Document:

ex_127302.htm

Exhibit 10.1

 

FOURTH AMENDMENT AND JOINDER TO CREDIT AGREEMENT

AND OTHER LOAN DOCUMENTS

 

This FOURTH AMENDMENT AND JOINDER TO CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS (this “Amendment”), dated as of November 30, 2018, is among LANDEC CORPORATION, a Delaware corporation, as Borrower (the “Borrower”), the other Loan Parties party hereto, the Lenders party hereto, JPMORGAN CHASE BANK, N.A., as administrative agent for itself and the other Lenders (in such capacity, the “Administrative Agent”) and, as of the Joinder Effective Time (as defined below), YUCATAN FOODS, L.P., a Delaware limited partnership (“Yucatan”), CAMDEN FRUIT CORP., a California corporation (“Camden”), TOLUCA GOURMET, INC., a California corporation (“Toluca”, together with Yucatan and Camden, “New Loan Parties” and each a “New Loan Party”). Unless otherwise specified herein, capitalized and/or initially capitalized terms used in this Amendment shall have the meanings ascribed to them in the Credit Agreement (as defined below), as amended hereby.

 

WHEREAS, the Borrower, the other Loan Parties, the Lenders and the Administrative Agent are parties to that certain Credit Agreement, dated as of September 23, 2016 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Original Credit Agreement”);

 

WHEREAS, on the Initial Effective Date (as hereinafter defined), the Lenders extended credit to the Borrower consisting of (a) a term loan in the aggregate principal amount of $50,000,000 and (b) a revolving credit facility in an aggregate principal amount not to exceed $100,000,000 at any time outstanding;

 

WHEREAS, the Borrower has requested that the Lenders extend additional credit to the Borrower consisting of (i) an additional term loan, which shall be added to, and become a part of, the Term Loan (as hereinafter defined), such that the aggregate principal amount of all Term Loans after giving effect to the additional term loan shall be $100,000,000 and (ii) an increase to the Revolving Commitment such that the aggregate amount of Revolving Commitments after giving effect to such increase shall be $105,000,000. The proceeds of the additional term loan and the loans made under the revolving credit facility shall be used to refinance existing Indebtedness, finance the Yucatan Acquisition (as hereinafter defined), for working capital and general corporate purposes of the Borrower and its Subsidiaries, including the financing of Permitted Acquisitions, and to pay fees and expenses related to this Agreement and the other Loan Documents, in connection with any of the foregoing and in connection with any of the transactions contemplated hereby;

 

WHEREAS, the Borrower has requested certain amendments to the Original Credit Agreement as set forth herein; and

 

WHEREAS, subject to the terms and conditions hereof, the Administrative Agent and the Lenders party hereto have agreed to amend the Original Credit Agreement as set forth herein.

 

NOW, THEREFORE, for and in consideration of the premises and mutual agreements herein contained and for the purposes of setting forth the terms and conditions of this Amendment and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be bound, hereby agree as follows:

 

 

 

 

1.     Amendments to the Original Credit Agreement. Subject to the terms and conditions of this Amendment, the Original Credit Agreement, including the Exhibits and Schedules thereto, are hereby amended as follows (the “Credit Agreement”):

 

(a)     The Table of Contents of the Credit Agreement is hereby amended by deleting reference to “Schedule 5.16”.

 

(b)     Section 1.01 of the Credit Agreement is hereby amended by adding the following definitions in the appropriate alphabetical order:

 

“Arranger” means JPMorgan Chase Bank, N.A., City National Bank and BMO Harris Bank N.A. in their capacities as joint bookrunners and joint lead arrangers hereunder.

 

“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

 

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

 

“Dividing Person” has the meaning assigned to it in the definition of “Division”.

 

“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.

 

“Division Successor” means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division. A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the occurrence of such Division.

 

“Flood Laws” has the meaning assigned to such term in Section 8.10.

 

“Fourth Amendment Effective Date” has the meaning assigned to such term in the Preamble.

 

“Fourth Amendment Term Loan Increase” has the meaning assigned to such term in Section 2.01(b).

 

“Initial Effective Date” means September 23, 2016, which was the date on which the initial Loans were made.

 

“Initial Effective Date Term Loan” has the meaning assigned to such term in Section 2.01(b).

 

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“Letter of Credit Agreement” has the meaning assigned to it in Section 2.06(b).

 

“Maintenance Capital Expenditures” means 50% of depreciation of the Borrower and its Subsidiaries for the applicable period.

 

“Margin Stock” means margin stock within the meaning of Regulations T, U and X, as applicable.

 

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

 

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

“Regulation D” means Regulation D of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

 

“Regulation T” means Regulation T of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

 

“Regulation U” means Regulation U of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

 

“Regulation X” means Regulation X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

 

“Yucatan” means Yucatan Foods, L.P, a Delaware limited partnership.

 

“Yucatan Acquisition” means the acquisition by Apio, Inc. of all of the outstanding Equity Interests of Yucatan pursuant to the Yucatan Purchase Agreement.

 

“Yucatan Purchase Agreement” means that certain Capital Contribution and Partnership Interest and Stock Purchase Agreement dated as of December 1, 2018, by and among Apio, Inc., a Delaware corporation, Yucatan, Camden Fruit Corp., a California corporation, each Equityholder (as defined therein) and Ardeshir Haerizadeh, in his capacity as the representative of the Equityholders.

 

(c)     Section 1.01 of Credit Agreement is hereby amended by amending and restating the following definitions set forth therein in their entirety to read as follows:

 

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the Initial Effective Date, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a Person.

 

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“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 1⁄2 of 1%, and (c) the Adjusted LIBO Rate for a one-month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the purpose of this definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not available for such one month Interest Period, the Interpolated Rate) at approximately 11:00 a.m. London time on such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof, then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the Alternate Base Rate as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Applicable Rate” means, for any day, with respect to any Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “ABR Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as the case may be, based upon the Borrower’s Total Leverage Ratio as of the most recent determination date, provided that until the delivery to the Administrative Agent, pursuant to Section 5.01, of the Borrower’s consolidated financial information for the fiscal quarter of Borrower ending February 24, 2019, the “Applicable Rate” shall be the applicable rates per annum set forth below in Category 2:

 

	
			Category

				
			Total Leverage

			Ratio

				
			ABR Spread

				
			Eurodollar

			Spread

				
			Commitment

			Fee Rate

			
	
			Category 1

				
			> 4.00 to 1.00

				
			2.25%

				
			3.25%

				
			0.45%

			
	
			Category 2

				
			≤ 4.00 to 1.00 but > than 3.50 to 1.00

				
			1.75%

				
			2.75%

				
			0.40%

			
	
			Category 3

				
			≤ 3.50 to 1.00 but > than 3.00 to 1.00

				
			1.25%

				
			2.25%

				
			0.35%

			
	
			Category 4

				
			≤ 3.00 to 1.00 but > than 2.25 to 1.00

				
			1.00%

				
			2.00%

				
			0.30%

			
	
			Category 5

				
			≤ 2.25 to 1.00 but > than 1.75 to 1.00

				
			0.75%

				
			1.75%

				
			0.25%

			
	
			Category 6

				
			≤ 1.75 to 1.00 but > than 1.00 to 1.00

				
			0.50%

				
			1.50%

				
			0.20%

			
	
			Category 7

				
			≤ 1.00 to 1.00

				
			0.25%

				
			1.25%

				
			0.15%

			

 

For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter of the Borrower, based upon the Borrower’s annual or quarterly consolidated financial statements delivered pursuant to Section 5.01 and (b) each change in the Applicable Rate resulting from a change in the Total Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change, provided that if the Borrower fails to deliver the annual or quarterly consolidated financial statements required to be delivered by it pursuant to Section 5.01, the Total Leverage Ratio shall be deemed to be in Category 1 during the period from the expiration of the time for delivery thereof until such consolidated financial statements are delivered.

 

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If at any time the Administrative Agent determines that the financial statements upon which the Applicable Rate was determined were incorrect (whether based on a restatement, fraud or otherwise), the Borrower shall be required to retroactively pay any additional amount that the Borrower would have been required to pay if such financial statements had been accurate at the time they were delivered.

 

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases or financing leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower; (b) occupation at any time of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) directors of the Borrower on the date of this Agreement nor (ii) nominated or appointed by the board of directors of the Borrower; or (c) the acquisition of direct or indirect Control of the Borrower by any Person or group; (d) the Borrower shall cease to own, free and clear of all Liens or other encumbrances, 100% of the outstanding voting Equity Interests of each of its Subsidiaries, on a fully diluted basis, except as permitted under Section 6.03(a); or (e) each other Loan Party shall cease to own, free and clear of all Liens or other encumbrances, 100% of the outstanding voting Equity Interests of each of its Subsidiaries (other than Apio Cooling, a California limited partnership, for which Apio, Inc., a Delaware corporation, shall cease to own at least 60% of the outstanding voting Equity Interests) on a fully diluted basis, except as permitted under Section 6.03(a).

 

“Change in Law” means the occurrence after the date of this Agreement (or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement) of any of the following: (a) the adoption of or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

 

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“Commitment” means, with respect to each Lender, the sum of such Lender’s Revolving Commitment and Term Commitments. The initial amount of each Lender’s Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Commitment, as applicable.

 

“Earn-Out Obligations” means contingent payment obligations of the Borrower and its Subsidiaries approved by the Administrative Agent in respect of and in accordance with any one or more Permitted Acquisitions consummated after the Initial Effective Date.

 

“Earn-Out Subordination Agreement” means any subordination agreement executed by a holder of Earn-Out Obligations in favor of the Administrative Agent from time to time after the Initial Effective Date in form and substance and on terms and conditions satisfactory to the Administrative Agent.

 

“EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense (less interest income) for such period, (ii) income tax expense for such period net of tax credits, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary non-cash charges for such period and related tax effects, (v) the amount of any non-cash expense as a result of any grant of Equity Interests to employees, (vi) fees and expenses paid in connection with the Yucatan Acquisition and the Fourth Amendment and the other Loan Documents in an aggregate amount not to exceed $3,000,000, (vii) any other non-cash charges for such period, (viii) any unusual, extraordinary or one-time cash items, in an aggregate amount not to exceed (x) 25% of EBITDA for periods ending on or prior to May 26, 2019 and (y) 20% of EBITDA for periods ending thereafter, in each case, calculated prior to giving effect to this clause (viii), (ix) pro forma adjustments related to Yucatan earnings prior to the Fourth Amendment Effective Date in amounts equal to (x) $1,301,451 for the fiscal quarter ending May 26, 2018, (y) $208,496 for the fiscal quarter ending August 25, 2018 and (z) approximately $1,982,000 for the fiscal quarter ending November 27, 2018, minus (b) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (a)(vii) taken in a prior period, (ii) any net gains from the collection of life insurance proceeds, (iii) any aggregate net gain, but not any aggregate net loss, from the sale, exchange, transfer or other disposition of property or assets not in the ordinary course of business of the Borrower and its Subsidiaries and related tax effects and (iv) any extraordinary gains and any non-cash items of income (including without limitation, income arising from the cancellation of Indebtedness) for such period, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“Electronic System” means any electronic system, including e-mail, e-fax, web portal access for the Borrower and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent or the Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, in critical status or in reorganization, within the meaning of Title IV of ERISA.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.19(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f) and (d) any withholding Taxes imposed under FATCA.

 

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“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

 

“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate, provided that, if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to zero for the purposes of this Agreement.

 

“Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) EBITDA minus Maintenance Capital Expenditures to (b) Fixed Charges, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“Fixed Charges” means, for any period, without duplication, the sum of scheduled principal payments on Indebtedness actually made, plus cash Interest Expense, plus cash taxes paid, plus Restricted Payments paid, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP; provided that, for the calculation of Fixed Charges as of the last day of the fiscal quarters ending February 24, 2019, May 26, 2019 and August 25, 2019 for the period of four consecutive fiscal quarters then ending (a) Interest Expense shall be calculated for the period commencing on the Fourth Amendment Effective Date and ending on the last day of the relevant fiscal quarter multiplied by 4.0, 2.0 and 1.33, respectively, and (b) scheduled principal payments on the Term Loan shall be deemed to be $10,000,000.

 

“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is available) that is shorter than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest period (for which the LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time; provided that, if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Issuing Bank Sublimit” means, as of the Initial Effective Date and the Fourth Amendment Effective Date, (i) $10,000,000, in the case of Chase and (ii) such amount as shall be designated to the Administrative Agent and the Borrower in writing by an Issuing Bank; provided that any Issuing Bank shall be permitted at any time to increase or reduce its Issuing Bank Sublimit upon providing five (5) days’ prior written notice thereof to the Administrative Agent and the Borrower.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable Interest Period or for any ABR Borrowing, the LIBO Screen Rate at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period; provided that, if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”), then the LIBO Rate shall be the Interpolated Rate, subject to Section 2.14 in the event that the Administrative Agent shall conclude that it shall not be possible to determine such Interpolated Rate (which conclusion shall be conclusive and binding absent manifest error). Notwithstanding the above, to the extent that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an ABR Borrowing, such rate shall be determined as modified by the definition of Alternate Base Rate.

 

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“LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar Borrowing for any Interest Period or for any ABR Borrowing, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for Dollars) for a period equal in length to such Interest Period as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion); provided that, if the LIBO Screen Rate as so determined would be less than zero, such rate shall be deemed to zero for the purposes of this Agreement.

 

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day(or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Loan Parties to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Initial Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.

 

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.

 

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“Permitted Acquisition” means any Acquisition approved by the Required Lenders in their discretion.

 

“Prepayment Event” means:

 

(a) any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of any Loan Party or any Subsidiary, other than dispositions described in Section 6.05(a);

 

(b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Loan Party or any Subsidiary;

 

(c) the issuance by the Borrower of any Equity Interests, or the receipt by the Borrower of any capital contribution, other than any issuance pursuant to the shelf registration of the Borrower as in effect on the Initial Effective Date; or

 

(d) the incurrence by any Loan Party or any Subsidiary of any Indebtedness, other than Indebtedness permitted under Section 6.01.

 

“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

 

“Required Lenders” means, subject to Section 2.20, at any time, Lenders having Credit Exposure and unused Commitments representing more than 50% of the sum of the Aggregate Credit Exposure and unused Commitments at such time; provided that, as long as there are only two Lenders, Required Lenders shall mean both Lenders; provided further that, for purposes of declaring the Loans to be due and payable pursuant to Article VII, and for all purposes after the Loans become due and payable pursuant to Article VII or the Commitments expire or terminate, then, as to each Lender, clause (a) of the definition of Swingline Exposure shall only be applicable for purposes of determining its Revolving Exposure to the extent such Lender shall have funded its participation in the outstanding Swingline Loans.

 

“Revolving Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate permitted amount of such Lender’s Revolving Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Revolving Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. On the Fourth Amendment Effective Date, the aggregate amount of the Lenders’ Revolving Commitments is $105,000,000.

 

10

 

 

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State or by the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any Sanctions.

 

“Term Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Term Loans expressed as an amount representing the maximum principal amount of the Term Loans to be made by such Lender, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lenders pursuant to Section 9.04. The initial amount of each Lender’s Term Commitment is set forth on the Commitment Schedule or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Term Commitment, as applicable. As of the Fourth Amendment Effective Date, the aggregate amount of the Lenders’ Term Commitment is $100,000,000.

 

(d)     Section 1.01 of Credit Agreement is hereby amended by deleting the definitions of “Cal Ex” and “Effective Date” in their entirety.

 

(e)     Section 1.04 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

“SECTION 1.04. Accounting Terms; GAAP.

 

(a)     Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after the date hereof there occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of such change in GAAP or in the application thereof (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, (a) all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Loan Party at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Board Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof and (b) any obligations of any Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations would be required to be classified and accounted for as an operating lease under GAAP as existing as of December 31, 2015 that are recharacterized and required to be capitalized on the balance sheet of the lessee due to a change in GAAP effective after December 31, 2015 shall not be treated as Capital Lease Obligations for any purpose under this Agreement, but instead shall be accounted for as if they were operating leases for all purposes under this Agreement as determined under GAAP as in effect on December 31, 2015.

 

11

 

 

(b)     Notwithstanding anything to the contrary contained in Section 1.04(a) or in the definition of “Capital Lease Obligations,” in the event of an accounting change requiring all leases to be capitalized, only those leases (assuming for purposes hereof that such leases were in existence on the date hereof) that would constitute capital leases in conformity with GAAP on the date hereof shall be considered capital leases, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.”

 

(f)     A new Section 1.05 is hereby added to the Credit Agreement to read as follows:

 

“SECTION 1.05 Interest Rates. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBO Rate” or with respect to any comparable or successor rate thereto, or replacement rate therefor.”

 

(g)     Section 1.05 of the Credit Agreement is hereby renumbered as Section 1.06 and amended and restated in its entirety to read as follows:

 

“SECTION 1.06     Pro Forma Adjustments for Acquisitions and Dispositions. To the extent the Borrower or any Subsidiary makes any Permitted Acquisition or disposition of assets outside the ordinary course of business permitted by Section 6.05 during the period of four fiscal quarters of the Borrower most recently ended, the financial ratios (including those set forth in Section 6.12) and related definitions, as applicable, shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to the acquisition or the disposition of assets, are factually supportable and are expected to have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer), as if such acquisition or such disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in the first day of such four-quarter period.”

 

(h)     Section 2.01 of the Credit Agreement is hereby amended and restated to read as follows:

 

12

 

 

“2.01     Commitments.

 

(a)     Subject to the terms and conditions set forth herein, each Lender severally (and not jointly) agrees to make Revolving Loans in dollars to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result (after giving effect to any application of proceeds of such Borrowing pursuant to Section 2.10(a)) in (i) such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or (ii) the Aggregate Revolving Exposure exceeding the aggregate Revolving Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

 

(b)     Each Term Lender made a Term Loan in dollars to the Borrower, on the Initial Effective Date, in an aggregate amount equal to $50,000,000.00 (the “Initial Effective Date Term Loan”). On the Fourth Amendment Effective Date, each Lender with an increased Term Commitment as of the Fourth Amendment Effective Date agrees, subject to the terms and conditions set forth herein, severally (and not jointly), to lend to Borrower in one draw its pro rata share of an additional term loan in the aggregate amount of $60,000,000 (the “Fourth Amendment Term Loan Increase”). The Fourth Amendment Term Loan Increase shall be advanced on a single borrowing on the Fourth Amendment Effective Date and shall be added to, and become part of, the Term Loan. After giving effect to the Fourth Amendment Term Loan Increase on the Fourth Amendment Effective Date, the parties hereto agree that the total outstanding principal of the Term Loan on the Fourth Amendment Effective Date is $100,000,000. Amounts prepaid or repaid in respect of Term Loans may not be reborrowed.”

 

(i)     Section 2.02(b) is hereby amended by replacing the reference to “Effective Date” with a reference to “Initial Effective Date”.

 

(j)     Section 2.05 of the Credit Agreement is hereby amended by deleting the following sentences: “Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower.” and replacing it with “Each such notice shall be in a form approved by Administrative Agent, shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower.”

 

(k)     Section 2.06(a) of the Credit Agreement is hereby amended by replacing each reference to “Effective Date” with “Initial Effective Date”.

 

(l)     Section 2.06(b) of the Credit Agreement is hereby amended by replacing the following sentence: “ If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a “Letter of Credit”.” with “In addition, as a condition to any such Letter of Credit issuance, the Borrower shall have entered into a continuing agreement (or other letter of credit agreement) for the issuance of letters of credit and/or shall submit a letter of credit application, in each case, as required by the Issuing Bank and using such bank’s standard form (each, a “Letter of Credit Agreement”).”

 

13

 

 

(m)     Section 2.06(f) of the Credit Agreement is hereby amended by adding “, any Letter of Credit Agreement” in clause (i) between “Letter of Credit Agreement” and “or this Agreement”.

 

(n)     A new clause (m) is hereby added to Section 2.06 of the Credit Agreement to read as follows:

 

“(m)      Letters of Credit Issued for Account of Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder supports any obligations of, or is for the account of, a Subsidiary, or states that a Subsidiary is the “account party,” “applicant,” “customer,” “instructing party,” or the like of or for such Letter of Credit, and without derogating from any rights of the applicable Issuing Bank (whether arising by contract, at law, in equity or otherwise) against such Subsidiary in respect of such Letter of Credit, the Borrower (i) shall reimburse, indemnify and compensate the applicable Issuing Bank hereunder for such Letter of Credit (including to reimburse any and all drawings thereunder) as if such Letter of Credit had been issued solely for the account of the Borrower and (ii) irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit. The Borrower hereby acknowledges that the issuance of such Letters of Credit for its Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.”

 

(o)     Section 2.07(b) is hereby amended to delete reference to “Federal Funds Effective Rate” and replacing it with “NYFRB Rate”.

 

(p)     Section 2.09 (a) is hereby amended and restated in its entirety to read as follows:

 

“(a)     Unless previously terminated, (i) all Term Commitments shall terminate at 5:00 p.m., Chicago time, on the Fourth Amendment Effective Date and (ii) all the Revolving Commitments shall terminate on the Revolving Credit Maturity Date.”

 

(q)     Section 2.09(e)(i) is hereby amended by replacing reference to “$25,000,000” with reference to “$10,000,000”.

 

(r)     Section 2.09(e)(ii) is hereby amended and restated in its entirety to read as follows:

 

“(ii) the Borrower may make a maximum of 1 such additional request after the Fourth Amendment Effective Date,”

 

(s)     Section 2.09(e)(iii) is hereby amended by replacing reference to “$75,000,000” with reference to “$10,000,000” .

 

(t)     Section 2.09(f) is hereby amended to replace reference to “Effective Date” to a reference to “Initial Effective Date”.

 

(u)     Section 2.10(b) is hereby amended and restated in its entirety to read as follows:

 

14

 

 

“(b)     The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Term Lender on each date set forth below the aggregate principal amount set forth opposite such date (as adjusted from time to time pursuant to Section 2.11(d) or 2.18(b)):

 

	
			Date

				
			Amount

			
	
			March 1, 2019

				
			$2,500,000

			
	
			June 1, 2019

				
			$2,500,000

			
	
			September 1, 2019

				
			$2,500,000

			
	
			December 1, 2019

				
			$2,500,000

			
	
			March 1, 2020

				
			$2,500,000

			
	
			June 1, 2020

				
			$2,500,000

			
	
			September 1, 2020

				
			$2,500,000

			
	
			December 1, 2020

				
			$2,500,000

			
	
			March 1, 2021

				
			$2,500,000

			
	
			June 1, 2021

				
			$2,500,000

			
	
			September 1, 2021

				
			$2,500,000

			
	
			Term Maturity Date

				
			The entire unpaid principal amount of all Term Loans

			

 

; provided if any date set forth above is not a Business Day, then payment shall be due and payable on the Business Day immediately preceding such date. To the extent not previously paid, all unpaid Term Loans shall be paid in full in cash by the Borrower on the Term Maturity Date.”

 

(v)     Section 2.11(c) is hereby amended and restated in its entirety to read as follows:

 

“(c)     In the event and on each occasion that any Net Proceeds are received by or on behalf of any Loan Party or any Subsidiary in respect of any Prepayment Event, the Borrower shall, immediately after such Net Proceeds are received by any Loan Party or Subsidiary, prepay the Obligations and cash collateralize the LC Exposure as set forth in Section 2.11(d) below in an aggregate amount equal to 100% of such Net Proceeds; provided that, in the case of a sale or other disposition of the Windset Investment, (i) if the Total Leverage Ratio (calculated on a pro forma basis (x) as if such disposition was made on the first day of the fiscal quarter then last ended for which financial statements have been delivered and (y) without giving effect to any income from the Windset Investment for the period of four consecutive fiscal quarters then last ended for which financial statements have been delivered) is less than or equal to 3.00 to 1.0, the Borrower shall not be required to apply the Net Proceeds of such sale to prepay the Obligations and (ii) if the Total Leverage Ratio (calculated on a pro forma basis (x) as if such disposition was made on the first day of the fiscal quarter then last ended for which financial statements have been delivered and (y) without giving effect to any income from the Windset Investment for the period of four consecutive fiscal quarters then last ended for which financial statements have been delivered) is greater than 3.00 to 1.0, the Borrower shall be required to apply the Net Proceeds of such sale to prepay the Obligations until the pro forma Total Leverage Ratio is less than or equal to 3.00 to 1.0; provided further that, in the case of any event described in clause (a) or (b) of the definition of the term “Prepayment Event” (other than a sale or other disposition of the Windset Investment), if the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer to the effect that the Loan Parties intend to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 180 days after receipt of such Net Proceeds, to acquire (or replace or rebuild) real property, equipment or other tangible assets (excluding Inventory) to be used in the business of the Loan Parties, and certifying that no Default or Event of Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds specified in such certificate, provided that to the extent of any such Net Proceeds that have not been so applied by the end of such 180 day period, a prepayment shall be required at such time in an amount equal to such Net Proceeds that have not been so applied; provided further that the Borrower shall not be permitted to make elections to use Net Proceeds to acquire (or replace or rebuild) real property, equipment or other tangible assets (excluding Inventory) with respect to Net Proceeds in any fiscal year in an aggregate amount in excess of $25,000,000.”

 

15

 

 

(w)     Sections 2.12(a) and 2.12(b) are hereby amended by replacing each reference to “Effective Date” with a reference to “Initial Effective Date”.

 

(x)     Section 2.14 is hereby amended and restated in its entirety as follows:

 

“SECTION 2.14      Alternate Rate of Interest; Illegality.

 

(a)     If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

 

(i)     the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable (including, without limitation, by means of an Interpolated Rate or because the LIBO Screen Rate is not available or published on a current basis) for such Interest Period; or

 

(ii)     the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or Loan) included in such Borrowing for such Interest Period; then the Administrative Agent shall give notice thereof to the Borrower and the Lenders through Electronic System as provided in Section 9.01 as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (A) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and any such Eurodollar Borrowing shall be repaid or converted into an ABR Borrowing on the last day of the then current Interest Period applicable thereto, and (B) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

16

 

 

(b)     If any Lender determines that any Requirement of Law has made it unlawful, or if any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain, fund or continue any Eurodollar Borrowing, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligations of such Lender to make, maintain, fund or continue Eurodollar Loans or to convert ABR Borrowings to Eurodollar Borrowings will be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower will upon demand from such Lender (with a copy to the Administrative Agent), either prepay or convert all Eurodollar Borrowings of such Lender to ABR Borrowings, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Borrowings to such day, or immediately, if such Lender may not lawfully continue to maintain such Loans. Upon any such prepayment or conversion, the Borrower will also pay accrued interest on the amount so prepaid or converted.

 

(c)     If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in clause (a)(i) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i) have not arisen but either (w) the supervisor for the administrator of the LIBO Screen Rate has made a public statement that the administrator of the LIBO Screen Rate is insolvent (and there is no successor administrator that will continue publication of the LIBO Screen Rate), (x) the administrator of the LIBO Screen Rate has made a public statement identifying a specific date after which the LIBO Screen Rate will permanently or indefinitely cease to be published by it (and there is no successor administrator that will continue publication of the LIBO Screen Rate), (y) the supervisor for the administrator of the LIBO Screen Rate has made a public statement identifying a specific date after which the LIBO Screen Rate will permanently or indefinitely cease to be published or (z) the supervisor for the administrator of the LIBO Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the LIBO Screen Rate may no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the LIBO Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable (but, for the avoidance of doubt, such related changes shall not include a reduction of the Applicable Rate). Notwithstanding anything to the contrary in Section 9.02, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five Business Days of the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required Lenders stating that such Required Lenders object to such amendment. Until an alternate rate of interest shall be determined in accordance with this clause (c) (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 2.14(c), only to the extent the LIBO Screen Rate for such Interest Period is not available or published at such time on a current basis), (x) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and any such Eurodollar Borrowing shall be repaid or converted into an ABR Borrowing on the last day of the then current Interest Period applicable thereto, and (y) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing; provided that, if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.”

 

17

 

 

(y)     The title of Section 2.17 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“SECTION 2.17 Withholding Taxes; Gross-Up.”

 

(z)     Section 2.17(h) is hereby amended and restated in its entirety to read as follows:

 

“(h)     Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document (including the payment in full of the Secured Obligations).”

 

(aa)     Section 2.18(e) is hereby amended by replacing the reference to “Federal Funds Effective Rate” with reference to “NYFRB Rate”.

 

(bb)     Section 2.19(b) is hereby amended by adding the following at the end of such clause to read as follows:

 

“Each party hereto agrees that (x) an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to a Platform as to which the Administrative Agent and such parties are participants), and (y) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to and be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.”

 

(cc)     Section 2.20 of the Credit Agreement is hereby amended by (i) adding a new clause (b) as written below and (ii) existing clauses (b), (c) and (d) are hereby renumbered as clauses (c), (d) and (e), respectively:

 

18

 

 

“(b)     any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 2.18(b) or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank or Swingline Lender hereunder; third, to cash collateralize the Issuing Banks’ LC Exposure with respect to such Defaulting Lender in accordance with this Section; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) cash collateralize the Issuing Banks’ future LC Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with this Section; sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Banks or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Disbursements owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to clause (d) below. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto;”

 

(dd)     Section 3.04(a) of the Credit Agreement is hereby amended by deleting the second reference to “May 29, 2016” and replacing it with “May 27, 2018”.

 

(ee)     Section 3.04(b) of the Credit Agreement is hereby amended by replacing reference to “May 29, 2016” with “May 27, 2018”.

 

19

 

 

(ff)     Section 3.11(a) of the Credit Agreement is hereby amended by replacing each reference to “Effective Date” with a reference to “Initial Effective Date”.

 

(gg)     A new Section 3.11(b) is hereby added to the Credit Agreement to read as follows:

 

“(b)     As of the Fourth Amendment Effective Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Fourth Amendment Effective Date to any Lender in connection with this Agreement is true and correct in all material respects.”

 

(hh)     Sections 3.13, 3.14 and 3.17 of the Credit Agreement are hereby amended to replace each reference to “Effective Date” with a reference to “Fourth Amendment Effective Date”.

 

(ii)     Section 3.18 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“SECTION 3.18. Margin Regulations. No Loan Party is engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Borrowing or Letter of Credit hereunder will be used to buy or carry any Margin Stock. Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of any Loan Party only or of the Loan Parties and their Subsidiaries on a consolidated basis) will be Margin Stock.”

 

(jj)     A new Section 3.24 of the Credit Agreement is hereby added to the Credit Agreement to read as follows:

 

“SECTION 3.24     Plan Assets; Prohibited Transactions. None of the Loan Parties or any of their Subsidiaries is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations), and neither the execution, delivery or performance of the transactions contemplated under this Agreement, including the making of any Loan and the issuance of any Letter of Credit hereunder, will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.”

 

(kk)     Sections 4.01(c), 4.01(d), 4.01(e), 4.01(f), 4.01(j), 4.01(k) and 4.01(o) of the Credit Agreement are hereby amended to replace each reference to “Effective Date” with a reference to “Initial Effective Date”.

 

(ll)     The last sentence of Section 4.01 of the Credit Agreement is hereby amended to replace the reference to “Effective Date” with a reference to “Initial Effective Date”.

 

(mm)     Section 5.01(h) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

“(h)     promptly following any request therefor, (x) such other information regarding the operations, material changes in ownership of Equity Interests, business affairs and financial condition of any Loan Party or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request and (y) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act and the Beneficial Ownership Regulation; and”

 

20

 

 

(nn)     Section 5.02 of the Credit Agreement is hereby amended by (i) deleting the “and” at the end of clause (e) thereof, (ii) deleting the “.” from the end of clause (f) thereof and substituting “; and” therefor and (iii) adding a new clause (g) at the end thereof to read as follows:

 

“(g)     any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification.”

 

(oo)     Section 5.03 of the Credit Agreement is hereby amended and restated in its entirety to read as follows”

 

“SECTION 5.03 Existence; Conduct of Business. Each Loan Party will, and will cause each Subsidiary to, (a) do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted; provided that the foregoing shall not prohibit any merger, consolidation, Division, liquidation or dissolution permitted under Section 6.03 and (b) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted (it being acknowledged that such restriction shall not require such line of business to engage in business activities involving only produce).”

 

(pp)     Section 5.08(b) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“(b)     The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted for a Person required to comply with Sanctions, or (c) in any manner that would result in the violation of any Sanctions applicable to any party hereto.”

 

(qq)     Section 5.13 and Section 5.14 of the Credit Agreement are hereby amended to replace each reference to “Effective Date” with a reference to “ Initial Effective Date”.

 

21

 

 

(rr)     Section 5.16 of the Credit Agreement is hereby deleted in its entirety and replaced with “[Intentionally Omitted]”.

 

(ss)     Section 6.01(i) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“(i)     Indebtedness of any Person that becomes a Subsidiary after the date hereof other than as a result of a Division; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (i) together with any Refinance Indebtedness in respect thereof permitted by clause (f) above, shall not exceed $2,500,000 at any time outstanding;”

 

(tt)     Section 6.01(j) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“(j)     Indebtedness of the Borrower secured solely by the Windset Investment; provided that (i) the aggregate principal amount of Indebtedness permitted by this clause (j) shall not exceed $50,000,000 at any time outstanding, (ii) after giving effect to the incurrence of such Indebtedness, the Total Leverage Ratio shall not be greater than 3.00 to 1.0 and the Borrower shall be in compliance with each other financial covenant set forth in Section 6.12, in each case, calculated on a pro forma basis (x) as if such Indebtedness was incurred on the first day of the fiscal quarter then last ended for which financial statements have been delivered and (y) without giving effect to any income from the Windset Investment for the period of four consecutive fiscal quarters then last ended for which financial statements have been delivered, and (iii) such Indebtedness shall otherwise be on terms and subject to subordination provisions and/or agreement acceptable to the Administrative Agent in its sole discretion (provided that (x) a payment blockage period for Events of Default of not less than 120 days shall be acceptable to Administrative Agent (other than Events of Default under clauses (a), (b), (h), (i) and (j) of Article VII, which shall result in a permanent payment blockage) and (y) such subordination provisions or agreement shall allow the Borrower to liquidate the Windset Investment at any time and use the proceeds to repay such Indebtedness, and for the holder of such Indebtedness to foreclose on the Borrower’s Windset Investment (and apply any such proceeds thereof to such Indebtedness), but shall not allow such holder to foreclose on or to take any other enforcement actions or remedies against any other assets or property of the Borrower, any other Loan Party or any of their Subsidiaries or against the Borrower, any such Loan Party or any such Subsidiaries);”

 

(uu)     Section 6.01(k) of the Credit Agreement is hereby amended by removing the reference to “and” at the end of such clause.

 

(vv)     Section 6.03(a) of the Credit Agreement is hereby amended and restated to read as follows:

 

“(a)     No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, consummate a Division as the Dividing Person, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, (i) any Subsidiary of the Borrower (or, in connection with a Permitted Acquisition, any other Person) may merge into the Borrower in a transaction in which the Borrower is the surviving entity, (ii) any Loan Party (other than the Borrower) (or, in connection with a Permitted Acquisition, any other Person) may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and, if any party to such merger is a Loan Party, such surviving entity is a Loan Party or becomes a Loan Party concurrently with such merger and (iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.”

 

22

 

 

(ww)     Section 6.03(c) of the Credit Agreement is hereby amended to replace reference to “Effective Date” with a reference to “ Initial Effective Date”.

 

(xx)     The lead-in of Section 6.04 of the Credit Agreement is hereby amended and restated to read as follows:

 

“SECTION 6.04     Investments, Loans, Advances, Guarantees and Acquisitions. No Loan Party will, nor will it permit any Subsidiary to, form any subsidiary after the Initial Effective Date, or purchase, hold or acquire (including pursuant to any merger with, or as a Division Successor pursuant to the Division of, any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger or Division) any Equity Interests, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:”

 

(yy)     Section 6.04(n) of the Credit Agreement is hereby amended by replacing each reference to “Effective Date” with a reference to “Initial Effective Date”.

 

(zz)     Section 6.05(g) of the Credit Agreement is hereby amended and restated to read as follows:

 

“(g)     sale or other disposition of the Windset Investment; provided that the proceeds of such sale or disposition are applied in accordance with Section 2.11(c), as applicable;”

 

(aaa)     Section 6.12(a) of the Credit Agreement is hereby amended by replacing reference to “November 27, 2016” with a reference to “February 24, 2018”.

 

(bbb)     Section 6.12(b) of the Credit Agreement is hereby amended and restated to read as follows:

 

23

 

 

“(b)     Maximum Total Leverage Ratio. The Borrower will not permit the Total Leverage Ratio, on the last day of any fiscal quarter ending during any period set forth below, to be greater than the ratio set forth below opposite such period:

 

	
			Period

				
			Ratio

			
	
			February 24, 2019

				
			4.50 to 1.0

			
	
			May 26, 2019

				
			4.50 to 1.0

			
	
			August 25, 2019

				
			4.50 to 1.0

			
	
			November 24, 2019

				
			4.00 to 1.0

			
	
			March 1, 2020

				
			4.00 to 1.0

			
	
			May 31, 2020

				
			4.00 to 1.0

			
	
			August 30, 2020

				
			4.00 to 1.0

			
	
			November 29, 2020

				
			3.50 to 1.0

			
	
			February 28, 2021

				
			3.50 to 1.0

			
	
			May 30, 2021

				
			3.50 to 1.0

			
	
			August 29, 2021 and the last day of each fiscal quarter ending thereafter

				
			3.50 to 1.0”

			

 

(ccc)     Clause (d) of Article VII of the Credit Agreement is hereby amended and restated to read as follows:

 

“(d)     any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s existence), 5.08 or 5.13 or in Article VI;”

 

(ddd)     Article VII of the Credit Agreement is hereby amended by adding a new clause (w) immediately following clause (v) thereof to read as follows:

 

“(w)     the “Closing” under and as defined in the Yucatan Purchase Agreement has not occurred pursuant to the Yucatan Purchase Agreement and related transaction documents on the forms certified to the Lenders on or prior to the Fourth Amendment Effective on or prior to one (1) day following the Fourth Amendment Effective Date;”

 

24

 

 

(eee)     The last paragraph of Article VII of the Credit Agreement is hereby amended and restated to read as follows:

 

“then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, whereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, but ratably as among the Classes of Loans and the Loans of each Class at the time outstanding, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), whereupon 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 accrued hereunder, shall become due and payable immediately, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in the case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, and (iii) require cash collateral for the LC Exposure in accordance with Section 2.06(j) hereof; and in the case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments (including the Swingline Commitment) shall automatically terminate and the principal of the Loans then outstanding, and cash collateral for the LC Exposure, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, increase the rate of interest applicable to the Loans and other Obligations as set forth in this Agreement and exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.”

 

(fff)     The title of Section 8.07 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“SECTION 8.07. Acknowledgements of Lenders and Issuing Banks.”

 

(ggg)     Section 8.07 of the Credit Agreement is hereby amended by (i) adding a new clause (b) as written below and (ii) existing clause (b) is hereby renumbered as clause (c).

 

“(b)     Each Lender, by delivering its signature page to this Agreement on the Initial Effective Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Initial Effective Date or the effective date of any such Assignment and Assumption or any other Loan document pursuant to which it shall have become a Lender hereunder.”

 

25

 

 

(hhh)     A new Section 8.11 is hereby added to the Credit Agreement to read as follows:

 

“SECTION 8.11. Certain ERISA Matters.

 

(a)     Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

 

(i)     such Lender is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments,

 

(ii)     the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, and the conditions for exemptive relief thereunder are and will continue to be satisfied in connection therewith,

 

(iii)     (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

 

(iv)     such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

 

(b)     In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that:

 

26

 

 

(i)     none of the Administrative Agent, or any Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto),

 

(ii)     the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21, as amended from time to time) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

 

(iii)     the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations),

 

(iv)     the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and

 

(v)     no fee or other compensation is being paid directly to the Administrative Agent, or any Arranger or any their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Commitments or this Agreement.

 

(c)     The Administrative Agent, and each Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.”

 

27

 

 

(iii)     A new Section 8.12 is hereby added to the Credit Agreement to read as follows:

 

“SECTION 8.12. Flood Laws. Chase has adopted internal policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and related legislation (the “Flood Laws”). Chase, as administrative agent or collateral agent on a syndicated facility, will post on the applicable electronic platform (or otherwise distribute to each Lender in the syndicate) documents that it receives in connection with the Flood Laws. However, Chase reminds each Lender and Participant in the facility that, pursuant to the Flood Laws, each federally regulated Lender (whether acting as a Lender or Participant in the facility) is responsible for assuring its own compliance with the flood insurance requirements.”

 

(jjj)     Section 9.01(a)(i) is hereby amended and restated in its entirety to read as follows:

 

“(i)      if to any Loan Party, to it in care of the Borrower at:

 

Landec Corporation

5201 Great America Parkway, Ste. 232

Santa Clara, CA 95054

Attention: Gregory Skinner

Fax No: (650) 261-3616”

 

(kkk)   Section 9.01(a)(ii) is hereby amended and restated in its entirety to read as follows:

 

“JPMorgan Chase Bank, N.A.

Middle Market Servicing

10 South Dearborn St, Floor L2

Suite IL1-1145

Chicago, IL 60603-2300

Fax No: (888) 303-9732

Email: jpm.agency.servicing.1@jpmorgan.com 

 

(lll)    Section 9.02(b) is hereby amended and restated in its entirety to read as follows:

 

28

 

 

“(b)     Subject to Section 2.14(c), neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that no such agreement shall (A) increase the Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender), (B) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (C) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (D) change Section 2.18(b) or (d) in a manner that would alter the manner in which payments are shared, without the written consent of each Lender (other than any Defaulting Lender), (E) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (F) change Section 2.20, without the consent of each Lender (other than any Defaulting Lender), (G) permit any Loan Party to assign any of its rights under this Agreement or any other Loan Document without the written consent of each Lender (other than any Defaulting Lender), (H) release any Guarantor from its obligation under its Loan Guaranty or Obligation Guaranty (except as otherwise permitted herein or in the other Loan Documents, including, without limitation, pursuant to a transaction permitted under Section 6.05(g)), without the written consent of each Lender (other than any Defaulting Lender), or (I) except as provided in clause (c) of this Section or in any Collateral Document, release all or substantially all of the Collateral without the written consent of each Lender (other than any Defaulting Lender); provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Swingline Lender or the Issuing Bank hereunder without the prior written consent of the Administrative Agent, the Swingline Lender or the Issuing Bank, as the case may be (it being understood that any amendment to Section 2.20 shall require the consent of the Administrative Agent, the Swingline Lender and the Issuing Bank); provided further that no such agreement shall amend or modify the provisions of Section 2.07 or any letter of credit application and any bilateral agreement between the Borrower and the Issuing Bank regarding the Issuing Bank’s Issuing Bank Sublimit or the respective rights and obligations between the Borrower and the Issuing Bank in connection with the issuance of Letters of Credit without the prior written consent of the Administrative Agent and the Issuing Bank, respectively. The Administrative Agent may also amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.04. Any amendment, waiver or other modification of this Agreement or any other Loan Document that by its terms affects the rights or duties under this Agreement of the Lenders of one or more Classes (but not the Lenders of any other Class), may be effected by an agreement or agreements in writing entered into by the Borrower and the requisite number or percentage in interest of each affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time.”

 

29

 

 

(mmm)     The last paragraph of Section 9.04(c) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 2.19(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(d) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement or any other Loan Document (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under this Agreement and any other Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.”

 

(nnn)     Section 9.08 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“SECTION 9.08     Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any Loan Party against any of and all the Secured Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender or such Issuing Bank different from the branch office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.20 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Banks, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The applicable Lender, the Issuing Bank or such Affiliate shall notify the Borrower and the Administrative Agent of such setoff or application; provided that the failure to give or any delay in giving such notice shall not affect the validity of such setoff or application under this Section. The rights of each Lender, each Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Bank or their respective Affiliates may have.”

 

30

 

 

(ooo)     Section 9.17 of the Credit Agreement is hereby amended by replacing reference to “Federal Funds Effective Rate” to reference to “NYFRB Rate”.

 

(ppp)     A new Section 9.18 is hereby added to the Credit Agreement to read as follows:

 

“SECTION 9.18     No Fiduciary Duty, etc. The Borrower acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that no Credit Party will have any obligations except those obligations expressly set forth herein and in the other Loan Documents and each Credit Party is acting solely in the capacity of an arm’s length contractual counterparty to the Borrower with respect to the Loan Documents and the transaction contemplated therein and not as a financial advisor or a fiduciary to, or an agent of, the Borrower or any other person. The Borrower agrees that it will not assert any claim against any Credit Party based on an alleged breach of fiduciary duty by such Credit Party in connection with this Agreement and the transactions contemplated hereby. Additionally, the Borrower acknowledges and agrees that no Credit Party is advising the Borrower as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction. The Borrower shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Credit Parties shall have no responsibility or liability to the Borrower with respect thereto.

 

The Borrower further acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that each Credit Party, together with its Affiliates, is a full service securities or banking firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business, any Credit Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, the Borrower and other companies with which the Borrower may have commercial or other relationships. With respect to any securities and/or financial instruments so held by any Credit Party or any of its customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

 

In addition, the Borrower acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that each Credit Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which the Borrower may have conflicting interests regarding the transactions described herein and otherwise. No Credit Party will use confidential information obtained from the Borrower by virtue of the transactions contemplated by the Loan Documents or its other relationships with the Borrower in connection with the performance by such Credit Party of services for other companies, and no Credit Party will furnish any such information to other companies. The Borrower also acknowledges that no Credit Party has any obligation to use in connection with the transactions contemplated by the Loan Documents, or to furnish to the Borrower, confidential information obtained from other companies.”

 

31

 

 

(qqq)     The existing Section 9.18 of the Credit Agreement is hereby renumbered as Section 9.19 of the Credit Agreement.

 

(rrr)     The existing Section 9.19 of the Credit Agreement is hereby renumbered as Section 9.20 of the Credit Agreement and is amended and restated to read as follows:

 

“SECTION 9.20     Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)     the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

 

(b)     the effects of any Bail-In Action on any such liability, including, if applicable:

 

(i)     a reduction in full or in part or cancellation of any such liability;

 

(ii)     a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)     the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.”

 

(sss)     Section 10.10 of the Credit Agreement is hereby amended and restated to read as follows:

 

“SECTION 10.10     Maximum Liability. Notwithstanding any other provision of this Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be limited to the extent, if any, required so that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, Uniform Voidable Transactions Act or similar statute or common law. In determining the limitations, if any, on the amount of any Loan Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Loan Guarantor may have under this Loan Guaranty, any other agreement or applicable law shall be taken into account.”

 

32

 

 

(ttt)      The Commitment Schedule is hereby amended and restated in its entirety by the attached Annex A The Commitment Schedule.

 

(uuu)    Exhibit A of the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit A hereto.

 

(vvv)    Exhibit B of the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit B hereto.

 

(www)  Exhibit C-1 of the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit C-1 hereto.

 

(xxx)     Exhibit C-2 of the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit C-2 hereto.

 

(yyy)     Exhibit C-3 of the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit C-3 hereto.

 

(zzz)      Exhibit C-4 of the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit C-4 hereto.

 

(aaaa)    Exhibit D of the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit D hereto.

 

(bbbb)   Exhibit E of the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit E hereto.

 

(cccc)    Schedules 3.05 through 6.10 to the Credit Agreement are hereby amended and restated in their entireties as set forth on Exhibit F hereto.

 

2.         Subject to the terms and conditions of the Amendment, Exhibits A through I to the Security Agreement are hereby amended and restated in their entireties as set forth on Exhibit G hereto.

 

3.         New Loan Party Joinder.

 

(a)     Omnibus Joinder. Immediately following the occurrence of the “Closing” under and as defined in the Yucatan Purchase Agreement (the “Joinder Effective Time”), each New Loan Party hereby acknowledges, agrees and confirms that, by its execution of this Amendment, such New Loan Party will be deemed to be (i) a Loan Party for all purposes under the Credit Agreement and each other Loan Document, (ii) a Loan Guarantor for all purposes under the Credit Agreement and (iii) a Grantor for all purposes under the Security Agreement, and shall have all of the obligations of a Loan Party, a Loan Guarantor and a Grantor under each Loan Document as if it had executed such Loan Document directly. Each New Loan Party hereby ratifies, as of the Joinder Effective Time, and agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement and each other Loan Document, including without limitation (x) all of the representations and warranties of the Loan Parties set forth in Article III of the Credit Agreement and in each of the other Loan Documents, (y) all of the covenants set forth in Articles V and VI of the Credit Agreement and in each of the other Loan Documents and (z) all of the guaranty obligations set forth in Article X of the Credit Agreement.

 

33

 

 

(b)     Guaranty. As of the Joinder Effective Time, without limiting the generality of the foregoing terms of Section 2(a), each New Loan Party, subject to the limitations set forth in Section 10.10 and 10.13 of the Credit Agreement, hereby guarantees, jointly and severally with the other Loan Guarantors, to the Administrative Agent and the Lenders, as provided in Article X of the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), each New Loan Party will, jointly and severally together with the other Loan Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

 

(c)     Security Grant; Further Assurances; Filing Authorization. As of the Joinder Effective Time, (i) without limiting the generality of the foregoing terms of Section 2(a), each New Loan Party hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Secured Parties, a security interest in all of such New Loan Party’s right, title and interest in and to the Collateral, whether now owned or hereafter acquired, to secure the prompt and complete payment and performance of the Secured Obligations; (ii) each New Loan Party shall take all steps necessary to perfect, in favor of the Administrative Agent, a first-priority security interest in and lien against such New Loan Party’s Collateral, including, without limitation, delivering all certificated Pledged Collateral (as defined in the Security Agreement) to the Administrative Agent (and other Collateral required to be delivered under the Security Agreement), and taking all steps necessary to properly perfect the Administrative Agent’s interest in any uncertificated Pledged Collateral; and (iii) each New Loan Party hereby authorizes the Administrative Agent to file all financing statements and other documents and take such other actions as may from time to time be requested by the Administrative Agent in order to maintain a first priority (subject to Liens permitted under Section 6.02 of the Credit Agreement which have priority as a matter of law) perfected security interest in and, if applicable, Control of, the Collateral owned by such New Loan Party. Any financing statement filed by the Administrative Agent may be filed in any filing office in any UCC jurisdiction and may indicate each applicable New Loan Party’s Collateral as all assets of such New Loan Party, or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction.

 

4.     Reallocation of Commitments. On the Fourth Amendment Effective Date, each Lender under the Original Credit Agreement that has a “Commitment” thereunder shall severally sell, assign and transfer, or purchase and assume, as the case may be, and receive payments from, or shall make payments to, the Administrative Agent such that after giving effect to all such assignments and purchases the Commitments will be held by the Lenders under the Credit Agreement as amended by this Amendment and each such Lender shall have funded its portion of its Commitment on the Fourth Amendment Effective Date. On the Fourth Amendment Effective Date, all outstanding “Commitments,” “Loans” and other outstanding advances under the Original Credit Agreement shall be reallocated among the Lenders under the Credit Agreement as amended by this Amendment in accordance with such Lenders’ respective revised Applicable Percentages. The assignments and purchases provided for in this Section 4 shall be without recourse, warranty or representation. The purchase price for each such assignment and purchase shall equal the principal amount of the Loan purchased and shall be payable to Administrative Agent for distribution to the Lenders.

 

34

 

 

5.     Conditions Precedent to Effectiveness. This Amendment shall become effective upon the satisfaction of each of the following conditions precedent, in case in form and substance reasonably satisfactory to Administrative Agent:

 

(a)     The Administrative Agent shall have received a fully executed copy of this Amendment;

 

(b)     The Administrative Agent shall have received certified copies of the Capital Contribution and Partnership Interest and Stock Purchase Agreement evidencing the Yucatan Acquisition and each other agreement, instrument, document and certificate related thereto;

 

(c)     The Administrative Agent shall have received copies of all reasonably requested business and financial information, including a pro forma statement of profits and losses;

 

(d)     The Administrative Agent shall have received (i) a certificate of each Loan Party, dated as of the date hereof and executed by its Secretary or Assistant Secretary, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and, in the case of the Borrower, its Financial Officers, and (C) contain appropriate attachments, including the charter, articles or certificate of organization or incorporation of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its bylaws or operating, management or partnership agreement, or other organizational or governing documents, and (ii) a good standing certificate for each Loan Party from its jurisdiction of organization;

 

(e)     The Administrative Agent shall have received (x) a certificate, signed by the chief financial officer of the Borrower and each other Loan Party, dated as of the Fourth Amendment Effective Date (i) stating that no Default or Event of Default has occurred and is continuing, (ii) stating that the representations and warranties contained in the Loan Documents are true and correct as of such date, and (iii) certifying as to any other factual matters as may be reasonably requested by the Administrative Agent and (y) a certificate signed by a Financial Officer dated the Fourth Amendment Effective Date stating that each Loan Party is in compliance with the solvency representation set forth in Section 3.13 of the Credit Agreement in form and substance reasonably satisfactory to the Administrative Agent;

 

(f)     The Administrative Agent shall have received the results of a recent lien search in the jurisdiction of organization of each Loan Party and such other jurisdictions as it may have requested, and such search shall reveal no Liens on any of the assets of the Loan Parties except for liens permitted by Section 6.02 of the Credit Agreement or discharged on or prior to date hereof pursuant to a pay-off letter or other documentation reasonably satisfactory to the Administrative Agent;

 

35

 

 

(g)     The Administrative Agent shall have received a written opinion of the Loan Parties’ counsel, addressed to the Administrative Agent and the Lenders consistent with the opinion letter delivered on the Initial Effective Date and in form and substance reasonably acceptable to the Administrative Agent and its counsel;

 

(h)     Before and after giving effect to the Amendment, the representations and warranties of the Loan Parties set forth in the Loan Documents are true and correct in all material respects with the same effect as if made on the Fourth Amendment Date (except to the extent stated to relate to a specific earlier date, in which case that representation or warranty is true and correct in all material respect or in all respects, as applicable, as of that earlier date);

 

(i)     The Administrative Agent shall have received the certificates representing the Equity Interests of each of Toluca and Camden pledged pursuant to the Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof;

 

(j)     Each document (including any Uniform Commercial Code financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.02 to the Credit Agreement), shall be in proper form for filing, registration or recordation;

 

(k)     to the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five (5) days prior to the Fourth Amendment Effective Date, any Lender that has requested a Beneficial Ownership Certification from the Borrower shall have received such Beneficial Ownership Certification;

 

(l)     The Administrative Agent shall have received the fees provided in Section 6 of this Amendment;

 

(m)     No Default or Event of Default shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment or would result from the making of the Loans to be made on the Fourth Amendment Date;

 

(n)     No event shall have occurred and no condition shall exist which has or could be reasonably expected to have a Material Adverse Effect; and

 

(o)     The Administrative Agent shall have received such other documents and taken such other actions as the Administrative Agent or its counsel may have reasonably requested (including, without limitation, any such documents, instruments and items set forth on that closing checklist last delivered to the Borrower by the Administrative Agent).

 

36

 

 

6.     Post-Closing Matters. The New Loan Parties shall execute and deliver (or cause to be executed and delivered) the following documents, and comply with the following requirements, in each case within the time limits specified (as may be extended by Administrative Agent in its sole discretion):

 

(a)     On or prior to the date which is 15 days following the Fourth Amendment Effective Date, the New Loan Parties will deliver to Administrative Agent satisfactory property and liability insurance certificates indicating that the New Loan Parties have been added.

 

(b)     On or prior to the date which is 60 days following the Fourth Amendment Effective Date, the New Loan Parties will deliver to Administrative Agent each Collateral Access Agreement required to be provided pursuant to Section 4.13 of the Security Agreement.

 

(c)     On or prior to the date which is 180 days following the Fourth Amendment Effective Date, the New Loan Parties will either (i) deliver to Administrative Agent each deposit account control agreement required to be provided pursuant to Section 4.14 of the Security Agreement or (ii) maintain one or more of the Administrative Agent or the Lenders as its principal depository bank pursuant to Section 5.13 of the Credit Agreement.

 

7.     Fees and Expenses.      The Borrower agrees to pay on demand all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent in connection with this Amendment, including, but not limited to, reasonable legal fees and expenses in connection with the preparation, negotiation, execution, closing, delivery and administration of this Amendment.

 

8.     Representations and Warranties. Each Loan Party jointly and severally represents and warrants to the Administrative Agent and the Lenders that (a) such Loan Party has all necessary power and authority to execute and deliver this Amendment and perform its obligations hereunder, (b) no Default or Event of Default exists either before or after giving effect to this Amendment, (c) this Amendment and the Loan Documents to which such Loan Party is a party, as amended hereby, constitute the legal, valid and binding obligations of each such Loan Party and are enforceable against such Loan Party in accordance with their terms, except as enforceability may be limited by debtor relief laws and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law), (d) all Liens created under the Loan Documents continue to be first priority, perfected Liens (subject only to Permitted Encumbrances) and (e) all representations and warranties of each Loan Party contained in the Credit Agreement and all other Loan Documents to which such Loan Party is a party, as amended or otherwise modified, are true and correct as of the date hereof (or, in the case of any representation or warranty not qualified as to materiality, true and correct in all material respects), except to the extent the same expressly relate to an earlier date (and in such case shall be true and correct (or, in the case of any representation or warranty not qualified as to materiality, true and correct in all material respects) as of such earlier date).

 

9.     Ratification. Except as expressly modified in this Amendment, all of the terms, provisions and conditions of the Credit Agreement and the other Loan Documents to which a Loan Party is a party, as heretofore amended, shall remain unchanged and in full force and effect and the Credit Agreement and each other Loan Document to which a Loan Party is a party are hereby ratified and confirmed in all respects. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders under the Credit Agreement or any of the other Loan Documents, or constitute a waiver of any provision of the Credit Agreement or any of the other Loan Documents. This Amendment shall not constitute a course of dealing with the Administrative Agent or the Lenders at variance with the Credit Agreement or the other Loan Documents such as to require further notice by the Administrative Agent or the Lenders to require strict compliance with the terms of the Credit Agreement and the other Loan Documents in the future.

 

37

 

 

10.     GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

 

11.     FORUM SELECTION AND CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH LOAN PARTY HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.01 OF THE CREDIT AGREEMENT. EACH LOAN PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

12.     WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

 

38

 

 

13.     RELEASE.

 

(a)     EACH LOAN PARTY ACKNOWLEDGES THAT ADMINISTRATIVE AGENT AND EACH LENDER WOULD NOT ENTER INTO THIS AMENDMENT WITHOUT SUCH LOAN PARTY’S ASSURANCE HEREUNDER. EXCEPT FOR THE OBLIGATIONS ARISING HEREAFTER UNDER THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS, ON BEHALF OF ITSELF AND EACH OF ITS SUBSIDIARIES, EACH LOAN PARTY HEREBY ABSOLUTELY DISCHARGES AND RELEASES ADMINISTRATIVE AGENT AND EACH LENDER, ANY PERSON THAT HAS OBTAINED ANY INTEREST FROM ADMINISTRATIVE AGENT OR ANY LENDER UNDER ANY LOAN DOCUMENT AND EACH OF ADMINISTRATIVE AGENT’S AND EACH LENDER’S FORMER AND PRESENT PARTNERS, STOCKHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES, SUCCESSORS, ASSIGNEES, AFFILIATES, AGENTS AND ATTORNEYS (COLLECTIVELY, THE “RELEASEES”) FROM ANY KNOWN OR UNKNOWN CLAIMS WHICH ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES NOW HAS AGAINST LENDER OR ANY OTHER RELEASEE OF ANY NATURE ARISING OUT OF OR RELATED TO THE BORROWERS OR ANY OF THEIR SUBSIDIARIES, ANY DEALINGS WITH SUCH LOAN PARTY OR ANY OF ITS SUBSIDIARIES, ANY OF THE LOAN DOCUMENTS OR ANY TRANSACTIONS PURSUANT THERETO OR CONTEMPLATED THEREBY, THE COLLATERAL (OR ANY OTHER COLLATERAL OF ANY PERSON THAT PREVIOUSLY SECURED OR NOW OR HEREAFTER SECURES ANY OF THE OBLIGATIONS), OR ANY NEGOTIATIONS FOR ANY MODIFICATIONS TO OR FORBEARANCE OR CONCESSIONS WITH RESPECT TO ANY OF THE LOAN DOCUMENTS, IN EACH CASE INCLUDING ANY CLAIMS THAT SUCH LOAN PARTY OR ANY OF ITS SUBSIDIARIES, SUCCESSORS, COUNSEL AND ADVISORS MAY IN THE FUTURE DISCOVER THEY WOULD HAVE NOW HAD IF THEY HAD KNOWN FACTS NOT NOW KNOWN TO THEM, AND IN EACH CASE WHETHER FOUNDED IN CONTRACT, IN TORT OR PURSUANT TO ANY OTHER THEORY OF LIABILITY.

 

(b)     Each Loan Party warrants, represents and agrees that it is fully aware of California Civil Code Section 1542, which provides as follows:

 

SECTION 1542. GENERAL RELEASE. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

The Loan Parties each hereby knowingly and voluntarily waive and relinquish the provisions, rights and benefits of Section 1542 and all similar federal or state laws, rights, rules, or legal principles of any other jurisdiction that may be applicable herein, and any rights they may have to invoke the provisions of any such law now or in the future with respect to the claims being released pursuant to Section 13(a), and the Loan Parties each hereby agree and acknowledge that this is an essential term of the releases set forth in Section 13(a). In connection with such releases, the Loan Parties each acknowledge that they are aware that they or their attorneys or others may hereafter discover claims or facts presently unknown or unsuspected in addition to or different from those which they now know or believe to be true with respect to the subject matter of the claims being released pursuant to Section 13(a). Nevertheless, it is the intention of the Borrowers and the other Loan Parties in executing this Amendment to fully, finally and forever settle and release all matters and all claims relating thereto, which exist, hereafter may exist or might have existed (whether or not previously or currently asserted in any action) constituting claims released pursuant to Section 13(a). Each Releasee, to the extent not a party hereto, shall be an express third-party beneficiary of this Amendment for purposes of this Section 13 and shall be entitled to enforce the provisions hereof as if it were a party hereto.

 

39

 

 

14.     Miscellaneous.

 

(a)     Counterparts; Integration; Effectiveness. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment and the other Loan Documents (as amended hereby), constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of a signature page of this Amendment by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment.

 

(b)     Severability. Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. All rights, remedies and powers provided in this Amendment may be exercised only to the extent that the exercise thereof does not violate any applicable mandatory provisions of law, and all the provisions of this Amendment are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Amendment invalid or unenforceable.

 

(c)     Headings. Section headings used in this Amendment are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

 

(d)     Incorporation. All references to the Credit Agreement in any Loan Document shall mean the Credit Agreement as hereby modified. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof’, “herein” or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby.

 

(e)     No Prejudice: No Impairment. This Amendment shall not prejudice any rights or remedies of the Administrative Agent or the Lenders under the Credit Agreement or other Loan Documents as hereby amended. The Administrative Agent and the Lenders reserve, without limitation, all rights which they have against any Loan Party or endorser of the Obligations.

 

[Signatures Immediately Follow]

 

40

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment and Joinder to Credit Agreement and Other Loan Documents to be duly executed by their respective authorized officers as of the day and year first above written.

 

	 	Borrower:
	 	 
	 	LANDEC CORPORATION
	 	 
	 	 
	 	By:	/s/ Gregory Skinner
	 	Name:	Gregory Skinner
	 	Title:	Chief Financial Officer

 

 

Signature Page to Fourth Amendment and Joinder to Credit Agreement

and Other Loan Documents

 

 

 

 

	 	Other Loan Parties:
	 	 
	 	APIO, INC.

			LIFECORE BIOMEDICAL, INC.

			LIFECORE BIOMEDICAL, LLC

			GREENLINE LOGISTICS, INC.
	 	 
	 	 
	 	By:	/s/ Gregory Skinner
	 	Name:	Gregory Skinner
	 	Title:	Vice President

 

 

Signature Page to Fourth Amendment and Joinder to Credit Agreement

and Other Loan Documents

 

 

 

 

	 	
			JPMORGAN CHASE BANK, N.A., as

			Administrative Agent and Lender

			
	 	 
	 	 
	 	By:	/s/ Peter M. Jaeschke
	 	Name:	Peter M. Jaeschke
	 	Title:	Executive Director

 

 

Signature Page to Fourth Amendment and Joinder to Credit Agreement

and Other Loan Documents

 

 

 

 

	 	BMO HARRIS BANK N. A., as Lender
	 	 
	 	 
	 	By:	/s/ C. Scott Place 
	 	Name:	C. Scott Place
	 	Title:	Director

 

 

Signature Page to Fourth Amendment and Joinder to Credit Agreement

and Other Loan Documents

 

 

 

 

	 	CITY NATIONAL BANK, as Lender
	 	 
	 	 
	 	By:	/s/ Theresa Wong
	 	Name:	Theresa Wong
	 	Title:	Vice President

 

 

Signature Page to Fourth Amendment and Joinder to Credit Agreement

and Other Loan Documents

 

 

 

 

IN WITNESS WHEREOF, the New Loan Parties have caused this Fourth Amendment and Joinder to Credit Agreement and Other Loan Documents to be duly executed by their respective authorized officers as of the Joinder Effective Time.

 

	 	New Loan Parties:
	 	 
	 	YUCATAN FOODS, L.P.
	 	 
	 	By:	/s/ Gregory Skinner
	 	Name:	Gregory Skinner
	 	Title:	Vice President
	 	 
	 	 
	 	CAMDEN FRUIT CORP.
	 	 
	 	 
	 	By:	/s/ Gregory Skinner
	 	Name:	Gregory Skinner
	 	Title:	Vice President
	 	 
	 	 
	 	TOLUCA GOURMET, INC.
	 	 
	 	 
	 	By:	/s/ Gregory Skinner
	 	Name:	Gregory Skinner
	 	Title:	Vice President

 

 

Signature Page to Fourth Amendment and Joinder to Credit Agreement

and Other Loan Documents

 

 

 

 

COMMITMENT SCHEDULE

 

 

	
			Lender

				
			Revolving

			Commitment

				
			Term 

			Commitment

				
			Swingline

			Commitment

				
			Commitment

			
	
			JPMorgan Chase Bank, N.A.

				
			$35,853,658.54

				
			$34,146,341.46

				
			$5,000,000.00

				
			$70,000,000.00

			
	
			BMO Harris Bank N.A.

				
			$35,853,658.54

				
			$34,146,341.46

				
			--

				
			$70,000,000.00

			
	
			City National Bank

				
			$33,292,682.92

				
			$31,707,317.08

				
			--

				
			$65,000,000.00

			
	
			Total

				
			$105,000,000.00

				
			$100,000,000.00

				
			$5,000,000.00

				
			$205,000,000.00

			

 

 

 

 

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

 

1.     This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

2.     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit and guarantees and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and other rights of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

1.     Assignor:     ______________________________

 

2.     Assignee:     ______________________________

 [and is an Affiliate/Approved Fund of [identify Lender]1]

 

3.     Borrower:     ______________________________

 

4.     Administrative Agent:     ______________________,

as the administrative agent under the Credit Agreement

 

5.     Credit Agreement:     The Credit Agreement dated as of September 23, 2016 among Landec Corporation, a Delaware corporation, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto

 

1  Select as applicable.

 

 

 

 

6.     Assigned Interest:

 

	
			Facility Assigned2

				
			Aggregate Amount of Commitment/Loans for all Lenders

				
			Amount of Commitment/Loans Assigned

				
			Percentage Assigned of Commitment/Loans3

			
	 	
			$

				
			$

				
			%

			
	 	
			$

				
			$

				
			%

			
	 	
			$

				
			$

				
			%

			

 

 

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including federal and state securities laws.

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR

 

[NAME OF ASSIGNOR]

 

By:______________________________

Name:____________________________

Title:_____________________________

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

 

By:______________________________

Name:___________________________

Title:_____________________________

 

 

2   Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “Revolving Commitment,” “Term Commitment,” etc.)

3   Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

 

 

 

 

[Consented to and]4 Accepted:

 

JPMORGAN CHASE BANK, N.A., as

Administrative Agent[, Issuing Bank and Swingline Lender]

 

By:________________________________

Name:______________________________

Title:_______________________________

 

[Consented to:]5

 

[NAME OF RELEVANT PARTY]

 

By:________________________________

Name:______________________________

Title:_______________________________

 

 

 

4   To be added only if the consent of the Administrative Agent, Issuing Bank and/or Swingline Lender, as applicable, is required by the terms of the Credit Agreement.

5   To be added only if the consent of the Borrower and/or other parties (e.g. Swingline Lender, Issuing Bank) is required by the terms of the Credit Agreement.

 

 

 

 

ANNEX 1 to

ASSIGNMENT AND ASSUMPTION

 

LANDEC CORPORATION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1. Representations and Warranties.

 

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any Subsidiary or Affiliate or any other Person obligated in respect of any Loan Document, (iv) any requirements under applicable law for the Assignee to become a lender under the Credit Agreement or any other Loan Document or to charge interest at the rate set forth therein from time to time or (v) the performance or observance by the Borrower, any Subsidiary or Affiliate, or any other Person of any of their respective obligations under any Loan Document.

 

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement and under any applicable law that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

 

 

 

 

2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

 

3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.

 

Acceptance and adoption of the terms of this Assignment and Assumption by the Assignee and the Assignor by Electronic Signature (as defined in the Credit Agreement) or delivery of an executed counterpart of a signature page of this Assignment and Assumption by any Electronic System (as defined in the Credit Agreement) shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

 

 

 

EXHIBIT B

 

[FORM OF]

 

BORROWING NOTICE

LANDEC CORPORATION

 

	Borrowing Request	Date: 6

 

JPMorgan Chase Bank, N.A.

Middle Market Servicing

10 South Dearborn, Floor L2

Suite IL1-1145

Chicago, IL, 60603-2300

Attention: ___________________

Fax No: (312) ___________

 

Ladies and Gentlemen:

 

This Borrowing Request is furnished pursuant to Section 2.03 of that certain Credit Agreement dated as of September 23, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Landec Corporation, a Delaware corporation (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders (the “Administrative Agent”). Unless otherwise defined herein, capitalized terms used in this Borrowing Request have the meanings ascribed thereto in the Credit Agreement. The Borrower represents that, as of the date of this Borrowing Request and the date of the proposed Borrowing set forth below, each of the conditions precedent set forth in Section 4.02 of the Credit Agreement have been satisfied.

 

The Borrower hereby notifies the Administrative Agent of its request for the following Borrowing:

 

(1)     The Borrowing shall be a ___ Revolving Borrowing OR ___ Term Loan Borrowing

(2)     Aggregate Amount of the Revolving Borrowing: $__________________

(3)     Aggregate Amount of the Term Loan Borrowing: $__________________

(4)     Date of the proposed Borrowing (must be a Business Day): ____________________

(5)     The Borrowing shall be a ___ ABR Borrowing OR ___ Eurodollar Borrowing

(6)     If a Eurodollar Borrowing, the duration of Interest Period:

One Month      __________     Three Months     __________

Six Months     __________

 

The Borrower hereby instructs the Administrative Agent to disburse by wire transfer or internal transfer, as the case may be, on the date of the proposed Borrowing set forth above the proceeds of the Borrowings pursuant to the instructions set forth on Annex 1 hereto. The proceeds of such Borrowings shall constitute Loans under the Credit Agreement and the Borrower hereby agrees that by making the disbursements set forth on Annex 1, it will have the same effect as if such proceeds were transferred directly to the Borrower.

 

6  This Borrowing Request is to be delivered (a) in the case of a Eurodollar Borrowing, not later than noon, Chicago time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 2:00 p.m., Chicago time, on the date of the proposed Borrowing.

 

 

 

 

	 	LANDEC CORPORATION	 
	 	 	 
	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

 

 

 

ANNEX 1 to

BORROWING NOTICE

 

[Wiring instructions to be attached]

 

 

 

 

EXHIBIT C-1

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of September 23, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Landec Corporation, a Delaware corporation (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders.

 

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

 

By:_________________________

Name:_______________________

Title:________________________

Date: ________ __, 20[ ]

 

 

 

 

EXHIBIT C-2

 

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of September 23, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Landec Corporation, a Delaware corporation (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders.

 

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT]

 

By:_________________________

Name:_______________________

Title:________________________

Date: ________ __, 20[ ]

 

 

 

 

EXHIBIT C-3

 

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of September 23, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Landec Corporation, a Delaware corporation (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders.

 

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by a withholding statement together with an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT]

 

By:_________________________

Name:_______________________

Title:________________________

 

Date: ________ __, 20[ ]

 

 

 

 

EXHIBIT C-4

 

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of September 23, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Landec Corporation, a Delaware corporation (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders.

 

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any promissory note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by a withholding statement together with an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

 

 

[NAME OF LENDER]

 

By:_________________________

Name:_______________________

Title:________________________

Date: ________ __, 20[ ]

 

 

 

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

	 	
			To:

				
			The Lenders party to the

			Credit Agreement described below

			

 

This Compliance Certificate (“Certificate”), for the period ended _____________, 20__, is furnished pursuant to that certain Credit Agreement dated as of September 23, 2016 (as amended, modified, renewed or extended from time to time, the “Credit Agreement”) among Landec Corporation, a Delaware corporation (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders and as the Issuing Bank and Swingline Lender. Unless otherwise defined herein, capitalized terms used in this Certificate have the meanings ascribed thereto in the Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES ON BEHALF OF THE BORROWER (AND NOT IN HIS OR HER INDIVIDUAL CAPACITY) THAT:

 

1.     I am the ______________ of the Borrower and I am authorized to deliver this Certificate on behalf of the Borrower and its Subsidiaries;

 

2.     I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the compliance of the Borrower and its Subsidiaries with the Agreement during the accounting period covered by the attached financial statements (the “Relevant Period”);

 

3.     The attached financial statements of the Borrower and, as applicable, its Subsidiaries and/or Affiliates for the Relevant Period: (a) have been prepared on an accounting basis (the “Accounting Method”) consistent with the requirements of the Agreement and, except as may have been otherwise expressly agreed to in the Agreement, in accordance with GAAP consistently applied, and (b) to the extent that the attached are not the Borrower’s annual fiscal year end statements, are subject to normal year-end audit adjustments and the absence of footnotes;

 

4.     The examinations described in paragraph 2 did not disclose and I have no knowledge of, except as set forth below, (a) the existence of any condition or event which constitutes a Default or an Event of Default under the Agreement or any other Loan Document during or at the end of the Relevant Period or as of the date of this Certificate or (b) any change in the Accounting Method or in the application thereof that has occurred since the date of the annual financial statements delivered to the Administrative Agent in connection with the closing of the Agreement or subsequently delivered as required in the Agreement;

 

5.     I hereby certify that, except as set forth below, no Loan Party has changed (i) its name, (ii) its chief executive office, (iii) its principal place of business, (iv) the type of entity it is or (v) its state of incorporation or organization without having given the Administrative Agent the notice required by Section 4.15 of the Security Agreement;

 

 

 

 

6.     The representations and warranties of the Loan Parties set forth in the Loan Documents are true and correct as of the date hereof, except to the extent that any such representation or warranty specifically refers to an earlier date, in which case it is true and correct only as of such earlier date;

 

7.     Schedule I hereto sets forth financial data and computations evidencing the Borrower’s compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct; and

 

8.     Schedule II hereto sets forth the computations necessary to determine the Applicable Rate commencing on the Business Day this Certificate is delivered.

 

Described below are the exceptions, if any, referred to in paragraph 4 hereof by listing, in detail, the (i) nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event or (ii) change in the Accounting Method or the application thereof and the effect of such change on the attached financial statements:

 

	 
	 

 

The foregoing certifications, together with the computations set forth in Schedule I and Schedule II hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this day of ,.

 

	 	LANDEC CORPORATION
	 	 
	 	 
	 	By:	 
	 	
			Name:

				 
	 	
			Title:

				 

 

 

 

 

Schedule I to Compliance Certificate

Compliance as of _________, ____ with

Provisions of Sections 6.12(a) and (b) of the Agreement

 

 

 

 

Schedule II to Compliance Certificate

Borrower’s Applicable Rate Calculation

 

 

 

 

EXHIBIT E

 

JOINDER AGREEMENT

 

THIS JOINDER AGREEMENT (this “Agreement”), dated as of __________, 20___, is entered into between ________________________________, a _________________ (the “New Subsidiary”) and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the “Administrative Agent”) under that certain Credit Agreement dated as of September 23, 2016 (as the same may be amended, modified, extended or restated from time to time, the “Credit Agreement”) among Landec Corporation, a Delaware corporation (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent for the Lenders. All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement.

 

The New Subsidiary and the Administrative Agent, for the benefit of the Secured Parties, hereby agree as follows:

 

1.     The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a “Loan Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of a Loan Party and a Loan Guarantor thereunder as if it had executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement, including without limitation (a) all of the representations and warranties of the Loan Parties set forth in Article III of the Credit Agreement, *[and]* (b) all of the covenants set forth in Articles V and VI of the Credit Agreement *[and (c) all of the guaranty obligations set forth in Article X of the Credit Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiary, subject to the limitations set forth in Section 10.10 and 10.13 of the Credit Agreement, hereby guarantees, jointly and severally with the other Loan Guarantors, to the Administrative Agent and the Lenders, as provided in Article X of the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Subsidiary will, jointly and severally together with the other Loan Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.]* *[The New Subsidiary has delivered to the Administrative Agent an executed Obligation Guaranty.]*

 

2.     If required, the New Subsidiary is, simultaneously with the execution of this Agreement, executing and delivering such Collateral Documents (and such other documents and instruments) as requested by the Administrative Agent in accordance with the Credit Agreement.

 

 

 

 

3.     The address of the New Subsidiary for purposes of Section 9.01 of the Credit Agreement is as follows:

 

                                                                        

                                                                        

                                                                        

 

4.     The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New Subsidiary upon the execution of this Agreement by the New Subsidiary.

 

5.     This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute one and the same instrument.

 

6.     THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Secured Parties, has caused the same to be accepted by its authorized officer, as of the day and year first above written.

 

[NEW SUBSIDIARY]

 

By:                                                       

Name:                                                  

Title:                                                     

 

Acknowledged and accepted:

 

JPMORGAN CHASE BANK, N.A., as Administrative Agent

 

By:                                                      

Name:                                                 

Title:                                                   

 

 

 

 

EXHIBIT F

 

SCHEDULES TO CREDIT AGREEMENT

 

 

 

 

Schedule 3.05 – Properties, etc.

 

	
			Loan Party

				
			Address

				
			Indicate if 

			Owned, Leased 

				
			Name and Address of Owner (if leased)

			
	
			Landec Corporation

				
			3603 Haven Avenue

			Menlo Park, CA 94025

				
			Leased

				
			B.I.G. Sunny-Park, LLC. Mailing address is c/o Brown & Kauffman Associates

			1733 Woodside Road, Suite 360, Redwood City, CA 94061

			
	
			Lifecore Biomedical, Inc.

				
			3515 Lyman Boulevard Chaska, MN 55318

				
			Owned

				
			N/A

			
	
			Lifecore Biomedical, LLC

				
			3515 Lyman Boulevard Chaska, MN 55318

				
			Owned

				
			N/A

			
	
			Lifecore Biomedical, LLC

				
			1245 Lakeview Drive

			Chaska, MN 55318

				
			Leased

				
			1245 LLP

			8821 Sunset Trail

			Chanhassen, MN 55317

			
	
			Apio, Inc.

				
			4575 W. Main Street, Guadalupe, CA 93434

				
			Owned

				
			N/A

			
	
			Apio Cooling A California Limited Partnership

				
			4595 W. Main Street, Guadalupe, CA 93434

				
			Owned

				
			N/A

			
	
			Apio, Inc.

				
			corner of 4th Street and Obispo Street,

			Guadalupe, CA 93434

				
			Leased

				
			Lupe’s Company

			P.O. Box 668

			Guadalupe, CA 93434

			
	
			Apio, Inc.

				
			12700 S Dixie Highway, Bowling Green, OH 43402

				
			Owned

				
			N/A

			 

			
	
			GreenLine Logistics, Inc.

				
			11 Stone Castle Rd.,

			Rock Tavern, NY 12575

				
			Leased

				
			Leroy Holding Company, Inc.

			26 Main Street

			Rock Tavern, NY 12204

			
	
			Apio, Inc.

				
			26 Industrial Drive

			Hanover, PA 17331

				
			Owned

				
			N/A

			
	
			Apio, Inc.

				
			9095 17th Place

			Vero Beach, FL 32966

				
			Leased

				
			GreenLine Florida Properties, LLC.

			519 W. Wooster Street

			Bowling Green, OH 43402

			
	
			GreenLine Logistics, Inc.

				
			205 Bryant Blvd

			Rock Hill, SC 29732

				
			Owned

				
			N/A

			
	
			Apio, Inc.

				
			P-501 Road 2

			McClure, OH 43534

				
			Leased

				
			GreenLine Farms, LLC.

			519 W. Wooster Street

			Bowling Green, OH 43402

			
	
			Apio, Inc.

				
			4719 W. Main Street, Guadalupe, CA 93434

				
			Leased

				
			Lupe’s Company

			P.O. Box 668

			Guadalupe, CA 93434

			
	
			Apio, Inc.

				
			4721 W. Main Street, Guadalupe, CA 93434

				
			Leased

				
			Lupe’s Company

			P.O. Box 668

			Guadalupe, CA 93434

			
	
			Cal Ex Trading Company

				
			290 Station Way, Suite B, Arroyo Grande, CA 93420

				
			Leased

				
			Nipomo Property Management

			185 W. Tefft Street

			Nipomo, CA 93444

			

 

 

 

 

INTELLECTUAL PROPERTY

 

Patents

 

	
			Name of Owner

				
			US Patent #

				
			Title

				
			Filing Date

				
			Issue date

			
	
			Landec Corporation

				
			6,376,032

				
			Gas Perm. Membrane

				
			12/5/96

				
			4/23/02

			
	
			Landec Corporation

				
			6,548,132

				
			Pkg Biol Mat.

				
			7/23/98

				
			4/15/03

			
	
			Apio, Inc.

				
			D482,280

				
			Party Tray Cover

				
			8/16/02

				
			11/18/03

			
	
			Apio, Inc.

				
			7,083,818

				
			Party Tray

				
			8/16/02

				
			8/1/06

			
	
			Landec Corporation

				
			7,169,451

				
			Gas Perm Memb

				
			10/12/01

				
			1/30/07

			
	
			Apio, Inc.

				
			7,329,452

				
			Gas Perm Memb

				
			12/19/03

				
			2/12/08

			
	
			Apio, Inc.

				
			7,601,374

				
			Pkg Resp Bio.

				
			11/20/01

				
			10/13/09

			
	
			Landec Corporation

				
			8,092,848

				
			Pkg resp Biol

				
			9/3/09

				
			1/10/12

			
	
			Apio, Inc.

				
			8,110,232

				
			Pkg Bananas

				
			5/15/01

				
			2/7/12

			
	
			Apio, Inc.

				
			8,828,463

				
			Pkg Resp Bio materials

				
			5/26/00

				
			9/9/14

			
	
			Apio, Inc.

				
			9,034,405

				
			Comb Atmos Cont Members

				
			7/28/05

				
			5/19/15

			
	
			Apio, Inc.

				
			9,034,408

				
			Packaging

				
			1/28/04

				
			5/19/15

			
	
			Apio, Inc.

				
			9,185,920

				
			Atmos Control Biol mat

				
			1/23/13

				
			11/17/15

			

 

	
			Name of Owner

				
			US Patent #

				
			Title

				
			Filing Date

				
			Issue date

			
	
			Landec Corporation

				
			6,199,318

				
			Aq. Emulsions

				
			12/12/96

				
			3/13/01

			
	
			Landec Corporation

				
			6,540,984*

				
			Aq. Emulsions

				
			12/12/96

				
			4/1/03

			
	
			Landec Corporation

				
			7,182,951

				
			Select. Treat. Seeds

				
			1/29/02

				
			2/27/07

			

* = patent list in multiple locations

 

	
			Name of Owner

				
			US Patent #

				
			Title

				
			Filing Date

				
			Issue date

			
	
			Landec Corporation

				
			6,224,793

				
			Encap active ag

				
			4/27/99

				
			5/1/01

			
	
			Landec Corporation

				
			6,255,367

				
			Poly Mod. Ag.

				
			3/7/95

				
			7/3/01

			
	
			Landec Corporation

				
			6,831,116

				
			Poly Mod. Ag.

				
			3/7/95

				
			12/14/04

			

 

	
			Name of Owner

				
			US Patent #

				
			Title

				
			Filing Date

				
			Issue date

			
	
			Landec Corporation

				
			6,540,984*

				
			Aq. Emulsions

				
			12/12/96

				
			4/1/03

			
	
			Landec Corporation

				
			6,989,417

				
			Poly Thicken.

				
			9/17/99

				
			1/24/06

			
	
			Landec Corporation

				
			7,175,832

				
			Aq. Emulsions

				
			12/12/97

				
			2/13/07

			
	
			Landec Corporation

				
			7,449,511

				
			Poly Thicken

				
			8/8/05

				
			11/11/08

			
	
			Apio, Inc.

				
			9,185,920

				
			Aq Disp Cryst Poly & Uses

				
			12/12/06

				
			2/16/16

			

* = patent listed in multiple locations

 

 

 

 

	
			Name of Owner

				
			US Patent #

				
			Title

				
			Filing Date

				
			Issue date

			
	
			Landec Corporation

				
			8,114,883

				
			Del of Bioactive

				
			12/4/07

				
			2/14/12

			
	
			Landec Corporation

				
			8,399,007

				
			Method of Form Cont rel Pharm

				
			12/5/06

				
			3/19/13

			
	
			Landec Corporation

				
			8,524,259

				
			Systems & methods for del of mat’ls

				
			12/3/08

				
			9/3/13

			
	
			Landec Corporation

				
			8,529,922

				
			Systems &methods for del of mat’ls

				
			2/14/12

				
			9/10/13

			
	
			Landec Corporation

				
			8,956,602

				
			Del of Drugs

				
			12/5/06

				
			2/17/15

			

 

	
			Name of Owner

				
			US Patent #

				
			Title

				
			Filing Date

				
			Issue date

			
	
			Landec Corporation 

				
			7,291,389

				
			Article w/shape

				
			2/13/03

				
			11/6/07

			
	
			Landec Corporation

				
			8,911,861

				
			Thermo Indicate

				
			12/11/08

				
			12/16/14

			

 

 

Other Patents and Applications

 

	
			Name of Owner

				
			US Patent #

				
			Title

				
			Filing Date

				
			Issue date

			
	
			Landec Corporation

				
			U.S. Application No. 15/097,987

				
			Thermochromic Indicators

				
			04/13/2016

				
			-

			
	
			Landec Corporation

				
			U.S. Application No. 14/571,256

				
			Thermochromic Indicators

				
			12/15/2014

				
			-

			
	
			Landec Corporation

				
			U.S. Application No. 13/566,056

				
			Ionic/Ionogenic Comb Copolymer Compositions And Personal Care Products Containing THE SAME

				
			08/03/2012

				
			-

			
	
			Landec Corporation

				
			U.S. Application No. 13/035,383

				
			Cationic/Cationogenic Comb Copolymer Compositions and Personal Care Products Containing the Same

				
			02/25/2011

				
			-

			
	
			Landec Corporation

				
			7,101,928

				
			Polymeric Thickeners For Oil-Continig Compositions

				
			09/17/1999

				
			09/05/2006

			
	
			Apio, Inc.

				
			U.S. Patent Application No. 14/943,022

				
			Atmosphere Control Around Respiring Biological Materials

				
			11/16/2015

				
			-

			
	
			Apio, Inc.

				
			U.S. Patent Application No. 14/480,625

				
			Packaging and Methods of Use For Respiring Biological Materials

				
			09/08/2014

				
			12/25/2014

			
	
			Landec Corporation

				
			US Application No. 14/210,149

				
			Compositions and Methods for the Controlled Release of Active Ingredients

				
			03/13/2014

				
			-

			

 

 

 

 

Trademarks 

 

	
			Mark

				 	
			Country

				 	
			Status

				 	
			App No

				 	
			App Date

				 	
			Reg No

				
			Reg Date

				
			Goods/Services

				 	
			Class

				
			Owner Name

			
	
			CORGEL

				 	
			United States Of America

				 	
			Registered/Granted

				 	
			77/941,188

				 	
			2/22/2010

				 	
			3,856,330

				
			10/5/2010

				
			Reagent kits containing hyaluronan derivatives for laboratory or research use in Int. Class 01

				 	
			01

				
			Lifecore Biomedical, LLC

			
	
			LIFECORE

				 	
			Canada

				 	
			Registered/Granted

				 	
			752496

				 	
			4/18/1994

				 	
			TMA453046

				
			1/26/1996

				
			Medical instruments for ophthalmic, orthopedic and dental surgery; namely, surgical instruments, prosthetics, attachments and accessories therefor in Int. Class GDS 1; Pharmaceutical preparations which incorporate or otherwise include hyaluronic acid, its salts, or derivatives thereof, for use in eye surgery, soft tissue repair, medical product, namely, dental implants and implant material for dental, craniofacial and orthopedic use which incorporates or otherwise includes hydroxyapatite, and/or other synthetic bone graft substitutes in Int. Class GDS 2;Cosmetic grade hyaluronic acid and its sodium salts for use in the manufacture of cosmetics in Int. Class GDS 3

				 	
			Gds 1; Gds 2; Gds 3

				
			Lifecore Biomedical, LLC

			
	
			LIFECORE

				 	
			France

				 	
			Registered/Granted

				 	
			94517173

				 	
			4/25/1994

				 	
			94517173

				
			10/14/1994

				
			Hyaluronic acid quality cosmetic and their salts sodium for using in manufacture of cosmetic in Int. Class 01;Pharmaceutical preparations containing hyaluronic acid, their salts or their derivatives for using in eye surgery, in repair of flexible tissue, and as delivery vehicles for medicines; medical products, cranio facial and orthopedic use containing hydroxylapatite and/or other substitutes synethetic grafts osseous in Int. Class 05

				 	
			01; 05

				
			Lifecore Biomedical, LLC

			
	
			LIFECORE

				 	
			Italy

				 	
			Registered/Granted

				 	
			302014902260564

				 	
			5/16/1994

				 	
			1605178

				
			10/7/1996

				
			Hyaluronic acid quality cosmetic and their salts sodium for using in manufacture of cosmetics in Int. Class 01;Pharmaceutical preparations containing hyaluronic acid, their salts or their derivatives for using in eye surgery, in repair of flexible tissue, and as delivery vehicles for medicines; medical products, cranio facial and orthopedic use containing hydroxylapatite and/or other substitutes synethetic grafts osseous in Int. Class 05

				 	
			01; 05

				
			Lifecore Biomedical, LLC

			
	
			LIFECORE

				 	
			United States Of America

				 	
			Registered/Granted

				 	
			76/489,693

				 	
			2/14/2003

				 	
			2,939,113

				
			4/12/2005

				
			Pharmaceutical preparations containing hyaluronic acid, its salts or its derivative for use in eye surgery, repair of flexible tissue, and injectable drug delivery formulations used as a facilitating agent for other pharmaceuticals in Int. Class 05

				 	
			05

				
			Lifecore Biomedical, LLC

			

 

 

 

 

	
			LIFECORE

				 	
			United States Of America

				 	
			Registered/Granted

				 	
			73/647,089

				 	
			3/2/1987

				 	
			1,488,016

				
			5/17/1988

				
			Hyaluronic acid and the sodium salt therefrom sold as a raw chemical for use in manufacturing processes such as for use in compounding pharmaceuticals or cosmetics in Int. Class 01

				 	
			01

				
			Lifecore Biomedical, LLC

			
	
			LUROCOAT

				 	
			Argentina

				 	
			Registered/Granted

				 	
			2914927

				 	
			5/14/2009

				 	
			2353771

				
			3/18/2010

				
			Pharmaceutical preparations utilizing hyaluronic acid, its salts or derivatives thereof, for use in ophthalmic applications in Int. Class 05

				 	
			05

				
			Lifecore Biomedical, LLC

			
	
			LUROCOAT

				 	
			Argentina

				 	
			Registered/Granted

				 	
			2914927

				 	
			5/14/2009

				 	
			2353771

				
			3/18/2010

				
			Pharmaceutical preparations utilizing hyaluronic acid, its salts or derivatives thereof, for use in ophthalmic applications in Int. Class 05

				 	
			05

				
			Lifecore Biomedical, LLC

			
	
			LUROCOAT

				 	
			United States Of America

				 	
			Registered/Granted

				 	
			74/113,041

				 	
			11/5/1990

				 	
			1,668,206

				
			12/17/1991

				
			Pharmaceutical preparations utilizing hyaluronic acid, its salts or derivatives thereof, for use in ophthalmic applications in Int. Class 05

				 	
			05

				
			Lifecore Biomedical, LLC

			
	
			ORTHOLURE

				 	
			China

				 	
			Registered/Granted

				 	
			4509834

				 	
			2/21/2005

				 	
			4509834

				
			7/14/2008

				
			Pharmaceutical preparations for use in orthopedic applications in Int. Class 05

				 	
			05

				
			Lifecore Biomedical, LLC

			
	
			ORTHOLURE

				 	
			China

				 	
			Registered/Granted

				 	
			4907915

				 	
			9/21/2005

				 	
			4907915

				
			9/14/2008

				
			Orthopedic articles in Int. Class 10

				 	
			10

				
			Lifecore Biomedical, LLC

			
	
			ORTHOLURE (in Chinese Characters)

				 	
			China

				 	
			Registered/Granted

				 	
			4907913

				 	
			9/21/2005

				 	
			4907913

				
			9/14/2008

				
			Orthopedic articles in Int. Class 10

				 	
			10

				
			Lifecore Biomedical, LLC

			
	
			ORTHOLURE (in Chinese Characters)

				 	
			China

				 	
			Registered/Granted

				 	
			4907914

				 	
			9/21/2005

				 	
			4907914

				
			2/14/2009

				
			Pharmaceutical preparations for use in orthopedic applications in Int. Class 05

				 	
			05

				
			Lifecore Biomedical, LLC

			
	
			RESTOR

				 	
			Republic Of Korea

				 	
			Registered/Granted

				 	
			14233/2007

				 	
			3/15/2007

				 	
			743138

				
			4/8/2008

				
			Intraocular lenses in Int. Class 10

				 	
			10

				
			Lifecore Biomedical, LLC

			
	
			REVITALURE

				 	
			European Community

				 	
			Registered/Granted

				 	
			6233316

				 	
			8/27/2007

				 	
			6233316

				
			8/7/2008

				
			Sodium hyaluronic solutions for use in the manufacture of cosmetics and personal care products in Int. Class 01;Dermatological pharmaceutical preparations utilizing sodium hyaluronic solutions injected in or under the skin for treating skin hydration, tone, and elasticity in Int. Class 05; Medical devices, namely, self-contained syringes and ampules for dispensing prepackaged hyaluronic solutions injected in or under the skin for treating skin hydration, tone, and elasticity; fluid injection needles for medical use in Int. Class 10

				 	
			01; 05; 10

				
			Lifecore Biomedical, LLC

			

See additional attached TM schedule.

 

 

 

 

Copyrights

 

	
			Title

				
			Regn No.

				
			Regn Date

				
			Owner

			
	
			FRENCH BEANS LABEL

				
			VA 1664798

				
			5/29/08

				
			Apio, Inc.

			
	
			MASHABLES BUTTERNUT SQUASH

				
			VA 1713914

				
			6/4/08

				
			Apio, Inc

			
	
			HARICOT VERT FRENCH BEANS LABEL

				
			VA 1655108

				
			5/27/08

				
			Apio, Inc

			
	
			ZUCCHINI SQUASH PACKAGING

				
			VA 1664797

				
			5/29/08

				
			Apio, Inc

			

 

 

 

 

Schedule 3.06 – Disclosed Matters 

 

 

	
			Company

				
			Matter

			
	
			Landec Corporation

				
			None.

			
	
			Apio, Inc.

				
			None.

			
	
			GreenLine Logistics, Inc.

				
			None.

			
	
			Lifecore Biomedical, LLC

				
			None.

			
	
			Lifecore Biomedical, Inc.

				
			None.

			
	
			Yucatan Foods, L.P.

				
			None.

			
	
			Toluca Gourmet Inc.

				
			None.

			
	
			Camden Fruit Corp.

				
			None.

			

 

 

 

 

Schedule 3.12 – Material Agreements

 

	
			Loan Party

				
			Counter Party

				
			Agreement

			
	
			Lifecore Biomedical, LLC

				
			Heron Therapeutics, Inc.

				
			Contract dated September 2, 2015, as amended

			
	
			Lifecore Biomedical, LLC

				
			AP Pharma Inc. (now known as Heron Therapeutics, Inc.)

				
			Contract dated November 29, 2011, as amended

			
	
			Lifecore Biomedical, LLC

				
			Heron Therapeutics, Inc.

				
			Contract dated January 29, 2015, as amended

			
	
			Lifecore Biomedical, LLC

				
			Heron Therapeutics, Inc.

				
			Contract dated March 29, 2016

			
	
			Lifecore Biomedical, LLC

				
			Heron Therapeutics, Inc.

				
			Contract dated May 26, 2015

			
	
			Lifecore Biomedical, LLC

				
			Alcon Pharmaceuticals Ltd.

				
			Contract dated August 1, 2008, as amended

			
	
			Lifecore Biomedical, LLC

				
			Alcon Pharmaceuticals Ltd.

				
			Contract dated January 1, 2006, as amended

			
	
			Lifecore Biomedical, LLC

				
			Abbott Medical Optics, Inc.

				
			Contract dated May 20, 2004, as amended

			
	
			Lifecore Biomedical, LLC

				
			Bausch & Lomb Incorporated

				
			Contract dated January 18, 2010, as amended

			
	
			Lifecore Biomedical, LLC

				
			Bio-Technology General (Israel) Ltd.

				
			Contract dated January 15, 2015, as amended

			
	
			Lifecore Biomedical, LLC

				
			Bio-Technology General (Israel) Ltd.

				
			Contract (effective upon FDA approval of product), as amended

			
	
			Lifecore Biomedical, LLC

				
			Musculoskeletal Transplant Foundation

				
			Contract dated January 1, 2015, as amended

			
	
			Lifecore Biomedical, LLC

				
			1245, LLP

				
			Lease agreement dated September 3, 2015

			
	
			Apio, Inc.

				
			Windset Holdings 2010 Ltd.

				
			Share Purchase Agreement, dated February 15, 2011

			
	
			Apio, Inc.

				
			Newell Capital Corporation and Windset Holdings 2010 Ltd.

				
			Stock Transfer Agreement dated July 15, 2014

			
	
			Apio, Inc.

				
			Windset Holdings 2010 Ltd.

				
			Senior B Preferred Share Purchase Agreement dated October 29, 2014

			
	
			Apio, Inc.

				
			Costco Wholesale Corporation

				
			Exclusive Distribution Contract

			
	
			Apio, Inc.

				
			Wal-Mart Stores, Inc.

				
			Exclusive Distribution Contract

			
	
			Apio, Inc.

				
			Sam’s Club

				
			Exclusive Distribution Contract

			
	
			Apio, Inc.

				
			Publix Super Markets, Inc.

				
			Exclusive Distribution Contract

			
	
			Apio, Inc.

				
			SuperValu, Inc.

				
			Exclusive Distribution Contract

			
	
			Apio, Inc.

				
			C&S Wholesale Grocers, Inc.

				
			Exclusive Distribution Contract

			
	
			Apio, Inc.

				
			USA Staffing, Inc.

				
			Contract Labor Agreement

			
	
			Apio, Inc.

				
			Westrock

				
			Corrugate Supply Agreement

			
	
			Apio, Inc.

				
			Print Pak

				
			Film Supply Agreement

			

 

 

 

 

Schedule 3.14 – Insurance 

 

	
			Insured

				
			Insurer

				
			Description of Insurance Coverage

				
			Coverage Limits

				
			Policy Number

				
			Policy Period

			
	
			Lifecore Biomedical, LLC

				
			Atlantic Specialty Insurance Co.

				
			Commercial General Liability

				
			$1mm Occurrence

			$2mm Aggregate

				
			711015091/0003

				
			5/31/18-19

			
	
			Lifecore Biomedical, LLC

				
			Atlantic Specialty Insurance Co.

				
			Automobile Liability

				
			Combined single limit - $1,000,000

				
			711015091/0003

				
			5/31/18-19

			
	
			Lifecore Biomedical, LLC

				
			Atlantic Specialty Insurance Co.

				
			Umbrella Liability

				
			$10,000,000 Occ/Agg

			Excl Products

				
			711015091/0003

				
			5/31/18-19

			
	
			Lifecore Biomedical, LLC

				
			Atlantic Specialty Insurance Co.

				
			Workers compensation and employers’ liability

				
			MN Statutory

			Employers Liability $500,000

				
			406043752/0003

				
			5/31/18-19

			
	
			Lifecore Biomedical, LLC

				
			Atlantic Specialty Insurance Co.

				
			Property

				
			$220,440,000

			Bldg, Contents, Business Income

				
			711015091/0003

				
			5/31/18-19

			
	
			Lifecore Biomedical, LLC

				
			Atlantic Specialty Insurance Co.

				
			Products Liability

			Claims Made

				
			Limit - $10,000,000

			Retro Date – 08/04/1987

				
			750000005/0000

				
			5/31/18-19

			
	
			Lifecore Biomedical, LLC

				
			Atlantic Specialty Insurance Co.

				
			Foreign Package

				
			Gen’l Liab $1mm/$2mm

			Auto Liability $1mm

			Work Comp-USA Residents while traveling

			Repatriation $1mm

			Kidnap/Ransom $250,000

				
			711015091/0003

				
			5/31/18-19

			
	
			Lifecore Biomedical, LLC

				
			Commerce & Industry

				
			Storage Tank Pollution Liability

			Claims Made

				
			$2,000,000 Each Incident

			$5,000,000 Aggregate

				
			001926615

				
			11/19/18-19

			

 

 

For Landec Corporation, Apio, Inc., and GreenLine Logistics, Inc., and, as of December 1, 2018, Camden Fruit Corp., Toluca Gourmet Inc, and Yucatan Foods, L.P., see attached insurance summary. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 3.15 – Capitalization and Subsidiaries

 

 

	
			Entity

				
			Type of Entity

				
			Authorized Equity

				
			Current Capitalization

			
	
			Landec Corporation

				
			Corporation

				
			2,000,000 shares of Preferred Stock

			50,000,000 shares of Common Stock

				
			Public corporation.

			
	
			Lifecore Biomedical, Inc.

				
			Corporation

				
			1,000,000 shares of Preferred Stock

			5,000,000 shares of Common Stock

				
			2,352,941 shares of common stock held by Landec Corporation

			
	
			Lifecore Biomedical, LLC

				
			Limited Liability Company

				
			Membership interests

				
			14,117,697 common units held by Lifecore Biomedical, Inc.

			
	
			Apio, Inc.

				
			Corporation

				
			100 shares of Common Stock

				
			100 shares of common stock held by Landec Corporation (Certificate CS-27)

			
	
			GreenLine Logistics, Inc.

				
			Corporation

				
			850 shares of stock

				
			100 shares of Common Stock held by GreenLine Foods, Inc. (since merged into Apio, Inc.) (Certificate 2)

			
	
			Yucatan Foods, L.P.

				
			Limited Partnership

				
			GP Interests and LP Interests

				
			One GP Interest and One LP Interest to be held by Camden Fruit Corp. as of December 1, 2018. On LP Interest to be held by Apio, Inc. as of December 1, 2018.

			
	
			Toluca Gourmet Inc.

				
			Corporation

				
			1,000 shares of Common Stock

				
			300 shares of Common Stock to be held by Yucatan Foods, L.P. as of December 1, 2018 (Certificate 5)

			
	
			Camden Fruit Corp.

				
			Corporation

				
			15,000 shares of Common Stock

				
			11,441.5 shares of Common Stock to be held by Apio, Inc. as of December 1, 2018 (To be Certificate 60) (

			
	
			Procesadora Tanok, S. de R. L. de C. V.

				
			Limited Liability Company (Mexican Equivalent)

				
			LLC membership interests

				
			One membership interest (Series B) with a face value of $30.00 MXN  to be held by Apio, Inc. as of December 1, 2018 (1% of the Company); two membership interests (one Series B one Series B-1) with a combined face value of $25,485,219.00 MXN to be hold by Yucatan Foods, L.P. as of December 1, 2018 (99% of the entity)

			
	
			Tanokatan, S. de R. L. de C. V.

				
			Limited Liability Company (Mexican Equivalent)

				
			LLC membership interests

				
			One membership interest with a face value of $50.00 MXN to be held by Apio, Inc. as of December 1, 2018 (1% of the entity); one membership interest with a face value of $4,950.00 MXN to be held by Yucatan Foods, L.P. as of December 1, 2018 (99% of the entity)

			

 

 

 

 

Schedule 3.17 – Employment Matters

 

None.

 

 

 

 

Schedule 6.01 – Existing Indebtedness

 

	
			Company

				
			Description of Indebtedness

			
	
			Lifecore Biomedical, LLC

				
			Variable Rate Demand Revenue Bonds (Lifecore Biomedical, Inc. Project), Series 2004 (the “Bonds”), issued pursuant to that certain Indenture of Trust dated August 1, 2004 (the “Indenture”) by and between The City of Chaska, Minnesota and Wells Fargo Bank, National Association, as trustee.*

			
	
			Lifecore Biomedical, Inc.

			
	
			Lifecore Biomedical, LLC

				
			Credit Agreement and Reimbursement Agreement by and between Lifecore Biomedical, LLC and BMO Harris Bank N.A. dated May 23, 2012*

			

*Both debt instruments to be repaid on or prior to October 3, 2016

 

Debt to be paid off at closing:

 

	
			1

				
			Loan agreements by and between Landec Corporation, Apio, Inc. and General Electric Capital Corporation dated April 23, 2012

			
	
			 

				
			 

			
	
			2

				
			Second Amendment to Credit Agreement dated July 17, 2014 among Apio, Inc., Cal-Ex Trading Company, GreenLine Logistics, Inc. and General Electric Capital Corporation

			
	 	 
	
			3

				
			First Amendment to Loan Agreement dated as of August 28, 2014 among Apio, Inc., Apio Cooling LP and General Electric Capital Corporation

			
	
			  

				
			  

			
	
			4

				
			Promissory Note dated as of August 28, 2014 by Apio, Inc., payable to GE Capital Commercial, Inc.

			
	
			  

				
			  

			
	
			5

				
			Third Amendment to Credit Agreement dated as of August 28, 2014 among Apio, Inc., Cal-Ex Trading Company, GreenLine Logistics, Inc. and General Electric Capital Corporation

			
	
			  

				
			  

			
	
			6

				
			Second Amendment to Loan Agreement dated as of November 24, 2014 among Apio, Inc., Apio Cooling LP and General Electric Capital Corporation

			
	
			  

				
			  

			
	
			7

				
			Promissory Note dated as of November 24, 2014 by Apio, Inc., payable to GE Capital Commercial, Inc.

			
	
			  

				
			  

			
	
			8

				
			Proposal Letter dated April 2, 2015 between Banc of America Leasing & Capital, LLC, Apio, Inc. and Landec Corporation

			
	
			  

				
			  

			
	
			9

				
			Master Loan and Security Agreement dated as of May 7, 2015 between Apio, Inc. and Banc of America Leasing & Capital, LLC

			
	
			  

				
			  

			
	
			10

				
			Form of Equipment Security Note between Apio, Inc. and Banc of America Leasing & Capital, LLC

			
	
			  

				
			  

			
	
			11

				
			Guaranty dated as of May 7, 2015 between Landec Corporation and Banc of America Leasing & Capital, LLC,

			
	
			  

				
			  

			
	
			12

				
			Commitment Letter dated May 15, 2015 between General Electric Capital Corporation and Apio, Inc.

			
	
			  

				
			  

			
	
			13

				
			Equipment Security Note dated May 29, 2015 by Apio, Inc., payable to Banc of America Leasing & Capital, LLC

			

 

 

 

 

	
			14

				
			Fourth Amendment to Credit Agreement dated as of May 27, 2015 among Apio, Inc., Cal-Ex Trading Company, GreenLine Logistics, Inc. and General Electric Capital Corporation

			
	
			 

				
			 

			
	
			15

				
			Loan Agreement dated February 26, 2016 between Landec Corporation, Apio, Inc., Apio Cooling LP and CF Equipment Loans LLC (successor-in-interest to General Electric Capital Corporation)

			
	
			 

				
			 

			
	
			16

				
			Promissory Note dated February 26, 2016 issued by Apio to CF Equipment Loans, LLC

			
	 	 
	
			17

				
			Promissory Note dated February 26, 2016 issued by Apio to CF Equipment Loans, LLC

			
	
			 

				
			 

			
	
			18

				
			Guaranty dated February 26, 2016 between Landec Corporation and CF Equipment Loans, LLC

			

 

 

 

 

Schedule 6.02 – Existing Liens

 

None.

 

 

 

 

Schedule 6.04 – Existing Investments

 

None.

 

 

 

 

Schedule 6.10 – Existing Restrictions

 

 

None.

 

 

 

 

EXHIBIT G

 

SCHEDULES TO SECURITY AGREEMENT

 

 

 

 

EXHIBIT A

(See Sections 3.2, 3.3, 3.4, 3.8 and 3.9 of Security Agreement)

 

INFORMATION AND COLLATERAL LOCATIONS OF BORROWER

 

 

	
			I. Grantor

				
			II. State of Incorporation or Organization

				
			III. Type of Entity

				
			IV. Organizational Number

				
			V. Federal Identification Number

				
			Principal Location

			
	
			LANDEC CORPORATION

				
			DELAWARE

				
			CORPORATION

				
			4356515

				
			94-3025618

				
			5201 Great America Parkway Suite 232, Santa Clara, CA 95054

			
	
			LIFECORE BIOMEDICAL, INC.

				
			DELAWARE

				
			CORPORATION

				
			4517189

				
			74-3254579

				
			3515 Lyman Boulevard, Chaska, MN 55318

			
	
			LIFECORE BIOMEDICAL, LLC

				
			MINNESOTA

				
			LIMITED LIABILITY COMPANY

				
			2701712

				
			74-3254579

				
			3515 Lyman Boulevard, Chaska, MN 55318

			
	
			APIO, INC.

				
			DELAWARE

				
			CORPORATION

				
			2863977

				
			77-0528042

				
			4575 W. Main Street, Guadalupe, CA 93434

			
	
			GREENLINE LOGISTICS, INC.

				
			OHIO

				
			CORPORATION

				
			1094684

				
			34-1897402

				
			4575 W. Main Street, Guadalupe, CA 93434

			
	
			YUCATAN FOODS, L.P.

				
			DELAWARE

				
			LIMITED PARTNERSHIP

				
			3784394

				
			95-4563002

				
			9841 Airport Blvd #1578, Los Angeles, CA 90045

			
	
			CAMDEN FRUIT CORP.

				
			CALIFORNIA

				
			CORPORATION

				
			C1572479

				
			95-4316276

				
			9841 Airport Blvd #1578, Los Angeles, CA 90045

			
	
			TOLUCA GOURMET INC.

				
			CALIFORNIA

				
			CORPORATION

				
			C2542374

				
			33-1064121

				
			9841 Airport Blvd #1578, Los Angeles, CA 90045

			
	
			LANDEC CORPORATION

				
			DELAWARE

				
			CORPORATION

				
			4356515

				
			94-3025618

				
			5201 Great America Parkway Suite 232, Santa Clara, CA 95054

			

 

 

 

 

VII.     Locations of Collateral:

 

 

	
			Grantor

				
			Address

				
			Owned, Leased or Operated by Third Party

				
			Name and Address of Owner (if leased) or Third-Party Operator (if operated by a third party)

			
	
			Landec Corporation

				
			1099 E Street, San Rafael, CA 94901

				
			Owned

				
			N/A

			
	
			Landec Corporation

				
			5201 Great America Parkway Suite 232, Santa Clara, CA 95054

				
			Leased

				
			Hudson Techmart Commerce Center, LLC

			Mailing address: Hudson Techmart Commerce Center, LLC c/o Hudson Pacific Properties, 2055 Gateway Place, Suite 200, San Jose, CA 95110

			Attn: Building manager 

			
	
			Landec Corporation

				
			1997 S. McDowell Boulevard, Suites A, C & D, Petaluma CA 94954

				
			Leased

				
			Dianne Lynn Anderson Schott 2017 Trust

			c/o KNM Properties, Inc.

			P.O Box 223, Napa, CA 94559

			
	
			Landec Corporation

				
			1975 E Locust Street, Suite B, Ontario, CA 91761

				
			Leased

				
			Goodyear Investment Company, LLC

			c/o Mouseworks

			999 Corporate Drive, Suite 100, Ladera Ranch, CA 92694

			
	
			Landec Corporation

				
			450 Charcot Avenue

			San Jose, CA 95131

				
			Operated by Third Party

				
			Corodata Records Management, Inc.

			450 Charcot Avenue

			San Jose, CA 95131

			
	
			Lifecore Biomedical, Inc.

				
			3515 Lyman Boulevard Chaska, MN 55318

				
			Owned

				
			N/A

			

 

 

 

 

	Grantor	Address	Owned, Leased or Operated by Third Party	Name and Address of Owner (if leased) or Third-Party Operator (if operated by a third party)
	
			Lifecore Biomedical, LLC

				
			3515 Lyman Boulevard Chaska, MN 55318

				
			Owned

				
			N/A

			
	
			Lifecore Biomedical, LLC

				
			1245 Lakeview Drive

			Chaska, MN 55318

				
			Leased

				
			1245 LLP

			8821 Sunset Trail

			Chanhassen, MN 55317

			
	
			Lifecore Biomedical, LLC

				
			9450 West Bloomington Freeway

			Bloomington, MN 55431

				
			Operated by Third Party

				
			Iron Mountain

			9450 West Bloomington Freeway

			Bloomington, MN 55431

			
	
			Lifecore Biomedical, LLC

				
			13700 Water Tower Circle

			Plymouth, MN 55441

				
			Operated by Third Party

				
			Advanced Records Management (ARM)

			13700 Water Tower Circle

			Plymouth, MN 55441

			
	
			Apio, Inc.

				
			4575 W. Main Street, Guadalupe, CA 93434

				
			Owned

				
			N/A

			
	
			Apio, Inc.

				
			4595 W. Main Street, Guadalupe, CA 93434

				
			Owned

				
			N/A

			
	
			Apio, Inc.

				
			690 Innovation Drive, Bowling Green, OH 43402

				
			Owned

				
			N/A

			
	
			Apio, Inc.

				
			2811-2815 Airpark Drive, Santa Maria, CA 93455

				
			Leased

				
			NKT Development, LLC

			684 Higuera St. Suite B, San Luis Obispo, CA 93401

			
	
			Apio, Inc.

				
			Corner of 4th Street and Obispo Street, Guadalupe, CA 93434

				
			Leased

				
			Lupe’s Company

			P.O. Box 668

			Guadalupe, CA 93434

			
	
			Apio, Inc.

				
			12700 S Dixie Highway, Bowling Green, OH 43402

				
			Owned

				
			N/A

			 

			
	
			GreenLine Logistics, Inc.

				
			11 Stone Castle Rd.,

			Rock Tavern, NY 12575

				
			Leased

				
			Leroy Holding Company, Inc.

			26 Main Street

			Rock Tavern, NY 12204

			
	
			Apio, Inc.

				
			26 Industrial Drive

			Hanover, PA 17331

				
			Owned

				
			N/A

			

 

 

 

 

	Grantor	Address	Owned, Leased or Operated by Third Party	Name and Address of Owner (if leased) or Third-Party Operator (if operated by a third party)
	
			Apio, Inc.

				
			9095 17th Place

			Vero Beach, FL 32966

				
			Leased

				
			GreenLine Florida Properties, LLC.

			519 W. Wooster Street

			Bowling Green, OH 43402

			
	
			GreenLine Logistics, Inc.

				
			205 Bryant Blvd

			Rock Hill, SC 29732

				
			Owned

				
			N/A

			
	
			Apio, Inc.

				
			P-501 Road 2

			McClure, OH 43534

				
			Leased

				
			GreenLine Farms, LLC.

			519 W. Wooster Street

			Bowling Green, OH 43402

			
	
			Apio, Inc.

				
			4721 W. Main Street, Guadalupe, CA 93434

				
			Leased

				
			Lupe’s Company

			P.O. Box 668

			Guadalupe, CA 93434

			
	
			Apio, Inc.

				
			4719 W. Main Street, Guadalupe, CA 93434

				
			Leased

				
			Lupe’s Company

			P.O. Box 668

			Guadalupe, CA 93434

			
	
			Apio, Inc.

				
			P.O. Box 1469, Easley, SC 29641

				
			Operated by Third Party

				
			Ortec, Inc.,

			P.O. Box 1469

			Easley, SC 29641

			
	
			Apio, Inc.

				
			576 College Commerce Way, Upland, CA 91786

				
			Operated by Third Party

				
			CCL Label

			576 College Commerce Way Upland, CA 91786

			
	
			Apio, Inc.

				
			381 Geneva Ave., Tallmadge, OH 44278

				
			Operated by Third Party

				
			Derma-Med Coating Co LLC. 381 Geneva Ave.

			Tallmadge, OH 44278

			
	
			Apio, Inc.

				
			210 Kansas City Avenue, Shreveport, LA 71107

				
			Operated by Third Party

				
			Printpack, Inc.

			210 Kansas City Avenue Shreveport, LA 71107

			
	
			Apio, Inc.

				
			Caretera Panamericana Km. 291-1

			Colonia La Fortaleza C.P. 38300

			Cortazar, Guanajuato; México

				
			Operated by Third Party

				
			Empacadora GAB

			Caretera Panamericana Km. 291-1

			Colonia La Fortaleza C.P. 38300

			Cortazar, Guanajuato; México

			
	
			Apio, Inc.

				
			140 Hind Lane

			San Luis Obispo, CA  93401

				
			Operated by Third Party

				
			DocuTeam

			140 Hind Lane

			San Luis Obispo, CA  93401

			
	
			Yucatan Foods, L.P., TOLUCA GOURMET INC. and Camden Fruit Corp.

				
			9841 Airport Blvd, Suite #1520, 1578, and 1580, Los Angeles, CA 90045

				
			Leased

				
			Airport Holdings, LP

			3470 Wilshire Blvd.

			Los Anglees, CA 90010

			

 

 

 

 

EXHIBIT B

(See Section 3.5 of Security Agreement)

 

DEPOSIT ACCOUNTS

 

	
			Name of Grantor

				
			Name of Institution

				
			Account Number

			
	
			Landec Corporation

				
			JPMC

			 

			 

			 

			 

			(The following two accounts to be closed within 90 days)

			Bank of San Francisco

			Bank of America

				
			907690916

			907693126

			907692128

			276702252 

			276702567

			 

			704013005

			3250-8934-6907

			
	
			Apio, Inc.

				
			JPMC

				
			100079828

			100079836

			100079893

			4000012934

			100079844

			
	
			Apio Cooling A California Limited Partnership

				
			JPMC

				
			100079901

			
	
			GreenLine Logistics, Inc.

				
			JPMC

				
			100079927

			
	
			Cal-Ex Trading Company (Cal-Ex account is to be closed within 90 days)

				
			JPMC

				
			100079919

			100079877

			
	
			Lifecore Biomedical, LLC.

				
			BMO Harris Bank

				
			317-566-8

			317-489-3

			317-567-6

			317-459-6

			
	
			Yucatan

				
			(The following three accounts to be closed within 120 days)

			California Bank & Trust

				
			3290088271

			3290001412

			3290088431

			

 

 

 

 

EXHIBIT C

(See Section 3.7 of Security Agreement)

 

LETTER-OF-CREDIT RIGHTS

 

 

None.

 

 

 

 

CHATTEL PAPER

 

None.

 

 

 

 

EXHIBIT D

(See Section 3.10 and 3.11 of Security Agreement)

 

INTELLECTUAL PROPERTY RIGHTS

 

PATENTS

 

	
			Name of Grantor

				
			Patent Description

				
			Patent Number

				
			Issue Date

			
	
			Apio, Inc.

				
			Party Tray

				
			7,083,818

				
			8/1/06

			
	
			Landec Corporation

				
			Gas Perm Memb

				
			7,169,451

				
			1/30/07

			
	
			Apio, Inc.

				
			Gas Perm Memb

				
			7,329,452

				
			2/12/08

			
	
			Apio, Inc.

				
			Pkg Resp Bio.

				
			7,601,374

				
			10/13/09

			
	
			Landec Corporation

				
			Pkg resp Biol

				
			8,092,848

				
			1/10/12

			
	
			Apio, Inc.

				
			Pkg Bananas

				
			8,110,232

				
			2/7/12

			
	
			Apio, Inc.

				
			Pkg Resp Bio materials

				
			8,828,463

				
			9/9/14

			
	
			Apio, Inc.

				
			Comb Atmos Cont Members

				
			9,034,405

				
			5/19/15

			
	
			Apio, Inc.

				
			Packaging

				
			9,034,408

				
			5/19/15

			
	
			Apio, Inc.

				
			Atmos Control Biol mat

				
			9,185,920

				
			11/17/15

			
	
			Landec Corporation

				
			Select. Treat. Seeds

				
			7,182,951

				
			2/27/07

			
	
			Landec Corporation

				
			Encap active ag

				
			6,224,793

				
			5/1/01

			
	
			Landec Corporation

				
			Poly Mod. Ag.

				
			6,255,367

				
			7/3/01

			
	
			Landec Corporation

				
			Poly Mod. Ag.

				
			6,831,116

				
			12/14/04

			
	
			Landec Corporation

				
			Poly Thicken.

				
			6,989,417

				
			1/24/06

			
	
			Landec Corporation

				
			Aq. Emulsions

				
			7,175,832

				
			2/13/07

			
	
			Landec Corporation

				
			Poly Thicken

				
			7,449,511

				
			11/11/08

			
	
			Landec Corporation

				
			Del of Bioactive

				
			8,114,883

				
			2/14/12

			
	
			Landec Corporation

				
			Method of Form Cont rel Pharm

				
			8,399,007

				
			3/19/13

			
	
			Landec Corporation

				
			Systems & methods for del of mat’ls

				
			8,524,259

				
			9/3/13

			
	
			Landec Corporation

				
			Systems &methods for del of mat’ls

				
			8,529,922

				
			9/10/13

			
	
			Landec Corporation

				
			Del of Drugs

				
			8,956,602

				
			2/17/15

			
	
			Landec Corporation

				
			Article w/shape

				
			7,291,389

				
			11/06/07

			
	
			Landec Corporation

				
			Thermo Indicate

				
			8,911,861

				
			12/16/14

			
	
			Landec Corporation

				
			Polymeric Thickeners For Oil-Continig Compositions

				
			7,101,928

				
			09/05/06

			

 

 

 

 

PATENT APPLICATIONS

 

	
			Name of Grantor

				
			Patent Application

				
			Application Filing Date

				
			Application Serial Number

			
	
			Landec Corporation

				
			Thermochromic Indicators

				
			04/13/2016

				
			U.S. Application No. 15/097,987

			
	
			Landec Corporation

				
			Thermochromic Indicators

				
			12/15/2014

				
			U.S. Application No. 14/571,256

			
	
			Apio, Inc.

				
			Atmosphere Control Around Respiring Biological Materials

				
			11/16/2015

				
			U.S. Patent Application No. 14/943,022

			
	
			Apio, Inc.

				
			Packaging and Methods of Use For Respiring Biological Materials

				
			09/08/2014

				
			U.S. Patent Application No. 14/480,625

			

 

 

TRADEMARKS

 

	
			Name of Grantor

				
			Trademark

				
			Registration Date

				
			Registration Number

				
			Jurisdiction

			
	
			Lifecore Biomedical, LLC

				
			CORGEL

				
			10/5/2010

				
			3,856,330

				
			United States Of America

			
	
			Lifecore Biomedical, LLC

				
			LIFECORE

				
			1/26/1996

				
			TMA453046

				
			Canada

			
	
			Lifecore Biomedical, LLC

				
			LIFECORE

				
			10/14/1994

				
			94517173

				
			France

			
	
			Lifecore Biomedical, LLC

				
			LIFECORE

				
			10/7/1996

				
			1605178

				
			Italy

			
	
			Lifecore Biomedical, LLC

				
			LIFECORE

				
			4/12/2005

				
			2,939,113

				
			United States Of America

			
	
			Lifecore Biomedical, LLC

				
			LIFECORE

				
			5/17/1988

				
			1,488,016

				
			United States Of America

			
	
			Lifecore Biomedical, LLC

				
			LUROCOAT

				
			3/18/2010

				
			2353771

				
			Argentina

			
	
			Lifecore Biomedical, LLC

				
			LUROCOAT

				
			3/18/2010

				
			2353771

				
			Argentina

			
	
			Lifecore Biomedical, LLC

				
			LUROCOAT

				
			12/17/1991

				
			1,668,206

				
			United States Of America

			
	
			Lifecore Biomedical, LLC

				
			LIFECORE

				
			7/31/2018

				
			5,528,166

				
			United States Of America

			

 

 

 

 

	Name of Grantor	Trademark	Registration Date	Registration Number	Jurisdiction
	
			Lifecore Biomedical, LLC

				
			LIFECORE

			BIOMEDICAL

				
			7/31/2018

				
			5,528,165

				
			United States Of America

			
	
			Yucatan Foods, L.P.

				
			CABO FRESH

			

				
			September 30, 2014

				
			4,612,370

				
			United States Of America

			
	
			Yucatan Foods, L.P.

				
			YUCATAN

			

				
			September 9, 2014

				
			4,599,822

				
			United States Of America

			
	
			Yucatan Foods, L.P.

				
			YUCATAN GUACAMOLE (Stylized)

			

				
			September 9, 2014

				
			4,599,828

				
			United States Of America

			
	
			Yucatan Foods, L.P.

				
			YUCATAN GUACAMOLE  (Stylized)

			

				
			July 26, 2013

				
			1171748

				
			International

			
	
			Yucatan Foods, L.P.

				
			YUCATAN GUACAMOLE (Stylized)

			

				
			July 26, 2013

				
			1171748

				
			European Union

			
	
			Yucatan Foods, L.P.

				
			YUCATAN GUACAMOLE (Stylized)

			

				
			July 26, 2013

				
			1171748

				
			China

			

 

 

 

 

	Name of Grantor	Trademark	Registration Date	Registration Number	Jurisdiction
	
			Yucatan Foods, L.P.

			 

			 

			 

			 

					
			2018-04-25

				
			TMA995,245

				
			Canada

			
	
			Yucatan Foods, L.P.

				
			

				
			2016-01-08

				
			TMA925,344

				
			Canada

			
	
			Yucatan Foods, L.P.

				
			

				
			2014-11-12

				
			1494897

				
			Mexico

			
	
			Yucatan Foods, L.P.

				
			YUCATAN GUACAMOLE (Stylized)

			

				
			2013-07-26

				
			1171748

				
			Korea, Republic of (KR)

			
	
			TOLUCA GOURTMET, INC.

				
			

				
			2008-10-28

				
			3,523,730

				
			United States of America

			

 

 

 

 

TRADEMARK APPLICATIONS

 

	
			Name of Grantor

				
			Trademark Application

				
			Application Filing Date

				
			Application Serial Number

			
	
			Lifecore Biomedical, LLC

				
			Design (Logo)

				
			8/29/2017

				
			87/587,728

			
	
			Yucatan Foods, L.P.

				
			CABO FRESCO

			 

			Allowed

			Statement of Use due November 22, 2018

				
			2017-08-18

				
			87/575,612

			
	
			Yucatan Foods, L.P.

				
			CABO FRESCO

			 

			(pending in Canada)

				
			2018-02-16

				
			1883730

			

 

 

 

 

COPYRIGHTS

 

	
			Name of Grantor

				
			Copyright

				
			Registration Date

				
			Registration Number

			
	
			Apio, Inc.

				
			FRENCH BEANS LABEL

				
			5/29/08

				
			VA 1664798

			
	
			Apio, Inc

				
			MASHABLES BUTTERNUT SQUASH

				
			6/4/08

				
			VA 1713914

			
	
			Apio, Inc

				
			HARICOT VERT FRENCH BEANS LABEL

				
			5/27/08

				
			VA 1655108

			
	
			Apio, Inc

				
			ZUCCHINI SQUASH PACKAGING

				
			5/29/08

				
			VA 1664797

			
	
			Apio, Inc.

				
			FRENCH BEANS LABEL

				
			5/29/08

				
			VA 1664798

			

 

COPYRIGHT APPLICATIONS

 

None. 

INTELLECTUAL PROPERTY LICENSES

 

None.

 

 

 

 

EXHIBIT E

(See Section 3.11 of Security Agreement)

 

TITLE DOCUMENTS

 

I. Vehicles subject to certificates of title:

 

None.

 

 

II. Aircraft/engines/parts, ships, railcars and other vehicles governed by federal statute:

 

None.

 

 

 

 

EXHIBIT F

(See Section 3.11 of Security Agreement)

 

FIXTURES

 

 

I. Legal description, county and street address of property on which Fixtures are located (by Grantor):

 

None.

 

 

II. Name and Address of Record Owner:

 

                                                            

                                                            

                                                            

                                                            

 

 

 

 

EXHIBIT G

(See Section 3.13 of Security Agreement and Definition of “Pledged Collateral”)

 

LIST OF PLEDGED COLLATERAL, SECURITIES AND OTHER INVESTMENT PROPERTY

 

 

STOCKS

 

	
			Name of Grantor

				
			Issuer

				
			Certificate Number(s)

				
			Number of Shares

				
			Class of Stock

				
			Percentage of Outstanding Shares

			
	
			Landec Corporation

				
			Apio, Inc.

				
			CS-27

				
			100

				
			Common Stock

				
			100%

			
	
			Landec Corporation

				
			Lifecore Biomedical, Inc.

				
			1

				
			2,352,941

				
			Common Stock

				
			100%

			
	
			Apio, Inc.

				
			Cal Ex Trading Company

				
			CS-2

				
			2,000

				
			Common Stock

				
			100%

			
	
			Apio, Inc.

				
			GreenLine Logistics, Inc.

				
			2

				
			850

				
			Common Stock

				
			100%

			
	
			Apio, Inc.

				
			Camden Fruit Corp.

				
			60

				
			11,441.5

				
			Common Stock

				
			100%

			
	
			Yucatan Foods, L.P.

				
			TOLUCA GOURMET INC.

				
			5

				
			300

				
			Common Stock

				
			100%

			

 

 

BONDS

 

	
			Name of Grantor

				
			Issuer

				
			Number

				
			Face Amount

				
			Coupon Rate

				
			Maturity

			
	
			None

				 	 	 	 	 

 

 

GOVERNMENT SECURITIES

 

	
			Name of Grantor

				
			Issuer

				
			Number

				
			Type

				
			Face Amount

				
			Coupon Rate

				
			Maturity

			
	
			None

				 	 	 	 	 	 

 

 

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)

 

	
			Name of Grantor

				
			Issuer

				
			Description of Collateral

				
			Percentage Ownership Interest

			
	
			Lifecore Biomedical, Inc.

				
			Lifecore Biomedical, LLC

				
			14,117,697 common units

				
			100%

			
	
			Apio, Inc.

				
			Yucatan Foods, L.P.

				
			LP Interest*

				
			See * Note Below

			
	
			Camden Fruit Corp.

				
			Yucatan Foods, L.P.

				
			LP Interest*

				
			See * Note Below

			
	
			Camden Fruit Corp.

				
			Yucatan Foods, L.P.

				
			GP Interest*

				
			See * Note Below

			
	
			Apio, Inc.

				
			Procesadora Tanok, S. dr R. L. de C. V.

				
			One membership interest (Series B) with a face value of $30.00 MXN

				
			1%**

			
	
			Apio, Inc.

				
			Tanokatan, S. de R. L. de C. V.

				
			One membership interest with a face value of $50.00 MXN

				
			1%**

			
	
			Yucatan Foods, L.P.

				
			Procesadora Tanok, S. dr R. L. de C. V.

				
			Two membership interests (one Series B one Series B-1)with a combined face value of $25,485,219.00 MXN

				
			99%**

			
	
			Yucatan Foods, L.P.

				
			Tanokatan, S. de R. L. de C. V.

				
			One membership interest with a face value of $4,950.00 MXN

				
			99%**

			

 

* Apio, Inc’s LP Interest and Camden Fruit Corp.’s LP Interest and GP Interest, shall, in the aggregate, equal 100% of the Equity Interests of Yucatan Foods, L.P.

 

** Pursuant to Section 5.14(b) of the Credit Agreement, notwithstanding anything else in the Security Agreement, no more than 65% of the voting equity interests (in the aggregate) of each of Procesadora Tanok, S. dr R. L. de C. V. and Tanokatan, S. de R. L. de C. V. shall be pledge by the Grantors hereunder.

 

 

 

 

EXHIBIT H

(See Section 3.1 of Security Agreement)

 

OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

 

	
			Grantor

				
			Office

			
	
			LANDEC CORPORATION

				
			DELAWARE

			
	
			LIFECORE BIOMEDICAL, INC.

				
			DELAWARE

			
	
			LIFECORE BIOMEDICAL, LLC

				
			MINNESOTA

			
	
			APIO, INC.

				
			DELAWARE

			
	
			GREENLINE LOGISTICS, INC.

				
			OHIO

			
	
			YUCATAN FOODS, L.P.

				
			DELAWARE

			
	
			TOLUCA GOURMET INC.

				
			CALIFORNIA

			
	
			CAMDEN FRUIT CORP.

				
			CALIFORNIA

			

 

 

 

 

EXHIBIT I

(See Definition of “Commercial Tort Claim”)

 

COMMERCIAL TORT CLAIMS

 

None.

 

 

 

 

EXHIBIT J 

(See Section 4.8 of Security Agreement)

 

AMENDMENT

 

 

 

This Amendment, dated ________________, ___ is delivered pursuant to Section 4.8 of the Security Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Security Agreement. The undersigned hereby certifies that the representations and warranties in Article III of the Security Agreement are and continue to be true and correct. The undersigned further agrees that this Amendment may be attached to that certain Pledge and Security Agreement, dated September 23, 2016, between the undersigned, as the Grantors, and JPMorgan Chase Bank, N.A., as the Administrative Agent, (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”) and that the Collateral listed on Schedule I to this Amendment shall be and become a part of the Collateral referred to in said Security Agreement and shall secure all Secured Obligations referred to in the Security Agreement.

 

	 	 	 
	 	 	 
	 	 	 
	 	By:  	 	 
	 	Name:	 	 
	 	Title:	 	 

 

 

 

 

Schedule I to Amendment to Security Agreement

 

COMMERCIAL TORT CLAIMS

 

{NOTE: SPECIFICALLY DESCRIBE THE CLAIM (I.E. PARTIES, DESCRIPTION OF THE DISPUTE, CASE NUMBER – IF AVAILABLE) - SEE OFFICIAL COMMENT 5 TO SECTION 9-108 OF THE UCC}.

 

	
			Name of Grantor

				
			Description of Claim

				
			Parties

				
			Case Number; Name of Court where Case was Filed

			
	 	 	 	 
	 	 	 	 

 

 

 

 

ANNEX I TO PLEDGE AND SECURITY AGREEMENT 

 

Reference is hereby made to the Pledge and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), dated as of September [__], 2016, by and among Landec Corporation, a Delaware corporation (the “Borrower”), the Loan Guarantors party thereto (“Loan Guarantors”), and certain other entities which become parties to the Security Agreement from time to time, including, without limitation, those that become party thereto by executing a Security Agreement Supplement in substantially the form hereof (such parties, including the undersigned, together with the Borrower and the Loan Guarantors, the “Grantors”), in favor of JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”), for the benefit of the Secured Parties under the Credit Agreement. Each capitalized terms used herein and not defined herein shall have the meanings given to it in the Security Agreement.

 

By its execution below, the undersigned, [NAME OF NEW GRANTOR], a [__________________________] [corporation] [partnership] [limited liability company] (the “New Grantor”) agrees to become, and does hereby become, a Grantor under the Security Agreement and agrees to be bound by such Security Agreement as if originally a party thereto. The New Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Secured Parties, a security interest in all of the New Grantor’s right, title and interest in and to the Collateral, whether now owned or hereafter acquired, to secure the prompt and complete payment and performance of the Secured Obligations.

 

By its execution below, the New Grantor represents and warrants as to itself that all of the representations and warranties contained in the Security Agreement are true and correct in all respects as of the date hereof. The New Grantor represents and warrants that the supplements to the Exhibits to the Security Agreement attached hereto are true and correct in all respects and such supplements set forth all information required to be scheduled under the Security Agreement. The New Grantor shall take all steps necessary to perfect, in favor of the Administrative Agent, a first-priority security interest in and lien against the New Grantor’s Collateral, including, without limitation, delivering all certificated Pledged Collateral to the Administrative Agent (and other Collateral required to be delivered under the Security Agreement), and taking all steps necessary to properly perfect the Administrative Agent’s interest in any uncertificated Pledged Collateral.

 

IN WITNESS WHEREOF, [NAME OF NEW GRANTOR], a [__________________] [corporation] [partnership] [limited liability company] has executed and delivered this Annex I counterpart to the Security Agreement as of this ___________ day of ____________, ____.

 

 

	 	[NAME OF NEW GRANTOR]	 
	 	 	 
	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:Exhibit

Exhibit 10.1
CORPORATE OFFICE PROPERTIES, L.P.

THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS PURSUANT TO A REGISTRATION OR EXEMPTION THEREFROM.

    
     
 

TABLE OF CONTENTS
Page
	
				
	Article I INTERPRETIVE PROVISIONS
	1

	 
	SECTION 1.1
	Certain Definitions
	1

	 
	SECTION 1.2
	Rules Of Construction
	14

	Article II CONTINUATION
	15

	 
	SECTION 2.1
	Continuation
	15

	 
	SECTION 2.2
	Name
	15

	 
	SECTION 2.3
	Place Of Business; Registered Office; Registered Agent
	15

	Article III BUSINESS PURPOSE
	15

	 
	SECTION 3.1
	Business
	15

	 
	SECTION 3.2
	Authorized Activities
	16

	Article IV CAPITAL CONTRIBUTION
	16

	 
	SECTION 4.1
	Capital Contributions
	16

	 
	SECTION 4.2
	Additional Partnership Interests
	16

	 
	SECTION 4.3
	No Third Party Beneficiaries
	17

	 
	SECTION 4.4
	Capital Accounts
	18

	 
	SECTION 4.5
	Return Of Capital Account; Interest
	19

	 
	SECTION 4.6
	Preemptive Rights
	20

	 
	SECTION 4.7
	Profit Interest Units
	20

	 
	SECTION 4.8
	Conversion of Profit Interest Units
	23

	Article V ALLOCATIONS AND DISTRIBUTIONS
	27

	 
	SECTION 5.1
	Limited Liability
	27

	 
	SECTION 5.2
	Profits, Losses And Distributive Shares
	27

	 
	SECTION 5.3
	Distributions
	34

	 
	SECTION 5.4
	Distributions Upon Liquidation
	37

	 
	SECTION 5.5
	Amounts Withheld
	37

	 
	SECTION 5.6
	Restricted Distributions
	37

	 
	SECTION 5.7
	Preferred Limited Partner Priority
	37

	 
	SECTION 5.8
	Profit Interest Units Intended to Qualify as Profits Interest
	37

	Article VI PARTNERSHIP MANAGEMENT
	38

	 
	SECTION 6.1
	Management And Control Of Partnership Business
	38

	 
	SECTION 6.2
	No Management by Limited Partners; Limitation of Liability
	38

	 
	SECTION 6.3
	Limitations on Partners
	39

	 
	SECTION 6.4
	Business With Affiliates
	39

	 
	SECTION 6.5
	Compensation; Reimbursement of Expenses
	39

	 
	SECTION 6.6
	Liability for Acts and Omissions
	40

	 
	SECTION 6.7
	Indemnification
	41

	Article VII ADMINISTRATIVE, FINANCIAL AND TAX MATTERS
	41

	 
	SECTION 7.1
	Books and Records
	41

	 
	SECTION 7.2
	Annual Audit and Accounting
	41

	 
	SECTION 7.3
	Partnership Funds
	41

	 
	SECTION 7.4
	Reports and Notices
	42

	 
	SECTION 7.5
	Tax Audits
	42

	 
	SECTION 7.6
	Tax Returns
	45

	 
	SECTION 7.7
	Tax Elections
	45

	 
	SECTION 7.8
	Withholding
	45

    
     
 

	
				
	Article VIII TRANSFER OF PARTNERSHIP INTERESTS; ADMISSION OF PARTNERS
	46

	 
	SECTION 8.1
	Transfer by General Partner
	46

	 
	SECTION 8.2
	Obligations of a Prior General Partner
	46

	 
	SECTION 8.3
	Successor General Partner
	46

	 
	SECTION 8.4
	Restrictions on Transfer and Withdrawal by Limited Partner
	47

	 
	SECTION 8.5
	Substituted Limited Partner
	48

	 
	SECTION 8.6
	Effect of Transfers
	49

	 
	SECTION 8.7
	Additional Limited Partners
	49

	 
	SECTION 8.8
	Amendment of Agreement and Certificate
	49

	 
	SECTION 8.9
	Pledges
	49

	Article IX REDEMPTION AND CONVERSION
	50

	 
	SECTION 9.1
	Right of Redemption
	50

	 
	SECTION 9.2
	Timing of Redemption
	50

	 
	SECTION 9.3
	Redemption Price
	50

	 
	SECTION 9.4
	Assumption of Redemption Obligation
	51

	 
	SECTION 9.5
	Further Assurances; Certain Representations
	51

	 
	SECTION 9.6
	Effect of Redemption
	51

	 
	SECTION 9.7
	Registration Rights
	51

	 
	SECTION 9.8
	Conversion
	51

	 
	SECTION 9.9
	Redemption Restriction
	52

	 
	SECTION 9.10
	Special Event
	53

	Article X DISSOLUTION AND LIQUIDATION
	54

	 
	SECTION 10.1
	Term and Dissolution
	54

	 
	SECTION 10.2
	Liquidation of Partnership Assets
	55

	 
	SECTION 10.3
	Effect of Treasury Regulations
	56

	 
	SECTION 10.4
	Time for Winding-Up
	57

	Article XI AMENDMENTS AND MEETINGS
	57

	 
	SECTION 11.1
	Amendment Procedure
	57

	 
	SECTION 11.2
	Meetings and Voting
	58

	Article XII MISCELLANEOUS PROVISIONS
	59

	 
	SECTION 12.1
	Title to Property
	59

	 
	SECTION 12.2
	Other Activities of Limited Partners and Preferred Limited Partners
	59

	 
	SECTION 12.3
	Power of Attorney
	59

	 
	SECTION 12.4
	Notices
	61

	 
	SECTION 12.5
	Further Assurances
	61

	 
	SECTION 12.6
	Titles and Captions
	61

	 
	SECTION 12.7
	Applicable Law
	61

	 
	SECTION 12.8
	Binding Agreement
	61

	 
	SECTION 12.9
	Waiver of Partition
	61

	 
	SECTION 12.10
	Counterparts and Effectiveness
	61

	 
	SECTION 12.11
	Survival of Representations
	62

	 
	SECTION 12.12
	Entire Agreement
	62

	 
	SECTION 12.13
	Merger
	62

	 
	 
	 
	 

	 
	 
	 
	 

	EXHIBIT 1
	Form of Partner Registry
	 

	EXHIBIT 2
	Form of Redemption or Conversion Notice
	 

	EXHIBIT 3
	Amended and Restated Registration Rights Agreement
	 

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	EXHIBIT 4
	Notice of Election by Limited Partner to Convert Profit Interest Units into Partnership Units
	 

	EXHIBIT 5
	Notice of Election by Partnership to Force Conversion of Profit Interest Units into Partnership Units
	 

iii
     
 

CORPORATE OFFICE PROPERTIES, L.P. 
THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
The undersigned, being the General Partner of CORPORATE OFFICE PROPERTIES, L.P. (the “Partnership”), a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act, does hereby enter into this Third Amended and Restated Partnership Agreement as of this 5th day of December, 2018.
R E C I T A L S:
A.The Partnership was formed pursuant to a Certificate of Limited Partnership filed on October 10, 1997 with the Secretary of State of the State of Delaware under the name “FCO, L.P.” following the execution of a Limited Partnership Agreement dated October 14, 1997 (the “Original Partnership Agreement”) among the General Partner’s predecessor and the Initial Limited Partners.
B.The Partnership changed its name to Corporate Office Properties, L.P. as of January 1, 1998.
C.The General Partner was reformed as a Maryland real estate investment trust on March 16, 1998.
D.The General Partner, the Limited Partners and the Preferred Limited Partners amended and restated the Original Partnership Agreement on March 16, 1998 (the “First Amended and Restated Partnership Agreement”).
E.The General Partner, the Limited Partners and the Preferred Limited Partners amended and restated the First Amended and Restated Partnership Agreement on December 7, 1999 (the “Second Amended and Restated Partnership Agreement”).
F.The General Partner, the Limited Partners and the Preferred Limited Partners desire to set forth the understandings and agreements, including certain rights and obligations, among the Partners (as hereinafter defined) with respect to the Partnership. This Agreement amends, restates and supersedes the Second Amended and Restated Partnership Agreement in its entirety.

ARTICLE I

INTERPRETIVE PROVISIONS

SECTION 1.1    Certain Definitions. The following terms have the definitions hereinafter indicated whenever used in this Agreement with initial capital letters:
2015 Budget Act Partnership Audit Rules: The provisions of Subchapter C of Subtitle F, Chapter 63 of the Code, as amended by P.L. 114-74, the Bipartisan Budget Act of 2015 (together with any subsequent amendments thereto, Regulations promulgated thereunder, published administrative interpretations thereof, any guidance issued thereunder and any successor provisions) or any similar procedures established by a state, local, or non-U.S. taxing authority.

    
     
 

Act: The Delaware Revised Uniform Limited Partnership Act, Sections 17-101 to 17-1111 of the Delaware Code, Title 6, as amended from time to time.
Additional Limited Partner/Preferred Limited Partner: A Person admitted to the Partnership as a Limited Partner or Preferred Limited Partner in accordance with Section 8.7 hereof and who is shown as such on the books and records of the Partnership in such Person’s capacity as a limited partner of the Partnership.
Adjusted Capital Account: With respect to any Partner, such Partner’s Capital Account maintained in accordance with Section 4.4 hereof, as of the end of the relevant Fiscal Year of the Partnership, after giving effect to the following adjustments:
(A)    Credit to such Capital Account such Partner’s share of Partnership Minimum Gain determined in accordance with Treasury Regulations Section 1.704-2(g)(1) and such Partner’s share of Partner Minimum Gain determined in accordance with Treasury Regulations Section 1.7042(i)(5).
(B)    Debit to such Capital Account the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of “Adjusted Capital Account” is intended to comply with the provisions of Treasury Regulations Sections 1.704-1(b)(2)(ii) and 1.704-2 and shall be interpreted consistently therewith.
Adjusted Capital Account Deficit: With respect to any Partner, the deficit balance, if any, in that Partner’s Adjusted Capital Account as of the end of the relevant Fiscal Year of the Partnership.
Adjustment Event:  An event in which (i) the Partnership makes a distribution of Partnership Units or other equity interests in the Partnership on all outstanding Partnership Units to the extent that the Profit Interest Unitholder did not participate in such distribution, (ii) the Partnership subdivides the outstanding Partnership Units into a greater number of Partnership Units or combines the outstanding Partnership Units into a lesser number of Partnership Units, (iii) the Partnership issues any Partnership Units in exchange for its outstanding Partnership Units by way of a reclassification or recapitalization of its Partnership Units, or (iv) a similar transaction involving Partnership Units where consideration is not received in connection with such transaction.  For the avoidance of doubt, the following shall not be an Adjustment Event:  (a) the issuance of Partnership Units in a financing, reorganization, acquisition or similar business transaction; (b) the issuance of Partnership Units pursuant to the Equity Incentive Plan or other compensation plan, or under a distribution reinvestment plan; or (c) the issuance of any Partnership Units to the General Partner or other Persons in respect of a Capital Contribution to the Partnership.
Affiliate: With respect to any referenced Person, (i) a member of such Person’s immediate family; (ii) any Person who directly or indirectly owns, controls or holds the power to vote ten percent (10%) or more of the outstanding voting interests or securities of the Person in question; (iii) any Person ten percent (10%) or more of whose outstanding interests or securities are directly or indirectly owned, controlled, or held with power to vote by the Person in question; (iv) any Person directly or indirectly controlling, 

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controlled by, or under direct or indirect common control with the Person in question; (v) if the Person in question is a corporation, any executive officer or director of such Person or of any corporation directly or indirectly controlling such Person; and (vi) if the Person in question is a partnership, any general partner of the partnership or any limited partner owning or controlling ten percent (10%) or more of either the capital or profits interest in such partnership. As used herein, “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
Agreed Value: In the case of any (i) Contributed Property acquired pursuant to a Contribution Agreement, the value of such Contributed Property as set forth in or determined pursuant to such Contribution Agreement or, if no such value is set forth or determined for such Contributed Property, the portion of the consideration provided for under such Contribution Agreement allocable to such Contributed Property, as determined by the General Partner in its reasonable discretion, (ii) Contributed Property acquired other than pursuant to a Contribution Agreement, the fair market value of such property at the time of contribution, as determined by the General Partner using such method of valuation as it may adopt in its reasonable discretion and (iii) property distributed to a Partner by the Partnership, the Partnership’s Book Value of such property at the time such property is distributed without taking into account, in the case of each of (i), (ii) and (iii), the amount of any related indebtedness assumed by the Partnership (or the Partner in the case of clause (iii)) or to which the Contributed Property is taken subject.
Agreement: This Third Amended and Restated Limited Partnership Agreement and all Exhibits attached hereto, as the same may be amended or restated and in effect from time to time which are hereby incorporated by reference and made a part of this Agreement.
Assignee: Any Person to whom one or more Partnership Units or Preferred Units have been Transferred as permitted under this Agreement but who has not become a Substituted Limited Partner/Preferred Limited Partner in accordance with the provisions hereof.
Bankruptcy: Either (i) a referenced Person’s making an assignment for the benefit of creditors, (ii) the filing by a referenced Person of a voluntary petition in bankruptcy, (iii) a referenced Person’s being adjudged insolvent or having entered against such referenced Person an order for relief in any bankruptcy or insolvency proceeding, (iv) the filing by a referenced Person of an answer seeking any reorganization, composition, readjustment, liquidation, dissolution, or similar relief under any law or regulation, (v) the filing by a referenced Person of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such referenced Person in any proceeding of reorganization, composition, readjustment, liquidation, dissolution, or for similar relief under any statute, law or regulation or (vi) a referenced Person’s seeking, consenting to, or acquiescing in the appointment of a trustee, receiver or liquidator for all or substantially all of such referenced Person’s property (or court appointment of such trustee, receiver or liquidator). The foregoing is intended to supersede the events listed in Section 17-402(a)(4) and (5) of the Act.
Book-Tax Disparity: With respect to any item of Contributed Property, or property the Book Value of which has been adjusted in accordance with Section 4.4(D), as of the date of determination, the difference between the Book Value of such property and the adjusted basis of such property for federal income tax purposes.

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Book Value: With respect to any Contributed Property, the Agreed Value of such property reduced (but not below zero) by all Depreciation with respect to such property properly charged to the Partners’ Capital Accounts and with respect to any other asset, the asset’s adjusted basis for federal income tax purposes; provided, however, (a) the Book Value of all Partnership Assets shall be adjusted in the event of a revaluation of Partnership Assets in accordance with Section 4.4(D) hereof, (b) the Book Value of any Partnership Asset distributed to any Partner shall be the fair market value of such asset on the date of distribution as determined by the General Partner and (c) such Book Value shall be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.
Capital Account: The account maintained by the Partnership for each Partner described in Section 4.4 hereof.
Capital Account Limitation:  As set forth in Section 4.8(B)(1).
Capital Contribution: The total amount of cash or cash equivalents and the Agreed Value (reduced to take into account the amount of any related indebtedness assumed by the Partnership, or to which the Contributed Property is subject) of Contributed Property which a Partner contributes or is deemed to contribute to the Partnership pursuant to the terms of this Agreement.
Cash Payment: The payment to a Redeeming Party of a cash amount determined by multiplying (i) the number of Partnership Units tendered for redemption by such Redeeming Party pursuant to a validly proffered Redemption Notice by (ii) the Unit Value with respect to such Partnership Units.
Certificate: The Partnership’s Certificate of Limited Partnership filed in the office of the Secretary of State of the State of Delaware, as amended from time to time.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Consent: Either the written consent of a Person or the affirmative vote of such Person at a meeting duly called and held pursuant to this Agreement, as the case may be, to do the act or thing for which the consent or vote is required or solicited, or the act of granting such consent or vote, as the context may require.
Constituent Person:  As set forth in Section 4.8(F).
Contributed Property: Each property or other asset (excluding cash and cash equivalents) contributed or deemed contributed to the Partnership. For the avoidance of doubt, the properties and assets held by the partnership constituting the Contributed Interests (as defined in the Formation Agreement) shall constitute Contributed Properties to the extent the Contributed Interests are acquired by the Partnership.
Contribution Agreements: Those certain agreements among one or more Persons and the Partnership pursuant to which, inter alia, such Persons directly or indirectly contributed property to the Partnership in exchange for Partnership Units or Preferred Units or are to contribute property to the Partnership in exchange for Partnership Units or Preferred Units including, without limitation, the Formation Agreement.

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Conversion Commencement Date: The date when Preferred Units which are convertible into Partnership Units first become convertible.
Conversion Factor: The number of Partnership Units issuable upon the conversion of each Preferred Unit of a class or series which are convertible into Partnership Units.
Conversion Notice: A Notice to the General Partner by a converting Preferred Limited Partner, substantially in the form attached as EXHIBIT 2, pursuant to which such Preferred Limited Partner requests the conversion of Preferred Units in accordance with Section 9.8 hereof.
COPT: Corporate Office Properties Trust, a Maryland real estate investment trust.
Current Partnership Audit Rules: Subchapter C of Subtitle F, Chapter 63 of the Code as in effect on November 1, 2015, and as subsequently amended prior to the effective date of the 2015 Budget Act Partnership Audit Rules.
Depreciation: For each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Book Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be adjusted as necessary so as to be an amount which bears the same ratio to such beginning Book Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period bears to the beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period is zero, Depreciation for such year or other period shall be determined with reference to such beginning Book Value using any reasonable method approved by the General Partner.
Distributable Cash: With respect to any period, and without duplication:
(i)    all cash receipts of the Partnership during such period from all sources;
(ii)    LESS all cash disbursements of the Partnership during such period, including, without limitation, disbursements for operating expenses, taxes, debt service (including, without limitation, the payment of principal, premium and interest), redemption of Partnership Interests and capital expenditures;
(iii)    LESS amounts added to reserves in the reasonable discretion of the General Partner;
(iv)    PLUS amounts withdrawn from reserves in the reasonable discretion of the General Partner.
Distribution Participation Date:  with respect to Profit Interest Units, such date as may be specified in the Profit Interest Award Certificate or other documentation pursuant to which such Profit Interest Units are issued.
Distribution Payment Date:  As set forth in Section 5.3(B).

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Distribution Period: With respect to any series of Preferred Units issued to the General Partner pursuant to Section 4.2(B) of this Agreement, the Distribution Period shall correspond to the distribution period of the related issuance of securities by the General Partner as provided in Section 4.2(B) of this Agreement. With respect to Preferred Units issued by the Partnership to Persons other than the General Partner, the Distribution Period shall be set forth on the Addendum to the Partner Registry or otherwise set forth in an amendment to this Agreement.
Distribution Period Commencement Date: The date which begins any Distribution Period.
Economic Capital Account Balances:  As set forth in Section 5.2(C).
ERISA: The Employee Retirement Income Security Act of 1976, as amended from time to time.
Equity Incentive Plan:  Any equity incentive or compensation plan heretofore or hereafter adopted by the Partnership or the General Partner, including, without limitation, the Corporate Office Properties Trust 2017 Omnibus Equity and Incentive Plan, as the same may be amended from time to time
Fiscal Year: The calendar year or such other twelve (12) month period designated by the General Partner.
Forced Profit Interest Conversion Notice:  As set forth in Section 4.8(C).
General Partner: COPT, and its respective successor(s) who or which become Successor General Partner(s) in accordance with the terms of this Agreement, in its capacity as general partner of the Partnership.
General Partner Interest: A Partnership Interest held by the General Partner that is a general partner interest. A General Partner Interest may be expressed as a number of Partnership Units.
Initial Limited Partners: Those Persons initially admitted to the Partnership as Limited Partners in connection with the contribution of property to the Partnership in accordance with the Formation Agreement and the other Contribution Agreements.
Involuntary Withdrawal: As to any (i) individual shall mean such individual’s death, incapacity or final, unappealable adjudication of incompetence, (ii) corporation shall mean its dissolution or revocation of its charter (unless such revocation is promptly corrected upon notice thereof), (iii) partnership shall mean the dissolution and commencement of winding-up of its affairs, (iv) trust shall mean the termination of the trust (but not the substitution of trustees), (v) estate shall mean the distribution by the fiduciary of the estate’s complete interest in the Partnership and (vi) Partner shall mean the Bankruptcy of such Partner.
IRS: The Internal Revenue Service, which administers the internal revenue laws of the United States.
Junior Preferred Units: Preferred Units which rank junior to the Senior Preferred Units, and prior and senior to the Partnership Units, in the payment of Priority Return Amounts and Liquidation Preferences. Junior Preferred Units shall be identified on the Addendum to the Partner Registry or otherwise set forth 

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in an amendment to this Agreement. Each class or series of Preferred Units which is denominated Junior Preferred Units shall be entitled to allocations and distributions with respect to Priority Return Amounts and Liquidation Preferences on a pari passu basis with each other class or series of Junior Preferred Units. If after their due date the full amount of all accrued Priority Return Amounts have not been distributed with respect to all Junior Preferred Units pursuant to Article V, no distribution shall be made to the holders of Partnership Units pursuant to that Article. Until the holders of Junior Preferred Units have been paid Liquidation Preferences and all Priority Return Amounts in connection with the liquidation of the Partnership pursuant to Section 10.2, no distribution shall be made to the holders of Partnership Units in connection with such liquidation pursuant to that Section.
Limited Partner: Those Persons listed as holding Partnership Units in the Partner Registry, as such Partner Registry may be updated from time to time, including any Person who becomes a Substituted Limited Partner or an Additional Limited Partner in accordance with the terms of this Agreement in such Person’s capacity as a limited partner of the Partnership; provided, however, that such term shall not include the Preferred Limited Partners.
Limited Partner Interest: A Partnership Interest held by a Limited Partner that is a limited partner interest. A Limited Partner Interest may be expressed as a number of Partnership Units.
Liquidating Gains:  As set forth in Section 5.2(C).
Liquidating Losses:  As set forth in Section 5.2(C).
Liquidation Preference: The amount of the liquidation preference, if any, of each class or series of Preferred Units determined by the General Partner in accordance with Section 4.2(A) or (B), whichever is applicable, and identified on the Partner Registry or otherwise set forth in an amendment to this Agreement.
Nonrecourse Liability: A liability as defined in Treasury Regulations Section 1.704-2(b)(3).
Notice: A writing containing the information required by this Agreement to be communicated to a Person and delivered to such Person in accordance with Section 12.4; provided, however, that any written communication containing such information actually received by such Person shall constitute Notice for all purposes of this Agreement.
Partner Minimum Gain: The gain (regardless of character) which would be realized by the Partnership if property of the Partnership subject to a partner nonrecourse debt (as such term is defined in Treasury Regulations Section 1.704-2(b)(4)) were disposed of in full satisfaction of such debt on the relevant date. The adjusted basis of property subject to more than one partner nonrecourse debt shall be allocated in a manner consistent with the allocation of basis for purposes of determining Partnership Minimum Gain hereunder. Partner Minimum Gain shall be computed hereunder using the Book Value, rather than the adjusted tax basis, of the Partnership property in accordance with Treasury Regulations Section 1.704-2(d)(3).

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Partner Nonrecourse Deductions: With respect to any partner nonrecourse debt (as such term is defined in Treasury Regulations Section 1.704-2(b)(4)), the increase in Partner Minimum Gain during the tax year plus any increase in Partner Minimum Gain for a prior tax year which has not previously generated a Partner Nonrecourse Deduction hereunder. The determination of which Partnership items constitute Partner Nonrecourse Deductions shall be made in a manner consistent with the manner in which Partnership Nonrecourse Deductions are determined hereunder.
Partners: The General Partner, the Preferred Limited Partners and the Limited Partners as a group. The term “Partner” shall mean a General Partner, a Preferred Limited Partner or a Limited Partner. Such terms shall be deemed to include such other Persons who become Partners pursuant to the terms of this Agreement.
Partnership: The Delaware limited partnership referred to herein as CORPORATE OFFICE PROPERTIES, L.P., as such partnership may from time to time be constituted.
Partnership Assets: At any particular time, any assets or property (real or personal, tangible or intangible, choate or inchoate, fixed or contingent) owned by the Partnership.
Partnership Interest or Interest: As to any Partner, such Partner’s ownership interest in the Partnership and including such Partner’s right to distributions under this Agreement and any other rights or benefits which such Partner has in the Partnership, together with any and all obligations of such Person to comply with the terms and provisions of this Agreement. A Partnership Interest may be expressed as a number of Partnership Units or Preferred Units.
Partnership Minimum Gain: The aggregate gain (regardless of character) which would be realized by the Partnership if all of the property of the Partnership subject to nonrecourse debt (other than partner nonrecourse debt as such term is defined in Treasury Regulations Section 1.704-2(b)(4)) were disposed of in full satisfaction of such debt and for no other consideration on the relevant date. In the case of any Nonrecourse Liability of the Partnership which is not secured by a mortgage with respect to any specific property of the Partnership, any and all property of the Partnership to which the holder of said liability has recourse shall be treated as subject to such Nonrecourse Liability for purposes of the preceding sentence. Partnership Minimum Gain shall be computed separately for each Nonrecourse Liability of the Partnership. For this purpose, the adjusted basis of property subject to two or more liabilities of equal priority shall be allocated among such liabilities in proportion to the outstanding balance of such liabilities, and the adjusted basis of property subject to two or more liabilities of unequal priority shall be allocated to the liability of inferior priority only to the extent of the excess, if any, of the adjusted basis of such property over the outstanding balance of the liability of superior priority. Partnership Minimum Gain shall be computed hereunder using the Book Value, rather than the adjusted tax basis, of the Partnership property in accordance with Treasury Regulations Section 1.704-2(d)(3).
Partnership Nonrecourse Deductions: The amount of Partnership deductions equal to the increase, if any, in the amount of the aggregate Partnership Minimum Gain during the tax year (plus any increase in Partnership Minimum Gain for a prior tax year which has not previously generated a Partnership Nonrecourse Deduction) reduced (but not below zero) by the aggregate distributions made during the tax year of the proceeds of a Nonrecourse Liability of the Partnership which are attributable to an increase in 

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Partnership Minimum Gain within the meaning of Treasury Regulations Section 1.704-2(d). The Partnership Nonrecourse Deductions for a Partnership tax year shall consist first of depreciation or cost recovery deductions with respect to each property of the Partnership giving rise to such increase in Partnership Minimum Gain on a pro rata basis to the extent of each such increase, with any excess made up pro rata of all items of deduction.
Partner Registry:  The Partner Registry maintained by the General Partner in the books and records of the Partnership, which contains substantially the same information as would be necessary to complete the form of the Partner Registry attached hereto as EXHIBIT 1.
Partnership Unit: A fractional, undivided share of the Partnership Interests (other than Partnership Interests represented by Preferred Units) of all the Partners heretofore or hereafter admitted to the Partnership pursuant to Section 4.1 or 4.2 hereof.
Partnership Unit Economic Balance:  As set forth in Section 5.2(C).
Partnership Unit Transaction: means any transaction or series of related transactions (including without limitation a merger, consolidation, unit exchange, self-tender offer for all or substantially all Partnership Units or other business combination or reorganization, or sale of all or substantially all of the Partnership’s assets, but excluding any Partnership Unit Transaction which constitutes an Adjustment Event) as a result of which Partnership Units shall be exchanged for or converted into the right, or the holders of such Partnership Units shall otherwise be entitled, to receive cash, securities or other property or any combination thereof.
Percentage Interest: As to any Partner (other than the Preferred Limited Partners), the percentage in the Partnership, as determined by dividing the Partnership Units then owned by such Partner by the total number of Partnership Units then outstanding, as the same may be automatically adjusted from time to time to reflect the issuance and redemption of Partnership Units in accordance with this Agreement.
Person: Any individual, partnership, limited liability company, corporation, trust or other entity.
Preferred Limited Partner: Those Persons listed as holding Preferred Units on the Partner Registry, as such Partner Registry may be amended from time to time, in their capacity as limited partners in the Partnership holding Preferred Units, including any Person who becomes a Substituted Preferred Limited Partner or an Additional Preferred Limited Partner in accordance with the terms of this Agreement and including the General Partner, but only in its capacity as the holder of Preferred Units.
Preferred Unit: A portion of the Partnership Interest held by a Preferred Limited Partner or the General Partner that represents a unit of preferred interest in the Partnership as identified on the Partner Registry or the Addendum to the Partner Registry (or otherwise set forth in an amendment to this Agreement) and a unit of any other class or series of preferred interest in the Partnership that may be issued to a Partner in the future in accordance with Section 4.2(A) or (B) hereof.

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Profit Interest Award Certificate:  Each or any, as the context implies, agreement or instrument entered into by a holder of Profit Interest Units upon acceptance of an award of Profit Interest Units under an Equity Incentive Plan.
Profit Interest Conversion Date:  As set forth in Section 4.8(B)(2).
Profit Interest Conversion Notice:  As set forth in Section 4.8(B)(2).
Profit Interest Conversion Right:  As set forth in Section 4.8(B)(1).
Profit Interest Distribution Amount:  As set forth in Section 5.3(B).
Profit Interest Unit: A Partnership Unit that is designated as a Profit Interest Unit and that has the rights, preferences and other privileges designated in Sections 4.7 and 4.8 and elsewhere in this Agreement in respect of holders of Profit Interest Units. The allocation of Profit Interest Units among the Limited Partners shall be set forth on the Partner Registry.
Profit Interest Unit Sharing Percentage:  For a Profit Interest Unit, the percentage that is specified as the Profit Interest Unit Sharing Percentage in the Profit Interest Award Certificate or other documentation pursuant to which such Profit Interest Unit is issued or, if no such percentage is specified, 100%.
Profit Interest Unitholder:  A Limited Partner that holds Profit Interest Units.
Priority Return Amount: For each Distribution Period, for each Partner holding any class or series of Preferred Units, the Priority Return Percentage times the Liquidation Preference times the number of Preferred Units held by such Partner as set forth on the Addendum to the Partner Registry (or otherwise set forth in an amendment to this Agreement). In the case of any Preferred Units issued during a Distribution Period, the Priority Return Amount attributable to such Preferred Units for such Distribution Period shall be pro rated to reflect the portion of such Distribution Period during which such Preferred Units were outstanding.
Priority Return Percentage: That percentage set forth on the Addendum to the Partner Registry (or otherwise set forth in an amendment to this Agreement) used to calculate the Priority Return Amount.
Profits and Losses: For each Fiscal Year or other period, an amount equal to the Partnership’s taxable income or loss (as the case may be) for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
(i)    Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss;
(ii)    Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 

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1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition, shall be subtracted from such taxable income or loss;
(iii)    Gain or loss resulting from any disposition of Partnership property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Value of the property disposed of notwithstanding that the adjusted tax basis of such property differs from such Book Value;
(iv)    In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year or other period, computed in accordance with the definition of “Depreciation” herein; and
(v)    In the event that any item of income, gain, loss or deduction that has been included in the initial computation of Profit or Loss is subject to the special allocation rules of Sections 5.2(C) and 5.2(D), Profit or Loss shall be recomputed without regard to such item.
Redeeming Party: A Limited Partner or Assignee (other than the General Partner) who tenders Partnership Units for redemption pursuant to a Redemption Notice.
Redemption Date: The date for redemption of Partnership Units as set forth in Section 9.2.
Redemption Notice: A Notice to the General Partner by a Redeeming Party, substantially in the form attached as EXHIBIT 2, pursuant to which the Redeeming Party requests the redemption of Partnership Units in accordance with Article IX.
Redemption Obligation: The obligation of the Partnership to redeem the Partnership Units as set forth in Section 9.1(A).
1Redemption Ratio: The ratio (carried out to four decimal places) applied when redeeming Partnership Units for REIT Shares, which shall initially be 1.0. In the event that on or after the date of this Agreement the General Partner (i) declares or pays a dividend on its outstanding REIT Shares in REIT Shares or makes a distribution to all holders of its outstanding REIT Shares in REIT Shares (ii) subdivides its outstanding REIT Shares or (iii) combines its outstanding REIT Shares into a smaller number of REIT Shares, the Redemption Ratio shall be adjusted by multiplying the Redemption Ratio by a fraction, the  numerator of which shall be the number of REIT Shares issued and outstanding on the record date (assuming for such purposes such dividend, distribution, subdivision or combination has occurred as of such time), and the denominator of which shall be the actual number of REIT Shares (determined without   the above assumption) issued and outstanding on the record  date for such dividend, distribution, subdivision or combination. In the event that the Partnership (a) declares or pays a distribution on the outstanding 
 ___________________
1 “Redemption Period” deleted in accordance with Amendment 26 to Partnership Agreement.

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Partnership Units or makes a distribution to all Partners in Partnership Units, (b) subdivides the outstanding Partnership Units or (c) combines the outstanding Partnership Units into a smaller number of Partnership Units, the Redemption Ratio shall be adjusted by multiplying the Redemption Ratio by a fraction, the numerator of which shall be the actual number of Partnership Units issued and outstanding on the record date (determined without giving effect to such dividend, distribution, subdivision or combination), and the denominator of which shall be the actual member of Partnership Units (determined after giving effect to such dividend, distribution, subdivision or combination) issued and outstanding on such record date. Any adjustment to the Redemption Ratio shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event.2 
Redemption Restriction: A restriction on the ability of the Partnership to redeem the Partnership Units as set forth in Section 9.1(A).
3Registration Rights Agreement: An Amended and Restated Registration Rights Agreement, substantially in the form of EXHIBIT 3 hereto, as the same may have heretofore or may hereafter be amended or restated and in effect from time to time, pursuant to which COPT agrees, among other things, to register under the Securities Act of 1933, as amended, REIT Shares issued in connection with Share Payments made under Article IX hereof.
REIT: A real estate investment trust, as defined in Code Section 856.
REIT Charter: The Amended and Restated Declaration of Trust of COPT filed with the State Department of Assessments and Taxation of Maryland on March 3, 1998, as the same may have been heretofore or may hereafter be amended or restated and in effect from time to time.
REIT Share: A common share of beneficial interest representing an ownership interest in the General Partner.
REIT Share Rights: Rights to acquire additional REIT Shares issued to all holders of REIT Shares, whether in the form of rights, options, warrants or convertible or exchangeable securities, to the extent the same have been issued without additional consideration after the initial acquisition of such REIT Shares.
SEC: The Securities and Exchange Commission.
Senior Preferred Units: Preferred Units which rank prior and senior to the Junior Preferred Units and the Partnership Units with respect to the payment of Priority Return Amounts and Liquidation Preferences. Senior Preferred Units shall be identified on the Addendum to the Partner Registry (or  otherwise set forth in an amendment to this Agreement). Each class or series of Preferred Units which are denominated as Senior Preferred Units shall be entitled to allocations and distributions with respect to
______________
2See Amendment 1 to Partnership Agreement.
3 “Redemption Rights” deleted in accordance with Amendment 1 to Partnership Agreement.

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Priority Return Amounts and Liquidation Preferences on a pari passu basis with each other class or series of Senior Preferred Units. If after their due date the full amount of all accrued Priority Return Amounts have not been distributed with respect to all Senior Preferred Units pursuant to Article V, no distribution shall be made to the holders of Junior Preferred Units or Partnership Units pursuant to that Article. Until the holders of Senior Preferred Units have been paid Liquidation Preferences and all Priority Return Amounts in connection with the liquidation of the Partnership pursuant to Section 10.2, no distribution shall be made to the holders of Junior Preferred Units or Partnership Units in connection with such liquidation pursuant to that Section.
Share Payment: The payment to a Redeeming Party of a number of REIT Shares determined by multiplying (i) the number of Partnership Units tendered for redemption by such Redeeming Party pursuant to a validly proffered Redemption Notice by (ii) the Redemption Ratio. In the event the General Partner grants any REIT Share Rights on or after the date of this Agreement and prior to such payment, any Share Payment shall include for the Redeeming Party such Redeeming Party's ratable share of such REIT Share Rights other than REIT Share Rights which have expired. In any case in which the Share Payment would result in the issuance of a fractional REIT Share, the General Partner shall pay the converting Redeeming Party cash in lieu of issuance of a fractional REIT Share, with the value of such fractional interest being determined by reference to the Unit Value applicable on the Redemption Date.4 
Subsidiary: With respect to any Person, any corporation or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.
Substituted Limited Partner/Preferred Limited Partner: That Person or those Persons admitted to the Partnership as a substitute Limited Partner or substitute Preferred Limited Partner, in accordance with the provisions of this Agreement, in such Person’s capacity as a limited partner of the Partnership. A Substituted Limited Partner or Substituted Preferred Limited Partner, upon admission as such, shall succeed to the rights, privileges and liabilities of the predecessor in interest as a Limited Partner or Preferred Limited Partner.
Successor General Partner: Any Person who is admitted to the Partnership as substitute General Partner pursuant to this Agreement, in its capacity as a general partner of the Partnership. A Successor General Partner, upon its admission as such, shall succeed to the rights, privileges and liabilities of its predecessor in interest as General Partner, in accordance with the provisions of the Act.
Target Balance:  As set forth in Section 5.2(C).
Terminating Capital Transaction: The sale or other disposition of all or substantially all of the Partnership Assets or a related series of transactions that, taken together, result in the sale or other disposition of all or substantially all of the Partnership Assets.
_________________________________ 
 4See Amendment 1 to Partnership Agreement.

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Transfer: With respect to any Partnership Interest shall mean a transaction in which a Partner assigns his Partnership Interest to another Person and includes any sale, assignment, gift, exchange or other disposition by law or otherwise; provided, however, the redemption or conversion of any Partnership Interest pursuant to Article IX hereof shall not constitute a “transfer” for purposes hereof. “Transfers,” “Transferring” and “Transferred” shall have correlative meanings.
Treasury Regulations: The Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time.
Unit Value: With respect to any Partnership Unit, the average of the daily market price for a REIT Share for the ten (10) consecutive trading days immediately preceding the date of receipt of a Redemption Notice by the General Partner multiplied by the Redemption Ratio. If the REIT Shares are traded on a securities exchange or the NASDAQ Small Cap Market or National Market System, the market price for each such trading day shall be the reported last sale price on such day or, if no sales take place on such day, the average of the closing bid and asked prices on such day. If the REIT Shares are not traded on a securities exchange or the NASDAQ Small Cap Market or National Market System, the market price for each such trading day shall be determined by the General Partner using any reasonable method of valuation. If a Share Payment would include any REIT Share Rights, the value of such REIT Share Rights shall be determined by the General Partner using any reasonable method of valuation, taking into account the Unit Value determined hereunder and the factors used to make such determination and the value of such REIT Share Rights shall be included in the Unit Value.5 
Unvested Profit Interest Units:  As set forth in Section 4.7(C).
Vested Profit Interest Units:  As set forth in Section 4.7(C).

SECTION 1.2    Rules Of Construction. The following rules of construction shall apply to this Agreement:
(A)    All section headings in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section.
(B)    All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders; the singular shall include the plural, and vice versa, as the context may require.
(C)    Each provision of this Agreement shall be considered severable from the rest, and if any provision of this Agreement or its application to any Person or circumstances shall be held invalid and contrary to any existing or future law or unenforceable to any extent, the remainder of this Agreement and the application of any other provision to any Person or circumstances shall not be affected thereby and shall be interpreted and enforced to the greatest extent permitted by law so as to give effect to the original intent of the parties hereto.
(D)    Unless otherwise specifically and expressly limited in the context, any reference herein to a decision, determination, act, action, exercise of a right, power or privilege, or other procedure by the General Partner shall mean and refer to the decision, determination, act, action, exercise or other procedure by the General Partner in its sole and absolute discretion.
__________________
 5See Amendment 1 to Partnership Agreement.

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ARTICLE II     

CONTINUATION

SECTION 2.1    Continuation. The Partners hereby continue the Partnership as a limited partnership under the Act and the Persons listed on the Partner Registry as Partners shall continue as Partners in the Partnership. The General Partner shall take all action required by law to perfect and maintain the Partnership as a limited partnership under the Act and under the laws of all other jurisdictions in which the Partnership may elect to conduct business, including but not limited to the filing of amendments to the Certificate with the Delaware Secretary of State, and qualification of the Partnership as a foreign limited partnership in the jurisdictions in which such qualification shall be required, as determined by the General Partner. The General Partner shall also promptly register the Partnership under applicable assumed or fictitious name statutes or similar laws.

SECTION 2.2    Name. The name of the Partnership is CORPORATE OFFICE PROPERTIES, L.P. The General Partner may adopt such assumed or fictitious names as it deems appropriate in connection with the qualifications and registrations referred to in Section 2.1.

SECTION 2.3    Place Of Business; Registered Office; Registered Agent. The principal office of the Partnership is located at 6711 Columbia Gateway Drive, Suite 300, Columbia, Maryland 21046, which office may be changed to such other place as the General Partner may from time to time designate. The Partnership may establish offices for the Partnership within or without the State of Delaware as may be determined by the General Partner. The address of the Partnership’s initial registered office and the initial registered agent for the Partnership in the State of Delaware is The Corporation Trust Company, whose address is c/o Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The Partnership’s registered office and agent may be changed by the General Partner.6 

ARTICLE III
BUSINESS PURPOSE

SECTION 3.1    Business. The business of the Partnership shall be (i) conducting any business that may be lawfully conducted by a limited partnership pursuant to the Act including, without limitation, acquiring, owning, managing, developing, leasing, marketing, operating and, if and when appropriate, selling, commercial, industrial, office and net leased retail properties, (ii) entering into any partnership, joint venture or other relationship to engage in any of the foregoing or the ownership of interests in any entity engaged in any of the foregoing, (iii) making loans, guarantees, indemnities or other financial accommodations and borrowing money and pledging its assets to secure the repayment thereof, (iv) doing any of the foregoing with respect to any Affiliate or Subsidiary and (v) doing anything necessary or incidental
_________________
6See Amendment 26 to Partnership Agreement.

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 to the foregoing; provided, however, that business of the Partnership shall be limited so as to permit the General Partner to elect and maintain its status as a REIT (unless the General Partner determines no longer to qualify as a REIT).

SECTION 3.2    Authorized Activities. In carrying out the purposes of the Partnership, but subject to all other provisions of this Agreement, the Partnership is authorized to engage in any kind of lawful activity, and perform and carry out contracts of any kind, necessary or advisable in connection with the accomplishment of the purposes and business of the Partnership described herein and for the protection and benefit of the Partnership; provided that the General Partner shall not be obligated to cause the Partnership to take, or refrain from taking, any action which, in the judgment of the General Partner, (i) could adversely affect the ability of the General Partner to qualify and continue to qualify as a REIT, (ii) could subject the General Partner to additional taxes under Code Section 857 or 4981 or (iii) could violate any law or regulation of any governmental body or agency having jurisdiction over the General Partner or its securities.

ARTICLE IV     
CAPITAL CONTRIBUTION

SECTION 4.1    Capital Contributions.
(A)    Upon the contribution to the Partnership of property in accordance with a Contribution Agreement, Partnership Units and/or Preferred Units shall be issued in accordance with, and as contemplated by, such Contribution Agreement, and the Persons receiving such Partnership Units and/or Preferred Units shall become Partners and shall be deemed to have made a Capital Contribution. The Partner Registry sets forth the number of Partnership Units and Preferred Units owned by each Partner. Except as set forth in Section 4.2 (regarding issuance of additional Partnership Units) or Section 7.8 (regarding withholding obligations) hereof, no Partner shall be required under any circumstances to contribute to the capital of the Partnership any amount beyond that sum required pursuant to this Article IV.
(B)    Anything in the foregoing Section 4.1(A) or elsewhere in this Agreement notwithstanding, the Partnership Units held by the General Partner shall, at all times, be deemed to be general partner interests in the Partnership and shall constitute the General Partner Interests.

SECTION 4.2    Additional Partnership Interests.
(A)    The Partnership may issue additional Limited Partner Interests in the form of Partnership Units or Preferred Units for any Partnership purpose at any time or from time to time to any Partner or other Person (other than the General Partner, except in accordance with Section 4.2(B) below).

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(B)    The Partnership also may from time to time issue to the General Partner additional Partnership Interests in such classes and having such designations, preferences and relative rights (including preferences and rights senior to the existing relative Limited Partner Interests) as shall be determined by the General Partner in accordance with the Act and governing law. Except as provided in Article IX, any such issuance of Partnership Units, Preferred Units or Partnership Interests to the General Partner shall be conditioned upon (i) the undertaking by the General Partner of a related issuance of its shares of beneficial interest (with such shares having designations, rights and preferences such that the economic rights of the holders of such shares of beneficial interest are substantially similar to the rights of the additional Partnership Interests issued to the General Partner) and the General Partner making a Capital Contribution (a) in an amount equal to the net proceeds raised in the issuance of such shares of beneficial interest, in the event such shares of beneficial interest are sold for cash or cash equivalents or (b) of the property received in consideration for such shares of beneficial interest, in the event such shares of beneficial interest are issued in consideration for other property or (ii) the issuance by the General Partner of shares of beneficial interest under any stock option or bonus plan and the General Partner making a Capital Contribution in an amount equal to the exercise price of the option exercised pursuant to such stock option or other bonus plan.
(C)    Except as contemplated by Article IX (regarding redemptions) or Section 4.2(B), the General Partner shall not issue any (i) additional REIT Shares, (ii) rights, options or warrants containing the right to subscribe for or purchase REIT Shares (other than options granted under the General Partner’s Stock Option Plan for Non-Employee Directors, 1998 Long Term Incentive Plan, as amended or as may be amended, the Equity Incentive Plan, or any stock option or similar plan for officers, directors and employees of the General Partner or any of its Affiliates) or (iii) securities convertible or exchangeable into REIT Shares (collectively, “Additional REIT Securities”) other than to all holders of REIT Shares, pro rata, unless (x) the Partnership issues to the General Partner (i) Partnership Interests, (ii) rights, options or warrants containing the right to subscribe for or purchase Partnership Interests or (iii) securities convertible or exchangeable into Partnership Interests such that the General Partner receives an economic interest in the Partnership substantially similar to the economic interest in the General Partner represented by the Additional REIT Securities and (y) the General Partner contributes to the Partnership the net proceeds from, or the property received in consideration for, the issuance of the Additional REIT Securities and the exercise of any rights contained in any Additional REIT Securities.
(D)    On or about the date of the Twenty-Eighth Amendment to Second Amended and Restated Limited Partnership Agreement of the Partnership, the Partnership issued to the General Partner 1,666,083 Partnership Units, which issuance caused the number of Partnership Units held by the General Partner to equal the outstanding number of REIT Shares at the time of such issuance.7 
___________________ 
 7See Amendment 28 to Partnership Agreement.

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SECTION 4.3    No Third Party Beneficiaries. The provisions of this Agreement, including the foregoing provisions of this Article IV, are not intended to be for the benefit of any creditor of the Partnership or other Person to whom any debts, liabilities or obligations are owed by (or who otherwise has any claim against) the Partnership or any of the Partners and no such creditor or other Person shall obtain any right under any such provision against the Partnership or any of the Partners by reason of any debt, liability or obligation (or otherwise).

SECTION 4.4    Capital Accounts.
(A)    The Partnership shall establish and maintain a separate Capital Account for each Partner in accordance with Code Section 704 and Treasury Regulations Section 1.704-1(b)(2)(iv). The Capital Account of each Partner shall be credited with:
(1)    the amount of all Capital Contributions made to the Partnership by such Partner in accordance with this Agreement; plus
(2)    all income and gain of the Partnership computed in accordance with this Section 4.4 and allocated to such Partner pursuant to Article V (including for purposes of this Section 4.4(A), income and gain exempt from tax); and shall be debited with the sum of:
(a)    all losses or deductions of the Partnership computed in accordance with this Section 4.4 and allocated to such Partner pursuant to Article V;
(b)    such Partner’s distributive share of expenditures of the Partnership described in Code Section 705(a)(2)(B); and
(c)    all cash and the Agreed Value (reduced to take into account the amount of any related indebtedness assumed by the Partner, or to which the distributed property is subject) of any property actually distributed or deemed distributed by the Partnership to such Partner pursuant to the terms of this Agreement.
Any reference in any section or subsection of this Agreement to the Capital Account of a Partner shall be deemed to refer to such Capital Account as the same may be credited or debited from time to time as set forth above.
(B)    For purposes of computing the amount of any item of income, gain, deduction or loss to be reflected in the Partners’ Capital Accounts, the determination, recognition and classification of each such item shall be the same as its determination, recognition and classification for federal income tax purposes, determined in accordance with Code Section 703(a), with the following adjustments:

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(1)    any income, gain or loss attributable to the taxable disposition of any Partnership Asset shall be determined by treating the adjusted basis of such property as of the date of such disposition as equal to the Book Value of such property as of such date;
(2)    the computation of all items of income, gain, loss and deduction shall be made without regard to any Code Section 754 election that may be made by the Partnership, except to the extent required in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)(m);
(3)    in lieu of depreciation, amortization and other cost recovery deductions taken into account in computing Profit and Loss, there shall be taken into account Depreciation for such Fiscal Year; and
(4)    in the event the Book Value of any Partnership Asset is adjusted pursuant to Section 4.4(D) below, the amount of such adjustment shall be treated as gain or loss from the disposition of such asset.
(C)    Any transferee of a Partnership Interest shall succeed to a pro rata portion of the transferor’s Capital Account transferred.
(D)    Consistent with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)(f), (i) immediately prior to the acquisition of an additional Partnership Interest by any new or existing Partner in connection with the contribution of money or other property (other than a de minimis amount) to the Partnership, (ii) immediately prior to the distribution by the Partnership to a Partner of Partnership property (other than a de minimis amount) as consideration for a Partnership Interest, (iii) immediately prior to the liquidation of the Partnership as defined in Treasury Regulations Section 1.704-1(b)(2)(ii)(g), (iv) immediately prior to the grant of an interest in the Partnership (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Partnership by an existing Partner acting in a Partner capacity or by a new partner acting in a Partner capacity or in anticipation of becoming a Partner (including the issuance of any Profit Interest Units), and (v) at such other times as permitted or required under Regulations, the Book Value of all Partnership Assets shall be revalued upward or downward to reflect the fair market value of each such Partnership Asset as determined by the General Partner using such reasonable method of valuation as it may adopt unless the General Partner shall determine that such revaluation is not necessary to maintain Capital Accounts in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv).
(E)    The foregoing provisions of this Section 4.4 are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event the General Partner shall determine that it is prudent to modify the manner in which the Partners’ Capital Accounts are computed hereunder in order to comply with such Treasury Regulations, the General Partner may make such modification if such modification is not likely to have a material effect on the amount or timing of any distribution to 

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any Partner under the terms of this Agreement and the General Partner notifies the other Partners in writing of such modification prior to making such modification.

SECTION 4.5    Return Of Capital Account; Interest. Except as otherwise specifically provided in this Agreement, (i) no Partner shall have any right to withdraw or reduce its Capital Contributions or Capital Account, or to demand and receive property other than cash from the Partnership in return for its Capital Contributions or Capital Account; (ii) no Partner shall have any priority over any other Partners as to the return of its Capital Contributions or Capital Account; (iii) any return of Capital Contributions or Capital Accounts to the Partners shall be solely from the Partnership Assets, and no Partner shall be personally liable for any such return; and (iv) no interest shall be paid by the Partnership on Capital Contributions or on balances in Partners’ Capital Accounts.

SECTION 4.6    Preemptive Rights. No Person shall have any preemptive or similar rights with respect to the issuance or sale of additional Partnership Units or Preferred Units.

SECTION 4.7    Profit Interest Units.
(A)    Issuance of Profit Interest Units.  The Partnership may from time to time issue Profit Interest Units to Persons who provide services to the Partnership or the General Partner, or any of their respective Subsidiaries, for such consideration as the General Partner may determine to be appropriate, and admit such Persons as Limited Partners. Subject to the following provisions of this Section 4.7 and the special provisions of Sections 4.8 and 5.1(C), Profit Interest Units shall be treated as Partnership Units, with all of the rights, privileges and obligations attendant thereto. For purposes of computing the Partners’ Percentage Interests, holders of Profit Interest Units shall be treated as Partnership Unit holders and Profit Interest Units shall be treated as Partnership Units. In particular, the Partnership shall maintain at all times a one-to-one correspondence between Profit Interest Units and Partnership Units for conversion, distribution and other purposes, including, without limitation, complying with the following procedures:
(1)    If an Adjustment Event occurs, then the General Partner shall make a corresponding adjustment to the Profit Interest Units to maintain a one-for-one conversion and economic equivalence ratio between Partnership Units and Profit Interest Units.  If more than one Adjustment Event occurs within any given time period, the adjustment to the Profit Interest Units need be made only once using a single formula that takes into account each and every Adjustment Event as if all Adjustment Events occurred simultaneously.  If the Partnership takes an action affecting the Partnership Units other than actions specifically defined as “Adjustment Events” and in the opinion of the General Partner such action would require an adjustment to the Profit Interest Units to maintain the one-to-one correspondence described above, the General Partner shall have the right to make such adjustment to the Profit Interest Units, to the extent permitted by law and by any applicable Equity Incentive Plan, in such manner and at such time as the General Partner, in its sole discretion, may determine to be appropriate under the circumstances.  If an adjustment is made to the Profit Interest Units, as herein provided, the Partnership shall promptly file in the books and records of the Partnership an officer’s certificate setting 

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forth such adjustment and a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error.  Promptly after filing of such certificate, the Partnership shall mail a notice to each Profit Interest Unitholder setting forth the adjustment to his or her Profit Interest Units and the effective date of such adjustment; and
(2)    Subject to the provisions of Sections 5.3(B), and 5.8, the Profit Interest Unitholders shall, when, as and if distributions with respect to Partnership Units are authorized and declared by the General Partner out of assets legally available for that purpose, be entitled to receive distributions in an amount per Profit Interest Unit equal to the distributions per Partnership Unit paid to holders of Partnership Units on such record date established by the General Partner with respect to such distribution. So long as any Profit Interest Units are outstanding, no distributions (whether in cash or in kind) shall be authorized, declared or paid on Partnership Units, unless equal distributions have been or contemporaneously are authorized, declared and paid on the Profit Interest Units.
(B)    Priority.  Subject to the provisions of this Section 4.7 and the special provisions of Sections 4.8, 5.3(B), and 5.8, the Profit Interest Units shall rank pari passu with the Partnership Units as to the payment of regular and special periodic or other distributions and distribution of assets upon liquidation, dissolution or winding up.  As to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, any class or series of Partnership Units which by its terms specifies that it shall rank junior to, on a parity with, or senior to the Partnership Units shall also rank junior to, or pari passu with, or senior to, as the case may be, the Profit Interest Units. Subject to the terms of any Profit Interest Award Certificate, a Profit Interest Unitholder shall be entitled to transfer his or her Profit Interest Units to the same extent, and subject to the same restrictions as holders of Partnership Units are entitled to transfer their Partnership Units pursuant to Article VIII.
(C)    Special Provisions. Profit Interest Units shall be subject to the following special provisions:
(1)    Profit Interest Award Certificates. Profit Interest Units may, in the sole discretion of the Board of Trustees of the General Partner (or any committee thereof delegated by the Board of Trustees), be issued subject to vesting, forfeiture and additional restrictions on transfer pursuant to the terms of a Profit Interest Award Certificate.  The terms of any Profit Interest Award Certificate may be modified by the General Partner from time to time in its sole discretion, subject to any restrictions on amendment imposed by the relevant Profit Interest Award Certificate or by any applicable Equity Incentive Plan.  Profit Interest Units that have vested under the terms of a Profit Interest Award Certificate are referred to as “Vested Profit Interest Units”; all other Profit Interest Units shall be treated as “Unvested Profit Interest Units.”
(2)    Repurchase, Forfeiture and Cancellation. Unless otherwise specified in the Profit Interest Award Certificate, upon the occurrence of any event specified in a Profit 

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Interest Award Certificate as resulting in either the right of the Partnership or the General Partner to repurchase Profit Interest Units at a specified purchase price or some other forfeiture of any Profit Interest Units, then if the Partnership or the General Partner exercises such right to repurchase or such forfeiture occurs in accordance with the applicable Profit Interest Award Certificate, the relevant Profit Interest Units shall immediately, and without any further action, be treated as cancelled and no longer outstanding for any purpose.  Unless otherwise specified in the Profit Interest Award Certificate, no consideration or other payment shall be due with respect to any Profit Interest Units that have been forfeited or cancelled, other than any distributions declared with respect to a record date established by the General Partner for a distribution pursuant to Section 5.3 prior to the effective date of the forfeiture or cancellation. In connection with any repurchase, forfeiture or cancellation of Profit Interest Units, the balance of the portion of the Capital Account of the Profit Interest Unitholder that is attributable to all of his or her Profit Interest Units shall be reduced by the amount, if any, by which it exceeds the target balance contemplated by Section 5.2(C) hereof, calculated with respect to the Profit Interest Unitholder’s remaining Profit Interest Units, if any.
(3)    Allocations. Profit Interest Unitholders shall be entitled to certain special allocations of gain under Section 5.2(C).  Profit Interest Units shall be allocated Profits and Losses, for any taxable year or portion of a taxable year occurring after such issuance and prior to the Distribution Participation Date for such Profit Interest Units, to the extent that the date of issuance and the Distribution Participation Date are not the same under the terms of the applicable Profit Interest Award Certificate, in amounts per Profit Interest Unit equal to the amounts allocated per Partnership Unit for the same period multiplied by the Profit Interest Unit Sharing Percentage for such Profit Interest Units.  Commencing with the portion of the taxable year of the Partnership that begins on the Distribution Participation Date established for any Profit Interest Units, such Profit Interest Units shall be allocated Profits and Losses in amounts per Profit Interest Unit equal to the amounts allocated per Partnership Unit.  The allocations provided by the preceding sentence shall be subject to Section 5.2(A) and Section 5.2(B) of the Agreement.  The General Partner is authorized in its discretion to delay or accelerate the participation of the Profit Interest Units in allocations of Profits and Losses, or to adjust the allocations made after the Distribution Participation Date, so that the ratio of (i) the total amount of Profits or Losses allocated with respect to each Profit Interest Unit in the taxable year in which that Profit Interest Unit’s Distribution Participation Date falls, to (ii) the total amount distributed to that Profit Interest Unit with respect to such period, is equal to such ratio as computed for the Partnership Units held by the General Partner.  In addition, the General Partner may, in its sole discretion, specially allocate net income or gain realized after the date a Profit Interest Unit was issued by the Partnership to such Profit Interest Unit to prevent Section 5.8 from reducing the amount distributed to such Profit Interest Unit.
(4)    Redemption. The redemption right provided to the holders of Partnership Units under Section 8.6 hereof shall not apply with respect to Profit Interest Units unless 

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and until they are converted to Partnership Units as provided in clause (5) below and Section 4.8.
(5)    Conversion to Partnership Units. Vested Profit Interest Units are eligible to be converted into Partnership Units in accordance with Section 4.8.
(D)    Voting. Profit Interest Unitholders shall (a) have the same voting rights as the Limited Partners, with the Profit Interest Units voting as a single class with the Partnership Units and having one vote per Profit Interest Unit; and (b) have the additional voting rights that are expressly set forth below. So long as any Profit Interest Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of a majority of the Profit Interest Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class), amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of this Agreement applicable to Profit Interest Units so as to materially and adversely affect any right, privilege or voting power of the Profit Interest Units or the Profit Interest Unitholders as such, unless such amendment, alteration, or repeal affects equally, ratably and proportionately the rights, privileges and voting powers of all of Partnership Units (including the Partnership Units held by the General Partner); but subject, in any event, to the following provisions:
(1)    With respect to any Partnership Unit Transaction (as defined in Section 4.8(F) hereof), so long as the Profit Interest Units are treated in accordance with Section 4.8(F) hereof, the consummation of such Partnership Unit Transaction shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the Profit Interest Units or the Profit Interest Unitholders as such; and
(2)    Any creation or issuance of any Partnership Units or of any class or series of Partnership Interest in accordance with the terms of this Agreement, including, without limitation, additional Partnership Units or Profit Interest Units, whether ranking senior to, junior to, or on a parity with the Profit Interest Units with respect to distributions and the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the Profit Interest Units or the Profit Interest Unitholders as such.
The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding Profit Interest Units shall have been converted into Partnership Units.

SECTION 4.8    Conversion of Profit Interest Units. 
(A)    Automatic Conversion. Unless sooner converted pursuant to the following paragraphs of this Section 4.8, each Profit Interest Unit will convert automatically, without any action by the holder of such Profit Interest Unit, into one (1) fully paid and non-assessable Partnership Unit, giving effect to all adjustments (if any) made pursuant to Section 4.7 hereof, on the date on which both of the following conditions are satisfied with respect to such Profit Interest Unit: (i) such Profit Interest Unit becomes a Vested Profit Interest Unit, and (ii) Economic Capital 

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Account Balance attributable to such Profit Interest Unit becomes equal to the Partnership Unit Economic Balance.
(B)    Conversion Right. 
(1)    To the extent a Profit Interest Unitholder’s Profit Interest Units have not automatically converted into Partnership Units pursuant to Section 4.8(A), such holder shall have the right (the “Profit Interest Conversion Right”), at his or her option, at any time to convert all or a portion of his or her Vested Profit Interest Units into a number of fully paid and non-assessable Partnership Units, giving effect to all adjustments (if any) made pursuant to Section 4.7 hereof, equal to (x) the Economic Capital Account Balance of such Profit Interest Unitholder, to the extent attributable to its ownership of such Profit Interest Units being converted, divided by (y) the Partnership Unit Economic Balance, in each case as determined as of the effective date of conversion (the “Capital Account Limitation”); provided, however, that a holder may not exercise the Profit Interest Conversion Right for fewer than [five hundred (500)] Vested Profit Interest Units or, if such holder holds fewer than [five hundred (500)] Vested Profit Interest Units, all of the Vested Profit Interest Units held by such holder.  Profit Interest Unitholders shall not have the right to convert Unvested Profit Interest Units into Partnership Units until they become Vested Profit Interest Units; provided, however, that when a Profit Interest Unitholder is notified of the expected occurrence of an event that will cause his or her Unvested Profit Interest Units to become Vested Profit Interest Units, such Profit Interest Unitholder may give the Partnership a Profit Interest Conversion Notice conditioned upon and effective as of the time of vesting and such Profit Interest Conversion Notice, unless subsequently revoked by the Profit Interest Unitholder, shall be accepted by the Partnership subject to such condition.  The General Partner shall have the right at any time to cause a conversion of Vested Profit Interest Units into Partnership Units.  In all cases, the conversion of any Profit Interest Units into Partnership Units shall be subject to the conditions and procedures set forth in this Section 4.8.
(2)    In order to exercise his or her Profit Interest Conversion Right, a Profit Interest Unitholder shall deliver a notice (a “Profit Interest Conversion Notice”) in the form attached as EXHIBIT 4 to this Agreement to the Partnership (with a copy to the General Partner) not less than ten (10) nor more than sixty (60) days prior to a date (the “Profit Interest Conversion Date”) specified in such Profit Interest Conversion Notice; provided, however, that if the General Partner has not given to the Profit Interest Unitholders notice of a proposed or upcoming Partnership Unit Transaction (as defined in Section 4.8(F) hereof) at least thirty (30) days prior to the effective date of such Partnership Unit Transaction, then Profit Interest Unitholders shall have the right to deliver a Profit Interest Conversion Notice until the earlier of (x) the tenth day after such notice from the General Partner of a Partnership Unit Transaction or (y) the third business day immediately preceding the effective date of such Partnership Unit Transaction.  A Profit Interest Conversion Notice shall be provided in the manner provided in Section 12.4.  Each Profit 

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Interest Unitholder covenants and agrees with the Partnership that all Vested Profit Interest Units to be converted pursuant to this Section 4.8(B) shall be free and clear of all liens and encumbrances.  Notwithstanding anything herein to the contrary, a holder of Profit Interest Units may deliver a Redemption Notice pursuant to Section 9.2 relating to those Partnership Units that will be issued to such holder upon conversion of such Profit Interest Units into Partnership Units in advance of the Profit Interest Conversion Date; provided, however, that the redemption of such Partnership Units by the Partnership shall in no event take place until after the Profit Interest Conversion Date.  For clarity, it is noted that the objective of this paragraph is to put a Profit Interest Unitholder in a position where, if he or she so wishes, the Partnership Units into which his or her Vested Profit Interest Units will be converted can be redeemed by the Partnership simultaneously with such conversion, with the further consequence that, if the General Partner elects to assume and perform the Partnership’s redemption obligation with respect to such Partnership Units under Section 9.2 hereof by delivering to such holder the Shares Payment rather than the Cash Payment, then such holder can have such REIT Shares issued to him or her simultaneously with the conversion of his or her Vested Profit Interest Units into Partnership Units.  The General Partner and Profit Interest Unitholder shall reasonably cooperate with each other to coordinate the timing of the events described in the foregoing sentence.  A Profit Interest Unitholder may give a Profit Interest Conversion Notice with respect to Unvested Profit Interest Units, provided that such Unvested Profit Interest Units become Vested Profit Interest Units on or prior to the Profit Interest Conversion Date.
(C)    Forced Profit Interest Conversion. To the extent a Profit Interest Unitholder’s Profit Interest Units have not automatically converted into Partnership Units pursuant to Section 4.8(A), the Partnership, at any time at the election of the General Partner, may cause any number of Vested Profit Interest Units held by a Profit Interest Unitholder to be converted (a “Forced Profit Interest Conversion”) into an equal number of fully paid and non-assessable Partnership Units, giving effect to all adjustments (if any) made pursuant to Section 4.7 equal to (x) the Economic Capital Account Balance of such Profit Interest Unitholder, to the extent attributable to its ownership of such Profit Interest Units being converted, divided by (y) the Partnership Unit Economic Balance, in each case as determined as of the effective date of conversion; provided, however, that the Partnership may not cause Forced Profit Interest Conversion of any Profit Interest Units that would not at the time be eligible for conversion at the option of such Profit Interest Unitholder pursuant to Section 4.8(B)(2).  In order to exercise its right of Forced Profit Interest Conversion, the Partnership shall deliver a notice (a “Forced Profit Interest Conversion Notice”) in the form attached as EXHIBIT 5 to this Agreement to the applicable Profit Interest Unitholder not less than ten (10) nor more than sixty (60) days prior to the Profit Interest Conversion Date specified in such Forced Profit Interest Conversion Notice.  A Forced Profit Interest Conversion Notice shall be provided in the manner provided in Section 12.4.
(D)    Completion of Conversion. A conversion of Vested Profit Interest Units pursuant to this Section 4.8 shall occur automatically after the close of business on the applicable Profit 

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Interest Conversion Date without any action on the part of such Profit Interest Unitholder, as of which time such Profit Interest Unitholder shall be credited on the books and records of the Partnership with the issuance as of the opening of business on the next day of the number of Partnership Units issuable upon such conversion.  After the conversion of Profit Interest Units as aforesaid, the Partnership shall deliver to such Profit Interest Unitholder, upon his or her written request, a certificate of the General Partner certifying the number of Partnership Units and remaining Profit Interest Units, if any, held by such person immediately after such conversion.  The Assignee of any Limited Partner pursuant to Article VIII hereof may exercise the rights of such Limited Partner pursuant to this Section 4.8 and such Limited Partner shall be bound by the exercise of such rights by the Assignee.
(E)    Impact of Conversions for Purposes of Section 5.2(C). For purposes of making future allocations under Section 5.2(C) hereof and applying the Capital Account Limitation, the portion of the Economic Capital Account Balance of the applicable Profit Interest Unitholder that is treated as attributable to his or her Profit Interest Units shall be reduced, as of the date of conversion, by the product of the number of Profit Interest Units converted and the Partnership Unit Economic Balance.
(F)    Partnership Unit Transactions. If the Partnership or the General Partner shall be a party to any Partnership Unit Transaction, then the General Partner shall, immediately prior to the Partnership Unit Transaction, exercise its right to cause a Forced Profit Interest Conversion with respect to the maximum number of Profit Interest Units then eligible for conversion, taking into account any allocations that occur in connection with the Partnership Unit Transaction or that would occur in connection with the Partnership Unit Transaction if the assets of the Partnership were sold at the Partnership Unit Transaction price or, if applicable, at a value determined by the General Partner in good faith using the value attributed to the Partnership Units in the context of the Partnership Unit Transaction (in which case the Profit Interest Conversion Date shall be the effective date of the Partnership Unit Transaction).  In anticipation of such Forced Profit Interest Conversion and the consummation of the Partnership Unit Transaction, the Partnership shall use commercially reasonable efforts to cause each Profit Interest Unitholder to be afforded the right to receive in connection with such Partnership Unit Transaction in consideration for the Partnership Units into which his or her Profit Interest Units will be converted the same kind and amount of cash, securities and other property (or any combination thereof) receivable upon the consummation of such Partnership Unit Transaction by a holder of the same number of Partnership Units, assuming such holder of Partnership Units is not a Person with which the Partnership consolidated or into which the Partnership merged or which merged into the Partnership or to which such sale or transfer was made, as the case may be (a “Constituent Person”), or an affiliate of a Constituent Person.  In the event that holders of Partnership Units have the opportunity to elect the form or type of consideration to be received upon consummation of the Partnership Unit Transaction, prior to such Partnership Unit Transaction the General Partner shall give prompt written notice to each Profit Interest Unitholder of such election, and shall use commercially reasonable efforts to afford the Profit Interest Unitholders the right to elect, by written notice to the General Partner, the form or 

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type of consideration to be received upon conversion of each Profit Interest Unit held by such holder into Partnership Units in connection with such Partnership Unit Transaction.  If a Profit Interest Unitholder fails to make such an election, such holder (and any of its transferees) shall receive upon conversion of each Profit Interest Unit held by him or her (or by any of his or her transferees) the same kind and amount of consideration that a holder of a Partnership Unit would receive if such Partnership Unit holder failed to make such an election.  Subject to the rights of the Partnership and the General Partner under any Profit Interest Award Certificate and any applicable Equity Incentive Plan, to the extent any Profit Interest Units are then outstanding, the Partnership shall use commercially reasonable efforts to cause the terms of any Partnership Unit Transaction to be consistent with the provisions of this Section 4.8(F) and to enter into an agreement with the successor or purchasing entity, as the case may be, for the benefit of any Profit Interest Unitholders whose Profit Interest Units will not be converted into Partnership Units in connection with the Partnership Unit Transaction that will (i) contain provisions enabling the holders of Profit Interest Units that remain outstanding after such Partnership Unit Transaction to convert their Profit Interest Units into securities as comparable as reasonably possible under the circumstances to the Partnership Units and (ii) preserve as far as reasonably possible under the circumstances the distribution, special allocation, conversion, and other rights set forth in this Agreement for the benefit of the Profit Interest Unitholders.

ARTICLE V     
ALLOCATIONS AND DISTRIBUTIONS

SECTION 5.1    Limited Liability. For bookkeeping purposes, the Profits of the Partnership shall be shared, and the Losses of the Partnership shall be borne, by the Partners as provided in Section 5.2 below; provided, however, that except as required by the Act or as expressly provided in this Agreement, neither any Limited Partner (in its capacity as a Limited Partner) nor any Preferred Limited Partner (in its capacity as a Preferred Limited Partner) shall be personally liable for losses, costs, expenses, liabilities or obligations of the Partnership in excess of its Capital Contribution required under Article IV hereof.

SECTION 5.2    Profits, Losses And Distributive Shares.
(A)    Profits. After giving effect to the special allocations, if any, provided in Section 5.2(D) and (E), Profits in each Fiscal Year shall be allocated in the following order:
(1)    First, to the General Partner until the cumulative Profits allocated to the General Partner under this Section 5.2(A)(1) equal the cumulative Losses allocated to such Partner under Section 5.2(B)(4);
(2)    Second, to the Preferred Limited Partners in the proportion to the cumulative Losses allocated to such Partners under Section 5.2(B)(3), until the cumulative Profits allocated to such Partners under this Section 5.2(A)(2) equal the cumulative Losses allocated to such Partners under Section 5.2(B)(3);

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(3)    Third, to each Partner in proportion to the cumulative Losses allocated to such Partner under Section 5.2(B)(2), until the cumulative Profits allocated to such Partner under this Section 5.2(A)(3) equal the cumulative Losses allocated to such Partner under Section 5.2(B)(2);
(4)    Fourth, to each Partner in proportion to the cumulative Losses allocated to such Partner under Section 5.2(B)(1), until the cumulative Profits allocated to such Partner under this Section 5.2(A)(4) equal the cumulative Losses allocated to such Partner under Section 5.2(B)(1);
(5)    Fifth, to the Preferred Limited Partners in an amount equal to the excess of (x) the Priority Return Amount for each Distribution Period or portion thereof that ends on or prior to the close of the Fiscal Year over (y) the cumulative Profits previously allocated under this Section 5.2(B)(5); and
(6)    Then, the balance, if any, to the Partners (other than the Preferred Limited Partners, with respect to their Preferred Units) in accordance with their respective Percentage Interests.
The allocation of Profits to any Preferred Limited Partner under Section 5.2(A)(5) shall be appropriately prorated in the case of Preferred Units that are outstanding for less than all of any Distribution Period.
(B)    Losses. After giving effect to the special allocations, if any, provided in Section 5.2(D) and (E), Losses in each Fiscal Year shall be allocated in the following order of priority:
(1)    First, to the Partners (other than the Preferred Limited Partners, with respect to their Preferred Units), in accordance with their respective Percentage Interests, but not in excess of the positive Capital Account balance of any Partner prior to the allocation provided for in this Section 5.2(B)(1);
(2)    Second, to the Partners (other than the Preferred Limited Partners, with respect to their Preferred Units) with positive Adjusted Capital Account balances prior to the allocation provided for in this Section 5.2(B)(2), in proportion to the amount of such balances until all such balances are reduced to zero;
(3)    Third, to the Preferred Limited Partners in proportion to their Adjusted Capital Account balances until their Adjusted Capital Accounts are reduced to zero; and
(4)    Thereafter, to the General Partner; provided, however, that this Section 5.2(B) shall control, notwithstanding any reallocation or adjustment of 

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taxable income, loss or other items by the Internal Revenue Service or any other taxing authority.
(C)    Special Allocations Regarding Profit Interest Units.  Notwithstanding the provisions of Section 5.2(A) and subject to the immediately following sentence, Liquidating Gains shall first be allocated to the Profit Interest Unitholders until their Economic Capital Account Balances, to the extent attributable to their ownership of Profit Interest Units, are equal to (i) the Partnership Unit Economic Balance, multiplied by (ii) the number of their Profit Interest Units, plus the aggregate net amount of Profits and Losses allocated to such Profit Interest Units prior to the Distribution Participation Date with respect to such Profit Interest Units (such amount, the “Target Balance”); provided, however, that no such Liquidating Gains will be allocated with respect to any particular Profit Interest Unit unless and to the extent that such Liquidating Gains, when aggregated with other Liquidating Gains realized since the issuance of such Profit Interest Unit, exceed Liquidating Losses realized since the issuance of such Profit Interest Unit.  Liquidating Gains shall be allocated to the Profit Interest Unitholders pursuant to the preceding sentence (i) on a “first-in, first-out” basis with respect to Profit Interest Units issued on different dates and (ii) on an equal basis with respect to Profit Interest Units issued on the same date (i.e., Liquidating Gains shall be allocated first to the Profit Interest Units that were issued on the earliest date, and then with respect to such Profit Interest Units, equally among such Profit Interest Units).  After giving effect to the special allocations set forth in Section 5.2(D), and notwithstanding the provisions of Sections 5.2(A) and 5.2(B) above, in the event that, due to distributions with respect to Partnership Units in which the Profit Interest Units do not participate or otherwise, the Economic Capital Account Balances of any present or former holder of Profit Interest Units, to the extent attributable to the holder’s ownership of Profit Interest Units, exceed the Target Balance, then Liquidating Losses shall be allocated to such holder to the extent necessary to reduce or eliminate the disparity.  In the event that Liquidating Gains or Liquidating Losses are allocated under this Section 5.2(C), Profits under Section 5.2(A)(6) and any Losses shall be recomputed without regard to the Liquidating Gains or Liquidating Losses so allocated.  For this purpose, “Liquidating Gains” means net gains that are or would be realized in connection with the actual or hypothetical sale of all or substantially all of the assets of the Partnership, including but not limited to net capital gain realized in connection with an adjustment to the value of Partnership assets under Section 704(b) of the Code made pursuant to Section 5.2(F).  “Liquidating Losses” means any net capital loss realized in connection with any such event.  The “Economic Capital Account Balances” of the Profit Interest Unitholders will be equal to their Capital Account balances to the extent attributable to their ownership of Profit Interest Units, plus the amount of their share of any Partner Minimum Gain or Partnership Minimum Gain, in either case to the extent attributable to their ownership of Profit Interest Units and computed on a hypothetical basis after taking into account all allocations through the date on which any allocation is made under this Section 5.2(C), but prior to the realization of any Liquidating Gains.  

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Similarly, the “Partnership Unit Economic Balance” shall mean (i) the Capital Account balance of the General Partner, plus the amount of the General Partner’s share of any Partner Minimum Gain or Partnership Minimum Gain, in either case to the extent attributable to the General Partner’s ownership of Partnership Units and computed on a hypothetical basis after taking into account all allocations through the date on which any allocation is made under this Section 5.2(C), but prior to the realization of any Liquidating Gains, divided by (ii) the number of the General Partner’s Partnership Units. Any such allocations shall be made among the Profit Interest Unitholders in proportion to the amounts required to be allocated to each under this Section 5.2(C). The parties agree that the intent of this Section 5.2(C) is to make the Capital Account balance associated with each Profit Interest Unit to be economically equivalent to the Capital Account balance associated with the General Partner’s Partnership Units (on a per-Unit basis), to the extent that Liquidating Gains are of a sufficient magnitude to do so upon a sale of all or substantially all of the assets of the Partnership, or upon an adjustment to the Partners’ Capital Accounts pursuant to Section 5.2(F).  To the extent the Profit Interest Unitholders receive a distribution in excess of their Capital Accounts, such distribution will be a guaranteed payment under Section 707(c) of the Code.
(D)    Special Allocations. Except as otherwise provided in this Agreement, the following special allocations will be made in the following order and priority:
(1)    Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Article V, if there is a net decrease in Partnership Minimum Gain during any tax year or other period for which allocations are made, each Partner will be specially allocated items of Partnership income and gain for that tax year or other period (and, if necessary, subsequent periods) in an amount equal to such Partner’s share of the net decrease in Partnership Minimum Gain during such tax year or other period determined in accordance with Treasury Regulations Section 1.704-2(g). Allocations pursuant to the preceding sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.2(D)(1) is intended to comply with the minimum gain chargeback requirements set forth in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith, including the exceptions to the minimum gain chargeback requirement set forth in Treasury Regulations Section 1.704-2(f) and -(3). If the General Partner concludes, after consultation with tax counsel, that the Partnership meets the requirements for a waiver of the minimum gain chargeback requirement as set forth in Treasury Regulations Section 1.704-2(f)(4), the General Partner may take steps reasonably necessary or appropriate in order to obtain such waiver.

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(2)    Partner Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding any other provision of this Section (other than Section 5.2(D)(1) which shall be applied before this Section 5.2(D)(2)), if there is a net decrease in Partner Minimum Gain during any tax year or other period for which allocations are made, each Partner with a share of Partner Minimum Gain determined in accordance with Treasury Regulations Section 1.704-2(i)(5) shall be specially allocated items of Partnership income and gain for that period (and, if necessary, subsequent periods) in an amount equal to such Partner’s share of the net decrease in Partner Minimum Gain determined in accordance with Treasury Regulations Section 1.704-2(i)(4). The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii). This Section 5.2(D)(2) is intended to comply with the minimum gain chargeback requirements of Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith, including the exceptions set forth in Treasury Regulations Section 1.704-2(f)(2) and (3) to the extent such exceptions apply to Treasury Regulations Section 1.704-2(i)(4). If the General Partner concludes, after consultation with tax counsel, that the Partnership meets the requirements for a waiver of the Partner Minimum Gain chargeback requirement set forth in Treasury Regulations Section 1.704-2(f), but only to the extent such exception applies to Treasury Regulations Section 1.704-2(i)(4), the General Partner may take steps necessary or appropriate to obtain such waiver.
(3)    Qualified Income Offset. A Partner who unexpectedly receives any adjustment, allocation or distribution described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) will be specially allocated items of Partnership income and gain in an amount and manner sufficient to eliminate, to the extent required by Treasury Regulations Section 1.704-1(b)(2)(ii)(d), the Adjusted Capital Account Deficit of the Partner as quickly as possible; provided that an allocation pursuant to this Section 5.2(D)(3) shall be made if and only to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article V have been tentatively made as if this Section 5.2(D)(3) were not contained in this Agreement.
(4)    Partnership Nonrecourse Deductions. Partnership Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated among the Partners in proportion to their respective Partnership Interests in the Partnership.
(5)    Partner Nonrecourse Deductions. Notwithstanding anything to the contrary in this Agreement, any Partner Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated to the Partner 

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who bears the economic risk of loss with respect to the liability to which the Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i).
(6)    Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Partnership asset under Code Section 734(b) or 743(b) is required to be taken into account in determining Capital Accounts under Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or (4), the amount of the adjustment to the Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset), and the gain or loss will be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted under Treasury Regulations Section 1.704-1(b)(2)(iv)(m).
(7)    Depreciation Recapture. In the event there is any recapture of Depreciation or investment tax credit, the allocation thereof shall be made among the Partners in the same proportion as the deduction for such Depreciation or investment tax credit was allocated.
(8)    Interest in Partnership. Notwithstanding any other provision of this Agreement, no allocation of Profit or Loss (or item of Profit or Loss) will be made to a Partner if the allocation would not have “economic effect” under Treasury Regulations Section 1.704-1(b)(2)(ii)(a) or otherwise would not be in accordance with the Partner’s interest in the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(3).
(9)    In the event that during any taxable year any Preferred Units are converted, pursuant to Section 9.8(A), into Partnership Units prior to a distribution having been made under Section 5.3(A) of an unpaid Priority Return Amount with respect to such Preferred Units, there shall be allocated to the Partner who held such converted Preferred Units items of loss and deduction in an amount equal to the excess of (a) allocations previously made with respect to such converted Preferred Units pursuant to Section 5.2(A)(5) over (b) the Priority Return Amount previously distributed or remaining to be distributed with respect to such converted Preferred Units pursuant to Sections 5.3(A), 9.8(A) and 9.8(B).
(E)    Curative Allocations. The allocations set forth in Section 5.2(D)(1) through (8) (the “Regulatory Allocations”) are intended to comply with certain requirements of Treasury Regulations Sections 1.704-1(b) and 1.704-2. The Regulatory Allocations may not be consistent with the manner in which the Partners intend to divide Partnership distributions. Accordingly, the General Partner is authorized to further allocate Profits, Losses, and other items among the Partners in a reasonable manner so as to prevent the Regulatory Allocations 

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from distorting the manner in which Partnership distributions would be divided among the Partners under Section 5.3, but for application of the Regulatory Allocations. In general, the reallocation will be accomplished by specially allocating other Profits, Losses and items of income, gain, loss and deduction, to the extent they exist, among the Partners so that the net amount of the Regulatory Allocations and the special allocations to each Partner is zero. The General Partner may accomplish this result in any reasonable manner that is consistent with Code Section 704 and the related Treasury Regulations.
(F)    Tax Allocations.
(1)    Except as otherwise provided in Section 5.2(F)(2), each item of income, gain, loss and deduction shall be allocated for federal income tax purposes in the same manner as each correlative item of income, gain, loss or deduction is allocated for book purposes pursuant to the provisions of Section 5.2 hereof.
(2)    Notwithstanding anything to the contrary in this Article V, in an attempt to eliminate any Book-Tax Disparity with respect to a Contributed Property, items of income, gain, loss or deduction with respect to each such property shall be allocated for federal income tax purposes among the Partners as follows:
(a)    Depreciation, Amortization and Other Cost Recovery Items. In the case of each Contributed Property with a Book-Tax Disparity, any item of depreciation, amortization or other cost recovery allowance attributable to such property shall be allocated as follows: (x) first, to Partners (the “Non-Contributing Partners”) other than the Partners who contributed such property to the Partnership (or are deemed to have contributed the property pursuant to Section 4.1(A) (the “Contributing Partners”) in an amount up to the book allocation of such items made to the Non-Contributing Partners pursuant to Section 5.2 hereof, pro rata in proportion to the respective amount of book items so allocated to the Non-Contributing Partners pursuant to Section 5.2 hereof; and (y) any remaining depreciation, amortization or other cost recovery allowance to the Contributing Partners in proportion to their Percentage Interests. In no event shall the total depreciation, amortization or other cost recovery allowance allocated hereunder exceed the amount of the Partnership’s depreciation, amortization or other cost recovery allowance with respect to such property.
(b)    Gain or Loss on Disposition. In the event the Partnership sells or otherwise disposes of a Contributed Property with a Book-Tax Disparity, any gain or loss recognized by the Partnership in connection with such sale or other disposition shall be allocated among the Partners as follows: (x) first, any gain or loss shall be allocated to the Contributing Partners in proportion 

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to their Percentage Interests to the extent required to eliminate any Book-Tax Disparity with respect to such property; and (y) any remaining gain or loss shall be allocated among the Partners in the same manner that the correlative items of book gain or loss are allocated among the Partners pursuant to Section 5.2 hereof.
(3)    In the event the Book Value of a Partnership Asset (including a Contributed Property) is adjusted pursuant to Section 4.4(D) hereof, and such asset has not been deemed contributed to a new partnership, with the contributing partnership then being liquidated pursuant to Code Section 708 subsequent thereto, all items of income, gain, loss or deduction in respect of such property shall be allocated for federal income tax purposes among the Partners in the same manner as provided in Section 5.2(F)(2) hereof to take into account any variation between the fair market value of the property, as determined by the General Partner using such reasonable method of valuation as it may adopt, and the Book Value of such property, both determined as of the date of such adjustment.
(4)    The General Partner shall have the authority to elect alternative methods to eliminate the Book-Tax Disparity with respect to one or more Contributed Properties, as permitted by Treasury Regulations Sections 1.704-3 and 1.704-3T, and such election shall be binding on all of the Partners.
(5)    The Partners hereby intend that the allocation of tax items pursuant to this Section 5.2(F) comply with the requirements of Code Section 704(c) and Treasury Regulations Sections 1.704-3 and 1.704-3T.
(6)    The allocation of items of income, gain, loss or deduction pursuant to this Section 5.2(E) are solely for federal, state and local income tax purposes, and the Capital Account balances of the Partners shall be adjusted solely for allocations of “book” items in respect of Partnership Assets pursuant to Section 5.2(A), (B), (C), (D), (E) and (G) hereof.
(G)    Other Allocation Rules. The following rules will apply to the calculation and allocation of Profits, Losses and other items:
(1)    Except as otherwise provided in this Agreement, all Profits, Losses and other items allocated to the Partners will be allocated among them in proportion to their Percentage Interests.
(2)    For purposes of determining the Profits, Losses or any other item allocable to any period, Profits, Losses and other items will be determined on a daily, 

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monthly or other basis, as determined by the General Partner using any permissible method under Code Section 706 and the related Treasury Regulations.
(3)    Except as otherwise provided in this Agreement, all items of Partnership income, gain, loss and deduction, and other allocations not provided for in this Agreement will be divided among the Partners in the same proportions as they share Profits and Losses; provided that any credits shall be allocated in accordance with Treasury Regulations Section 1.704-1(b)(4)(ii).
(4)    For purposes of Treasury Regulations Section 1.752-3(a), the Partners hereby agree that any nonrecourse liabilities of the Partnership in excess of the sum of (i) the Partnership Minimum Gain and (ii) the aggregate amount of taxable gain that would be allocated to the Partners under Section 704(c) (or in the same manner as Section 704(c) in connection with a revaluation of Partnership property) if the Partnership disposed of (in a taxable transaction) all Partnership property subject to one or more nonrecourse liabilities of the Partnership in full satisfaction of such liabilities and for no other consideration, shall be allocated among the Partners in accordance with their respective shares of Profits. The General Partner shall have discretion in any Fiscal Year to allocate such excess nonrecourse liabilities among the Partners (a) in a manner reasonably consistent with allocations (that have substantial economic effect) of some other significant item of Partnership income or gain or (b) in accordance with the manner in which it is reasonably expected that the deductions attributable to the excess nonrecourse liabilities will be allocated.
(H)    Partner Acknowledgment. The Partners agree to be bound by the provisions of this Section 5.2 in reporting their shares of Partnership income, gain, loss, deduction and credit for income tax purposes.
(I)    Regulatory Compliance. The foregoing provisions of this Section 5.2 relating to the allocation of Profits, Losses and other items for federal income tax purposes are intended to comply with Treasury Regulations Sections 1.704-1(b), 1.704-2, 1.704-3 and 1.704-3T and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

SECTION 5.3    Distributions.
(A)    Distributable Cash for each Fiscal Year shall be distributed in the following order of priority:
(1)    First, the General Partner shall cause the Partnership to distribute to the holder of each Preferred Unit an amount in cash equal to the cumulative undistributed Priority Return Amount on December 31, March 31, June 30 and 

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September 30 of each year, commencing on March 31, 1998 (or in the case of a Preferred Unit with an issuance date after March 31, 1998, on the first such distribution date following the applicable issuance date); provided that, if any such distribution date shall be a Saturday, Sunday or day on which banking institutions in the State of New York are authorized or obligated by law to close, or a day which is declared a national or New York State holiday (any of the foregoing, a “Non-business Day”), then such distribution shall be made on the next succeeding day which is not a Non-business Day. In any case in which a Preferred Unit is outstanding for less than all of one or more Distribution Periods, the amount distributable to the Preferred Limited Partner in respect of such Unit shall be appropriately adjusted on the basis of a 360-day year consisting of twelve 30-day months.
(2)    Second, except for distributions with respect to the Profit Interest Units, which distributions are provided in Sections 5.3(B), there shall be distributed with respect to each Partnership Unit an amount equal on a per Unit basis to the amount distributed (other than in REIT Shares) by the General Partner on its common shares during the Fiscal Year (other than a liquidating distribution), except that (i) the first distribution paid to a Limited Partner with respect to newly issued Partnership Units shall be prorated to reflect the actual portion of the Distribution Period for which the distribution is being paid during which such Partnership Units were outstanding, and (ii) the first distribution made to the General Partner with respect to Partnership Units newly issued to the General Partner pursuant to Section 4.2(B) hereof shall be pro rated to the same extent (if any) by which the first dividends payable on the REIT Shares newly issued by the General Partner are subject to proration. To the extent practicable, distributions under this paragraph shall be made at the same time as the dividend distributions made by the General Partner on its REIT Shares.
(3)    Third, there shall be distributed to each holder of a Limited Partner Interest (including, for clarity, each Profit Interest Unithholder) an amount equal to (x) the product of the taxable income and gain allocated to such holder for the Fiscal Year under Section 5.2(F) and the maximum federal income tax rate plus 7% reduced by (y) the distributions received by such holder under Sections 5.3(A)(2) and 5.3(B) during the Fiscal Year. To the extent practicable, distributions under this paragraph shall be made in sufficient time to permit Limited Partners to pay required installments of estimated tax and the final tax payment for the taxable year.
(B)    Commencing from the Distribution Participation Date established for any Profit Interest Units, for any quarterly or other period holders of such Profit Interest Units shall be entitled to receive, if, when and as regular cash distributions are authorized by the General Partner out of funds legally available for the payment of distributions, regular cash 

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distributions in an amount per unit equal to the distribution payable on each Partnership Unit for the corresponding quarterly or other period (the “Profit Interest Distribution Amount”).  In addition, from and after the Distribution Participation Date, Profit Interest Units shall be entitled to receive, if, when and as non-liquidating special, extraordinary or other distributions are authorized by the General Partner out of funds or other property legally available for the payment of distributions, non-liquidating special, extraordinary or other distributions in an amount per unit equal to the amount of any non-liquidating special, extraordinary or other distributions payable on the Partnership Units which may be made from time to time.  Profit Interest Units shall also be entitled to receive, if, when and as distributions representing proceeds of a sale or other disposition of all or substantially all of the assets of the Partnership are authorized by the General Partner out of funds or other property legally available for the payment of distributions, distributions representing proceeds of a sale or other disposition of all or substantially all of the assets of the Partnership in an amount per unit equal to the amount of any such distributions payable on the Partnership Units, whether made prior to, on or after the Distribution Participation Date, provided that the amount of such distributions shall not exceed the positive balances of the Capital Accounts of the holders of such Profit Interest Units to the extent attributable to the ownership of such Profit Interest Units.  Distributions on the Profit Interest Units, if authorized, shall be payable on such dates and in such manner as may be authorized by the General Partner (any such date, a “Distribution Payment Date”); provided that the Distribution Payment Date and the record date for determining which holders of Profit Interest Units are entitled to receive a distribution shall be the same as the corresponding dates relating to the corresponding distribution on the Partnership Units.  Notwithstanding anything in the foregoing to the contrary, prior to the Distribution Participation Date with respect to a Profit Interest Unit, such Profit Interest Unit will only be entitled to receive such distributions, other than distributions representing proceeds of a sale or other disposition of all or substantially all of the assets of the Partnership, in an amount equal to the product of the Profit Interest Unit Sharing Percentage for such Profit Interest Unit and the amount otherwise distributable with respect to such Profit Interest Unit pursuant to this Section 5.3(B).
(C)    After giving effect to Sections 5.3(A), and 5.3(B), the General Partner shall have the authority to cause the Partnership to make other distributions from time to time as it determines, including without limitation, distributions that are sufficient to enable the General Partner to (i) maintain its status as a REIT, (ii) avoid the imposition of any tax under Code Section 857 and (iii) avoid the imposition of any excise tax under Code Section 4981.
(D)    Distributions pursuant to Section 5.3(C) shall be made pro rata among the Partners of record on the Record Date established by the General Partner for the distribution, in accordance with their respective Percentage Interests, without regard to the length of time the record holder has been such. Notwithstanding the foregoing, the General Partner may 

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pro rate any distributions pursuant to Section 5.3(A)(2) appropriately in the case of Partnership Units that are outstanding for less than all of any Distribution Period.
(E)    The General Partner shall use its reasonable efforts to make distributions to the Partners so as to preclude any distribution or portion thereof from being treated as part of a sale of property to the Partnership by a Partner under Section 707 of the Code or the Treasury Regulations thereunder; provided that the General Partner and the Partnership shall not have liability to a Limited Partner under any circumstances as a result of any distribution to a Partner being so treated.

SECTION 5.4    Distributions Upon Liquidation. Notwithstanding any other provision hereof, proceeds of a Terminating Capital Transaction and other distributions following dissolution of the Partnership shall be distributed to the Partners in accordance with Section 10.2.

SECTION 5.5    Amounts Withheld. All amounts withheld pursuant to the Code or any provision of state or local tax law and Section 7.8 of this Agreement with respect to any allocation, payment or distribution to the General Partner, the Preferred Limited Partners, the Limited Partners or Assignees shall be treated as amounts distributed to such General Partner, the Preferred Limited Partners, the Limited Partners or Assignees, as applicable, pursuant to Section 5.3 of this Agreement.

SECTION 5.6    Restricted Distributions. Notwithstanding any provision to the contrary contained in this Agreement, the Partnership, and the General Partner on behalf of the Partnership, shall not make a distribution to a Partner on account of its interest in the Partnership if such distribution would violate Section 17-607 of the Act or other applicable law.

SECTION 5.7    Preferred Limited Partner Priority. Allocations and distributions in connection with this Article V to Preferred Limited Partners holding Senior Preferred Units and/or Junior Preferred Units shall be made first to Preferred Limited Partners with respect to classes or series of Preferred Units which are Senior Preferred Units, and thereafter to Preferred Limited Partners with respect to classes or series of Preferred Units which are Junior Preferred Units. After distribution of all accrued but unpaid Priority Return Amounts, the Preferred Limited Partner shall be entitled to no further payment under Article V of the Agreement with respect to such Preferred Unit.

SECTION 5.8    Profit Interest Units Intended to Qualify as Profits Interest. Distributions made pursuant to Section 5.3 shall be adjusted as necessary to ensure that the amount apportioned to each Profit Interest Unit does not exceed the amount attributable to items of Partnership income or gain realized after the date such Profit Interest Unit was issued by the Partnership.  If distributions are reduced in accordance with the preceding sentence for a taxable year due to insufficient net income or gain for such year, distributions shall be made up in subsequent taxable years when there is sufficient net income or gain.  The intent of this Section 5.8 is to ensure that any Profit Interest Units issued after the date of this Agreement qualify as “profits interests” under Revenue Procedure 

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93-27, 1993-2 C.B. 343 (June 9, 1993) and Revenue Procedure 2001-43, 2001-2 C.B. 191 (August 3, 2001), and this Section 5.8 shall be interpreted and applied consistently therewith. The General Partner at its discretion may amend this Section 5.8 to ensure that any Profit Interest Units granted after the date of this Agreement will qualify as “profits interests” under Revenue Procedure 93-27, 1993-2 C.B. 343 (June 9, 1993) and Revenue Procedure 2001-43, 2001-2 C.B. 191 (August 3, 2001) (and any other similar rulings or regulations that may be in effect at such time).

ARTICLE VI     
PARTNERSHIP MANAGEMENT

SECTION 6.1    Management And Control Of Partnership Business.
(A)    Except as otherwise expressly provided or limited by the provisions of this Agreement, the General Partner shall have full, exclusive and complete discretion to manage the business and affairs of the Partnership, to make all decisions affecting the business and affairs of the Partnership and to take all such action as it deems necessary or appropriate to accomplish the purposes of the Partnership as set forth herein. Except as set forth in this Agreement, neither the Limited Partners nor the Preferred Limited Partners shall have any authority, right, or power to bind the Partnership, or to manage, or to participate in the management of the business and affairs of the Partnership in any manner whatsoever. Such management shall in every respect be the full and complete responsibility of the General Partner alone as herein provided.
(B)    In carrying out the purposes of the Partnership, the General Partner shall be authorized to take all actions it deems necessary and appropriate to carry on the business of the Partnership. The Limited Partners and the Preferred Limited Partners, by execution hereof, agree that the General Partner is authorized to execute, deliver and perform any agreement and/or transaction on behalf of the Partnership, without their further Consent, unless this Agreement expressly provides otherwise.
(C)    The General Partner and its Affiliates may acquire Limited Partner Interests or Preferred Units from Limited Partners or Preferred Limited Partners who agree so to Transfer Limited Partner Interests or Preferred Units acquired from the Partnership in accordance with Section 4.2(A). Any Limited Partner Interest or Preferred Limited Partner Interest acquired by the General Partner shall be automatically converted into a General Partner Interest. Upon acquisition of any Limited Partner Interest or Preferred Limited Partner Interest by an Affiliate of the General Partner, such Affiliate shall have all the rights of a Limited Partner or Preferred Limited Partner, as the case may be.

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SECTION 6.2    No Management by Limited Partners; Limitation of Liability. Neither the Limited Partners, in their capacity as Limited Partners, nor the Preferred Limited Partners, in their capacity as Preferred Limited Partners, shall take part in the day-to-day management, operation or control of the business and affairs of the Partnership or have any right, power, or authority to act for or on behalf of or to bind the Partnership or transact any business in the name of the Partnership. Neither the Limited Partners, in their capacity as Limited Partners, nor the Preferred Limited Partners, in their capacity as Preferred Limited Partners, shall have any rights other than those specifically provided herein or granted by law where consistent with a valid provision hereof. Any approvals rendered or withheld by the Limited Partners or the Preferred Limited Partners pursuant to this Agreement shall be deemed as consultation with or advice to the General Partner in connection with the business of the Partnership and, in accordance with the Act, shall not be deemed as participation by the Limited Partners or the Preferred Limited Partners in the business of the Partnership and are not intended to create any inference that the Limited Partners or the Preferred Limited Partners should be classified as general partners under the Act.
(A)    Neither any Limited Partner nor any Preferred Limited Partner shall have any liability under this Agreement except with respect to withholding under Section [1446] of the Code, in connection with any express provision of this Agreement by such Limited Partner or Preferred Limited Partner or as provided in the Act.
(B)    The General Partner shall not take any action which would subject a Limited Partner (in its capacity as Limited Partner) or a Preferred Limited Partner (in its capacity as a Preferred Limited Partner) to liability as a general partner.
(C)    No Partner shall take any action that would result in the Partnership being treated as an association taxable as a corporation, or as a corporation, for federal income tax purposes.

SECTION 6.3    Limitations on Partners. No Partner or Affiliate of a Partner shall have any authority to perform (i) any act in violation of any applicable law or regulation thereunder, (ii) any act prohibited by Section 6.2(C), or (iii) any act which is required to be Consented to or ratified pursuant to this Agreement without such Consent or ratification.
(A)    No action shall be taken by a Partner if it would cause the Partnership to be treated as an association taxable as a corporation for federal income tax purposes or, without the Consent of the General Partner, as a publicly traded partnership within the meaning of Section 7704 of the Code. A determination of whether such action will have the above-described effect shall be based upon a declaratory judgment or similar relief obtained from a court of competent jurisdiction, a favorable ruling from the IRS or the receipt of a written opinion of counsel.

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SECTION 6.4    Business With Affiliates. The General Partner, in its discretion, may cause the Partnership to transact business with any Partner or its Affiliates for goods or services reasonably required in the conduct of the Partnership’s business; provided that any such transaction shall be effected only on terms competitive with those that may be obtained in the marketplace from unaffiliated Persons. The foregoing proviso shall not apply to transactions between the Partnership and its Subsidiaries. In addition, neither the General Partner nor any Affiliate of the General Partner may sell, transfer or otherwise convey any property to, or purchase any property from, the Partnership, except (i) on terms competitive with those that may be obtained in the marketplace from unaffiliated Persons or (ii) where the General Partner determines, in its sole judgment, that such sale, transfer or conveyance confers benefits on the General Partner or the Partnership in respect of matters of tax or corporate or financial structure; provided, in the case of this clause (ii), such sale, transfer or conveyance is not being effected for the purpose of materially disadvantaging the Limited Partners.
(A)    In furtherance of Section 6.4(A), the Partnership may lend or contribute to its Subsidiaries on terms and conditions established by the General Partner.

SECTION 6.5    Compensation; Reimbursement of Expenses. In consideration for the General Partner’s services to the Partnership in its capacity as General Partner, the Partnership shall pay on behalf of or reimburse to the General Partner all expenses of the General Partner incurred in connection with the management of the business and affairs of the Partnership, including all employee compensation of employees of the General Partner related to services performed for the Partnership and indemnity or other payments made pursuant to agreements entered into in furtherance of the Partnership’s business. Except as otherwise set forth in this Agreement, the General Partner shall be fully and entirely reimbursed by the Partnership for any and all direct and indirect costs and expenses incurred in connection with the formation and continuation of the Partnership pursuant to this Agreement. In addition, the General Partner shall be reimbursed by the Partnership for all expenses incurred by the General Partner in connection with issuance of additional Partnership Interests.

SECTION 6.6    Liability for Acts and Omissions. The General Partner shall not be liable, responsible or accountable in damages or otherwise to the Partnership or any of the other Partners for any act or omission performed or omitted in good faith on behalf of the Partnership and in a manner reasonably believed to be (i) within the scope of the authority granted by this Agreement and (ii) in the best interests of the Partnership or the shareholders of the General Partner. In exercising its authority hereunder, the General Partner may, but shall not be under any obligation to, take into account the tax consequences to any Partner of any action it undertakes on behalf of the Partnership. Neither the General Partner nor the Partnership shall have any liability as a result of any income tax liability incurred by a Partner as a result of any action or inaction of the General Partner hereunder in good faith and, by their execution of this Agreement, the Limited Partners and the Preferred Limited Partners acknowledge the foregoing.

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(A)    Unless otherwise prohibited hereunder, the General Partner shall be entitled to exercise any of the powers granted to it and perform any of the duties required of it under this Agreement directly or through any agent. The General Partner shall not be responsible for any misconduct or negligence on the part of any agent; provided that the General Partner selected or appointed such agent in good faith.
(B)    The General Partner acknowledges that it owes fiduciary duties both to its shareholders and to the Limited Partners and the Preferred Limited Partners and it shall use its reasonable efforts to discharge such duties to each; provided, however, that in the event of a conflict between the interests of the shareholders of the General Partner and the interests of the Limited Partners or the Preferred Limited Partners, the Limited Partners and the Preferred Limited Partners agree that the General Partner shall discharge its fiduciary duties to the Limited Partners and the Preferred Limited Partners by acting in the best interests of the General Partner’s shareholders. Nothing contained in the preceding sentence shall be construed as entitling the General Partner to realize any profit or gain from any transaction between the General Partner and the Partnership (except in connection with a distribution in accordance with this Agreement), including from the lending of money by the General Partner to the Partnership or the contribution of property by the General Partner to the Partnership, it being understood that in any such transaction the General Partner shall be entitled to cost recovery only.
The provisions of this Agreement, to the extent that they restrict the duties and liabilities of the General Partner otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of the General Partner.

SECTION 6.7    Indemnification. The Partnership shall indemnify the General Partner and each director, officer and shareholder of the General Partner and each Person (including any Affiliate) designated as an agent by the General Partner in its reasonable discretion (each, an “Indemnified Party”) to the fullest extent permitted under the Act (including any procedures set forth therein regarding advancement of expenses to such Indemnified Party) from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorneys’ fees), judgments, fines, settlements and any other amounts out of or in connection with any claims, demands, actions, suits or proceedings (civil, criminal or administrative) relating to or resulting (directly or indirectly) from the operations of the Partnership, in which such Indemnified Party becomes involved, or reasonably believes it may become involved, as a result of the capacity referred to above.
(A)    The Partnership shall have the authority to purchase and maintain such insurance policies on behalf of the Indemnified Parties as the General Partner shall determine, which policies may cover those liabilities the General Partner reasonably believes may be incurred by an Indemnified Party in connection with the operation of the business of the Partnership. The right to procure such insurance on behalf of the Indemnified Parties shall 

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in no way mitigate or otherwise affect the right of any such Indemnified Party to indemnification pursuant to Section 6.7(A) hereof.
(B)    The provisions of this Section 6.7 are for the benefit of the Indemnified Parties, their heirs, executors, guardians, conservators, successors, assigns and administrators and shall not be deemed to create any rights in or benefit to any other Person.

ARTICLE VII     
ADMINISTRATIVE, FINANCIAL AND TAX MATTERS

SECTION 7.1    Books and Records. The General Partner shall maintain at the office of the Partnership full and accurate books of the Partnership showing all receipts and expenditures, assets and liabilities, profits and losses, names and current addresses of Partners, and all other records necessary for recording the Partnership’s business and affairs. Each Limited Partner and Preferred Limited Partner shall have, upon written demand and at such Limited Partner’s or Preferred Limited Partner’s expense, as the case may be, the right to receive true and complete information regarding Partnership matters to the extent required (and subject to the limitations) under Delaware law.

SECTION 7.2    Annual Audit and Accounting. The books and records of the Partnership shall be kept for financial and tax reporting purposes on the accrual basis of accounting in accordance with generally accepted accounting principles (“GAAP”). The accounts of the Partnership shall be audited annually by a nationally recognized accounting firm of independent public accountants selected by the General Partner (the “Independent Accountants”).

SECTION 7.3    Partnership Funds. The General Partner shall have responsibility for the safekeeping and use of all funds and assets of the Partnership, whether or not in its direct or indirect possession or control. All funds of the Partnership not otherwise invested shall be deposited in one or more accounts maintained in such banking institutions as the General Partner shall determine, and withdrawals shall be made only in the regular course of Partnership business on such signatures as the General Partner may from time to time determine.

SECTION 7.4    Reports and Notices. The General Partner shall provide all Partners with the following reports no later than the dates indicated or as soon thereafter as circumstances permit:
(A)    By March 31 of each year, IRS Form 1065 and Schedule K-1, or similar forms as may be required by the IRS, stating each Partner’s allocable share of income, gain, loss, deduction or credit for the prior Fiscal Year;
(B)    Within ninety (90) days after the end of each of the first three (3) fiscal quarters, as of the last day of the fiscal quarter, a report containing unaudited financial statements of the Partnership, or of the General Partner if such statements are prepared on 

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a consolidated basis with the General Partner, and such other information as may be legally required or determined to be appropriate by the General Partner; and
(C)    Within one hundred twenty (120) days after the end of each Fiscal Year, as of the close of the Fiscal Year, an annual report containing audited financial statements of the Partnership, or of the General Partner if such statements are prepared on a consolidated basis with the General Partner, presented in accordance with GAAP and certified by the Independent Accountants.

SECTION 7.5    Tax Audits. 
(A)    General.  The General Partner shall be the “tax matters partner” of the Partnership for federal income tax purposes pursuant to Section 6231(a)(7) of the Code under the Current Partnership Audit Rules and the “partnership representative” pursuant to Section 6223(a) of the Code  under the 2015 Budget Act Partnership Audit Rules.  The partnership representative shall have the authority to designate from time to time a “designated individual” to act on behalf of the partnership representative, and such designated individual shall be subject to replacement by the partnership representative in accordance with Section 301.6223-1 of the Treasury Regulations.  The designated individual will act only as directed by the partnership representative. So long as Section 6230(e) of the Current Partnership Audit Rules is in effect, upon receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the Partnership, the General Partner shall furnish the IRS with the name, address, taxpayer identification number and profit interest of each of the Limited Partners and any Assignees; provided, however, that such information is provided to the Partnership by the Limited Partners and the Assignees.  The tax matters partner or partnership representative, as applicable, shall deliver to the Limited Partners and Preferred Limited Partners within ten (10) business days of the receipt thereof a copy of any notice or other communication with respect to the Partnership received from the IRS (or other governmental tax authority), or any court, in each case with respect to any administrative or judicial proceeding involving the Partnership. The Partners agree to cooperate with each other in connection with the conduct of all proceedings pursuant to this Section 7.5(A).
(B)    Powers.  The General Partner is authorized, but not required (and the Partners hereby consent to the tax matters partner, the partnership representative and the designated individual, as relevant, taking the following actions):
(1)    to elect out of the 2015 Budget Act Partnership Audit Rules, if available;
(2)    to enter into any settlement with the IRS with respect to any administrative or judicial proceedings for the adjustment of Partnership items 

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required to be taken into account by a Partner for income tax purposes (such administrative proceedings being referred to as a “tax audit” and such judicial proceedings being referred to as “judicial review”), and in the settlement agreement the General Partner may expressly state that such agreement shall bind the Partnership and all Partners, except that, so long as the Current Partnership Audit Rules are in effect, such settlement agreement shall not bind any Partner (i) who (within the time prescribed pursuant to the Code and Regulations under the Current Partnership Audit Rules) files a statement with the IRS providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner or (ii) who is a “notice partner” (as defined in Section 6231(a)(8) of the Current Partnership Audit Rules) or a member of a “notice group” (as defined in Section 6223(b)(2) of the Current Partnership Audit Rules);
(3)    in the event that a notice of a final administrative adjustment assessed by the IRS or any other tax authority, at the Partnership level of any item required to be taken into account by a Partner for tax purposes (a “final adjustment”) is mailed to the General Partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the United States Tax Court or the filing of a complaint for refund with the United States Claims Court or the District Court of the United States for the district in which the Partnership’s principal place of business is located;
(4)    to intervene in any action brought by any other Partner for judicial review of a final adjustment;
(5)    to file a request for an administrative adjustment with the IRS or other tax authority at any time and, if any part of such request is not allowed by the IRS or other tax authority, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request;
(6)    to enter into an agreement with the IRS or other tax authority to extend the period for assessing any tax which is attributable to any item required to be taken into account by a Partner for tax purposes, or an item affected by such item; and
(7)    to take any other action on behalf of the Partners or the Partnership in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations, including, without limitation, the following actions to the extent that the 2015 Budget Act Partnership Audit Rules apply to the Partnership and its current or former Partners:
(a)    electing to have the alternative method for the underpayment of taxes set forth in Section 6226 of the Code, as included in the 2015 Budget 

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Act Partnership Audit Rules, apply to the Partnership and its current or former Partners; and
(b)    for Partnership level assessments under Section 6225 of the Code, as included in the 2015 Budget Act Partnership Audit Rules, determining apportionment of responsibility for payment among the current or former Partners, setting aside reserves from available funds of the Partnership, withholding of distributions to the Partners, and requiring current or former Partners to make cash payments to the Partnership for their share of the Partnership level assessments; and
(8)    to take any other action required or permitted by the Code and Regulations in connection with its role as the tax matters partner, the partnership representative and designative individual, as relevant.
The taking of any action and the incurring of any expense by the General Partner in connection with any such audit or proceeding, except to the extent required by law, is a matter in the sole and absolute discretion of the General Partner and the provisions relating to indemnification of the General Partner set forth in Section 6.7 of this Agreement shall be fully applicable to the tax matters partner, the partnership representative and the designated individual, as relevant, in its capacity as such.  In addition, the General Partner shall be entitled to indemnification set forth in Section 6.7 for any liability for tax imposed on the Partnership under the 2015 Budget Act Partnership Audit Rules that is collected from the General Partner.
The current and former Partners agree to reasonably cooperate with the General Partner and to do or refrain from doing any or all things reasonably requested by the General Partner in connection with such audit or proceeding.  To the extent that the 2015 Budget Act Partnership Audit Rules apply to the Partnership and its current or former Partners, the current and former Partners agree to provide any information and documentation reasonably requested by the partnership representative and designated individual in connection with the 2015 Budget Act Partnership Audit Rules (and if applicable, with certifications as to the filing of the initial and amended tax returns), including, but not limited to, the following:
(1)    information and documentation to determine and prove eligibility of the Partnership to elect out of the 2015 Budget Act Partnership Audit Rules;
(2)    information and documentation to reduce the Partnership level assessment consistent with Section 6225(c) of the Code, as included in the 2015 Budget Act Partnership Audit Rules; and

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(3)    information and documentation to prove payment of the attributable liability under Section 6226 of the Code, as included in the 2015 Budget Act Partnership Audit Rules.
In addition to the foregoing, and notwithstanding any other provision of this Agreement, including, without limitation, Section 11.1 of this Agreement, the General Partner is authorized (without any requirement of the consent or approval of any other Partners) to make all such amendments to this Section 7.5 as it shall determine, in its sole judgment, to be necessary, desirable or appropriate to implement the 2015 Budget Act Partnership Audit Rules and any regulations, procedures, rulings, notices, or other administrative interpretations thereof promulgated by the U.S. Treasury Department.
(C)    Reimbursement. The tax matters partner, the partnership representative and the designated individual shall receive no compensation for their services.  All third-party costs and expenses incurred by the tax matters partner, the partnership representative and the designated individual in performing their respective duties as such (including legal and accounting fees and expenses) shall be borne by the Partnership.  Nothing herein shall be construed to restrict the Partnership from engaging an accounting and/or law firm to assist the tax matters partner, the partnership representative and the designated individual in discharging their respective duties hereunder, so long as the compensation paid by the Partnership for such services is reasonable
(D)    Survival. The obligations of each Partner under this Section 7.5 shall survive the termination, dissolution, liquidation and winding up of the Partnership and such Partner’s withdrawal from the Partnership or the transfer of such Partner’s interest in the Partnership, and each Partner agrees to execute such documentation requested by the Partnership at the time of such Partner’s withdrawal from the Partnership or the transfer of such Partner’s interest in the Partnership to acknowledge and confirm such Partner’s continuing obligations under this Section 7.5.

SECTION 7.6    Tax Returns. The General Partner shall cause to be prepared all federal, state and local income tax returns required of the Partnership at the Partnership’s expense.

SECTION 7.7    Tax Elections. Except as set forth herein, the General Partner shall determine whether to make (and, if necessary, revoke) any tax election available to the Partnership under the Code or any state tax law; provided, however, upon the request of any Partner, the General Partner shall make the election under Code Section 754 and the Treasury Regulations promulgated thereunder. The Partnership shall elect to deduct expenses, if any, incurred by it in organizing the Partnership in accordance with the provisions of Code Section 709.

SECTION 7.8    Withholding. Each Partner hereby authorizes the Partnership to withhold from or pay to any taxing authority on behalf of such Partner any tax that the General Partner 

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determines the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Partner. Any amount paid to any taxing authority which does not constitute a reduction in the amount otherwise distributable to such Partner shall be treated as a loan from the Partnership to such Partner, which loan shall bear interest at the “prime rate” as published from time to time in THE WALL STREET JOURNAL plus two (2) percentage points, and shall be repaid within ten (10) business days after request for repayment from the General Partner. The obligation to repay any such loan shall be secured by such Partner’s Partnership Interest and each Partner hereby grants the Partnership a security interest in his Partnership Interest for the purposes set forth in this Section 7.8, this Section 7.8 being intended to serve as a security agreement for purposes of the Uniform Commercial Code with the Partnership having in respect hereof all of the remedies of a secured party under the Uniform Commercial Code. Each Partner agrees to take such reasonable actions as the General Partner may request to perfect and continue the perfection of the security interest granted hereby. In the event any Partner fails to repay any deemed loan pursuant to this Section 7.8, the Partnership shall be entitled to avail itself of any rights and remedies it may have. Furthermore, upon the expiration of ten (10) business days after demand for payment, the General Partner shall have the right, but not the obligation, to make the payment to the Partnership on behalf of the defaulting Partner and thereupon be subrogated to the rights of the Partnership with respect to such defaulting Partner.

ARTICLE VIII     
TRANSFER OF PARTNERSHIP INTERESTS; ADMISSION OF PARTNERS

SECTION 8.1    Transfer by General Partner. The General Partner may not voluntarily withdraw or, except as provided in Section 8.2, Transfer all or any portion of its General Partner Interest. Notwithstanding the foregoing, the General Partner may pledge its General Partner Interest in furtherance of the Partnership’s business (including, without limitation, in connection with a loan agreement under which the Partnership is a borrower) without the Consent of any Partner.

SECTION 8.2    Obligations of a Prior General Partner. Upon an Involuntary Withdrawal of the General Partner, the General Partner’s Interest may be transferred to a successor with the Consent of the holders of a majority of each of the Partnership Units and the Preferred Units, voting separately. The transferring General Partner shall (i) remain liable for all obligations and liabilities (other than Partnership liabilities payable solely from Partnership Assets) incurred by it as General Partner before the effective date of such event and (ii) pay all costs associated with the admission of its Successor General Partner. However, such General Partner shall be free of and held harmless by the Partnership against any obligation or liability incurred on account of the activities of the Partnership from and after the effective date of such event, except as provided in this Agreement.

SECTION 8.3    Successor General Partner. A successor to all of a General Partner’s General Partner Interest who has been approved in accordance with Section 8.2 shall be admitted as the Successor General Partner, effective immediately prior to the Transfer. Any such Successor shall 

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carry on the business of the Partnership without dissolution. In addition, the following conditions must be satisfied:
(A)    The Person shall have accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a counterpart thereof and such other documents or instruments as may be required or appropriate in order to effect the admission of such Person as a General Partner;
(B)    An amendment to this Agreement evidencing the admission of such Person as a General Partner shall have been executed by all General Partners and an amendment to the Certificate shall have been filed as required by the Act; and
(C)    Any Consent required under Section 11.1(A) hereof shall have been obtained.

SECTION 8.4    Restrictions on Transfer and Withdrawal by Limited Partner.
(A)    Subject to the provisions of Section 8.4(D), no Limited Partner or Preferred Limited Partner may Transfer all or any portion of its Partnership Interest without first obtaining the Consent of the General Partner, which Consent may be granted or withheld in the sole and absolute discretion of the General Partner. Any such purported Transfer undertaken without such Consent shall be considered to be null and void ab initio and shall not be given effect.
(B)    No Limited Partner or Preferred Limited Partner may withdraw from the Partnership other than as a result of a permitted Transfer (i.e., a Transfer consented to as contemplated by clause (A) above or clause (D) below or a Transfer pursuant to clause (C) below) of all of such Limited Partner’s Partnership Units or such Preferred Limited Partner’s Preferred Units pursuant to this Article VIII or pursuant to a redemption or exchange of all of such Limited Partner’s or Preferred Limited Partner’s Partnership Units pursuant to Article IX. Upon the permitted Transfer or redemption of all of a Limited Partner’s or Preferred Limited Partner’s Partnership Interests, such Limited Partner or Preferred Limited Partner shall cease to be a Limited Partner or Preferred Limited Partner, as the case may be.
(C)    Upon the Involuntary Withdrawal of any Limited Partner or Preferred Limited Partner (which shall under no circumstance in and of itself cause the dissolution of the Partnership), the executor, administrator, trustee, guardian, receiver or conservator of such Limited Partner’s or Preferred Limited Partner’s estate shall become a Substituted Limited Partner or Substituted Preferred Limited Partner upon compliance with the provisions of Section 8.5(A)(1)-(3).
(D)    Subject to clause (E) below, a Limited Partner or Preferred Limited Partner may Transfer, with the Consent of the General Partner, all or a portion of such Limited Partner’s or Preferred Limited Partner’s Partnership Interests to (a) a parent or parents, 

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spouse, natural or adopted descendant or brother or sister, or a trust created by such Limited Partner or Preferred Limited Partner for the benefit of such Limited Partner or Preferred Limited Partner and/or any such Person(s), of which trust such Limited Partner or Preferred Limited Partner or any such Person(s) is a trustee, (b) a corporation controlled by a Person or Persons named in (a) above, (c) if the Limited Partner or Preferred Limited Partner is an entity, its beneficial owners, or (d) a family limited partnership comprised of members of the family of a Limited Partner or a Preferred Limited Partner, and the General Partner shall grant its Consent to any Transfer pursuant to this Section 8.4(D) unless such Transfer, in the reasonable judgment of the General Partner, would cause (or have the potential to cause) the General Partner to fail to qualify for taxation as a REIT, in which case the General Partner shall have the sole and absolute discretion to refuse to permit such Transfer, and any purported Transfer in violation of this Section 8.4(D) shall be null and void ab initio and shall not be given effect.
(E)    No Transfer of Limited Partnership Interests or Preferred Limited Partner Partnership Interests shall be made if such Transfer would (i) in the opinion of Partnership counsel, cause the Partnership to be treated as an association taxable as a corporation (rather than a partnership) for federal income tax purposes; (ii) be effected through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Code Section 7704 and the Treasury Regulations thereunder; (iii) in the opinion of Partnership counsel, violate the provisions of applicable securities laws; (iv) violate the terms of (or result in a default or acceleration under) any law, rule, regulation, agreement or commitment binding on the Partnership; (v) cause the Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(e) of the Code); (vi) in the opinion of counsel to the Partnership, cause any portion of the underlying assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.3-101; or (vii) result in a deemed distribution to any Partner attributable to a failure to meet the requirements of Treasury Regulations Section 1.752-2(d)(1), unless such Partner consents thereto.
(F)    Prior to the consummation of any Transfer under this Section 8.4, the transferor and/or the transferee shall deliver to the General Partner such opinions, certificates and other documents as the General Partner shall request in connection with such Transfer.

SECTION 8.5    Substituted Limited Partner.
(A)    No transferee shall become a Substituted Limited Partner or Substituted Preferred Limited Partner in place of its assignor unless and until the following conditions have been satisfied:

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(1)    The assignor and transferee file a Notice or other evidence of Transfer and such other information reasonably required by the General Partner, including, without limitation, names, addresses and telephone numbers of the assignor and transferee;
(2)    The transferee executes, adopts and acknowledges this Agreement, or a counterpart hereto, and such other documents as may be reasonably requested by the General Partner, including without limitation, all documents necessary to comply with applicable tax and/or securities rules and regulations; and
(3)    The assignor or transferee pays all costs and fees incurred or charged by the Partnership to effect the Transfer and substitution.
(B)    If a transferee of a Limited Partner or Preferred Limited Partner does not become a Substituted Limited Partner or Substituted Preferred Limited Partner pursuant to Section 8.5(A), such transferee shall be an Assignee and shall not have any rights to require any information on account of the Partnership’s business, to inspect the Partnership’s books or to vote or otherwise take part in the affairs of the Partnership (such Partnership Interests being deemed to have been voted in the same proportion as all other Partnership Interests held by Limited Partners or Preferred Limited Partners, as the case may be, have been voted). Such Assignee shall be entitled, however, to all the rights of an assignee of a limited partner interest under the Act. Any Assignee wishing to Transfer the Partnership Units acquired shall be subject to the restrictions set forth in this Article VIII.

SECTION 8.6    Effect of Transfers. Upon any Transfer of a Partnership Interest in accordance with this Article VIII or redemption of a Partnership Interest in accordance with Article IX, the Partnership shall allocate all items of Profit and Loss between the assignor and the transferee in accordance with Section 5.2(F)(2) hereof. The assignor shall have the right to receive all distributions as to which the Record Date precedes the date of Transfer and the transferee shall have the right to receive all distributions thereafter.8 

SECTION 8.7    Additional Limited Partners. Other than in accordance with the transactions specified in the Contribution Agreements, after the execution of the First Amended and Restated Partnership Agreement and the admission to the Partnership of the Initial Limited Partners, any Person making a Capital Contribution to the Partnership in accordance herewith shall be admitted as an Additional Limited Partner or Additional Preferred Limited Partner only (i) with the Consent of the General Partner and (ii) upon execution, adoption and acknowledgment of this Agreement, or a counterpart hereto, and such other documents as may be reasonably requested by the General Partner, including, without limitation, the power of attorney required under Section 12.3. Upon
__________________________ 
 8See Amendment 26 to Partnership Agreement.

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satisfaction of the foregoing requirements, such Person shall be admitted as an Additional Limited Partner or Additional Preferred Limited Partner effective on the date upon which the name of such Person is recorded on the books of the Partnership.

SECTION 8.8    Amendment of Agreement and Certificate. Upon any admission of a Person as a Partner to the Partnership, the General Partner shall make any necessary amendment to this Agreement to reflect such admission and, if required by the Act, to cause to be filed an amendment to the Certificate.

SECTION 8.9    Pledges. No Limited Partner or Preferred Limited Partner may pledge, mortgage, hypothecate or encumber any Limited Partnership Interest or Preferred Limited Partner Partnership Interest, without first obtaining the Consent of the General Partner, which Consent may be granted or withheld in the sole and absolute discretion of the General Partner. Any such purported pledge, mortgage, hypothecation or encumbrance undertaken without such Consent shall be considered null and void ab initio and shall not be given effect.

ARTICLE IX     
REDEMPTION AND CONVERSION

SECTION 9.1    Right of Redemption.
(A)    Subject to compliance with (v) the Act, (w) the terms and conditions of the REIT Charter, (x) all requirements under the Code applicable to real estate investment trusts, (y) Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland, as amended, or any other law as in effect from time to time and (z) any applicable rule or policy of any stock exchange or self-regulatory organization (a “Redemption Restriction”), except if prohibited by other contractual obligations, each Redeeming Party shall have the right to redeem its Partnership Units by providing the General Partner with a Redemption Notice. A Limited Partner may invoke its rights under this Article IX with respect to one or more Partnership Units or all of the Partnership Units held by such Limited Partner. Upon the General Partner’s receipt of a Redemption Notice from a Redeeming Party, the Partnership shall be obligated (subject to the existence of any Redemption Restriction) to redeem the Partnership Units from such Redeeming Party (the “Redemption Obligation”)9.
(B)    Upon receipt of a Redemption Notice from a Redeeming Party, the General Partner shall either (i) cause the Partnership to redeem the Partnership Units tendered in the Redemption Notice, (ii) assume the Redemption Obligation, as set forth in Section 9.4, or (iii) provide written Notice to the Redeeming Party of each applicable Redemption Restriction.
____________
 9See Amendment 26 to Partnership Agreement.

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SECTION 9.2    Timing of Redemption. The Redemption Obligation (or the obligation to provide Notice of an applicable Redemption Restriction, if one exists) shall mature on the date which is seven (7) business days after the receipt by the General Partner of a Redemption Notice from the Redeeming Party (the “Redemption Date”).

SECTION 9.3    Redemption Price. On or before the Redemption Date, the Partnership (or the General Partner if it elects pursuant to Section 9.4) shall deliver to the Redeeming Party, in the sole and absolute discretion of the General Partner, either (i) a Share Payment or (ii) a Cash Payment; provided, however, that a Share Payment shall not be made, and a Cash Payment shall instead be made in all cases, if, in the sole and absolute discretion of the General Partner, the making of a Share Payment would result in a material risk of termination of the General Partner's status as a REIT under the Code. In order to enable the Partnership to effect a redemption by making a Share Payment pursuant to this Section 9.3, the General Partner in its sole and absolute discretion may issue to the Partnership the number of REIT Shares required to make such Share Payment in exchange for the issuance to the General Partner of Partnership Units equal in number to the quotient of the number of REIT Shares issued divided by the Redemption Ratio. Any such Partnership Unit redeemed by the Redeeming Party shall be deemed canceled.10 

SECTION 9.4    Assumption of Redemption Obligation. Upon receipt of a Redemption Notice, the General Partner, in its sole and absolute discretion, shall have the right to assume the Redemption Obligation of the Partnership. In such case, the General Partner shall be substituted for the Partnership for all purposes of this Article IX and, upon acquisition of the Partnership Units tendered by the Redeeming Party pursuant to the Redemption Notice shall be treated for all purposes of this Agreement as the owner of such Partnership Units. Such Partnership Units shall constitute General Partner Interests. Such exchange transaction shall be treated for federal income tax purposes by the Partnership, the General Partner and the Redeeming Party as a sale by the Redeeming Party as seller to the General Partner as purchaser.

SECTION 9.5    Further Assurances; Certain Representations. Each party to this Agreement agrees to execute any documents deemed reasonably necessary by the General Partner to evidence the issuance of any Share Payment to a Redeeming Party. Each Limited Partner and Preferred Limited Partner, by executing this Agreement, shall be deemed to have represented to the General Partner and the Partnership that (i) its acquisition of its Partnership Interest is or will be made as a principal for its own account, for investment purposes only and not with a view to the resale or distribution of such Partnership Interest and (ii) if it shall receive REIT Shares pursuant to this Article IX other than pursuant to an effective registration statement under the Securities Act of 1933, as amended, that its acquisition of such REIT Shares is or will be made as a principal for its own account, for investment purposes only and not with a view to the resale or distribution of such
__________
10 See Amendment 1 to Partnership Agreement.

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REIT Shares and agrees that such REIT Shares may bear a legend to the effect that such REIT Shares have not been so registered and may not be sold other than pursuant to such a registration statement or an exemption from the registration requirements of such Act.

SECTION 9.6    Effect of Redemption. Upon the satisfaction of the Redemption Obligation by the Partnership or the General Partner, as the case may be, the Redeeming Party shall have no further right to receive any Partnership distributions in respect of the Partnership Units so redeemed and shall be deemed to have represented to the Partnership and the General Partner that the Partnership Units tendered for redemption are not subject to any liens, claims or encumbrances.

SECTION 9.7    Registration Rights. In the event a Limited Partner receives REIT Shares in connection with a redemption of Partnership Units pursuant to this Article IX, such Limited Partner shall be entitled to have such REIT Shares registered under the Securities Act of 1933, as amended, as provided in the Registration Rights Agreement.

SECTION 9.8    Conversion.
(A)    (1) Each Limited Partner holding Preferred Units which are convertible into Partnership Units under the terms of this Agreement shall have the right, at any time or from time to time, to convert after the Conversion Commencement Date applicable to such Preferred Units some or all of such Preferred Units into Partnership Units, effective upon January 1, April 1, July 1 or October 1 of any year, by providing the General Partner with a Profit Interest Conversion Notice not less than 30 days prior to the effective date of such conversion. Upon the effective date of any such conversion, each Preferred Unit which is the subject of such conversion shall be converted, without necessity of any further action by the General Partner, into that number of Partnership Units the Limited Partner is entitled to receive on such conversion equal to the applicable Conversion Factor plus an amount of cash equal to the accrued Priority Return Amount in respect of such Preferred Unit. With respect to any series of Preferred Units issued to the General Partner pursuant to Section 4.2(B) of this Agreement, the Conversion Commencement Date and the applicable Conversion Factor shall be the conversion commencement date and conversion factor of the related issuance of securities by the General Partner as provided in Section 4.2(B) of this Agreement. With respect to preferred units issued by the Partnership to Persons other than the General Partner, the Conversion Commencement Date and the Conversion Factor shall be set forth on the Addendum to the Partner Registry or otherwise set forth in an amendment to this Agreement. In any case in which the conversion into Partnership Units would result in the issuance of a fractional Partnership Unit, the General Partner shall pay the converting Limiting Partner cash in lieu of issuance of a fractional Partnership Unit, with the value of such fractional interest being determined by the Unit Value applicable on the date of conversion.

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(2)    Other classes of Preferred Units, if any, issued to Limited Partners after the date hereof shall be convertible into Partnership Units on such terms as may be agreed by the Partnership and the holder of such Preferred Units, and the right to convert such Preferred Units shall be subject to such further restrictions and limitations as may be agreed upon.
(3)    Intentionally omitted.
(4)    In any case in which the conversion into Partnership Units under this Section 9.8(A) would result in the issuance of a fractional Partnership Unit, the General Partner shall pay the converting Partner cash in lieu of issuance of a fractional Partnership Unit, with the value of such fractional interest being determined by reference to the Unit Value applicable on the date of conversion.
(B)    In any case in which there is an unpaid Priority Return Amount with respect to a Preferred Unit that is converted pursuant to paragraph (A) of this Section, the converting Partner shall continue to have the right to distributions (and allocations) under Article V and Section 10.2 of this Agreement as if the converting Partner continued to hold the converted Preferred Unit until the unpaid distributions (and related allocations) have been paid (or allocated).

SECTION 9.9    Redemption Restriction.
(A)    The General Partner shall not take, or cause to be taken, any action which would cause a Redemption Restriction to exist or continue.
(B)    The General Partner shall, at its cost and expense, take, or cause to be taken, all such actions that may be necessary or desirable to mitigate the existence or effect of any Redemption Restriction and to facilitate and make effective the rights of redemption and conversion provided in this Article IX.

SECTION 9.10    Special Event
(A)    Notwithstanding any provision of this Agreement to the contrary, upon the occurrence of a Special Event (whether before or after September 1, 1998), each Redeeming Party shall immediately have the unconditional right (irrespective of whether a Redemption Restriction exists or could thereby be created other than a Redemption Restriction under the Act) to require the Partnership to redeem all or a portion of the Partnership Units held by such Redeeming Party by providing the General Partner with a Redemption Notice. A Limited Partner may invoke its rights under this Section 9.10 with respect to one or more Partnership Units or all of the Partnership Units held by such Limited Partner. Any such redemption shall otherwise be governed by and effected and implemented pursuant to this Article IX as if no Redemption Restriction existed.

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(B)    Notwithstanding any provision of this Agreement to the contrary, upon the occurrence of a Special Event (whether before or after October 1, 1999), each Preferred Limited Partner shall have the right effective upon the happening of such Special Event, at any time or from time to time, to convert some or all of its Preferred Units into Limited Partner Interests by providing the General Partner with a Profit Interest Conversion Notice. Any such conversion shall otherwise be governed by and effected and implemented pursuant to this Article IX.
(C)    “Special Event” means the occurrence of any of the following:
(1)    any person or group (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)) other than the Permitted Holders, directly or indirectly, makes an offer to purchase or commences a tender offer for REIT Shares such that, after acquiring all such REIT Shares offered to be acquired or tendered for, such person or group would then be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of 20% or more of the total number of REIT Shares then issued and outstanding; or
(2)    any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in clause (C)(1) above, except that for purposes of this clause (II) such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 20% of the total voting power represented by all the REIT Shares then outstanding; or
(3)    during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Trustees of COPT (together with any new directors whose election by such Board of Trustees or whose nomination for election by the shareholders of COPT was approved by a vote of 66 2/3% of the directors of COPT then still in office who were either trustees at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Trustees of COPT then in office; or the merger or consolidation of COPT with or into another Person or the merger or consolidation of another Person with or into COPT, or the sale of all or substantially all the assets of COPT to another Person (other than a Person that is controlled by the Permitted Holders in the aggregate), and, in the case of any such merger or consolidation, the securities of COPT that are outstanding immediately prior to such transaction and which represent 100% of the aggregate voting power of the REIT Shares are changed into or exchanged for cash, securities or property.

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(D)    “Permitted Holders” means Jay H. Shidler, Clay W. Hamlin III, Westbrook Real Estate Fund I, L.P. and Westbrook Real Estate Co. Investment Partnership I, L.P. and any corporation, partnership, trust, estate or other legal entity controlled by any of the foregoing Persons (or jointly controlled by Messrs. Shidler and Hamlin).

ARTICLE X     
DISSOLUTION AND LIQUIDATION

SECTION 10.1    Term and Dissolution. The Partnership commenced as of October 10, 1997, and shall continue until October 31, 2096, at which time the Partnership shall dissolve, or until dissolution occurs prior to that date at any time there are no Limited Partners of the Partnership and for any one of the following reasons:
(A)    An Involuntary Withdrawal or a voluntary withdrawal, even though in violation of this Agreement, of the General Partner or any other event that causes the General Partner to cease to be a general partner under the Act (other than a Transfer to a Successor General Partner in accordance with Article VIII) unless, within ninety (90) days after such event, a majority of the Limited Partners remaining agree in writing to the continuation of the Partnership and to the appointment, effective as of the date of such event, of a Successor General Partner;
(B)    Entry of a decree of judicial dissolution of the Partnership under the Act;
(C)    The sale, exchange or other disposition of all or substantially all of the Partnership Assets; or
(D)    The affirmative vote of the holders of not less than two-thirds of the Limited Partner Interests.
For purposes of this Section 10.1 and Section 10.2, Preferred Units shall be treated as if they have been converted on the date of any such vote into Limited Partner Interests pursuant to Section 9.8 and the Preferred Limited Partners holding such Preferred Units shall be treated as Limited Partners.

SECTION 10.2    Liquidation of Partnership Assets.
(A)    Subject to Section 10.2(E), in the event of dissolution pursuant to Section 10.1, the Partnership shall continue solely for purposes of winding up the affairs of, achieving a final termination of, and satisfaction of the creditors of, the Partnership. The General Partner (or, if there is no General Partner remaining, any Person elected by a majority in interest of the Limited Partners (the “Liquidator”)) shall be responsible for oversight of the winding-up and termination of the Partnership. The Liquidator shall obtain a full accounting of the assets and liabilities of the Partnership and such Partnership Assets shall be liquidated (including, at the discretion of 

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the Liquidator, in exchange, in whole or in part, for REIT Shares) as promptly as the Liquidator is able to do so without any undue loss in value, with the proceeds therefrom applied and distributed in the following order:
(1)    First, to creditors, including partners who are creditors, in satisfaction of liabilities of the Partnership (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for distributions to Partners and former Partners;
(2)    Second, to the Preferred Limited Partners holding Preferred Units entitled to a Liquidation Preference in amounts equal to the Liquidation Preference;
(3)    Third, to the Preferred Limited Partners holding Preferred Units entitled to Priority Return Amounts in amounts equal to any unpaid Priority Return Amounts;
(4)    Fourth, to Partners and former Partners in satisfaction of liabilities for distributions; and
(5)    The balance, if any, to the Partners in accordance with their positive Capital Accounts after giving effect to all contributions, distributions (including, without limitation, distributions pursuant to Section 10.2(A)(2)) and allocations for all periods; provided, however, that after distribution of the Liquidation Preference and Priority Return Amounts, a Preferred Limited Partner shall be entitled to no further payment pursuant to this Section with respect to such Preferred Unit.
Distributions made pursuant to this Section 10.2(A) to Preferred Limited Partners holding Senior Preferred Units and/or Junior Preferred Units shall be made first to the Preferred Limited Partners with respect to classes or series of Preferred Units which are Senior Preferred Units, and thereafter to Preferred Limited Partners with respect to classes or series of Preferred Units which are Junior Preferred Units.
(B)    In accordance with Section 10.2(A), the Liquidator shall proceed without any unnecessary delay to sell and otherwise liquidate the Partnership Assets; provided, however, that if the Liquidator shall determine that an immediate sale of part or all of the Partnership Assets would cause undue loss to the Partners, the Liquidator may defer the liquidation except (i) to the extent provided by the Act or (ii) as may be necessary to satisfy the debts and liabilities of the Partnership to Persons other than the Partners.
(C)    If, in the sole and absolute discretion of the Liquidator, there are Partnership Assets that the Liquidator will not be able to liquidate, or if the liquidation of such assets would result in undue loss to the Partners, the Liquidator may distribute such Partnership Assets to the Partners in kind, in lieu of cash, as tenants-in-common in accordance with the priorities set forth in Section 10.2(A). The foregoing notwithstanding, such in-kind distributions shall only be made if in the Liquidator’s good faith-judgment that is in the best interest of the Partners.

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(D)    Upon the complete liquidation and distribution of the Partnership Assets, the Partners shall cease to be partners of the Partnership, and the Liquidator shall execute, acknowledge and cause to be filed all certificates and notices required by law to terminate the Partnership. Upon the dissolution of the Partnership pursuant to Section 10.1, the Liquidator shall cause to be prepared, and shall furnish to each Partner, a statement setting forth the assets and liabilities of the Partnership. Promptly following the complete liquidation and distribution of the Partnership Assets, the Liquidator shall furnish to each Partner a statement showing the manner in which the Partnership Assets were liquidated and distributed.
(E)    Notwithstanding the foregoing provisions of this Section 10.2, in the event that the Partnership shall dissolve as a result of the type expiration of the term provided for herein or as a result of the occurrence of an event of the type described in Section 10.1(B) or (C), then each Limited Partner shall be deemed to have delivered a Redemption Notice on the date of such dissolution. In connection with each such Redemption Notice, the General Partner shall have the option, subject to the Act, of either (i) complying with the redemption procedures contained in Article IX or (ii) at the request of any Limited Partner, delivering to such Limited Partner Partnership property approximately equal in value (after taking into account the liabilities herein referred to) to the amount otherwise distributable to such Partner under Section 10.2(A)(4) hereof upon the assumption by such Limited Partner of such Limited Partner’s proportionate share of the Partnership’s liabilities and payment by such Limited Partner (or the Partnership) of any excess (or deficiency) of the value of the property so delivered over the amount otherwise distributable to such Partner under Section 10.2(A)(4). In lieu of requiring such Limited Partner to assume its proportionate share of Partnership liabilities, the General Partner may, subject to the Act, deliver to such Limited Partner unencumbered Partnership property approximately equal in value to the amount otherwise distributable to such Partner under Section 10.2(A)(4). In furtherance of the foregoing, a Partner may be compelled to accept a distribution of any asset in kind from the Partnership despite the fact that the percentage of the assets distributed to such Partner, exceeds the percentage of that asset which is equal to the percentage in which he shares in distributions from the Partnership.

SECTION 10.3    Effect of Treasury Regulations.
(A)    In the event the Partnership is “liquidated” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g) and there has been a dissolution of the Partnership under Section 10.1 hereof, distributions shall be made pursuant to this Article X to the General Partner, the Limited Partners, and the Preferred Limited Partners who have positive Capital Accounts in compliance with Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2). Except to the extent the General Partner, in its sole discretion, permits a Limited Partner to enter into a deficit restoration obligation agreement with the Partnership, if any Partner has a deficit balance in its Capital Account (after giving effect to all contributions (without regard to this Section 10.3(A)), distributions and allocations), such Partner shall have no obligation to make any contribution to the capital of the Partnership. 11Any deficit restoration obligation pursuant to the provisions hereof shall be for the benefit of creditors of the 

59
     
 

Partnership or any other Person to whom any debts, liabilities, or obligations are owed by (or who otherwise has any claim against) the Partnership or the General Partner, in its capacity as general partner of the Partnership.
___________
11 See Amendment 32 to Partnership Agreement.
(B)    In the event the Partnership is “liquidated” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g) but there has been no dissolution of the Partnership under Section 10.1 hereof, then the Partnership Assets shall not be liquidated, the Partnership’s liabilities shall not be paid or discharged and the Partnership’s affairs shall not be wound up.
In the event of such a liquidation there shall be deemed to have been a distribution of Partnership Assets in kind to the Partners in accordance with their respective Capital Accounts followed by a recontribution of the Partnership Assets by the Partners also in accordance with their respective Capital Accounts.

SECTION 10.4    Time for Winding-Up. Anything in this Article X notwithstanding, a reasonable time shall be allowed for the orderly winding-up of the business and affairs of the Partnership and the liquidation of the Partnership Assets in order to minimize any potential for losses as a result of such process. During the period of winding-up, this Agreement shall remain in full force and effect and shall govern the rights and relationships of the Partners inter se.

ARTICLE XI     
AMENDMENTS AND MEETINGS

SECTION 11.1    Amendment Procedure.
(A)    Amendments to this Agreement may be proposed by the General Partner. An amendment proposed at any time when the General Partner holds less than 90% of all Partnership Units will be adopted and effective only if it receives the Consent of the holders of a majority of each of the Partnership Units and Preferred Units, voting separately, not then held by the General Partner and an amendment proposed at any time when the General Partner holds 90% or more of all Partnership Units and Preferred Units may be made by the General Partner without the Consent of any Limited Partner or Preferred Limited Partner; provided, however, no amendment shall be adopted if it would (i) convert a Limited Partner’s Partnership Interest or Preferred Limited Partner’s Preferred Units into a general partner interest, (ii) increase the liability of a Limited Partner or a Preferred Limited Partner under this Agreement, (iii) except as otherwise permitted in this Agreement, alter the amount or the Partner’s rights to distributions set forth in Article V or X, or the allocations set forth in Article IV, (iv) alter or modify any aspect of the Partner’s rights with respect to redemption of Partnership Units or conversion of Preferred Units, (v) cause the 

60
     
 

early termination of the Partnership (other than pursuant to the terms hereof), (vi) permit allocations or distributions with respect to Priority Return Amounts or Liquidation Preferences among each class or series of Senior Preferred Units on a basis other than a pari passu basis with each other class or series of Senior Preferred Units12 or (vii) amend this Section 11.1(A), in each case without the Consent of each Partner adversely affected thereby. In connection with any proposed amendment of this Agreement requiring Consent, the General Partner shall either call a meeting to solicit the vote of the Partners or seek the written vote of the Partners to such amendment. In the case of a request for a written vote, the General Partner shall be authorized to impose such reasonable time limitations for response, but in no event less than ten (10) days, with the failure to respond being deemed a vote consistent with the vote of the General Partner.
(B)    Notwithstanding the foregoing, amendments may be made to this Agreement by the General Partner, without the Consent of any Limited Partner or Preferred Limited Partner, to (i) add to the representations, duties or obligations of the General Partner or surrender any right or power granted to the General Partner herein; (ii) cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein or make any other provisions with respect to matters or questions arising hereunder which will not be inconsistent with any other provision hereof; (iii) reflect the admission, substitution, termination or withdrawal of Partners in accordance with this Agreement (including the issuance of Partnership Units and Preferred Units to a Partner (including the General Partner) in accordance with the requirements of Section 4.2(A) or (B) hereof, and the designation of the preferences and rights of any such Preferred Units); or (iv) satisfy any requirements, conditions or guidelines contained in any order, directive, opinion, ruling or regulation of a federal or state agency or contained in federal or state law. The General Partner shall reasonably promptly notify the Limited Partners and Preferred Limited Partners whenever it exercises its authority pursuant to this Section 11.1(B).
(C)    Within ten (10) days of the making of any proposal to amend this Agreement, the General Partner shall give all Partners Notice of such proposal (along with the text of the proposed amendment and a statement of its purposes).

SECTION 11.2    Meetings and Voting.
(A)    Meetings of Partners may be called by the General Partner. The General Partner shall give all Partners Notice of the purpose of such proposed meeting not less than seven (7) days nor more than thirty (30) days prior to the date of the meeting. Meetings shall be held at a reasonable time and place selected by the General Partner. Whenever the vote or Consent of Partners is permitted or required hereunder, such vote or Consent shall be requested by the General Partner and may be given by the Partners in the same manner as set forth for a vote with respect to an amendment to this Agreement in Section 11.1(A).
(B)    Any action required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a written Consent setting forth the action to be taken is signed by the Partners owning Percentage Interests required to vote in favor of such action, which Consent may be evidenced in one or more instruments (for this purpose Preferred Units and 

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Preferred Limited Partners shall be treated as provided in Section 10.1(D) in the case of a vote pursuant to such Section). Consents need not be solicited from any other Partner if the written Consent of a sufficient number of Partners has been obtained to take the action for which such solicitation was required.
_____________
12 See Amendment 17 to Partnership Agreement

(C)    Each Limited Partner and each Preferred Limited Partner may authorize any Person or Persons, including without limitation the General Partner, to act for him by proxy on all matters on which a Limited Partner or a Preferred Limited Partner may participate. Every proxy (i) must be signed by the Limited Partner, the Preferred Limited Partner or their attorney-in-fact, (ii) shall expire eleven (11) months from the date thereof unless the proxy provides otherwise and (iii) shall be revocable at the discretion of the Limited Partner or Preferred Limited Partner granting such proxy.

ARTICLE XII     
MISCELLANEOUS PROVISIONS

SECTION 12.1    Title to Property. All property owned by the Partnership, whether real or personal, tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually, shall have any ownership of such property. The Partnership may hold any of its assets in its own name or in the name of its nominee, which nominee may be one or more individuals, corporations, partnerships, limited liability companies, trusts or other entities.

SECTION 12.2    Other Activities of Limited Partners and Preferred Limited Partners. Except as expressly provided otherwise in this Agreement or in any other agreement entered into by a Limited Partner or a Preferred Limited Partner or any Affiliate of a Limited Partner or a Preferred Limited Partner and the Partnership, the General Partner or any Subsidiary of the Partnership or the General Partner, any Limited Partner or Preferred Limited Partner or any Affiliate of any Limited Partner or Preferred Limited Partner may engage in, or possess an interest in, other business ventures of every nature and description, independently or with others, including, without limitation, real estate business ventures, whether or not such other enterprises shall be in competition with any activities of the Partnership, the General Partner or any Subsidiary of the Partnership or the General Partner; and neither the Partnership, the General Partner, any such Subsidiary nor the other Partners shall have any right by virtue of this Agreement in and to such independent ventures or to the income or profits derived therefrom.

SECTION 12.3    Power of Attorney.

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(A)    Each Partner hereby irrevocably appoints and empowers the General Partner (which term shall include the Liquidator, in the event of a liquidation, for purposes of this Section 12.3) and each of their authorized officers and attorneys-in-fact with full power of substitution as his true and lawful agent and attorney-in-fact, with full power and authority in his name, place and stead to:
(1)    make, execute, acknowledge, publish and file in the appropriate public offices (a) any duly approved amendments to the Certificate pursuant to the Act and to the laws of any state in which such documents are required to be filed; (b) any certificates, instruments or documents as may be required by, or may be appropriate under, the laws of any state or other jurisdiction in which the Partnership is doing or intends to do business; (c) any other instrument which may be required to be filed by the Partnership under the laws of any state or by any governmental agency, or which the General Partner deems advisable to file; (d) any documents which may be required to effect the continuation of the Partnership, the admission, withdrawal or substitution of any Partner pursuant to Article VIII, dissolution and termination of the Partnership pursuant to Article X, or the surrender of any rights or the assumption of any additional responsibilities by the General Partner; (e) any document which may be required to effect an amendment to this Agreement, to the extent such amendment is permitted by Section 11.1; and (f) all instruments (including this Agreement and amendments and restatements hereof) relating to the determination of the rights, preferences and privileges of any class or series of Partnership Interests issued pursuant to Section 4.2(B) of this Agreement; and
(2)    sign, execute, swear to and acknowledge all voting ballots, Consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole discretion of the General Partner, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement and appropriate or necessary, in the sole discretion of the General Partner, to effectuate the terms or intent of this Agreement.
(B)    Nothing herein contained shall be construed as authorizing the General Partner to amend this Agreement except in accordance with Article XI or as may be otherwise expressly provided for in this Agreement.
(C)    The foregoing grant of authority (i) is a special power of attorney, coupled with an interest, and it shall survive the disability or Involuntary Withdrawal of any Partner and shall extend to such Partner’s heirs, executors, guardians, conservators, successors, assigns and personal representatives; (ii) may be exercised by the General Partner for each and every Partner acting as attorney-in-fact for each and every Partner; and (iii) shall survive the Transfer by a Limited Partner or Preferred Limited Partner of all or any portion of its 

63
     
 

Partnership Interest and shall be fully binding upon such transferee; except that the power of attorney shall survive such assignment with respect to the assignor Limited Partner or Preferred Limited Partner for the sole purpose of enabling the General Partner to execute, acknowledge and file any instrument necessary to effect the admission of the transferee as a Substituted Limited Partner or Substituted Preferred Limited Partner. Each Partner hereby agrees to be bound by any representations made by the General Partner acting in good faith pursuant to such power of attorney. Each Partner shall execute and deliver to the General Partner, within fifteen (15) days after receipt of the General Partner’s request therefor, such further designations, powers of attorney and other instruments as the General Partner deems necessary to effectuate this Agreement and the purposes of the Partnership.

SECTION 12.4    Notices. All Notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery, (i) if to a Limited Partner or a Preferred Limited Partner, at the most current address given by such Limited Partner or Preferred Limited Partner to the General Partner by means of a Notice given in accordance with the provisions of this Section 12.4, which address initially is the address contained in the records of the General Partner or the Partnership, or (ii) if to the General Partner or the Partnership, Corporate Office Properties Trust, 6711 Columbia Gateway Drive, Suite 300, Columbia, Maryland 21046, Attn: President. All such Notices and communications shall be deemed to have been duly given: at the time delivered by hand, if hand delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; or when receipt is acknowledged, if telecopied.

SECTION 12.5    Further Assurances. The parties agree to execute and deliver all such documents, provide all such information and take or refrain from taking any action as may be necessary or desirable to achieve the purposes of this Agreement and the Partnership.

SECTION 12.6    Titles and Captions. All article or section titles or captions in this Agreement are solely for convenience and shall not be deemed to be part of this Agreement or otherwise define, limit or extend the scope or intent of any provision hereof.

SECTION 12.7    Applicable Law. This Agreement, and the application or interpretation thereof, shall be governed exclusively by its terms and by the laws of the State of Delaware, without regard to its principles of conflicts of laws.

SECTION 12.8    Binding Agreement. This Agreement shall be binding upon the parties hereto, their heirs, executors, personal representatives, successors and assigns.

SECTION 12.9    Waiver of Partition. Each of the parties hereto irrevocably waives during the term of the Partnership any right that it may have to maintain any action for partition with respect to any property of the Partnership.

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SECTION 12.10    Counterparts and Effectiveness. This Agreement may be executed in several counterparts, which shall be treated as originals for all purposes, and all so executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that all the parties are not signatory to the original or the same counterpart. Any such counterpart shall be admissible into evidence as an original hereof against each Person who executed it. The execution of this Agreement and delivery thereof by facsimile shall be sufficient for all purposes, and shall be binding upon any party who so executes.

SECTION 12.11    Survival of Representations. All representations and warranties herein shall survive the dissolution and final liquidation of the Partnership.

SECTION 12.12    Entire Agreement. This Agreement (and all Exhibits hereto) contains the entire understanding among the parties hereto and supersedes all prior written or oral agreements among them respecting the within subject matter, unless otherwise provided herein. There are no representations, agreements, arrangements or understandings, oral or written, among the Partners hereto relating to the subject matter of this Agreement which are not fully expressed herein and in said Exhibits.

SECTION 12.13    Merger. The Partnership may merge with, or consolidate into, another business entity (as defined in Section 17-211(a) of the Act) upon approval by the General Partner and the Consent of the holders of a majority of each of the Partnership Units and the Preferred Units, voting separately. In accordance with Section 17-211 of the Act (including Section 17-211(g)), notwithstanding anything to the contrary contained in this Agreement, an agreement of merger or consolidation approved by the General Partner and Consented to by the holders of a majority of each of the Partnership Units and the Preferred Units, voting separately, may (A) effect any amendment to this Agreement, or (B) effect the adoption of a new partnership agreement for the Partnership if it is the surviving or resulting limited partnership of the merger or consolidation. Any amendment to this Agreement or adoption of a new partnership agreement made pursuant to the foregoing sentence shall be effective at the effective time or date of the merger or consolidation. The provisions of this Section shall not be construed to limit the accomplishment of a merger or of any of the matters referred to herein by any other means otherwise permitted by law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the parties hereto as of the day and year first above written.

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	CORPORATE OFFICE PROPERTIES TRUST

	 

	By: /s/ Stephen E. Budorick

	Name: Stephen E. Budorick

	Title: President and Chief Executive Officer

            

 

Exhibit 1
Form of Schedule of Partners

	
				
	General Partner
	Common Units of Partnership Units
	 
	Series I Preferred Units

	Corporate Office Properties Trust
	108,853,741
	 
	 

	 
	 
	 
	 

	Limited Partners and Preferred Limited Partners
	 
	 
	 

	Clay W. Hamlin, III
	55,291
	 
	 

	LBCW Limited Partnership
	91,107
	 
	 

	Robert L. Denton
	281,500
	 
	 

	James K. Davis
	51,589
	 
	 

	Lawrence J. Taff
	13,733
	 
	 

	M.O.R. 44 Gateway Associates Limited Partnership
	1
	 
	 

	Jacquelyn E. Parsinen Trust
	49,434
	 
	 

	M.O.R. Commons Limited Partnership
	7
	 
	 

	Lynn Hamlin
	121,411
	 
	 

	Housing Affiliates, Inc.
	4,402
	 
	 

	Reingle Corp.
	730
	 
	 

	Joseph Tawil
	2,160
	 
	 

	Leo Joy II Enterprises, L.P.
	59,528
	 
	 

	Susan Wilstein Survivors Trust
	59,528
	 
	 

	A. Charles Wilson, Trustee of the Wilson Survivors Trust
	5,908
	 
	 

	Irwin Hoffman
	1,880
	 
	 

	Lawrence G. Rief
	2,526
	 
	 

	David D. Jenkins
	262,165
	 
	 

	Donald Manekin
	23,336
	 
	 

	Edward Rouse Winstead
	7,009
	 
	 

	William H. Winstead
	7,010
	 
	 

	Robert Manekin
	8,988
	 
	 

	Charles Manekin
	3,899
	 
	 

	Francine Manekin
	880
	 
	 

	Sandye Sirota
	5,427
	 
	 

	Lynn Stern
	880
	 
	 

	Jamie Deutsch
	22
	 
	 

	Kelly Alter
	22
	 
	 

	Kirk Property Limited Partnership
	221,501
	 
	 

	TRC Associates Limited Partnership
	 
	 
	352,000

	TOTAL
	110,195,615
	 
	352,000

 

CORPORATE OFFICE PROPERTIES TRUST L.P. 
EXHIBIT 2 TO 
LIMITED PARTNERSHIP AGREEMENT
Form of Redemption or Conversion Notice 
Redemption [Conversion] Notice
The undersigned hereby irrevocably (i) elects to exercise its [redemption] [conversion] rights contained in ARTICLE IX of the Limited Partnership Agreement of Corporate Office Properties, L.P. (the “Partnership Agreement”) with respect to an aggregate of __________ [Partnership Units] [Preferred Units], (ii) surrenders such [Partnership Units] [Preferred Units] and all right, title and interest therein and (iii) directs that the [REIT Shares (or applicable cash amount if so determined by the General Partner in accordance with the Partnership Agreement)] [Units of Limited Partner Interest] deliverable upon [redemption] [conversion] of such [Partnership Units] [Preferred Units] be delivered to the address specified below. Terms used above which are defined in the Partnership Agreement are used herein are defined therein.
Dated:     
Name of Limited Partner or Preferred 
  Limited Partner:         
Social Security or 
  Federal Employer ID Number:            
 
(Signature of Limited Partner or Preferred Limited Partner)
 
(Street Address)
 
    (City)    (State)    (Zip Code)
Signature Guaranteed by: 
    

 

CORPORATE OFFICE PROPERTIES TRUST, L.P. 
EXHIBIT 3 
 
TO 
 
LIMITED PARTNERSHIP AGREEMENT
Amended and Restated Registration Rights Agreement

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
 Dated as of March 16, 1998
 of 
CORPORATE OFFICE PROPERTIES TRUST
 for the benefit of 
HOLDERS OF PARTNERSHIP UNITS AND PREFERRED UNITS
 of 
CORPORATE OFFICE PROPERTIES, L.P. 
and 
HOLDERS OF COMMON SHARES OF BENEFICIAL INTEREST
 of 
CORPORATE OFFICE PROPERTIES TRUST 

 

          AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

          THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of March 16, 1998 by Corporate Office Properties Trust, a Maryland real estate investment trust (the "Company"), for the benefit of (w) the persons who own limited partnership units ("Partnership Units") and/or preferred units ("Preferred Units"), whether owned as of the date hereof or hereafter acquired, of Corporate Office Properties, L.P., a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act (the "Partnership"), (x) Vernon Beck, Robert L. Denton, Clay W. Hamlin III, John Parsinen and Jay H. Shidler, (y) persons issued common shares of beneficial interest, par value $0.01 per share of the Company ("Common Shares") in exchange for shares of common stock, par value $0.01 per share (the "Common Stock"), of Royale Investments, Inc., a Minnesota corporation ("Royale"), pursuant to the Contribution Agreement (as defined below), and (z) the respective successors. assigns, transferees and estates of the persons identified in clauses (w), (x) and (y) (herein referred to collectively as the "Holders" and individually as a "Holder").  The Partnership Units and Preferred Units are herein sometimes collectively called the "Units."

          WHEREAS, on October [14], 1997 certain Holders become owners of Units in connection with the contributions (the "Contributions") of certain general and limited partnership interests and other assets to the Partnership pursuant to the Formation/Contribution Agreement dated as of September 7, 1997 by and among the Company, H/SIC Corporation, Strategic Facility Investors, Inc., South Brunswick Investment Company, LLC, Comcourt investment Corporation and Gateway Shannon Development Corporation, as the same may at any time be amended, modified and supplemented and in effect (the "Contribution Agreement");

          WHEREAS, pursuant to the Partnership Agreement (as defined below) 
the Holders of Preferred Units have the right to convert them into Partnership Units as and to the extent set forth in the Partnership Agreement;

          WHEREAS, on October [14], 1997, Royale became the sole general partner of the Partnership and executed a registration rights agreement with terms substantially the same as this Agreement;

          WHEREAS, on October [14], 1997 certain Holders become owners of shares of Common Stock pursuant to the Contribution Agreement in consideration of assets transferred to the Company;

          WHEREAS, on the date hereof, the Company has succeeded by merger to all of the rights and obligations of Royale and each share of Common Stock has been converted into the right to receive one Common Share;

          WHEREAS, on the date hereof, the Common Shares are publicly held and traded and the Company is an issuer which is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended from time to time (the "Exchange Act");

          WHEREAS, in connection with the foregoing, the Company wishes to confirm its obligations and has agreed, subject to the terms, conditions and limitations set forth in this Agreement, to provide the Holders with certain registration rights in respect of Common Shares either issued (x) pursuant to the Contribution Agreement or (y) upon redemption of Partnership Units as and to the extent set forth in that 

 

certain Limited Partnership Agreement of the Partnership dated October 14, 1997 among the sole general and initial limited partners party thereto, as the same has been, and may be further, amended, modified or supplemented from time to time and in effect (the "Partnership Agreement").

          NOW, THEREFORE, the Company and the Partnership for the benefit of the Holders each agrees as follows:

          Section 1.     Definitions.

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

          Commission:  The Securities and Exchange Commission.

          Common Shares:  Common shares of beneficial interest, $0.01 par value, of the Company.

          Contribution Agreement:  As set forth in the preamble.

          Contributions:  As set forth in the preamble.

          Exchange Act:  As set forth in the preamble.

          Holder or Holders:  As set forth in the preamble.

          Holders Entitled to Registration Rights:  As set forth in Section 2(b).

          Indemnitee:  A Holder of Registerable Securities covered by a registration statement filed with the Commission as provided in this Agreement pursuant to Sections 2, 4 or 5 hereof.

          Majority Holders:  At any time, Holders of Registrable Securities, Preferred Units then convertible into Partnership Units and Partnership Units then redeemable for Registrable Securities who, if all such Preferred Units were converted and all such Partnership Units were so redeemed, would then hold a majority of the Registrable Securities.

          Minimum Registrable Amount:  At any date of determination, Registrable Securities having an aggregate fair market value of at least $3 million.

          NASD:  The National Association of Securities Dealers, Inc.

          Partnership:  As set forth in the preamble.

          Partnership Agreement:  As set forth in the preamble.

          Partnership Units:  As set forth in the Partnership Agreement.

          Person:  Any individual, partnership, corporation, limited liability company, trust or other legal entity.

          Preferred Units:  As set forth in the Partnership Agreement.

 

          Prospectus:  A prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and by all other amendments and supplements to such prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.

          Registrable Securities:  The Shares, excluding (i) Shares as to which a Registration Statement shall have become effective under the Securities Act pursuant to Section 2, 3 or 4 of this Agreement and which shall have been disposed of under such Registration Statement, (ii) Shares sold or otherwise distributed pursuant to Rule 144 under the Securities Act and (iii) Shares as to which registration under the Securities Act is not required to permit the sale thereof to the public.

          Sale Period:  The 45-day period immediately following the filing with the Commission by the Company of an annual report of the Company on Form 10-K or a quarterly report of the Company on Form 10-Q or such other period as the Company may determine from time to time.

          Securities Act:  The Securities Act of 1933, as amended from time to time.

          Shares:  The Common Shares issued to Holders of Partnership Units upon redemption of their Partnership Units pursuant to the Partnership Agreement or to Holders pursuant to the Contribution Agreement.

          Shelf Registration:  A "shelf" registration of the Registrable Securities under Rule 415 under the Securities Act.

          Shelf Registration Statement:  Shall mean a "shelf" registration statement of the Company and any other entity required to be a registrant with respect to such shelf registration statement pursuant to the requirements of the Securities Act which covers all of the Registrable Securities then issued and outstanding or which may thereafter be issued in redemption of any Partnership Units (including, without limitation, Units issuable upon conversion of Preferred Units) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the Commission, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all materials incorporated by reference therein.

          Units:  Preferred Units and Partnership Units, collectively.

          Section 2.     Shelf Registration Under the Securities Act.

          (a)  Filing of Shelf Registration Statement.  By August [14], 1998 and by each March 31 after such initial filing, the Company shall cause to be filed a Shelf Registration Statement covering the sale by the then Holders of all of the Registrable Securities then held by them in accordance with the terms hereof and will use its reasonable best efforts to cause each such Shelf Registration Statement to be declared effective by the Commission as soon as reasonably practicable.  The Company agrees to use its reasonable best efforts to keep each such Shelf Registration Statement continuously effective under the Securities Act until such time as the aggregate number of Registrable Securities covered by all such Shelf Registration Statements and then outstanding (computed for this purpose as if all outstanding Preferred Units have been converted into Partnership Units and all thereafter outstanding Partnership Units have 

 

been redeemed for Common Shares) is less than 5% of the then outstanding Common Shares (computed as aforesaid and including, without limitation, Common Shares issuable in respect of Retained Interests (as defined in the Contribution Agreement)), and further agreesto supplement or amend each such Shelf Registration Statement, if and as required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder for a Shelf Registration.  Each Holder who sells Shares as part of any such Shelf Registration shall be deemed to have agreed to all of the terms and conditions of this Agreement and to have agreed to perform any an all obligations of a Holder hereunder.

          (b)  Inclusion in Shelf Registration Statement.  Not later than 30 days prior to filing the Shelf Registration Statement with the Commission, the Company shall notify each then Holder of Registrable Securities (including any Person who is then entitled to become a Holder pursuant to the Partnership Agreement by reason of owning Units or Preferred Units, including, without limitation, Persons holding Retained Interests) ("Holders Entitled to Registration Rights") of its intention to make such filing and request advice from each such Holder as to whether such Holder desires to have Registrable Securities held by it or which it is entitled to receive not later than the last day of the first Sale Period occurring in whole or in part after the date of such notice included in the Shelf Registration Statement at such time; provided, however, that the Company shall not be required to so notify any such Holder in respect of Registrable Securities previously registered pursuant to a Shelf Registration Statement filed in accordance with this Section 2 which such Holder could then dispose of pursuant to such Registrable Securities.  Any such Holder who is so notified and does not provide the information reasonably requested by the Company in connection with the preparation of the Shelf Registration Statement as promptly as practicable after receipt of such notice, but in no event later than 20 days thereafter, shall not be entitled to have its Registrable Securities included in such Shelf Registration Statement at the time it becomes effective, but shall have the right thereafter to deliver to the Company a Registration Notice as contemplated by Section 3(b).

          Section 3.     Shelf Registration Procedures.

          In connection with the obligations of the Company with respect to each Shelf Registration Statement pursuant to Section 2 hereof, the Company shall:

          (a)  prepare and file with the SEC, within the time period set forth in Section 2(a) hereof, a Shelf Registration Statement, which Shelf Registration Statement (i) shall be available for the sale of the Registrable Securities covered thereby in accordance with the intended method or methods of distribution by the selling Holders thereof and (ii) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the Commission to be filed therewith.

          (b)  subject to the last three sentences of this Section 3(b) and to Section 3(i) hereof, (i) prepare and file with the Commission such amendments and post-effective amendments to such Shelf Registration Statement as may be necessary to keep such Shelf Registration Statement effective for the applicable period; (ii) cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 or any similar rule that may be adopted under the Securities Act; (iii) respond promptly to any comments received from the Commission with respect to such Shelf Registration Statement, or any amendment, post-effective amendment or supplement relating thereto; and (iv) comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Shelf Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the selling Holders thereof.  Notwithstanding anything 

 

to the contrary contained herein, the Company shall not be required to take any of the actions described in clauses (i), (ii) or (iii) above with respect to a particular Holder of Registrable Securities unless and until the Company has received either a written notice (a "Registration No-tice") from such Holder that it intends to make offers or sales under such Shelf Registration Statement as specified in such Registration Notice or a written response from such Holder of the type contemplated by Section 2(b); provided, however, that the Company shall have 7 business days to prepare and file any such amendment or supplement after receipt of a Registration Notice.  Once a Holder has delivered such a written response or a Registration Notice to the Company, such Holder shall promptly provide to the Company such information as the Company reasonably requests in order to identify such Holder and the method of distribution in a post-effective amendment to such Shelf Registration Statement or a supplement to a Prospectus.  Offers or sales under such Shelf Registration Statement may be made only during a Sale Period.  Such Holder also shall notify the Company in writing upon completion of such offer or sale or at such time as such Holder no longer intends to make offers or sales under such Shelf Registration Statement.

          (c)  furnish to each Holder of Registrable Securities that has delivered a Registration Notice to the Company, without charge, as many copies of each applicable Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Securities; the Company consents to the use of such Prospectus, including each preliminary Prospectus, by each such Holder of Registrable Securities in connection with the offering and sale of the Registrable Securities covered by such Prospectus or the preliminary Prospectus.

          (d)  use its reasonable best efforts to register or qualify the Registrable Securities covered thereby by the time such Shelf Registration Statement is declared effective by the Commission under all applicable state securities or "blue sky" laws of such jurisdictions as any Holder of Registrable Securities covered by such Shelf Registration Statement shall reasonably request in writing, keep each such registration or qualification effective during the period such Shelf Registration Statement is required to be kept effective or during the period offers or sales are being made by a Holder that has delivered a Registration Notice to the Company, whichever is shorter, and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Securities then owned by such Holder (after giving effect to the redemption of Partnership Units then held by such Holder); provided, however, that the Company shall not be required (i) to qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not be required so to qualify or register but for this Section 3(d), (ii) to subject itself to taxation in any such jurisdiction or (iii) to submit to the general service of process in any such jurisdiction.

          (e)  notify each Holder when such Shelf Registration Statement has become effective and notify each Holder of Registrable Securities that has delivered a Registration Notice to the Company promptly and, if requested by such Holder, confirm such advice in writing (i) when any post-effective amendments and supplements to such Shelf Registration Statement become effective, (ii) of the issuance by the Commission or any state securities authority of any stop order suspending the effectiveness of such Shelf Registration Statement or the initiation of any proceedings for that purpose, (iii) if the Company receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose and (iv) of the happening of any event during the period such Shelf Registration Statement is effective as a result of which such Shelf Registration Statement or a related Prospectus contains any untrue statement of a material fact or omits to 

 

state any material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading.

           (f)  make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of such Shelf Registration Statement at the earliest possible moment.

           (g)  furnish to each Holder of Registrable Securities covered thereby that has delivered a Registration Notice to the Company, without charge, at least one conformed copy of such Shelf Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested).

           (h)  cooperate with the selling Holders of Registrable Securities covered thereby to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any Securities Act legend; and enable certificates for such Registrable Securities to be issued for such numbers of shares and registered in such names as the selling Holders may reasonably request at least two business days prior to any sale of Registrable Securities.

           (i)  subject to the last three sentences of Section 3(b) hereof, upon the occurrence of any event contemplated by Section 3(e)(iv) hereof, use its reasonable best efforts promptly to prepare and file a supplement or prepare, file and obtain effectiveness of a post-effective amendment to such Shelf Registration Statement or a related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

           (j)  make available for inspection by representatives of the Holders of the Registrable Securities and any counsel or accountant retained by such Holders, all financial and other records, pertinent corporate documents and properties of the Company, and cause the respective officers, directors and employees of the Company to supply all information reasonably requested by any such representative, counsel or accountant in connection with such Shelf Registration Statement; provided, however, that such records, documents or information which the Company determines in good faith to be confidential, and notifies such representatives, counsel or accountants in writing that such records, documents or information are confidential, shall not be disclosed by the representatives, counsel or accountants unless (i) the disclosure of such records, documents or information is necessary to avoid or correct a material misstatement or omission in such Shelf Registration Statement, (ii) the release of such records, documents or information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or (iii) such records, documents or information have been generally made available to the public otherwise than in violation of this Agreement.

           (k)  a reasonable time prior to the filing of any Prospectus, any amendment to such Shelf Registration Statement or amendment or supplement to a Prospectus, provide copies of such document (not including any documents incorporated by reference therein unless requested) to the Holders of Registrable Securities that have provided a Registration Notice to the Company.

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

 

           (m)  obtain a CUSIP number for all Registrable Securities, not later than the effective date of such Shelf Registration Statement.

           (n)  otherwise use its reasonable efforts to comply with all applicable rules and regulations of the Commission and make available to its security holders, as soon as reasonably practicable, an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

           (o)  use its reasonable best efforts to cause the Registrable Securities covered by such Shelf Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable Holders that have delivered Registration Notices to the Company to consummate the disposition of such Registrable Securities. 

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

In connection with and as a condition to the Company's obligations with respect to any Shelf Registration Statement pursuant to Section 2 hereof and this Section 3, each Holder agrees with the Company that:

           (i)  it will not offer or sell its Registrable Securities under a Shelf Registration Statement until (A) it has either (1) provided a Registration Notice pursuant to Section 3(b) hereof or (2) had Registrable Securities included in such Shelf Registration Statement at the time it.became effective pursuant to Section 2(b) hereof and (B) it has received copies of the supplemented or amended Prospectus contemplated by Section 3(b) hereof and receives notice that any post-effective amendment has become effective;

           (ii) upon receipt of any notice from the Company of the happening of anv event of the kind described in Section 3(b)(iv) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to such Shelf Registration Statement until such Holder receives copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof and receives notice that any post-effective amendment has become effective, and, if so directed by the Company, such Holder will deliver to the Company (at the expense of the Company) all copies in its possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice;

           (iii) all offers and sales under such Shelf Registration Statement shall be completed within forty-five (45) days after the first date on  which offers or sales can be made pursuant to clause (i) above, and upon expiration of such forty-five (45) day period the Holder will not offer or sell its Registrable Securities under the Shelf Registration Statement until it has again complied with the provisions of clauses (i)(A)(1) and (B) above, except that if the applicable Registration  Notice was delivered to the Company at a time which was not part of a Sale Period, such forty-five (45) day period shall be the next succeeding Sale Period;

           (iv) if the Company determines in its good faith judgment, after consultation with counsel, that the filing of a Shelf Registration Statement under Section 2 hereof or the use of any Prospectus would require the disclosure of important information which the Company has a bona fide business purpose for preserving as confidential or the disclosure of which would impede the Company's ability to consummate 

 

a significant transaction, upon written notice of such determination by the Company, the rights of the Holders to offer, sell or distribute any Registrable Securities pursuant to a Shelf Registration Statement or Prospectus or to require the Company to take action with respect to the registration or sale of any Registrable Securities pursuant to a Shelf Registration Statement (including any action contemplated by this Section 3) will be suspended until the date upon which the Company notifies the Holders in writing that suspension of such rights for the grounds set forth in this paragraph is no longer necessary; provided, however, that the Company may not suspend such rights for an aggregate period of more than 90 days in any 12-month period; and

           (v)  in the case of the registration of any underwitten equity offering proposed by the Company (other than any registration by the Company on Form S-8, or a successor or substantially similar form, of (i) an employee stock option, stock purchase or compensation plan or of securities issued or issuable pursuant to any such plan or (ii) a dividend reinvestment plan), such Holder will agree, if requested in writing by the managing underwriter or underwriters administering such offering, not to effect any offer, sale or distribution of any Registrable Securities (or any option or right to acquire Registrable Securities) (each, a "Transfer") during the period commencing on the 10th day prior to the expected effective date (which date shall be stated in such notice) of the registration statement covering such underwritten primary equity offering or, if such offering shall be a "take-down" from an effective shelf registration statement, the 10th day prior to the expected commencement date (which date shall be stated in such notice) of such offering, and ending on the date specified by such managing underwriter in such written request to such Holder; provided, however, that no Holder shall be required to agree not to Transfer its Registrable Securities for a period of time which is longer than the greater of 90 days or the period of time for which any senior executive of the Company is required so to agree in connection with such offering. Nothing in this paragraph shall be read to limit the ability of any Holder to redeem its Partnership Units for Common Shares in accordance with the Partnership Agreement.

          Section 4.     Piggyback Registration.

          (a)  Right to Piggyback.  Whenever on or after August [14], 1998 (x) the Company proposes to register any Common Shares (or securities convertible into or exchangeable or exercisable for such Common Shares) under the Securities Act for its own account or the account of any shareholder of the Company (other than offerings pursuant to employee plans, or noncash offerings in connection with a proposed acquisition, exchange offer, recapitalization or similar transaction) and (y) the registration form may be used for the registration of Registrable Securities (a "Piggyback Registration"), the Company will give prompt written notice to all of the Holders of Common Shares or Units outstanding on the date hereof (the "Original Holders") of its intention to effect such a registration and will, subject to Section 4(b) and Section 10 hereof, include in such registration all Registrable Securities with respect to which such Original Holders request in writing to be so included within 20 days after the receipt of the Company's notice; provided, however, that the Company shall not be required to give such notice or to effect such registration in respect of any Registerable Securities which have been, or are in the process of being, registered pursuant to any Shelf Registration Statement.

          (b)  Priority.  If a registration pursuant to this Section 4 involves an underwritten offering and the managing underwriter advises the Company in good faith that in its opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without having an adverse effect on such offering, including the price at which such securities can be sold, then the Company will be required to include in such registration the maximum number of shares that such underwriter advises can be so sold, allocated (x) first, to the securities the Company proposes to sell, (y) second, among the Common Shares requested to be included in such registration by the Original 

 

Holders (other than Registrable Securities previously registered pursuant to a Shelf Registration Statement filed in accordance with Section 2 hereof under which such Original Holder could then dispose of such Registrable Securities), considered in the aggregate (if such registration was initiated by the Company), and any other shareholder of the Company with Common Shares eligible for registration, pro rata, on the basis of the number of Common Shares such holder requests be included in such registration, and (z) third, among other securities, if any, requested and otherwise eligible to be included in such registration.

          (c)  Nothing contained herein shall prohibit the Company from determining, at any time, not to file a registration statement or, if filed, to withdraw such registration or terminate or abandon the registration related thereto.

          Section 5.     Requested Registration.

          (a)  Right to Request Registration.  Upon the written request of Original Holders owning 6% or more of the outstanding Registrable Securities then owned in the aggregate by such Holders (the "Requesting Holders") (computed for these purposes as if all Preferred Units have been converted into Partnership Units and thereafter all outstanding Partnership Units have been redeemed for Common Shares), requesting that the Company effect the registration under the Securities Act of at least the Minimum Registration Amount, the Company shall use its best efforts to effect, as expeditiously as possible, following the prompt (but in no event later than 15 days following the receipt of such written request) delivery of notice to all Original Holders, the registration under the Securities Act of such number of shares of Registrable Securities owned by the Requesting Holders and requested by the Requesting Holders to be so registered (subject to Section 5(c) hereof), together with (x) all other Common Shares entitled to registration, and (y) securities of the Company which the Company elects to register and offer for its own account; provided, however, that the Company shall not be required to (i) subject to Section 5(b) below, effect more than a total of three such registrations pursuant to this Agreement, (ii) file a registration statement relating to a registration request pursuant hereto within a period of six months after the effective date of any other registration statement of the Company requested hereunder (other than pursuant to Section 2) or pursuant to which the Requesting Holders shall have been given an opportunity to participate pursuant to Section 4 hereof and which opportunity they declined or which registration statement under Section 4 hereof included shares of Registrable Securities owned by Holders Entitled to Registration Rights (so long as such registration statement became and was effective for sufficient, time to permit the sales contemplated thereby) or (iii) file a registration statement relating to the registration of Registerable Securities which are already being registered pursuant to a Shelf Registration Statement; provided further, that the Company shall not be required to file a registration statement relating to an offering of Common Shares on a delayed or continuous basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated under the Securities Act if the Company is not, at the time, eligible to register Common Shares on Form S-3 (or a successor form).

          Notwithstanding the foregoing, if the Board of Directors of the Company determines in its good faith judgment, (x) after consultation with a nationally recognized investment banking fim, that there will be an adverse effect on a then contemplated public offering of the Company's securities, (y) that the disclosures that would be required to be made by the Company in connection with such registration would be materially harmful to the Company because of transactions then being considered by, or other events then concerning, the Company, or (z) the registration at the time would require the inclusion of pro forma or other information, which requirements the Company is reasonably unable to comply with, then the Company may defer the filing (but not the preparation) of the registration statement which is required to effect any registration pursuant to this Section 5 for a reasonable period of time, but not in excess of 90 

 

calendar days (or any longer period agreed to by the Holders Entitled to Registration Rights), provided that at all times the Company is in good faith using all reasonable efforts to file such registration statement as soon as practicable.

          (b)  Effective Registration.  A registration requested pursuant to this Section 5 shall not be deemed to have been effected (and, therefore, not requested for purposes of Section 5(a) above) (w) unless the registration statement relating thereto has become effective under the Securities Act, (x) if after it has become effective such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason other than a misrepresentation or an omission by a Holder and, as a result thereof, the shares of Registrable Securities requested to be registered cannot be completely distributed in accordance with the plan of distribution, (y) if the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied or waived other than by reason of some act or omission by a participating Holder or (z) if with respect to what would otherwise be deemed the third, or last, request under Section 5(a) hereof, less than all of the Common Shares that the Original Holders requested be registered were actually registered due to the operation of Section 5(c) hereof; provided that clause (z) above may not be invoked by the Original Holders unless (I) such request includes at least the Minimum Registration Amount or (II) if such request includes an amount that is less than the Minimum Registration Amount, Rule 144 under the Securities Act is not available to the Original Holders for the sale of all of the Common Shares owned by the Original Holders; and provided further that clause (z) above may be invoked only at the request of Original Holders meeting the foregoing requirements and owning more than 10% of the shares of Registrable then owned (computed as aforesaid) in the aggregate by the Original Holders.

          (c)  Priority.  If a requested registration pursuant to this Section 5 involves an underwritten offering and the managing underwriter shall advise the Company that in its opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without having an adverse effect on such offering, including the price at which such securities can be sold, then the Company will be required to include in such registration the maximum number of shares that such underwriter advises can be so sold, allocated (x) first, among all Common Shares requested by the Original Holders to be included in such registration, pro rata on the basis of the number of Common Shares then owned by each of them (or, if such holder requests that less than all of the Common Shares owned by such holder be included in such registration, such lesser number of shares) (y) second, to any securities requested to be included in such registration by any other shareholder of the Company having registration rights and (z) third, to any securities the Company proposes to sell.

          Section 6.  Registration Procedures.  If and whenever the Company is required to use its best efforts to effect or cause the registration of any Registrable Securities under the Securities Act as provided in this Agreement pursuant to Section 4 or 5 hereof, the Company 
shall:

          (a)  prepare and file with the Commission as expeditiously as possible but in no event later than 90 days after receipt of a request for registration with respect to such Registrable Securities, a registration statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate, which form shall be available for the sale of the Registrable Securities in accordance with the intended methods of distribution thereof, and use its best efforts to cause such registration statement to become effective; provided that before filing with the Commission a registration statement or prospectus or any amendments or supplements thereto, including documents incorporated by reference after the initial filing of any registration statement, the Company shall (x) fur-nish to each participating 

 

Holder and to one firm of attorneys selected collectively by the participating Holders and the holders of other securities covered by such registration statement, but in no event to more than one such counsel for all such selling securityholders, copies of all such documents proposed to be filed, which documents shall be subject to the review of the participating Holders and such counsel, and (y) notify the participating Holders of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered;

          (b)  prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than 180 days or such shorter period which shall terminate when all Registrable Securities covered by such registration statement have been sold (but not before the expiration of the 90-day period referred to in Section 4(3) of the Securities Act and Rule 174, or any successor thereto, thereunder, if applicable), and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;

          (c)  furnish, without charge, to the participating Holders and each underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto (including one conformed copy to each participating Holder and one signed copy to each managing underwriter and in each case including all exhibits thereto), and the prospectus included in such registration statement (including each preliminary prospectus), in conformity with the requirements of the Securities Act, and such other documents as the participating Holders may reasonably request in order to facilitate the disposition of the Registrable Securities registered thereunder;

          (d)  use its best efforts to register or qualify such Registrable Securities covered by such registration statement under such other securities or blue sky laws of such jurisdiction as the participating Holders, and the managing underwriter, if any, reasonably requests and do any and all other acts and things which may be reasonable necessary or advisable to enable the participating Holders and each underwriter, if any, to consummate the disposition in such jurisdiction of the Registrable Securities registered thereunder; provided that the Company shall not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6(d), (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction;

          (e)  use its best efforts to cause the Registrable Securities covered by such registration statement to be registered with or approved by such insurance regulatory authorities may be necessary by virtue of the business and operations of the Company to enable the participating Holders and other holders, if any, of securities covered by such registration statement to consummate the disposition of Registrable Securities registered thereunder;

          (f)  immediately notify the managing underwriter, if any, and the participating Holders at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event which comes to the Company's attention if as a result of such event the prospectus included in such registration statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company shall promptly prepare and furnish to the participating Holders and any other holder of securities covered by such registration statement and prospectus a supplement or amendment to such prospectus so that as thereafter delivered, such prospectus shall not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the 

 

statements therein not misleading; provided, however, that if the Company determines in good faith that the disclosure that would be required to be made by the Company would be materially harmful to the Company because of transactions then being considered by, or other events then concerning, the Company, or a supplement or amendment to such prospectus at such time would require the inclusion of pro forma or other information, which requirement the Company is reasonably unable to comply with, then the Company may defer for a reasonable period of time, not to exceed 90 days, furnishing to the participating Holders and any other holder of securities covered by such registration statement and prospectus a supplement or amendment to such prospectus; provided, further, that at all times the Company is in good faith using all reasonable efforts to file such amendment as soon as practicable,

          (g)  use its best efforts to cause all such securities being registered to be listed on each securities exchange on which similar securities issued by the Company are then listed, and enter into such customary agreements including a listing application and indemnification agreement in customary form (provided that the applicable listing requirements are satisfied), and to provide a transfer agent and register for such Registrable Securities covered by such registration statement no later than the effective date of such registration statement;

          (h)  make available for inspection by any of the participating Holders and any holder of securities covered by such registration statement, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such persons (collectively, the "Inspectors"), all financial and other records of the Company and its subsidiaries (collectively, "Records"), if any, as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's and its subsidiaries' officers, directors and employees to supply all information and respond to all inquiries reasonably requested by any such Inspector in connection with such registration statement.  Notwithstanding the foregoing, the Company shall have no obligation to disclose any Records to the Inspector in the event the Company determines that such disclosure is reasonably likely to have an adverse effect on the Company's ability to assert the existence of an attorney-client privilege with respect thereto;

          (i)  if requested, use its best efforts to obtain a "cold comfort" letter and a "bring-down cold comfort" letter from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by such letters;

          (j)  enter into a form of underwriting agreement that contains customary terms and provisions for similar securities offerings;

          (k)  make available senior management personnel to participate in, and cause them to cooperate with the underwriters in connection with, "road show" and other customary marketing activities, including "one-on-one" meetings with prospective purchasers of the Registrable Securities; and

          (l)  otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering a period of at least 12 months, beginning with the first month after the effective date of the registration statement (as the term "effective date" is defined in Rule 158(c) under the Securities Act), which earnings statement shall satisfy the provisions of Section 11 (a) of the Securities Act and Rule 158 thereunder. 

It shall be a condition precedent to the obligation of the Company to take any action pursuant to this Agreement in respect of Registrable Securities which are to be registered at the request of any of the 

 

participating Holders that the participating Holders shall fumish to the Company such information regarding the securities held by the participating Holders and the intended method of disposition thereof as the Company shall reasonably request and as shall be required in connection with the action taken by the Company.

     Each of the Holders agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 6(f) hereof, the Holders shall discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until receipt of the copies of the supplemented or amended prospectus contemplated by Section 6(f) hereof or until otherwise notified by the Company, and, if so directed by the Company, the participating Holders shall deliver to the Company (at the Company's expense) all copies (including, without limitation, any and all drafts), other than permanent file copies, then in any participating Holder's possession, of the prospectus covering such Registrable Securities at the time of receipt of such notice.  In the event the Company shall give any such notice, the period specified in Section 6(b) hereof shall be extended by the greater of (x) three months of (y) the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(f) hereof to and including the date when each of the participating Holders shall have received the copies of the supplemented or amended prospectus contemplated by, Section 6(f) hereof.

     Section 7.     Selection or Underwriters.  If any offering pursuant to a registration statement is to be an underwritten offering, the Company will select a managing underwriter or underwriters to administer the offering, provided that in the case of a registration statement pursuant to Section 5 hereof, the Original Holders holding more than 50% of the shares of Registrable Securities held by the Original Holders to be included in such underwritten offering shall select the managing underwriter or underwriters, subject to the consent of the Company which consent shall not be unreasonably withheld or delayed.

     Section 8.     Registration Expenses.  The Company shall pay, in connection with any registration pursuant to Section 2, 4 or 5, the following registration expenses incurred in connection therewith: (i) all Commission,stock exchange or NASD registration and filing fees, (ii) all fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with the blue sky qualifications of the Registrable Securities), (iii) printing expenses, (iv) internal expenses (including without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with the listing of the Registrable Securities on any national securities exchange or interdealer quotation system, (vi) the reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses of any comfort letters or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters), (vii) the reasonable fees and disbursements of not more than one firm of attorneys acting as legal counsel for (x) all of the selling shareholders, collectively, in respect of a registration pursuant to Section 4 hereof or (y) all of the participating Holders, collectively, in respect of a registration pursuant to Section 5 hereof, (viii) the fees and expenses of any registrar and transfer agent for the Common Shares, (ix) the underwriting fees, discounts and commissions applicable to any Common Shares sold for the account of the Company and (x) all expenses of any Person in preparing or assisting in preparing, word processing, printing and distributing any registration statement, prospectus, certificates and other documents relating to the performance of and compliance with this Agreement.  Except as otherwise provided in clause (ix) of this Section 8, the Company shall have no obligation to pay any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities.

          Section 9.     Indemnification; Contribution.

 

          (a)  The Company agrees to indemnify and hold harmless each Indemnitee from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any prepricing prospectus, registration statement or prospectus or in any amendment or supplement thereto, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission which has been made therein or omitted therefrom in reliance upon and in conformity with the information relating to a participating Holder furnished in writing to the Company by or on behalf of a participating Holder expressly for use in connection therewith.  The foregoing indemnity agreement shall be in addition to any liability which the Company may otherwise have.

          (b)  If any action, suit or proceeding shall be brought against an Indemnitee in respect of which indemnity may be sought against the Company, such Indemnitee shall promptly notify the Company, and the Company shall assume the defense thereof, including the employment of counsel and payment of all fees and expenses.  The Indemnitee shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnitee unless (x) the Company has agreed in writing to pay such fees and expenses, (y) the Company has failed to assume the defense and employ counsel, or (z) the named parties to any such action, suit or proceeding (including any impleaded parties) include both such Indemnitee and the Company, and such Indemnitee shall have been advised by its counsel that representation of such Indemnitee and the Company by the same counsel would be inappropriate under applicable standards of professional conduct (whether or not such representation by the same counsel has been proposed) due to actual or potential differing interests between them (in which case the Company shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Indemnitee).  It is understood, however, that the Company shall, in connection with any one such action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnitees not having actual or potential differing interests among themselves, and that all such fees and expenses shall be reimbursed as they are incurred.  The Company shall not be liable for any settlement of any such action, suit or proceeding effected without its written consent, but if settled with such written consent, or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the Company agrees to indemnify and hold harmless such Indemnitee, to the extent provided in the preceding paragraph, from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment.

          (c)  Each of the participating Holders, severally and not jointly, agree to indemnify and hold harmless the Company, its directors, its officers who sign the registration statement, and any person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Company to an Indemnitee, but only with respect to information relating to such Holder furnished in writing by or on behalf of such Holder expressly for use in the registration statement, prospectus or any prepricing prospectus, or any amendment or supplement thereto.  If any action, suit or proceeding shall be brought against the Company, any of its directors, any such officer, or any such controlling person based on the registration statement, prospectus or any prepricing prospectus, or any amendment or supplement thereto, and in respect of which indemnity may be sought against any Holder pursuant to this Section 9(c), such Holder shall have the rights and duties given to the Company by Section 9(b) hereof (except that if the Company 

 

shall have assumed the defense thereof such Holder shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof, but the fees and expenses of such counsel shall be at the Holder's expense), and the Company, its directors, any such officer, and any such controlling person shall have the rights and duties given to an Indemnitee by Section 9(b) hereof.  The foregoing indemnity agreement shall be in addition to any liability which the participating Holders may otherwise have.

          (d)  If the indemnification provided for in this Section 9 is unavailable to an indemnified party under paragraphs (a) or (c) hereof in respect of any losses, claims, damages, liabilities or expenses referred to therein. then an indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Company and of the participating Holders in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses.  The relative fault of the Company on the one hand and a participating Holder on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or by such participating Holder on the other hand and the parties' relative intent, knowledge, access or information and opportunity to correct or prevent such statement or omission.

          (e)  The Company and the participating Holders agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by a pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in Section 9(d) hereof.  The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to in Section 9(d) hereof shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating any claim or defending any such action, suit or proceeding.  Notwithstanding the provisions of this Section 9, no participating Holder shall be required to contribute any amount in excess of the amount by which the proceeds to such participating Holder exceeds the amount of any damages which such participating Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

          (f)  No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding.

          (g)  Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 9 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred.  The indemnity and contribution agreements contained in this Section 9 shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of an Indemnitee, the Company, its directors or officers, or any person controlling the Company, and (ii) any termination of this Agreement.

          Section 10.    Participation in Underwritten Registrations.  An Original Holder may not participate in any underwritten offering pursuant to Section 4 or 5 hereof unless such Holder (i) agrees to sell its 

 

Registrable Securities on the basis provided in any underwriting arrangements which, to the extent applicable solely to the participating Original Holders, are approved by the participating Original Holders in their reasonable discretion or which, to the extent applicable to the Company and the participating Original Holders, are approved by the Company in its reasonable discretion and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents (including lock-up agreements) reasonably required under the terms of such underwriting arrangements which are not inconsistent with the terms of this Agreement.

          Section 11.    Other Registration Rights.  The Company agrees that it shall not enter into any agreement which provides registration rights to any Person that are inconsistent with the provisions contained in this Agreement.  If the Company does become a party to such an agreement, the Company agrees that to the extent that the provisions of such agreement conflict with this Agreement, the provisions of this Agreement shall control.

          Section 12.    Rule 144 Sales.

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

          (b)  In connection with any sale, transfer or other disposition by any Holder of any Registrable Securities pursuant to Rule 144 under the Securities Act, the Company shall cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any Securities Act legend, and enable certificates for such Registrable Securities to be for such number of shares and registered in such names as the selling Holders may reasonably request at least two business days prior to any sale of Registrable Securities. 

          Section 13.    Miscellaneous.

          (a)  Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent of the Company and Holders constituting Majority Holders; provided, however, that no amendment, modification or supplement or waiver or consent to the departure with respect to the provisions of Sections 1 through 12, inclusive, hereof or which would impair the rights of any Holder under such provisions, shall be effective as against any Holder of Registrable Securities, Preferred Units or Partnership Units unless consented to in writing by such Holder of Registrable Securities, Preferred Units or Partnership Units.  Notice of any amendment, modification or supplement to this Agreement adopted in accordance with this Section 13(a) shall be provided by Company to each Holder of Registrable Securities, Preferred Units or Partnership Units at least thirty (30) days prior to the effective date of such amendment, modification or supplement.

          (b)  Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier or any courier guaranteeing overnight delivery, (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 13(b), which address initially is, with respect to each Holder, the address set forth in the Partnership Agreement, or (ii) if to the Company, at One Logan Square, Suite 1105, Philadelphia, Pennsylvania.

 

          All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; or at the time delivered if delivered by an air courier guaranteeing overnight delivery.

          (c)  Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the Company and the Holders, including without limitation and without the need for an express assignment, subsequent Holders.  If any successor, assignee or transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be entitled to receive the benefits hereof and shall be conclusively deemed to have agreed to be bound by all of the terms and provisions hereof.

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

          (e)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF.

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

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

          IN WITNESS WHEREOF, the Company has executed this Agreement as of 
the date first written above.

	
			
	 	CORPORATE OFFICE PROPERTIES TRUST

	 
	 	By:
	/s/ Clay W. Hamlin, III

	 	 
	Name: Clay W. Hamlin, III

	 	 
	Title: CEO

 

CORPORATE OFFICE PROPERTIES TRUST, L.P. 
EXHIBIT 4 
 
TO 
 
LIMITED PARTNERSHIP AGREEMENT
Notice of Election by Limited Partner to Convert Profit Interest Units into Partnership Units
The undersigned holder of Profit Interest Units hereby irrevocably (i) elects to convert _____________ Profit Interest Units in Corporate Office Properties, L.P. (the “Partnership”) into Partnership Units in accordance with the terms of the Third Amended and Restated Agreement of Limited Partnership of the Partnership, as amended; and (ii) directs that any cash in lieu of Partnership Units that may be deliverable upon such conversion be delivered to the address specified below.  The undersigned hereby represents, warrants, and certifies that the undersigned (a) has title to such Profit Interest Units, free and clear of the rights or interests of any other person or entity other than the Partnership; (b) has the full right, power, and authority to cause the conversion of such Profit Interest Units as provided herein; and (c) has obtained the consent to or approval of all persons or entities, if any, having the right to consent or approve such conversion.

 
	
						
	Dated:
	 
	 
	Name of Holder:

	 
	 

	 
	 

	 
	 

	 
	(Signature of Holder)

	 
	 

	 
	 

	 
	 

	 
	(Street Address)

	 
	 

	 
	(City)
	(State)
	(Zip Code)

	 
	 

	 
	Signature Guaranteed by:

	 
	 

	 
	 

 

CORPORATE OFFICE PROPERTIES TRUST, L.P. 
EXHIBIT 5 
 
TO 
 
LIMITED PARTNERSHIP AGREEMENT
Notice of Election by Partnership to Force Conversion of Profit Interest Units into Partnership Units
Corporate Office Properties, L.P. (the “Partnership”) hereby irrevocably elects to cause the number of Profit Interest Units held by the holder of Profit Interest Units set forth below to be converted into Partnership Units in accordance with the terms of the Third Amended and Restated Agreement of Limited Partnership of the Partnership, as amended.

 
	
		
	 
	Name of Holder:

	 
	 

	 
	Date of this Notice:

	 
	 

	 
	Number of Profit Interest Units to be Converted:

	 
	 

	 
	Please Print: Exact Name as Registered with Partnership

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