such claim has been satisfied or
otherwise resolved.

 

Section 18.          Section
Headings.

 

The headings contained
in this Agreement are inserted for convenience only and shall not constitute a part hereof or in any way affect the meaning or
interpretation of this Agreement.

 

Section 19.          Entire
Agreement; Amendments and Waivers.

 

(a)          Entire Agreement.
This Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein. No
alteration, amendment, modification, or waiver of any of the terms of this Agreement shall be valid unless made by an instrument
signed by an authorized officer of each of FRP and Patriot, or in the case of a waiver, by the party against whom the waiver is
to be effective.

 

(b)          Amendments
and Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver
hereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right,
power or privilege. This Agreement shall not be waived, amended or otherwise modified except in writing, duly executed by all of
the parties hereto.

 

Section 20.          Governing
Law and Interpretation.This Agreement shall be construed and enforced in accordance with the laws of the State of Florida
without giving, effect to laws and principles relating to conflicts of law.

 

Section
21.          Dispute Resolution. In the event of any dispute
relating to this Agreement, including but not limited to whether a Tax liability is a liability of the FRP Group or the
Patriot Group, the parties shall work together in good faith to resolve such dispute within 30 days. If the parties are
unable to resolve such dispute within 30 days, such dispute shall be resolved by an accounting firm whose selection shall be
reasonably satisfactory to both parties and whose fees and costs shall be shared equally by FRP and Patriot.

 

Section 22.          Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same Agreement.

 

Section 23.          Assignments;
Third Party Beneficiaries. Except as provided below, this Agreement shall be binding upon and shall inure only to the benefit
of the parties hereto and their respective successors and assigns, by merger, acquisition of assets or otherwise (including but
not limited to any successor of a party hereto succeeding to the Tax attributes of such party under applicable law). This Agreement
is not intended to benefit any person other than the parties hereto and such successors and assigns, and no such other person
shall be a third party beneficiary hereof.

 

    	18

    	 

    

 

Section
24.          Authorization, Etc. Each of the parties hereto
hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this
Agreement has been duly authorized by all necessary corporate action on the part of such party, that this Agreement
constitutes a legal, valid and binding obligation of each such party, and that the execution, delivery and performance of
this Agreement by such party does not contravene or conflict with any provision or law or of its charter or bylaws or any
agreement, instrument or order binding on such party.

 

IN WITNESS WHEREOF,
the parties have executed and delivered this Agreement as of the day and year first written above.

 

	 	FRP HOLDINGS, INC., a Florida
corporation, on its behalf and on behalf of the members of the FRP Group
	 	 	 
	 	By	 
	 	Name:  	 
	 	Title:	 
	 	 	 
	 	PATRIOT TRANSPORTATION HOLDING,
INC., a Florida corporation, on its behalf and on behalf of the members of the Patriot Group
	 	 	 
	 	By	 
	 	Name:  	 
	 	Title:	 

 

 

19

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