Document:

arex-ex106_263.htm

Exhibit 10.6

LIMITED FORBEARANCE AGREEMENT

This LIMITED FORBEARANCE AGREEMENT (this “Agreement”), is entered into as of May 9, 2019, among APPROACH RESOURCES INC., a Delaware corporation, as the Borrower (the “Borrower”), each Guarantor (as such term is defined in the Credit Agreement referenced below) (the Borrower, together with each Guarantor, collectively, the “Credit Parties”), the lenders party to this Agreement (the “Consenting Lenders”), the Issuing Bank and JPMORGAN CHASE BANK, N.A., a national banking association, in its capacity as administrative agent for itself and the other Secured Parties (the “Administrative Agent”).

RECITALS:

	
A.
	
The Borrower, the Guarantors, the Administrative Agent and the financial institutions named therein as lenders (the “Lenders”) are parties to that certain Amended and Restated Credit Agreement, dated as of May 7, 2014 (as heretofore amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), pursuant to which the Lenders agreed to make Loans and provide certain other financial accommodations to the Borrower.

	
B.
	
Pursuant to the Credit Agreement, the Guarantors have guaranteed all of the Indebtedness.

	
C.
	
The Credit Parties acknowledge that (i) an Event of Default under Section 10.01(d) of the Credit Agreement may occur on account of the failure by the Borrower to maintain a ratio of EBITDAX for the four fiscal quarter period ending March 31, 2019 to Interest Expense for such period of not less than 2.25 to 1.00 as required by Section 9.01(a) of the Credit Agreement, (ii) an Event of Default under Section 10.01(d) of the Credit Agreement may occur on account of the failure by the Borrower to maintain a Total Leverage Ratio for the fiscal quarter ended March 31, 2019 of less than 5.00 to 1.00 as required by Section 9.01(c) of the Credit Agreement and (iii) an Event of Default under Section 10.01(d) may occur on account of the failure by the Borrower to deliver notice as required by Section 8.02(a) of the Credit Agreement with respect to the Events of Default described in the foregoing clauses (i) and (ii) (clauses (i), (ii) and (iii) collectively, the “Specified Defaults”).

	
D.
	
The Credit Parties have requested that the Administrative Agent, the Issuing Bank and the Lenders, upon certain terms and conditions set forth in this Agreement, forbear from exercising their rights and remedies for a limited period expiring on the Forbearance Termination Date (as defined below) arising as a result of the occurrence and continuation of the Specified Defaults as provided herein.

	
E.
	
The Administrative Agent, the Issuing Bank and the Consenting Lenders, which constitute Majority Lenders, are willing to grant such forbearance subject to the terms and conditions of this Agreement and the other Loan Documents.

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

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1.Definitions.  Capitalized terms used and not otherwise defined herein shall have the same meanings as set forth in the Credit Agreement.  In addition, the following terms, for the purposes of this Agreement, shall have the following meanings:

“Agent Counsel” has the meaning given to such term in Section 5.2 hereof.

“Agent Advisor” has the meaning given to such term in Section 5.2 hereof.

“Borrower Advisor” means Tudor, Pickering, Holt & Co., a division of Perella Weinberg Partners LP.

“Budget” has the meaning given to such term in Section 5.1 hereof.

“Collateral” means all of the Property of the Credit Parties in which Liens are purported to be granted pursuant to the Security Instruments as security for the Indebtedness.  

“Forbearance Effective Date” has the meaning given to such term in Section 3 hereof.

“Forbearance Period” means the period commencing on the Forbearance Effective Date and continuing until the Forbearance Termination Date.

“Forbearance Termination Date” means 5:00 p.m. (Dallas, Texas time) on the earlier of (i) June 22, 2019, or (ii) the date on which a Forbearance Termination Event occurs.

“Forbearance Termination Event” means the occurrence of any of the following: (i) Borrower or any Guarantor shall fail to perform, observe or comply timely with any covenant, agreement or term contained in Section 5.1 or 5.5 of this Agreement, (ii) any Event of Default, other than the Specified Defaults, shall occur or shall have occurred under this Agreement or any of the Loan Documents, (iii) the Borrower or any Restricted Subsidiary shall (A) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (B) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 10.01(h) of the Credit Agreement, (C) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Restricted Subsidiary or for a substantial part of its assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors or (F) take any action for the purpose of effecting any of the foregoing or (iv) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (A) liquidation, reorganization or other relief in respect of the Borrower or any Restricted Subsidiary or its debts, or of a substantial part of its assets, under any  Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (B) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Restricted Subsidiary or for a substantial part of its assets.  

“Lender-Related Parties” has the meaning given to such term in Section 9 hereof.

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2.Forbearance.  

2.1.Each Credit Party specifically acknowledges the potential existence and continuation of the Specified Defaults.  In reliance on the representations, warranties, covenants and agreements contained in this Agreement, and subject to the satisfaction of each condition precedent set forth in Section 3 hereof but only so long as the Forbearance Termination Date shall not have occurred and except as permitted by this Agreement, the Administrative Agent, the Consenting Lenders and the Issuing Bank hereby agree to forbear during the Forbearance Period from exercising their rights and remedies under the Loan Documents and applicable law arising as a result of the occurrence or continuance of the Specified Defaults.  Notwithstanding the foregoing, the forbearance granted by the Administrative Agent, the Consenting Lenders and the Issuing Bank shall not constitute, and shall not be deemed to constitute a waiver of the Specified Defaults or of any other Default or Event of Default under the Loan Documents.  On and after the Forbearance Termination Date, the Administrative Agent’s, the Consenting Lenders’ and the Issuing Bank’s agreement hereunder to forbear shall terminate automatically without further act or action by the Administrative Agent, any Lender or Issuing Bank, and the Administrative Agent, the Lenders and the Issuing Bank shall be entitled to exercise any and all rights and remedies available to them under this Agreement and the other Loan Documents, at law, in equity or otherwise without any further lapse of time, expiration of applicable grace periods or requirements of notice, all of which are hereby expressly waived by each Credit Party.  For the avoidance of doubt, the foregoing forbearance shall not prohibit the Administrative Agent from delivering notices relating to any other Defaults, Events of Default or a Forbearance Termination Event.

2.2.Each Credit Party specifically acknowledges that (a) the conditions to each credit event set forth in Section 6.02 of the Credit Agreement are not able to be satisfied, (b) the Lenders have no obligation to make Loans and (c) the Issuing Bank has no obligation to issue, amend, renew or extend any Letter of Credit.  Notwithstanding the forbearance set forth in Section 2.1, the Administrative Agent and the Required Lenders may elect to impose the default rate of interest on all outstanding Loans pursuant to Section 3.02(c) of the Credit Agreement at any time after the occurence of any Specified Default or any other Event of Default.  Each Credit Party specifically acknowledges that, pursuant to Section 3.02(c) of the Credit Agreement, all Loans outstanding shall automatically bear interest at the default rate upon the occurrence and continuance of an Event of Default of the type described in Section 10.01(a), Section 10.01(b), Section 10.01(h), Section 10.01(i) or Section 10.01(j) of the Credit Agreement.  

3.Conditions Precedent.  This Agreement shall be effective beginning on the first date that each condition precedent set forth in this Section 3 is satisfied (the “Forbearance Effective Date”):

3.1.Signed Agreement.  The Administrative Agent shall have received counterparts of this Agreement duly executed by the Administrative Agent, the Credit Parties, the Issuing Bank and Lenders constituting Majority Lenders.

3.2.Forbearance Fee.  The Administrative Agent shall have received, for the ratable benefit of the Consenting Lenders, a forbearance fee in an aggregate amount equal to 0.10% of each Consenting Lender’s Commitment as of the Forbearance Effective Date, which shall be fully earned and payable on the Forbearance Effective Date. 

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3.3.Expenses.  The Administrative Agent and related advisors shall have received payment of all out-of-pocket accrued costs and expenses (including the fees of Agent Counsel and Agent Advisor) for which invoices have been submitted in summary form on or prior to the Forbearance Effective Date.

Upon the satisfaction of the foregoing conditions, the Administrative Agent shall advise the other parties hereto in writing of the occurrence of the Forbearance Effective Date.

4.Representations and Warranties.  To induce the Administrative Agent and the Consenting Lenders to enter into this Agreement, each Credit Party hereby represents and warrants as of the Forbearance Effective Date as follows:

4.1.Organization; Powers.  Each of the Borrower and the Restricted Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority, and has all material governmental licenses, authorizations, consents and approvals necessary, to own its assets and to carry on its business as now conducted, and is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where failure to have such power, authority, licenses, authorizations, consents, approvals and qualifications would not reasonably be expected to have a Material Adverse Effect.

4.2.Authority; Enforceability.  The execution, delivery and performance by each Credit Party of this Agreement are within such Credit Party’s corporate, limited partnership, limited liability company, or other organizational powers and have been duly authorized by all necessary corporate, limited partnership, limited liability company, or other organizational and, if required, stockholder, partner, or member action (including any action required to be taken by any class of directors, partners, members, or managers, as applicable, of such Credit Party or any other Person, whether interested or disinterested, in order to ensure the due authorization of the Transactions).  This Agreement has been duly executed and delivered by such Credit Party and constitutes a legal, valid and binding obligation of such Credit Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

4.3.Approvals; No Conflicts The execution, delivery and performance by each Credit Party of this Agreement (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any other third Person (including shareholders or any class of directors, whether interested or disinterested, of the Borrower or any other Person), nor is any such consent, approval, registration, filing or other action necessary for the validity or enforceability of any Loan Document or the consummation of the transactions contemplated thereby, except such as have been obtained or made and are in full force and effect other than (i) the recording and filing of the Security Instruments as required by the Credit Agreement and (ii) those third party approvals or consents which, if not made or obtained, would not cause a Default hereunder, would not reasonably be expected to have a Material Adverse Effect or do not have an adverse effect on the enforceability of the Loan Documents, (b) will not violate any applicable law or regulation or the charter, bylaws or other organizational documents of the Borrower or any Restricted Subsidiary or any order of any Governmental Authority, (c) will not 

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violate or result in a default under any indenture, material agreement or other material instrument binding upon the Borrower or any Restricted Subsidiary or any of their Properties, or give rise to a right thereunder to require any payment to be made by the Borrower or such Restricted Subsidiary and (d) will not result in the creation or imposition of any Lien on any Property of the Borrower or any Restricted Subsidiary (other than the Liens created by the Loan Documents).

4.4.No Defenses.  As of the Forbearance Effective Date, no Credit Party has any defenses to payment, counterclaims, or rights of setoff or recoupment with respect to any obligations applicable to such Credit Party owing to the Administrative Agent or any Lender, including, without limitation, the Loans, the advances, and the Indebtedness. 

4.5.No Other Defaults.  Except for the Specified Defaults, no other Default or Event of Default has occurred and is continuing.  Without taking into effect the terms, conditions, and agreements set forth in this Agreement, as a result of the Specified Defaults, the Administrative Agent may, and at the request of the Required Lenders shall, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Notes and the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower and the Guarantors accrued hereunder and under the Notes and the other Loan Documents (including the payment of cash collateral to secure the LC Exposure as provided in Section 2.08(j) of the Credit Agreement), shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind.  All advances, credit extensions, and transfers after the Forbearance Effective Date pursuant to this Agreement and the Credit Agreement are intended to be, and are, exchanged contemporaneously for new value provided to the Credit Parties, and with any and all relation back rights and privileges of the Administrative Agent, as applicable.

4.6.Principal Balance; Letters of Credit.  As of the close of business on May 2, 2019, (a) the outstanding principal amount of the Loans was $322,000,000, and (b) the aggregate stated amount of outstanding Letters of Credit was $325,000.

4.7.Complete Disclosure.  None of the factual information furnished by or on behalf of the Credit Parties to the Administrative Agent or any Lender for purposes of or in connection with this Agreement or the other Loan Documents (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact (other than industry-wide risks normally associated with the types of business conducted by the Credit Parties to the extent that such risks do not have a disproportionate effect on the Credit Parties (in comparison to the effect of such risks on other similarly situated parties associated with such types of business)) necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that (a) with respect to projected financial information, prospect information, geological and geophysical data and engineering projections, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time and (b) as to statements, information and reports supplied by third parties, the Borrower represents only that it is not aware of any material misstatement or omission therein.

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5.Covenants.  Each Credit Party shall comply with the covenants set forth in this Section 5 (whether or not a Forbearance Termination Event occurs) in addition to the covenants in the Credit Agreement and any other Loan Documents. 

5.1.Cash Flow Forecasts.  

(a)The Credit Parties shall deliver to the Administrative Agent:

(1)by no later than 12 noon Central Time on Thursday of each week beginning on May 16, 2019 and by no later than 12 noon Central Time on each Thursday thereafter, an updated weekly 13-week cash flow forecast, in form and substance acceptable to the Administrative Agent, setting forth all sources and uses of cash and beginning and ending cash balances (the “Budget”), 

(2)by no later than 12 noon Central Time on Thursday of each week, beginning on May 23, 2019, a variance report (each a “Variance Report”), reconciling the prior week’s cash flow forecast to the actual sources and uses of cash for the prior week, along with an explanation of material variances, and 

(3)upon the written request of the Administrative Agent, following delivery of any Variance Report, a report via teleconference with the Administrative Agent and the Agent Advisor reconciling actual weekly cash flow (including actual disbursements), including an explanation of material variances.  

(b)The Credit Parties shall also provide the Administrative Agent and the Agent Advisor access to the Credit Parties’ management and the Borrower Advisor to discuss any variances.  

(c)The Credit Parties shall deliver to the Administrative Agent by no later than 12 noon Central Time on Thursday of each week beginning on May 16, 2019 and by no later than 12 noon Central Time on each Thursday thereafter, a listing of each Credit Party’s trade payables as of the end of the previous week, specifying the trade creditor and balance due, and a detailed trade payable aging, all in form reasonably satisfactory to the Administrative Agent.

Notwithstanding the foregoing, the Administrative Agent may agree to extend the deadline for the delivery of any reporting required by this Section 5.1 in any specific instance in its sole and absolute discretion.  

5.2.Access; Cooperation.  The Administrative Agent and its representatives and consultants shall have reasonable access to the Credit Parties’ business premises and to the Collateral to review, audit, appraise and evaluate the Collateral and to inspect the financial records and other records of the Credit Parties concerning the operation of their businesses, their financial condition, the transfers and expenditures of funds generated therefrom, the accrual of expenses relating thereto, and any and all other records relating to the Collateral, or the operations of any of the Credit Parties.  Each Credit Party will fully cooperate with the Administrative Agent and related representatives and consultants (including Agent Counsel and Agent Advisor) regarding such reviews, audits, evaluations and inspections, and the Credit Parties shall use commercially reasonable efforts to make their employees, consultants and professionals reasonably available to 

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the Administrative Agent and related representatives and consultants (including, without limitation, the Borrower Advisor) in conducting such reviews, evaluations and inspections, in each case, during normal business hours.  Credit Parties acknowledge that Vinson & Elkins L.L.P. has been engaged as Administrative Agent’s legal counsel (“Agent Counsel”) and that Opportune LLP has been engaged as Administrative Agent’s advisor (“Agent Advisor”).  The Credit Parties agree to pay all out-of-pocket fees, costs and expenses of Agent Counsel and Agent Advisor promptly (but, in any event, within two (2) Business Days) upon submission of invoices therefor in summary form (which amounts, for the avoidance of doubt, shall also constitute Indebtedness secured by the Collateral).

5.3.Further Information.  In addition to any notices or information required to be given under the Loan Documents, each Credit Party will provide the Administrative Agent with (a) written notice within one Business Day of the occurrence of any Forbearance Termination Event and/or any breach or violation of this Agreement by any Credit Party, (b) prompt written notice of a default or event of default or required redemption relating to any other Debt of any Credit Party, (c) prompt written notice of the occurrence of any default or event of default, or the pursuit of any remedies against any Credit Party, in connection with any material contract (including termination thereof) and (d) prompt written notice of the filing or commencement of, or the threat in writing of, any action, suit (whether in state or federal court), proceeding, receivership, involuntary petition in bankruptcy, investigation or arbitration by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Credit Party, threatened against or affecting any of the Credit Parties not previously disclosed in writing to Administrative Agent or any material adverse development in any action, suit, proceeding, investigation or arbitration (whether or not previously disclosed to the Administrative Agent).

5.4.No Control.No act committed or action taken by the Administrative Agent prior to the Forbearance Effective Date under this Agreement or the Loan Documents will be used, construed, or deemed to hold the Administrative Agent to be in control of the Credit Parties, or the governance, management or operations of the Credit Parties for any purpose, without limitation, or to be participating in the management of the Credit Parties or acting as a “responsible person” or “owner or operator” or a person in “control” with respect to the governance, management or operation of the Credit Parties or their respective businesses (as such terms, or any similar terms, are used in the Code, Title 11 of the United States Code entitled “Bankruptcy”, or the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, each as may be amended from time to time, or any other federal or state statute, at law, in equity, or otherwise) by virtue of the interests, rights, and remedies granted to or conferred upon the Administrative Agent under this Agreement or the Loan Documents.

5.5.Additional Information.  Not later than 10 Business Days after the Forbearance Effective Date (or such later date as the Administrative Agent may consent to in its sole and absolute discretion), the Credit Parties shall deliver to the Administrative Agent a current list of the Deposit Accounts, commodities accounts and securities accounts of the Borrower and each Credit Party, certified by a Responsible Officer of the Borrower.  

6.Preservation of Collateral.  Each Credit Party shall maintain the Liens and security interests in the Collateral created by the Loan Documents as first priority, perfected Liens and security interests and shall defend such Liens and security interests against the claims and 

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demands of all Persons whomsoever except for Liens permitted by Section 9.03 of the Credit Agreement.  The Borrower at its sole expense will, and will cause each Restricted Subsidiary to, promptly execute and deliver to the Administrative Agent all such other documents, agreements and instruments reasonably requested by the Administrative Agent to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of the Borrower or any Restricted Subsidiary, as the case may be, in the Loan Documents, including the Notes, or to further evidence and more fully describe the collateral intended as security for the Indebtedness, or to correct any defect, error or inaccuracy in this Agreement or the Security Instruments, or to state more fully the obligations secured therein, or to perfect, protect or preserve any Liens created pursuant to this Agreement or any of the Security Instruments or the priority thereof, or to make any recordings, file any notices or obtain any consents, all as may be reasonably  necessary or appropriate, in the sole discretion of the Administrative Agent, in connection therewith.

7.Protective Advances.  From and after the Forbearance Effective Date, the parties hereto hereby authorize the Administrative Agent from time to time, but with no obligation, to make loans, with or without the consent of the Credit Parties, which the Administrative Agent, in its sole and absolute discretion, deems necessary or desirable to (a)  preserve or protect the Collateral, or any portion thereof, (b) enhance the likelihood of, or maximize the amount of, repayment of the Indebtedness, or (c) pay any other amount chargeable to or required to be paid by any Credit Party pursuant to the terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and expenses as described in Section 12.03 of the Credit Agreement) and other sums payable under the Loan Documents (a “Protective Advance”); provided that (x) the aggregate amount of Protective Advances permitted to be made under this Section 7 shall not exceed $2,500,000 and (y) after giving effect to any such Protective Advance, the total Revolving Credit Exposure shall not exceed the total Commitments.  Any Protective Advance may be funded at the Administrative Agent’s election by deposit into a deposit account of, or other payment to, the Borrower.  Each Protective Advance shall be secured by the Liens in favor of the Administrative Agent in and to the Collateral and shall initially constitute ABR Loans under the Credit Agreement and shall be subject to the provisions of the Credit Agreement, including without limitation, Section 2.05 of the Credit Agreement.   The making of a Protective Advance on any one occasion shall not obligate the Administrative Agent to make any Protective Advance on any other occasion.  The Credit Parties hereby acknowledge that the Administrative Agent has no commitment or obligation to make any Protective Advance, that any Protective Advance or other advance made by the Administrative Agent to the Borrower shall constitute new value in the form of money and new credit, and that any such any Protective Advance or other advance shall be secured to the fullest extent of any and all liens and security interests granted under the Loan Documents and this Agreement.

8.Ratification of Loan Documents and Collateral.  Except as modified by this Agreement, each Credit Party hereby acknowledges, ratifies, reaffirms and agrees that each of the Loan Documents to which it is a party and the first priority (subject only to Liens permitted by Section 9.03 of the Credit Agreement or, in the case of Borrowing Base Properties, subject only to Liens permitted by Section 9.03(a) and (f) of the Credit Agreement and Excepted Liens), perfected Liens and security interests created thereby in favor of the Administrative Agent, for the benefit of the Secured Parties, in the Collateral, are and will remain in full force and effect and binding on such Credit Party, and are enforceable in accordance with their respective terms and applicable law.  By its execution hereof, each Credit Party (in its individual capacity and in its capacity as 

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member, shareholder or partner of each other Credit Party, as applicable) acknowledges, ratifies and reaffirms all of the terms and provisions of the Loan Documents and the enforceability thereof against it, which terms and provisions, except as modified herein, are incorporated by reference as of the Forbearance Effective Date as if set forth herein including, without limitation, all promises, agreements, warranties, representations, covenants, releases, and indemnifications contained therein.  Without limitation of the foregoing, (i) Borrower hereby acknowledges, ratifies and confirms the Credit Agreement and all of its debts and obligations to the Administrative Agent and the Lenders thereunder and (ii) each Credit Party hereby acknowledges, ratifies and confirms its guaranty of the Indebtedness under the Credit Agreement and all of its debts and obligations to the Administrative Agent and the Lenders thereunder.

9.NO CLAIMS; RELEASE; COVENANT NOT TO SUE.  EACH CREDIT PARTY (IN ITS OWN RIGHT AND ON BEHALF OF ITS PREDECESSORS, SUCCESSORS AND ASSIGNS) HEREBY EXPRESSLY AND UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT, AS OF THE DATE HEREOF, IT HAS NO SETOFFS, COUNTERCLAIMS, ADJUSTMENTS, RECOUPMENTS, DEFENSES, CLAIMS, CAUSES OF ACTION, ACTIONS OR DAMAGES OF ANY CHARACTER OR NATURE, WHETHER CONTINGENT, NONCONTINGENT, LIQUIDATED, UNLIQUIDATED, FIXED, MATURED, UNMATURED, DISPUTED, UNDISPUTED, LEGAL, EQUITABLE, SECURED OR UNSECURED, KNOWN OR UNKNOWN, ACTUAL OR PUNITIVE, FORESEEN OR UNFORESEEN, DIRECT, OR INDIRECT, AGAINST ADMINISTRATIVE Agent, any lender, THE ISSUING BANK, ANY OF their AFFILIATES OR ANY OF their OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS, consultants to attorneys OR REPRESENTATIVES OR ANY OF THEIR RESPECTIVE PREDECESSORS, SUCCESSORS OR ASSIGNS (COLLECTIVELY, THE “LENDER-RELATED PARTIES”), in each case which existed, arose or occurred at any time prior to the forbearance effective date OR ANY GROUNDS OR CAUSE FOR REDUCTION, MODIFICATION, SET ASIDE OR SUBORDINATION OF THE SECURED Indebtedness OR ANY LIENS OR SECURITY INTERESTS OF ADMINISTRATIVE AGENT.  IN PARTIAL CONSIDERATION FOR THE AGREEMENT OF THE ADMINISTRATIVE AGENT, the CONSENTING LENDERs AND THE ISSUING BANK TO ENTER INTO THIS AGREEMENT, EACH CREDIT PARTY HEREBY KNOWINGLY AND UNCONDITIONALLY WAIVES AND FULLY AND FINALLY RELEASES AND FOREVER DISCHARGES THE LENDER-RELATED PARTIES FROM, and covenants not to sue the Lender-related parties for, ANY AND ALL SETOFFS, COUNTERCLAIMS, ADJUSTMENTS, RECOUPMENTS, CLAIMS, DEMANDS, CAUSES OF ACTION, ACTIONS, GROUNDS, CAUSES, DAMAGES, REMEDIES, COSTS AND EXPENSES OF EVERY NATURE AND CHARACTER, WHETHER CONTINGENT, NONCONTINGENT, LIQUIDATED, UNLIQUIDATED, FIXED, MATURED, UNMATURED, DISPUTED, UNDISPUTED, LEGAL, EQUITABLE, SECURED OR UNSECURED, KNOWN OR UNKNOWN, ACTUAL OR PUNITIVE, FORESEEN OR UNFORESEEN, DIRECT OR INDIRECT, ARISING OUT OF OR FROM OR RELATED TO ANY LAW, STATUTE, RULE, REGULATION, OR ANY OF THE LOAN DOCUMENTS, WHETHER AT LAW, IN EQUITY, OR OTHERWISE, WHICH any CREDIT PArTY OWNS AND HOLDS as of the date hereof, OR HAS AT ANY TIME prior to the date hereof 

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OWNED OR HELD, SUCH WAIVER, RELEASE AND DISCHARGE BEING MADE WITH FULL KNOWLEDGE AND UNDERSTANDING OF THE CIRCUMSTANCES AND EFFECTS OF SUCH WAIVER, RELEASE AND DISCHARGE AND AFTER HAVING CONSULTED LEGAL COUNSEL OF ITS OWN CHOOSING WITH RESPECT THERETO.  THIS SECTION IS IN ADDITION TO ANY OTHER RELEASE OF ANY OF THE LENDER-RELATED PARTIES BY ANY CREDIT PARTY AND SHALL NOT IN ANY WAY LIMIT ANY OTHER RELEASE, COVENANT NOT TO SUE, OR WAIVER BY ANY CREDIT PARTY IN FAVOR OF ANY OF THE LENDER-RELATED PARTIES, IT BEING THE INTENT OF THE CREDIT PARTIES THAT THIS RELEASE AND COVENANT NOT TO SUE BE AS BROAD AND INCLUSIVE AS PERMITTED BY APPLICABLE LAW.

10.No Obligation.  Each Credit Party hereby acknowledges and understands that upon the expiration or earlier termination of the Forbearance Period, if the Specified Defaults have not been waived by written agreement in accordance with the Credit Agreement, or if there shall at any time exist any other Event of Default, then the Administrative Agent, the Lenders and the Issuing Bank shall have the right to proceed to exercise any or all available rights and remedies, which may include, without limitation, foreclosure on the Collateral and/or institution of legal or equitable proceedings.  The Administrative Agent, the Lenders and the Issuing Bank have not and shall have no obligation whatsoever to extend the maturity of the Indebtedness, waive any Default or Event of Default, defer any payments, or further forbear from exercising their rights and remedies.

11.No Implied Waivers.  No failure or delay on the part of the Administrative Agent, any Lender or the Issuing Bank in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement, the Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

12.Expenses; Indemnity.  Section 12.03 of the Credit Agreement is incorporated by reference herein, mutatis mutandis.

13.Survival of Representations and Warranties.  All representations and warranties made in this Agreement or any other Loan Document shall be considered to have been relied upon by the Agent, the Issuing Bank and the Consenting lenders and shall survive the execution and delivery of this Agreement, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any other Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.

14.Review and Construction of Documents.  Each Credit Party hereby acknowledges, and represents and warrants to the Administrative Agent, the Lenders and the Issuing Bank that, such Credit Party has (a) had the opportunity to consult with legal counsel of 

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its own choice and has been afforded an opportunity to review this Agreement with its legal counsel, (b) reviewed this Agreement and fully understands the effects thereof and all terms and provisions contained herein, and (c) executed this Agreement of its own free will and volition.  The recitals contained in this Agreement shall be construed to be part of the operative terms and provisions of this Agreement.

15.ENTIRE AGREEMENT; AMENDMENT.  THIS AGREEMENT AND THE LOAN DOCUMENTS AS INCORPORATED HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO REGARDING THE MATTERS CONTAINED HEREIN, INCLUDING THE ADMINISTRATIVE AGENT’S, THE CONSENTING LENDERS’ AND THE ISSUING BANK’S FORBEARANCE WITH RESPECT TO THEIR RIGHTS AND REMEDIES ARISING AS A RESULT OF THE SPECIFIED DEFAULTS, AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO.  THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.  The provisions of this Agreement may be amended or waived only by an instrument in writing signed by the Credit Parties, the Administrative Agent, the Issuing Bank and Consenting Lenders.  The Loan Documents, as modified by this Agreement, continue to evidence the agreement of the parties with respect to the subject matter thereof.

16.Notices.  All notices, requests, demands and other communications under this Agreement will be given in accordance with the provisions of the Credit Agreement.

17.Successors and Assigns.  This Agreement will be binding upon, and will inure to the benefit of, the parties hereto and their respective heirs, legal representatives, successors and assigns, provided that no Credit Party may assign any rights or obligations under this Agreement without the prior written consent of the Administrative Agent, the Issuing Bank and the Lenders in accordance with the terms of the Credit Agreement.

18.Tolling of Statutes of Limitation.  The parties hereto agree that all applicable statutes of limitations with respect to the Loan Documents shall be tolled and not begin running until the Forbearance Termination Date.

19.Arms-Length/Good Faith.  This Agreement has been negotiated at arms-length and in good faith by the parties hereto.

20.Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York and applicable laws of the United States of America.

21.Interpretation.  Wherever the context hereof will so require, the singular shall include the plural, the masculine gender shall include the feminine gender and the neuter and vice versa.  The headings, captions and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

11

 

 

22.Severability.  In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

23.Counterparts.  This Agreement may be executed and delivered in any number of counterparts, and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute one and the same instrument; provided, that no party shall be bound by this Agreement until the Credit Parties, the Administrative Agent, the Issuing Bank and the Consenting Lenders have executed a counterpart hereof.  Execution of this Agreement via facsimile or other electronic transmission (e.g., “.pdf”) shall be effective, and signatures received via facsimile or other electronic transmission shall be binding upon the parties hereto and shall be effective as originals.

24.Further Assurances.  Each Credit Party agrees to execute, acknowledge, deliver, file and record such further certificates, instruments and documents, and to do all other acts and things, as may be reasonably requested by the Administrative Agent as necessary or advisable to carry out the intents and purposes of this Agreement.

25.Loan Documents.  This Agreement is a Loan Document for all purposes of the Credit Agreement and other Loan Documents.  To the extent of a conflict or inconsistency between this Agreement and any other of the other Loan Documents, this Agreement shall control.

26.WAIVER OF JURY TRIAL.  SECTION 12.09(d) OF THE CREDIT AGREEMENT IS INCORPORATED BY REFERENCE HEREIN, MUTATIS MUTANDIS.

27.Lender Direction.  Each Consenting Lender hereby directs and authorizes the Administrative Agent to enter into this Agreement.  

[Signatures Follow]

 

 

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

	
BORROWER:
	
APPROACH RESOURCES INC.,

a Delaware corporation

 

		
	
By:
	
/s/ Sergei Krylov

	
Name:
	
Sergei Krylov

	
Title:  
	
Chief Executive Officer and Chief Financial Officer

	

	

[Signature Page to Limited Forbearance Agreement – Approach]

 

 

	
GUARANTORS:
	
APPROACH OPERATING, LLC,

a Delaware limited liability company

		
	
By:
	
/s/ Sergei Krylov

	
Name:
	
Sergei Krylov

	
Title:  
	
Chief Executive Officer and Chief Financial Officer

 

	

	
 

	

	
APPROACH RESOURCES I, LP,

a Texas limited partnership

		
	
By:
	
/s/ Sergei Krylov

	
Name:
	
Sergei Krylov

	
Title:  
	
Chief Executive Officer and Chief Financial Officer

 

	

	
APPROACH OIL & GAS INC.,

a Delaware corporation

		
	
By:
	
/s/ Sergei Krylov

	
Name:
	
Sergei Krylov

	
Title:  
	
Chief Executive Officer and Chief Financial Officer

 

	

	
 

	

	
APPROACH DELAWARE, LLC,

a Delaware limited liability company

		
	
By:
	
/s/ Sergei Krylov

	
Name:
	
Sergei Krylov

	
Title:  
	
Chief Executive Officer and Chief Financial Officer

 

	

	
APPROACH SERVICES, LLC,

a Delaware limited liability company

		
	
By:
	
/s/ Sergei Krylov

	
Name:
	
Sergei Krylov

	
Title:  
	
Chief Executive Officer and Chief Financial Officer

	

	
 

	

	
APPROACH MIDSTREAM HOLDINGS LLC,

a Delaware limited liability company

		
	
By:
	
/s/ Sergei Krylov

	
Name:
	
Sergei Krylov

	
Title:  
	
Chief Executive Officer and Chief Financial Officer

[Signature Page to Limited Forbearance Agreement – Approach]

 

 

	
 
	

	
 

 

 

 

 

ADMINISTRATIVE AGENT:

JPMORGAN CHASE BANK, N.A., as Administrative Agent, an Issuing Bank, and a Lender

 

		
	
By:
	
/s/ David Morris

	
Name:
	
David Morris

	
Title:  
	
Authorized Officer

[Signature Page to Limited Forbearance Agreement – Approach]

 

 

CONSENTING LENDERS:KEYBANK NATIONAL ASSOCIATION,

as a Lender

		
	
By:
	
/s/ Dale Conder

	
Name:
	
Dale Conder

	
Title:  
	
Senior Vice President

[Signature Page to Limited Forbearance Agreement – Approach]

 

 

ROYAL BANK OF CANADA,

as a Lender

		
	
By:
	
/s/ Leslie P. Vowell

	
Name:
	
Leslie P. Vowell

	
Title:  
	
Attorney-in-Fact

[Signature Page to Limited Forbearance Agreement – Approach]

 

 

FROST BANK,

as a Lender

		
	
By:
	
/s/ Justin Armstrong

	
Name:
	
Justin Armstong

	
Title:  
	
Senior Vice President

[Signature Page to Limited Forbearance Agreement – Approach]

 

 

CAPITAL ONE, NATIONAL ASSOCIATION, 

as a Lender

		
	
By:
	
/s/ Mark Brewster

	
Name:
	
Mark Brewster

	
Title:  
	
Vice President

[Signature Page to Limited Forbearance Agreement – Approach]

 

 

COMERICA BANK,

as a Lender

		
	
By:
	
/s/ Cynthia B. Jones

	
Name:
	
Cynthia B. Jones

	
Title:  
	
Vice President

[Signature Page to Limited Forbearance Agreement – Approach]

 

 

HANCOCK WHITNEY BANK,

as a Lender

		
	
By:
	
/s/ Brock Berilgen

	
Name:
	
Brock Berilgen

	
Title:  
	
Senior Vice President

 

 

 

[Signature Page to Limited Forbearance Agreement – Approach]Exhibit

Exhibit 4.1

MODIFIED REDEMPTION RIGHTS AGREEMENT
 
Redemption Rights Agreement, dated December 11, 2003, among BPR OP, LP (formerly known as GGP Limited Partnership), a Delaware limited partnership (together with its successors and assigns, the “Partnership”), Brookfield Property REIT Inc. (formerly known as GGP Inc.), a Delaware corporation (together with its successors and assigns, the “General Partner”), and Everitt Enterprises, Inc., a Colorado corporation (together with its successors and assigns, the “Contributing Party”). This Modified Agreement reflects the effective provisions made by the General Partner, in accordance with Section 6(c), to account for the Major Transaction Event that occurred on or about August 27, 2018.
 
R E C I T A L S
 
WHEREAS, the General Partner was the general partner of the Partnership;
 
WHEREAS, pursuant to that certain Contribution and Sale Agreement dated as of November 26, 2003 (as the same has been amended and may be further amended from time to time, the “Purchase Agreement”), among the Partnership, Contributing Partner and the other parties thereto, the Contributing Party was admitted as a limited partner of the Partnership and the Partnership issued to it 6.5% Series D Cumulative Convertible Preferred Units of limited partnership in the Partnership (such units issued pursuant to the Purchase Agreement or any other securities issued in substitution therefor pursuant to the Series D Preferred Unit Designation, the “Series D Preferred Units”); 
 
WHEREAS, pursuant to the Series D Preferred Unit Designation, the Series D Preferred Units were initially convertible solely into Common Units; 

WHEREAS, on or about August 27, 2018 and August 28, 2018, the General Partner and the Partnership engaged in the transactions contemplated by the Agreement and Plan of Merger, as amended, by and among Brookfield Property Partners L.P., Goldfinch Merger Sub Corp. and the General Partner dated as of March 26, 2018 (the “Transactions”), and as a result of the Transactions holders of Common Stock of the General Partner received a dividend comprised of Class A Stock of the General Partner (the “Class A Stock”) and cash and such Common Stock was converted into the right to receive cash; 

WHEREAS, shares of Class A Stock are listed on the NASDAQ Stock Market;

WHEREAS, as a result of the Transactions, the Series D Preferred Units are convertible into Common Units, Series K Preferred Units and the right to receive a cash amount specified in the Series D Preferred Unit Designation;

WHEREAS, the Transactions constituted a Major Transaction Event, and the General Partner has made the adjustments provided for herein to account for the Transactions, as contemplated by Section 6(c) of this Agreement; and 
 
WHEREAS, the parties desire to set forth herein the terms and conditions upon which the Contributing Party may cause the Partnership to redeem its Common Units and Series K Preferred Units. 
 
NOW, THEREFORE, the parties hereby agree as follows:
 
1.  Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:
 
“Acts” shall mean the Securities Act and the Exchange Act, collectively.
 
“Affiliates” shall mean “affiliates” as defined pursuant to the Securities Act and the regulations promulgated thereunder.
 
“Business Day” shall mean any day upon which commercial banks are open for business in Chicago, Illinois.
 
“Cash Purchase Price” shall mean, with respect to any redeemed or purchased Series K Preferred Units, an amount of cash equal to the value of the Share Purchase Price (computed as of the Computation Date and equal to the Current Per Share Market Price on such Computation Date multiplied by the number of Shares included in the Share Purchase Price) that would be payable with respect to such Series K Preferred Units assuming the Share Purchase Price were paid in full satisfaction of the Purchase Price for such Series K Preferred Units. In the event that the Share Purchase Price includes securities and/or other property other than Shares, then the value of such other securities and/or property shall be determined by the General Partner acting in good faith on the basis of the closing prices of securities if listed on a nationally recognized exchange and otherwise on the basis of such quotations and other information as the General Partner considers, in its reasonable judgment, appropriate. 
 
“Certificate of Incorporation” shall mean the Certificate of Incorporation of the General Partner, as the same may be amended from time to time.
 
“Claims” shall have the meaning set forth in Section 4.1(c).
 
“Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor code.
 
“Class A Stock” shall have the meaning set forth in the recitals.
 
“Common Units” shall mean the common units of limited partnership in the Partnership into which Series D Preferred Units have been converted (or any other securities issued in substitution therefor (other than pursuant to this Agreement)).

“Common Unit Conversion Factor” shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(d).

“Common Unit Purchase Price” shall have the meaning set forth in Section 2(a).

“Computation Date” shall mean the date on which the applicable Notice is received by the Partnership or, if such date is not a Business Day, the first Business Day thereafter. 
 
“Conversion Factor” shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(a).
 
“Current Per Share Market Price” shall have the meaning set forth in the Partnership Agreement.
 
“Entity” shall mean any corporation, partnership, association, limited liability company, trust or other entity.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any successor statute.
 
“Exchange Act Reporting Company” shall mean any corporation or other entity which is subject to the reporting requirements of the Exchange Act.
 
“Liens” shall mean liens, pledges, security interests, mortgages, encumbrances and other claims of any type or kind.
 
“Major Transaction Event” shall mean, with respect to the General Partner, (a) a reclassification, capital reorganization or other similar change regarding or affecting outstanding Shares (other than a change addressed in Section 6(a)); (b) a merger or consolidation of the General Partner with one or more other corporations or entities, other than a merger pursuant to which the General Partner is the surviving corporation and the outstanding Shares are not affected, (c) a sale, lease or exchange of all or substantially all of the General Partner’s assets or (d) the liquidation, dissolution or winding up of the General Partner. 
 
“Notice” shall have the meaning set forth in Section 3.2.
 
“Partnership Agreement” shall mean that certain Fifth Amended and Restated Agreement of Limited Partnership of the Partnership, as the same may be further amended from time to time.
 
“Partnership Common Units” shall mean the common units of limited partnership of the Partnership.

“Partnership Series K Preferred Units” shall mean the Series K Preferred Units of the Partnership. 

“Person” shall mean any natural person or Entity.
 
“Preferred Units” shall mean preferred units of limited partnership in the Partnership that have been issued prior hereto or are issued hereafter. 

“Prospectus” shall mean, with respect to the Resale Registration Statement, the prospectus constituting a part thereof, as amended or supplemented.
 
“Purchase Agreement” shall have the meaning set forth in the recitals.
 
“Purchase Price” shall mean the Cash Purchase Price or the Share Purchase Price, or a combination thereof.
 
“Redemption Rights” shall have the meaning set forth in Section 2.
 
“REIT” shall mean real estate investment trust as such term is defined under the Code.
 
“REIT Requirements” shall have the meaning set forth in the Partnership Agreement, as the same may change from time to time.
 
“Resale Registration Statement” shall have the meaning set forth in Section 4.1(a).
 
“Rights” shall have the meaning set forth in Section 6(b).
 
“SEC” shall mean the Securities and Exchange Commission.
 
“Securities Act” shall mean the Securities Act of 1933, as amended, or any successor statute.
 
“Series D Preferred Units” shall have the meaning set forth in the recitals.
 
“Series D Preferred Unit Designation” shall mean Schedule B to the Partnership Agreement, as amended from time to time.

“Series K Preferred Units” shall mean the Series K Preferred Units of the Partnership into which Series D Preferred Units have been converted (or any other securities issued in substitution therefor (other than pursuant to this Agreement)).
 
“Share Purchase Price” shall mean, with respect to the exercise of any Redemption Rights and subject to the provisions of Section 6(c), a number of Shares equal to the product of (a) the number of Series K Preferred Units being redeemed or purchased multiplied by (b) the Conversion Factor; provided, however, that, in the event the General Partner, after the date of this Agreement, issues to all holders of Shares rights, options, warrants or convertible or exchangeable securities entitling the stockholders to subscribe for or purchase Shares (other than Rights referred to in Section 6(b) that have been issued pursuant thereto) or any other securities or property (other than distributions paid in cash), then the Share Purchase Price also shall include such rights, options, warrants or convertible or exchangeable securities or other securities or property that a holder of that number of Shares would have been entitled to receive had such holder held such Shares immediately prior to the time holders of Shares became entitled thereto (except to the extent that provision otherwise has been made for such holder to receive such rights, options, warrants or convertible or exchangeable securities or other securities or property or similar rights,  options, warrants or convertible or exchangeable securities in respect of Series K Preferred Units or adjustment otherwise has been made in respect thereof).
 
“Shares” shall mean shares of the Class A Stock.
 
2.  Grant of Redemption Rights.
 
(a)  Upon the terms and subject to the conditions contained herein, the Partnership does hereby grant to the Contributing Party, and the Contributing Party does hereby accept, the right, but without obligation on the part of the Contributing Party, to require the Partnership to redeem from time to time (i) part or all of the Series K Preferred Units of the Contributing Party for the Cash Purchase Price with respect to such Series K Preferred Units and (ii) part or all of the Common Units of the Contributing Party for a per unit amount equal to $0.324405869 multiplied by the Common Unit Conversion Factor (such per unit amount multiplied by the number of Common Units to be redeemed or purchased in accordance with this Agreement, the “Common Unit Purchase Price” and the redemption rights set forth in clauses (i) and (ii) of this paragraph, the “Redemption Rights”).  Notwithstanding the foregoing, with respect to each exercise of Redemption Rights, a proportionate number of Series K Preferred Units and Common Units must be submitted for redemption such that (x) the quotient of: the number of Series K Preferred Units then submitted for redemption divided by the total number of Series K Preferred Units that have been issued to date as a result of the conversion of Series D Preferred Units of the Contributing Party is equal to (y) the quotient of: the number of Common Units then submitted for redemption divided by the total number of Common Units that have been issued to date as a result of the conversion of Series D Preferred Units of the Contributing Party.  
 
(b)  Notwithstanding the provisions of Section 2(a), the General Partner may, in its sole and absolute discretion, assume and satisfy the obligation of the Partnership with respect to the Contributing Party’s exercise of the Redemption Rights with respect to the Series K Preferred Units for which the Contributing Party exercised its Redemption Rights by paying to the Contributing Party, at the General Partner’s election (which may be exercised in the General Partner’s sole discretion), either the Cash Purchase Price or the Share Purchase Price (or a combination thereof) with respect to the Series K Preferred Units for which the Contributing Party exercised its Redemption Rights. If the General Partner assumes such obligations with respect to the exercise by the Contributing Party of the Redemption Rights as to certain Series K Preferred Units and makes the required payment of the Share Purchase Price, the Cash Purchase Price or any combination thereof, then the Partnership shall have no obligation to pay any amount to the Contributing Party with respect to the exercise of the Redemption Rights for such Series K Preferred Units, and any Series K Preferred Units purchased shall be owned by the General Partner for all purposes. 
 
(c)  If the General Partner shall assume and satisfy the obligations of the Partnership with respect to the Series K Preferred Units for which the Contributing Party exercised its Redemption Rights, the Partnership, the Contributing Party and the General Partner each shall treat the transaction between the General Partner and the Contributing Party as a sale of the Contributing Party’s Series K Preferred Units (or a portion thereof) to the General Partner for federal income tax purposes.
 
(d)  Upon the redemption or purchase of part or all of the Contributing Party’s Series K Preferred Units and Common Units and the payment of the Purchase Price and Common Unit Purchase Price (respectively) with respect thereto, such Person shall be deemed withdrawn as a Partner in the Partnership to the extent of the Series K Preferred Units and Common Units redeemed or purchased and shall have no further rights or obligations under this Agreement with respect to such redeemed or purchased Series K Preferred Units and Common Units; provided, however, that the Contributing Party’s rights under this Agreement with regard to any other Series K Preferred Units and Common Units will continue in full force and effect.
 
(e)  No fractional Shares shall be issued hereunder. In lieu of fractional Shares, the General Partner shall pay cash based on the Current Per Share Market Price of the Shares on the relevant Computation Date. 

3.  Exercise of Redemption Rights.
 
3.1  Time for Exercise of Redemption Rights. The Contributing Party may exercise its Redemption Rights in whole or in part and at any time and from time to time on or after the first anniversary of the date hereof; provided, however, that the Redemption Rights may not be exercised at any one time by the Contributing Party (i) with respect to less than 1,000 Series K Preferred Units (or all the Series K Preferred Units then owned by the Contributing Party if the Contributing Party owns less than 1,000 Series K Preferred Units) and a proportionate number of Common Units as determined in accordance with the last sentence of Section 2(a), or (ii) in the event that such exercise of Redemption Rights (or the assignment of Series K Preferred Units or Common Units or delivery of the Cash Purchase Price, the Share Purchase Price or the Common Unit Purchase Price with respect thereto) violates the Partnership Agreement or applicable law. Once given, a Notice shall be irrevocable subject to the payment of the Purchase Price and Common Unit Purchase Price (respectively) for the Series K Preferred Units and Common Units specified therein in accordance with the terms hereof.
 
3.2  Method of Exercise. The Redemption Rights shall be exercised by delivery to the Partnership of (a) written notice (the “Notice”) in the form of Exhibit A specifying the number of the Series K Preferred Units and Common Units to be redeemed and the name or names (with address) in which any Shares issuable upon such exercise shall be registered if different than the Contributing Party and (b) the certificates, if any, representing such Series K Preferred Units and Common Units.
 
3.3  Closing. The closing of the redemption or purchase and sale pursuant to an exercise of the Redemption Rights by the Contributing Party shall occur within 30 days following the giving of the Notice. The Contributing Party shall execute such other documents as the General Partner may reasonably require in connection with the closing of such redemption or purchase and sale.
 
3.4  Payment of Cash or Issuance of Shares.

(a)  At the closing of the redemption or purchase and sale of Series K Preferred Units pursuant to an exercise of Redemption Rights by the Contributing Party, the Partnership shall deliver to the Contributing Party the Cash Purchase Price by check or, in the event that the General Partner has assumed the obligations of the Partnership with respect to such exercise of Redemption Rights, the General Partner shall deliver to the Contributing Party, at the election of the General Partner (which may be exercised in the General Partner’s sole discretion) either (a) the Cash Purchase Price by check or (b) certificates representing the Shares and any other securities and/or other property constituting the Share Purchase Price, together with cash in lieu of the issuance of any fraction of a Share as provided in Section 2(e), or a combination thereof. 

(b)  At the closing of the redemption or purchase and sale of Common Units pursuant to an exercise of Redemption Rights by the Contributing Party, the Partnership shall deliver to the Contributing Party the applicable Common Unit Purchase Price by check.

 
4.   Matters Relating to Shares.
 
4.1  Registration.
 
(a)  Within 15 days after the first issuance of any Shares pursuant hereto, the General Partner shall file with the SEC a registration statement on Form S-3 or other appropriate registration form with the SEC covering the resale by Contributing Party of such Shares and all other Shares issuable by the General Partner upon exercise of the Redemption Rights assuming full conversion of the Series D Preferred Units and full satisfaction of the Redemption Rights by delivery of Shares and shall use its reasonable best efforts to cause such registration statement (the “Resale Registration Statement”) to become effective as soon as practicable thereafter. Following the effective date of the Resale Registration Statement and until the Shares covered by the Resale Registration Statement have been sold or are eligible for resale under Rule 144(k) promulgated under the Securities Act (without regard to the period that the Series D Preferred Units or Series K Preferred Units were held prior to the exchange thereof for Shares pursuant to the Redemption Rights), the General Partner shall keep the Resale Registration Statement current, effective and available for the resale by Contributing Party of the Shares delivered to it pursuant hereto. 
 
(b)  During the time period when the Resale Registration Statement is required to be current, effective and available under this Section 4.1, the General Partner also shall:
 
(i) promptly prepare and file with the SEC such amendments and supplements to the Resale Registration Statement and the Prospectus relating thereto, as may be necessary to keep the Resale Registration Statement effective and to comply with the provisions of the Securities Act with respect to the sale of the Shares covered by the Resale Registration Statement whenever Contributing Party shall desire to sell or otherwise dispose of the same but in no event beyond the period in which the Registration Statement is required to be kept in effect. Upon ten (10) business days’ notice, the General Partner shall file any supplement or post-effective amendment to the Resale Registration Statement with respect to the plan of distribution or a Contributing Party’s ownership interests in its Shares that is reasonably necessary to permit the sale of such Contributing Party’s Shares pursuant to the Resale Registration Statement;
 
(ii) furnish to Contributing Party, without charge, such number of authorized copies of the Prospectus relating thereto, and any amendments or supplements to such Prospectus, in conformity with the requirements of the Securities Act, and such other documents as Contributing Party may reasonably request in order to facilitate the public sale or other disposition of the Shares owned by Contributing Party;
 
(iii) register or qualify the securities covered by the Resale Registration Statement under state securities or blue sky laws of such jurisdictions as are reasonably required to effect a sale thereof and do any and all other acts and things which may be necessary or appropriate under such state securities or blue sky laws to enable Contributing Party to consummate the public sale or other disposition in such jurisdictions of such securities;
 
(iv) before filing any amendments or supplements to the Resale Registration Statement or the Prospectus relating thereto, furnish copies of all such documents proposed to be filed to the Contributing Party, who shall be afforded a reasonable opportunity to review and comment thereon; provided, however, that all such documents shall be subject to the approval of the Contributing Party insofar as they relate to information concerning the Contributing Party (including, without limitation, the proposed method of distribution of Contributing Party’s securities);
 
(v) notify Contributing Party promptly (A) when the Resale Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (B)  of any request by the SEC or any state securities authority for amendments and supplements to the Resale Registration Statement and the Prospectus relating thereto or for additional information, and (C) of the happening of any event during the period the Resale Registration Statement is effective which in the judgment of the General Partner makes any statement made in the Resale Registration Statement or such Prospectus untrue in any material respect or which requires the making of any changes in the Resale Registration Statement or such Prospectus in order to make the statements therein not misleading;
 
(vi) cooperate with Contributing Party to facilitate the timely preparation and delivery of certificates representing Shares being sold, which certificates shall not bear any restrictive legends provided the Shares evidenced thereby have been sold in a manner permitted by the Prospectus relating to the Resale Registration Statement;
 
(vii) upon the occurrence of any event contemplated by clause (v)(C) above, promptly prepare and file a supplement or post-effective amendment to the Resale Registration Statement or the Prospectus relating thereto or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Shares, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein in light of the circumstances under which they were made, not misleading; provided, however, that the obligation to prepare and file any such supplement or post-effective amendment shall be suspended if the General Partner, relying upon advice of counsel, determines that disclosure of any information required to be included therein would be adverse to its interests, but such suspension (A) shall not extend beyond sixty (60) days with respect to any such specified event and (B)  shall not occur more than twice during any period of twelve (12)  consecutive months; and
 
(viii) promptly notify each Contributing Party of,  and confirm in writing, (A) the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of the Resale Registration Statement or the initiation of any proceedings for that purpose, or (ii) if, between the effective date of any the Resale Registration Statement and the sale of the Shares to which it relates, the General Partner receives any notification with respect to the suspension of the qualification of the Shares or initiation of any proceeding for such purpose. The General Partner shall use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the Resale Registration Statement at the earliest practicable time.
 
(c)  The General Partner hereby agrees to indemnify and hold harmless Contributing Party and each person, if any, who controls Contributing Party (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) from and against any and all losses, claims, damages, costs and expenses (including reasonable attorneys’ fees) (“Claims”) to which Contributing Party or such controlling person may become subject, under the Securities Act or otherwise, caused by any untrue statement or alleged untrue statement of a material fact contained in the Resale Registration Statement or the Prospectus relating thereto or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse such Contributing Party and each such controlling person for any legal or other expenses reasonably incurred by such Contributing Party in connection with investigating or defending any such loss as such expenses are incurred;  provided, however, that the General Partner shall not be liable insofar as any such losses, claims, damages, costs and expenses (including reasonable attorneys’ fees) are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the General Partner by any Contributing Party expressly for use therein. Each Contributing Party agrees to indemnify and hold harmless the General Partner and each person, if any, who controls the General Partner (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) from and against any and all Claims to which the General Partner or such controlling person may become subject, under the Securities Act or otherwise, caused by any untrue statement or omission or alleged untrue statement or omission based upon such information furnished in writing to the General Partner by such Contributing Party.
 
(d)  Each Contributing Party agrees that, upon receipt of any notice from the General Partner of the happening of any event of the kind described in clause (b)(v)(C) above and without waiving any rights under clause (b)(vii)  above, such Contributing Party will forthwith discontinue disposition of securities pursuant to the Resale Registration Statement until Contributing Party’s receipt of the copies of the supplemented or amended Prospectus contemplated by clause (b)(vii) above.
 
(e)  The General Partner shall bear all expenses relating to filing the Resale Registration Statement and keeping the Resale Registration Statement current, effective and available; provided, however, that the General Partner shall not be responsible for any brokerage fees or underwriting commissions due and payable in connection with the sale of Shares or any legal fees of Contributing Party.
 
(f)  The General Partner shall use reasonable best efforts to cause all Shares to be listed or otherwise eligible for full trading privileges on the principal national securities exchange (currently the NASDAQ Stock Market)  on which shares of Class A Stock are then listed on or before the date on which the Resale Registration Statement covering the Shares becomes effective or the Shares are issued by the General Partner to a Contributing Party, whichever is later. The General Partner will use reasonable best efforts to continue the listing or trading privilege for all Shares on the exchange on which shares of Class A Stock are then listed. The General Partner will promptly notify the Contributing Party of, and confirm in writing, the delisting of the Shares.
 
(g)  Notwithstanding anything to the contrary contained herein, the General Partner shall have no obligation to keep the Resale Registration Statement effective if the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated.
 
4.2  Reservation of Shares. At all times while the Redemption Rights are outstanding, the General Partner shall reserve for issuance such number of Shares as may be necessary to enable the General Partner to issue Shares in full satisfaction of all Redemption Rights which are from time to time outstanding (assuming that there are no limitations as to the ownership of such Shares under the Certificate of Incorporation which relate to compliance with the REIT Requirements, that all Series D Preferred Units have been converted into Series K Preferred Units and that the General Partner elected to pay the Share Purchase Price with respect to all such Redemption Rights).
 
4.3  Fully Paid and Non-Assessable. All Shares which may be issued upon exercise of the Redemption Rights shall be duly and validly issued and fully paid and non-assessable.
 
5.  Transfer and Similar Taxes. The General Partner shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Class A Stock or other securities or property pursuant hereto; provided, however, that the General Partner shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of shares of Class A Stock or other securities or property in a name other than that of the holder of the Series K Preferred Units to be exchanged, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the General Partner the amount of any such tax or established, to the reasonable satisfaction of the General Partner, that such tax has been paid.
 
6.  Anti-Dilution and Adjustment Provisions.
 
(a)  The Conversion Factor shall be adjusted in the event that the General Partner (i) declares or pays a dividend or distribution on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares, (ii) subdivides its outstanding Shares, or (iii)  combines its outstanding Shares into a smaller number of Shares. In such event,  the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date (or, if none, the effective date) for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date (or, if none, the effective date) for such dividend, distribution,  subdivision or combination. Any adjustment to the Conversion Factor pursuant to the immediately preceding sentence shall become effective immediately after the effective date of such event retroactive to the opening of business on the day next following the record date, if any, for such event. In addition, the Conversion Factor shall be adjusted in the event that the Partnership (i)  declares or pays a dividend or distribution on its outstanding Partnership Series K Preferred Units in Partnership Series K Preferred Units, (ii) subdivides its outstanding Partnership Series K Preferred Units, or (iii) combines its outstanding Partnership Series K Preferred Units into a smaller number of Partnership Series K Preferred Units. In such event, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the actual number of Partnership Series K Preferred Units issued and outstanding on the record date (or, if none, the effective date) for such dividend, distribution, subdivision or combination (determined without the below assumption) and the denominator of which shall be the number of Partnership Series K Preferred Units issued and outstanding on such record date (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) or effective date. Any adjustment to the Conversion Factor pursuant to the immediately preceding sentence shall become effective on the effective date of such event retroactive to the record date, if any, for such event.  

(b)  If at any time the holders of Class A Stock are entitled to any right (a “Right”) to subscribe pro rata for additional securities of the General Partner, whether Class A Stock or other classifications, or for any other securities or interests that the Contributing Party would have been entitled to subscribe for if, immediately prior to such grant, the Contributing Party had exercised its Redemption Rights and received the Share Purchase Price in payment thereof, in lieu of any adjustment under any other subsection of this Section 6 or other provision of this Agreement and except to the extent that provision otherwise has been made for the Contributing Party to receive such Right or a similar right in respect of the Series K Preferred Units or adjustment otherwise has been made in respect thereof, the Contributing Party also shall receive from the General Partner, prior to or concurrent with the time such Right becomes exercisable, the same Right that the Contributing Party would have been entitled to if the Contributing Party had exercised its Redemption Rights in full and received the Share Purchase Price in satisfaction thereof immediately prior to the time holders of Class A Stock became entitled to such Right.
 
(c)  Upon the occurrence of a Major Transaction Event, the General Partner shall cause effective provision to be made so that, upon full conversion of the Series D Preferred Units of the Contributing Party into Series K Preferred Units,  exercise of the Redemption Rights by the Contributing Party in respect thereof and the election of the General Partner to pay the Purchase Price at any time following such Major Transaction Event by means of the Share Purchase Price, the Contributing Party shall have the right to acquire, in lieu of the Shares which otherwise would have been issued to the Contributing Party, the kind and amount of shares of stock and other securities and property (and the provisions contained in Section 4.1 shall apply anew to the extent that such securities are of a class of securities of the General Partner or its successor that are registered under the Exchange Act) and interests as would be issued or payable with respect to or in exchange for the number of Shares constituting the Share Purchase Price as if all Series D Preferred Units of the Contributing Party had been converted into Series K Preferred Units, such Redemption Rights had been exercised and the General Partner had satisfied the Redemption Rights by delivery of the Share Purchase Price immediately before such Major Transaction Event.
 
(d)  In the event that the Partnership (i) declares or pays a dividend or distribution on its outstanding Partnership Common Units in Partnership Common Units or makes a distribution to all holders of outstanding Partnership Common Units in Partnership Common Units, (ii) subdivides the outstanding Partnership Common Units, (iii) combines the outstanding Partnership Common Units into a smaller number of Partnership Common Units, (iv) effects a reclassification, capital reorganization or other similar change regarding or affecting outstanding Partnership Common Units, (v) effects a merger or consolidation of the Partnership with one or more entities, other than a merger pursuant to which the Partnership is the surviving entity and the outstanding Partnership Common Units are not affected, (vi) effects a sale, lease or exchange of all or substantially all of the Partnership’s assets or (vii) effects a liquidation, dissolution or winding up of the Partnership (each of the foregoing, a “Common Unit Adjustment Event”), the Partnership shall make appropriate adjustments (including any adjustment to the Common Unit Conversion Factor, as applicable) so that the securities or other property received by the Contributing Party as a result of a Common Unit Adjustment Event, in the aggregate, may be submitted for redemption or purchase pursuant to Section 2 for an amount equal to the aggregate Common Unit Purchase Price that the Contributing Party would have received had the Contributing Party converted all of its Series D Preferred Units and exercised the Redemption Rights immediately prior to such Common Unit Adjustment Event.  Any adjustment to the Common Unit Conversion Factor pursuant to the immediately preceding sentence shall become effective on the effective date of such event retroactive to the record date, if any, for such event.  

(e)  The Partnership shall give written notice to the Contributing Party of any Major Transaction Event or Common Unit Adjustment Event promptly after such Major Transaction Event or Common Unit Adjustment Event is announced to the public.
 
(f)  Notwithstanding anything to the contrary contained herein, (i) the adjustment provisions contained in this Agreement shall be applied so that there is no duplication of adjustments made pursuant to any other document or other section hereof and (ii) no adjustment under any provision hereof shall be made on account of (A) the stock split approved by the stockholders of the General Partner on November 20, 2003 or (B) the split of the Partnership Common Units provided for in the Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership of the Partnership dated as of November 20, 2003.  The provisions of this Section 6 shall apply to successive events that may occur from time to time but only shall apply to a particular event if it occurs prior to the exercise in full of the Redemption Rights, or the liquidation of the Partnership. Nothing contained herein shall prevent or otherwise limit the liquidation of the Partnership pursuant to the Partnership Agreement, as amended from time to time.

(g)  Whenever the Conversion Factor or Common Unit Conversion Factor (as applicable) is adjusted as herein provided, the General Partner shall compute the adjusted Conversion Factor or Common Unit Conversion Factor (as applicable) in accordance with this Section 6 and shall prepare a certificate signed by the chief financial officer of the General Partner setting forth the adjusted Conversion Factor or Common Unit Conversion Factor (as applicable) and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at the offices of the General Partner.

(h)  Notwithstanding anything to the contrary contained herein (but subject to the first sentence of Section 6(f) hereof), the General Partner and the Partnership agree that they will apply the provisions of this Section 6, the definition of Share Purchase Price and any related provisions as if the Common Units were issued and outstanding as of the date hereof. Thus, for example, if an event were to occur on December 31, 2003 that would adjust the number of Shares into which the Common Units would be exchangeable had such Common Units been outstanding as of such date, but the Common Units were not actually issued until December 31, 2004, then such adjustment would be applied so that, upon such issuance (but subject to further adjustment for subsequent events), the Common Units would be exchangeable in accordance with the other terms hereof for the number of Shares for which the Common Units would have been exchangeable had such Common Units been outstanding on December 31, 2003.
 
7.  Miscellaneous Provisions.
 
7.1  Notices. All notices or other communications given pursuant to this Agreement, including without limitation any Notice, shall be sent to the party to whom or to which such notice is being sent, by certified or registered mail, return receipt requested, commercial overnight delivery service or delivered by hand with receipt acknowledged in writing and otherwise as set forth in this Section 7.1. All notices and other communications (a) shall be deemed given when received and (b) may be given either by a party or by such party’s attorneys. For purposes of this Section 7.1, the addresses of the parties shall be, in the case of the Partnership and the General Partner, 110 N.  Wacker Drive, Chicago, Illinois 60606, facsimile number (312) 960-5463,  Attention: Bernard Freibaum (with a copy to Neal, Gerber & Eisenberg, Two North LaSalle Street, Suite 2200, Chicago, Illinois 60602, Attn: Marshall E.  Eisenberg, facsimile number (312) 269-1747), and, in the case of the Contributing Party, as set forth on the records of the Partnership. The address of any party may be changed by a notice in writing given in accordance with the provisions hereof.
 
7.2  Assignment. The rights of the Contributing Party hereunder (including the Redemption Rights) shall automatically devolve upon any Person to the extent that such Person holds Series K Preferred Units, Common Units or Series D Preferred Units, and becomes a substituted partner with respect to such Series K Preferred Units, Common Units or Series D Preferred Units, in accordance with the Partnership Agreement and delivers to the Partnership a written instrument, in form reasonably satisfactory to the Partnership, pursuant to which such Person agrees to be bound by the terms hereof (but the rights of the Contributing Party hereunder are not otherwise assignable). All references herein to Contributing Party shall be deemed to be references to each assignee pursuant to this paragraph. Subject to the provisions of Section 6, the General Partner may assign this Agreement in connection with any Major Transaction Event or Common Unit Adjustment Event without the consent of the Contributing Party, provided that no such assignment shall relieve the General Partner of its obligations under this Agreement.
 
7.3      Binding Effect. Except as otherwise set forth herein, this Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns.
 
7.4      Amendments. The provisions of this Agreement may be amended only with the written consent of the Partnership, the General Partner and the holders of at least a majority of the issued and outstanding Common Units (assuming that all of the issued and outstanding Series D Preferred Units were converted into Common Units in accordance with the Partnership Agreement immediately prior to the execution of such amendment).
 
7.5      Governing Law. This Agreement shall be governed by the laws of the State of Delaware (without regard to its conflicts of law principles).
 
7.6      Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one document.
 
7.7      Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and/or agreements among them with respect thereto.
 
7.8      Pronouns; Headings; Etc. As used herein, all pronouns shall include the masculine, feminine and neuter, and all terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to a “Section” or “Exhibit” shall refer to a Section or Exhibit of this Agreement unless otherwise specified.
 
7.9      Survival. The representations, warranties and covenants contained herein or made pursuant hereto shall survive the execution and delivery of this Agreement and the closing of any redemption or purchase and sale pursuant to an exercise of Redemption Rights hereunder.
 
7.10     Further Assurances. Each of the parties shall hereafter execute and deliver such other instruments and documents and do such further acts and things as may be required or useful to carry out the purposes of this Agreement.

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 

 
IN WITNESS WHEREOF, the General Partner has caused certain effective provisions to be made in accordance with Section 6(c) of this Agreement as of August 28, 2018 and the Partnership hereby agrees to and acknowledges such provisions.
 
 
PARTNERSHIP:

BPR OP, LP , 
a Delaware limited partnership

By: GGP Real Estate Holding II, Inc.,
    a Delaware corporation, its general partner

By:__/s/ Stacie L. Herron________________
Name: Stacie L. Herron
Title: Executive Vice President, General Counsel & Secretary

GENERAL PARTNER:

Brookfield Property REIT Inc.,
a Delaware corporation

By: __/s/ Michelle L. Campbell____________
Name: Michelle L. Campbell
Title: Secretary and Senior Vice President

EXHIBIT A

Notice of Redemption

The undersigned hereby irrevocably (i) exercises its Redemption Rights as to _________ Series K Preferred Units and ___________ Common Units (together, the “Transferred Units”) in BPR OP, LP (the “Partnership”) in accordance with the terms of that certain Redemption Rights Agreement, dated December 11, 2003, as amended or modified from time to time (the “Agreement”), among the Partnership, Brookfield Property REIT Inc. (the “General Partner”), and Everitt Enterprises, Inc., (ii) transfers and surrenders such Transferred Units and all right, title and interest of the undersigned therein to the party, which shall be either the Partnership or the General Partner, that shall purchase or redeem such Transferred Units pursuant to the Agreement, and (iii) directs that the Common Unit Purchase Price and the Cash Purchase Price or Share Purchase Price, if applicable, payable upon exercise of the Redemption Rights be delivered to the address specified below and, if the Share Purchase Price is to be delivered, the Shares shall be registered or placed in the name(s) and at the address(es) specified below. Attached hereto are the certificates, if any, representing the Transferred Units.

The undersigned hereby represents, warrants and certifies that, as of the date hereof and as of the closing of the purchase or redemption of the Transferred Units pursuant to the exercise of Redemption Rights effected hereby, (i) that the undersigned has good and marketable title to the Transferred Units, free and clear of all Liens, (ii) that the undersigned has the full right, power and authority to transfer and surrender the Transferred Units as provided herein and such transfer and surrender has been authorized by all necessary action, (iii) that the undersigned is an accredited investor as defined in Regulation D under the Securities Act and any Shares that are acquired by it on account of this Notice of Redemption would be acquired for its own account, for investment purposes only and not with a view to, and with no present intention of, selling or distributing the same in violation of federal or state securities laws (but nothing contained in this clause (iii) impairs the right of Contributing Party to sell Shares pursuant to the Resale Registration Statement) and (iv) that the undersigned has obtained the consent or approval of all persons or entities, if any, having the right to consent to or approve such transfer and surrender.

*        *        *

Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement.

Dated: _____________

[NAME OF PERSON]

By:    _______________________

Name:    _______________________

Title:    _______________________

_____________________________
(Street Address)

_____________________________
(City, State, Zip Code)

Signature Guaranteed By:

_____________________________

If Shares are to be issued, issue to:

Please insert social security or identifying number:

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