Document:

Exhibit 10.1

 

Execution Version

 

 

 

 

 

 

 

 

 

 

STOCK PURCHASE AGREEMENT

 

among

 

MT. HAWLEY INSURANCE COMPANY,

 

CLEAR BLUE FINANCIAL HOLDINGS, LLC

 

and,

 

Solely for purposes of Section 14.17,

 

RLI INSURANCE COMPANY

 

Dated as of May 27, 2015

 

 

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE   I.
    	
DEFINITIONS
    	
1
    
	
Section 1.1.
    	
Definitions
    	
1
    
	
ARTICLE   II.
    	
PURCHASE   AND SALE OF THE SHARES; CLOSING
    	
4
    
	
Section 2.1.
    	
Purchase and Sale of the Shares
    	
4
    
	
Section 2.2.
    	
Purchase Price
    	
4
    
	
Section 2.3.
    	
Determination of Closing Admitted Assets Value and   Estimated Purchase Price
    	
5
    
	
Section 2.4.
    	
Closing
    	
6
    
	
Section 2.5.
    	
Purchase Price Adjustment
    	
7
    
	
Section 2.6.
    	
Prorations
    	
8
    
	
ARTICLE   III.
    	
REPRESENTATIONS   AND WARRANTIES OF SELLER
    	
8
    
	
Section 3.1.
    	
Organization; Existence and Authority of Seller
    	
9
    
	
Section 3.2.
    	
Organization; Good Standing; Corporate Books and Records of   the Company
    	
10
    
	
Section 3.3.
    	
Capitalization and Delivery of the Shares
    	
10
    
	
Section 3.4.
    	
No Violation; Approvals; Filings
    	
11
    
	
Section 3.5.
    	
Title to the Shares; Subsidiaries and Affiliates
    	
12
    
	
Section 3.6.
    	
Financial Statements
    	
12
    
	
Section 3.7.
    	
Obligations and Liabilities
    	
13
    
	
Section 3.8.
    	
Taxes
    	
13
    
	
Section 3.9.
    	
Insurance Qualifications
    	
15
    
	
Section 3.10.
    	
Title to Assets; Liens and Encumbrances
    	
16
    
	
Section 3.11.
    	
Contracts and Commitments
    	
16
    
	
Section 3.12.
    	
Legal Proceedings
    	
17
    
	
Section 3.13.
    	
Compliance with Law
    	
17
    
	
Section 3.14.
    	
Absence of Certain Changes
    	
18
    
	
Section 3.15.
    	
Bank Accounts; Powers of Attorney
    	
19
    
	
Section 3.16.
    	
Employees and Labor Relations
    	
20
    
	
Section 3.17.
    	
Property
    	
20
    
	
Section 3.18.
    	
Intellectual Property
    	
20
    
	
Section 3.19.
    	
Insurance Policies
    	
21
    
	
Section 3.20.
    	
Ratings
    	
21
    
	
Section 3.21.
    	
Brokers and Finders
    	
21
    
	
Section 3.22.
    	
Disclaimer
    	
21
    
	
ARTICLE   IV.
    	
REPRESENTATIONS   AND WARRANTIES OF BUYER
    	
21
    
	
Section 4.1.
    	
Organization; Existence and Authority of Buyer
    	
21
    

 

i

 

	
Section 4.2.
    	
Investment Representation
    	
22
    
	
Section 4.3.
    	
No Violation; Approvals; Filings
    	
22
    
	
Section 4.4.
    	
Brokers and Finders
    	
23
    
	
Section 4.5.
    	
Financial Ability
    	
23
    
	
Section 4.6.
    	
Investigation
    	
23
    
	
Section 4.7.
    	
Disclaimer
    	
23
    
	
ARTICLE   V.
    	
COVENANTS
    	
24
    
	
Section 5.1.
    	
Conduct of Business
    	
24
    
	
Section 5.2.
    	
Approvals
    	
26
    
	
Section 5.3.
    	
Cooperation
    	
28
    
	
Section 5.4.
    	
Notification of Changes
    	
28
    
	
Section 5.5.
    	
Right of Access and Inspection; Preparation of Financial   Statements
    	
28
    
	
Section 5.6.
    	
Confidentiality of Information
    	
29
    
	
Section 5.7.
    	
Intercompany Agreements and Accounts
    	
29
    
	
Section 5.8.
    	
Rescinded Insurance Qualifications
    	
30
    
	
Section 5.9.
    	
Authority; Bank Accounts
    	
30
    
	
Section 5.10.
    	
Deposits
    	
31
    
	
Section 5.11.
    	
Agency Agreements; Non-Insurance Contracts and Reinsurance   Treaties
    	
31
    
	
Section 5.12.
    	
Assets of the Company
    	
31
    
	
Section 5.13.
    	
Minimum Statutory Surplus
    	
31
    
	
Section 5.14.
    	
Intellectual Property Assignment and Application to Change   Name
    	
31
    
	
Section 5.15.
    	
Insurance
    	
32
    
	
Section 5.16.
    	
Post-Closing Insurance Qualifications
    	
32
    
	
Section 5.17.
    	
Financing
    	
32
    
	
ARTICLE   VI.
    	
SURVIVAL
    	
33
    
	
Section 6.1.
    	
Survival
    	
33
    
	
ARTICLE   VII.
    	
INDEMNITIES
    	
33
    
	
Section 7.1.
    	
Indemnification of Buyer
    	
33
    
	
Section 7.2.
    	
Indemnification of Seller
    	
34
    
	
Section 7.3.
    	
Notice
    	
35
    
	
Section 7.4.
    	
Determination of Right to Indemnification
    	
35
    
	
Section 7.5.
    	
Determination of Amount of Indemnification
    	
35
    
	
Section 7.6.
    	
Adjustments to Indemnification Amounts
    	
36
    
	
Section 7.7.
    	
Tax Matters
    	
36
    
	
Section 7.8.
    	
Limitations on Indemnification
    	
36
    

 

ii

 

	
Section 7.9.
    	
Losses
    	
37
    
	
Section 7.10.
    	
Mitigation
    	
37
    
	
Section 7.11.
    	
Exclusive Remedy
    	
37
    
	
ARTICLE   VIII.
    	
CONDITIONS   PRECEDENT TO OBLIGATIONS OF SELLER TO CLOSE
    	
37
    
	
Section 8.1.
    	
Seller’s Conditions
    	
37
    
	
ARTICLE   IX.
    	
CONDITIONS   PRECEDENT TO OBLIGATIONS OF BUYER TO CLOSE
    	
38
    
	
Section 9.1.
    	
Buyer’s Conditions
    	
38
    
	
ARTICLE   X.
    	
DELIVERIES   OF SELLER
    	
39
    
	
Section 10.1.
    	
Seller’s Closing Deliveries
    	
39
    
	
ARTICLE   XI.
    	
DELIVERIES   OF BUYER
    	
41
    
	
Section 11.1.
    	
Buyer’s Closing Deliveries
    	
41
    
	
ARTICLE   XII.
    	
TAX   MATTERS
    	
41
    
	
Section 12.1.
    	
Tax Indemnities
    	
41
    
	
Section 12.2.
    	
Preparation of Tax Returns, etc.
    	
43
    
	
Section 12.3.
    	
Tax Cooperation and Exchange of Information
    	
44
    
	
Section 12.4.
    	
Conveyance Taxes
    	
45
    
	
Section 12.5.
    	
Contests
    	
45
    
	
Section 12.6.
    	
Tax Covenants
    	
46
    
	
Section 12.7.
    	
Miscellaneous
    	
47
    
	
Section 12.8.
    	
Section 336(e) Election
    	
47
    
	
Section 12.9.
    	
Certain Definitions Relating to Taxes
    	
48
    
	
ARTICLE   XIII.
    	
TERMINATION
    	
49
    
	
Section 13.1.
    	
Termination of this Agreement
    	
49
    
	
Section 13.2.
    	
Effects of Termination
    	
50
    
	
ARTICLE   XIV.
    	
MISCELLANEOUS
    	
50
    
	
Section 14.1.
    	
Further Assurances and Cooperation
    	
50
    
	
Section 14.2.
    	
Cooperation and Assistance
    	
50
    
	
Section 14.3.
    	
Notices
    	
51
    
	
Section 14.4.
    	
Expenses; Attorneys’ Fees
    	
51
    
	
Section 14.5.
    	
Entire Agreement; No Modification
    	
52
    
	
Section 14.6.
    	
Waiver of Breach
    	
52
    
	
Section 14.7.
    	
Consent to Jurisdiction
    	
52
    
	
Section 14.8.
    	
Specific Performance
    	
52
    
	
Section 14.9.
    	
Benefit of Parties; Assignment
    	
52
    
	
Section 14.10.
    	
Exhibits, Schedules and Instruments
    	
53
    

 

iii

 

	
Section 14.11.
    	
Headings
    	
53
    
	
Section 14.12.
    	
Governing Law
    	
53
    
	
Section 14.13.
    	
Multiple Counterparts
    	
53
    
	
Section 14.14.
    	
Unenforceability or Invalidity
    	
53
    
	
Section 14.15.
    	
Third Parties
    	
53
    
	
Section 14.16.
    	
Interpretation
    	
53
    
	
Section 14.17.
    	
RLI Guaranty
    	
53
    

 

iv

 

LIST OF EXHIBITS

 

Exhibit A                                 Form of Reinsurance Agreement

Exhibit B                                  Form of Services Agreement

Exhibit C                                  Form of Assignment and Assumption Agreement

Exhibit D                                 Form of Intellectual Property Assignment

Exhibit E                                   Form of Section 336(e) Tax Election Agreement

 

v

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT, dated as of May 27, 2015 (this “Agreement”), is made by and among MT. HAWLEY INSURANCE COMPANY, an insurance company domiciled in the State of Illinois (“Seller”), CLEAR BLUE FINANCIAL HOLDINGS, LLC, a limited liability company organized under the laws of the Commonwealth of Puerto Rico (“Buyer”), and, solely for purposes of Section 14.17, RLI INSURANCE COMPANY, an Illinois corporation (“RLI”).

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, Buyer desires to purchase all of the issued and outstanding shares of capital stock of RLI Indemnity Company, an insurance company domiciled in the State of Illinois (the “Company”), upon the terms and subject to the conditions set forth in this Agreement;

 

WHEREAS, the authorized capital stock of the Company consists of 5,100,000 shares of common stock, $7.00 par value per share, of which 600,000 shares are issued and outstanding (such outstanding shares being referred to herein as the “Shares”);

 

WHEREAS, Seller is the record and beneficial owner of 100% of the Shares; and

 

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the Shares upon the terms and subject to the conditions set forth in this Agreement.

 

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

 

ARTICLE I.

 

DEFINITIONS

 

Section 1.1.       Definitions.  Each of the following terms is defined in the Section indicated opposite such term:

 

	
Term
    	
 
    	
Section
    
	
Actions
    	
 
    	
3.12(a)
    
	
Administrative Services   Agreement
    	
 
    	
3.1
    
	
Adjustment Date
    	
 
    	
2.2(b)
    
	
Affiliate
    	
 
    	
3.1
    

 

1

 

	
Term
    	
 
    	
Section
    
	
Agency Agreements
    	
 
    	
3.9(d)
    
	
Agreement
    	
 
    	
Preamble
    
	
Allocation Statement
    	
 
    	
12.8(b)(iv)
    
	
A.M. Best
    	
 
    	
3.20
    
	
Applicable Law
    	
 
    	
3.4(a)(i)
    
	
Assignment and   Assumption Agreement
    	
 
    	
3.1
    
	
Business Day
    	
 
    	
2.4(a)
    
	
Buyer
    	
 
    	
Preamble
    
	
Buyer Fundamental   Representations
    	
 
    	
6.1
    
	
Buyer’s Approvals
    	
 
    	
4.3(b)
    
	
Closing
    	
 
    	
2.4(a)
    
	
Closing Admitted Assets
    	
 
    	
2.3(b)
    
	
Closing Admitted Assets   Value
    	
 
    	
2.3(c)
    
	
Closing Certificate
    	
 
    	
2.5(a)
    
	
Closing Date
    	
 
    	
2.4(a)
    
	
Code
    	
 
    	
12.9(a)
    
	
Company
    	
 
    	
Recitals
    
	
Company Statutory   Financial Statements
    	
 
    	
3.6(a)
    
	
Confidential   Information
    	
 
    	
5.5(a)
    
	
Confidentiality   Agreement
    	
 
    	
5.5(a)
    
	
Contest
    	
 
    	
12.5(b)
    
	
Employees
    	
 
    	
3.16(a)
    
	
Encumbrances
    	
 
    	
2.4(b)
    
	
Equity Commitment   Letter
    	
 
    	
4.5
    
	
Equity Financing
    	
 
    	
4.5
    
	
ERISA
    	
 
    	
3.16(b)
    
	
Estimated Admitted   Assets Value
    	
 
    	
2.3(a)
    
	
Estimated Purchase   Price
    	
 
    	
2.3(a)
    
	
Excluded Taxes
    	
 
    	
12.1(a)
    
	
Final Allocation
    	
 
    	
12.8
    
	
Form A
    	
 
    	
5.2(c)
    

 

2

 

	
Term
    	
 
    	
Section
    
	
Indemnification Cap
    	
 
    	
7.1
    
	
Indemnification   Threshold
    	
 
    	
7.1
    
	
Indemnitee
    	
 
    	
7.3
    
	
Indemnitor
    	
 
    	
7.3
    
	
Independent Accountant
    	
 
    	
2.5(d)
    
	
Initial Allocation
    	
 
    	
12.8
    
	
Insurance Contract
    	
 
    	
3.11(a)
    
	
Insurance   Qualification/Insurance Qualifications
    	
 
    	
3.9(b)
    
	
Intellectual Property   Assignment
    	
 
    	
3.1
    
	
Interim Period
    	
 
    	
5.1
    
	
Knowledge of Seller
    	
 
    	
3.2(a)
    
	
Losses
    	
 
    	
7.1
    
	
Material Adverse Effect
    	
 
    	
3.4(a)
    
	
Non-Insurance Contracts
    	
 
    	
3.11(a)
    
	
Notice of Objection
    	
 
    	
2.5(b)
    
	
Ordinary Course of   Business
    	
 
    	
3.12(a)
    
	
Outside Date
    	
 
    	
13.1(c)
    
	
Permitted Encumbrance
    	
 
    	
3.10
    
	
Plans
    	
 
    	
3.16(b)
    
	
Pre-Closing Tax Period
    	
 
    	
12.1(a)
    
	
Post-Closing Returns
    	
 
    	
12.2(b)
    
	
Post-Closing Tax Period
    	
 
    	
3.8(n)
    
	
Purchase Price
    	
 
    	
2.2(a)
    
	
Purchase Price   Adjustment Consultation Period
    	
 
    	
2.5(c)
    
	
Reinsurance Agreement
    	
 
    	
3.1
    
	
Reinsurance Treaties
    	
 
    	
3.9(e)
    
	
Related Agreements
    	
 
    	
3.1
    
	
Representatives
    	
 
    	
2.4(b)
    
	
Rescinded Insurance   Event
    	
 
    	
5.8
    
	
Rescinded Insurance   Qualification
    	
 
    	
5.8
    
	
RLI
    	
 
    	
Preamble
    

 

3

 

	
Term
    	
 
    	
Section
    
	
RLI Group
    	
 
    	
3.8(l)
    
	
SAP
    	
 
    	
3.6(a)
    
	
Section 336(e) Election
    	
 
    	
12.8(a)
    
	
Section 336(e) Tax   Election Agreement
    	
 
    	
3.1
    
	
Seller
    	
 
    	
Preamble
    
	
Seller Fundamental   Representations
    	
 
    	
6.1
    
	
Seller Tax Indemnitee
    	
 
    	
12.1(b)
    
	
Seller’s Approvals
    	
 
    	
3.4(b)
    
	
Seller Trademarks
    	
 
    	
3.18
    
	
Seller’s Knowledge
    	
 
    	
3.2(a)
    
	
Shares
    	
 
    	
Recitals
    
	
Statutory Accounts
    	
 
    	
5.9(a)
    
	
Statutory Deposits
    	
 
    	
2.3(b)(i)
    
	
Straddle Period
    	
 
    	
12.1(c)
    
	
Subsidiary
    	
 
    	
3.5(c)
    
	
Tax Indemnitee
    	
 
    	
12.1(a)
    
	
Tax Return
    	
 
    	
12.9(b)
    
	
Taxes
    	
 
    	
12.9(c)
    
	
Taxing Authority
    	
 
    	
12.9(d)
    

 

ARTICLE II.

 

PURCHASE AND SALE OF THE SHARES; CLOSING

 

Section 2.1.       Purchase and Sale of the Shares.  Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Shares upon the terms and subject to the conditions set forth in this Agreement.

 

Section 2.2.       Purchase Price.

 

(a)          In consideration of the sale, assignment and transfer of the Shares provided for in this Agreement, Buyer agrees to pay to Seller the sum of the following (as may be adjusted hereunder, the “Purchase Price”):

 

(i)           $7,500,000; and

 

(ii)          an amount equal to the Closing Admitted Assets Value.

 

4

 

(b)          The Purchase Price shall be subject to adjustment at the Closing, in the event that any Insurance Qualification has been and continues to be a Rescinded Insurance Qualification as of the Closing Date, by decreasing the Purchase Price by an amount equal to $150,000 with respect to each Rescinded Insurance Qualification, if any.

 

Section 2.3.       Determination of Closing Admitted Assets Value and Estimated Purchase Price.

 

(a)          After 8:00 p.m. Eastern Time on the Business Day immediately preceding the Closing Date, Seller shall provide to Buyer a certificate signed by a senior officer of Seller setting forth: (i) an estimated list of all Closing Admitted Assets (which, for the avoidance of doubt, shall take into account any distribution made to Seller pursuant to Section 5.13); (ii) the estimated value of the Closing Admitted Assets (the “Estimated Admitted Assets Value”); and (iii) an estimate of the Purchase Price, determined with reference to the Estimated Admitted Assets Value and taking into account any applicable adjustments contemplated by Section 2.2(b) (the “Estimated Purchase Price”).

 

(b)          For purposes of this Agreement, the “Closing Admitted Assets” shall mean the admitted assets of the Company as of the Closing, calculated taking into account the assets to be transferred to RLI on the Closing Date pursuant to the Reinsurance Agreement, such Closing Admitted Assets to consist only of:

 

(i)        securities on deposit in certain jurisdictions as a condition of maintaining the Insurance Qualifications (“Statutory Deposits”);

 

(ii)       marketable securities consisting only of U.S. Treasury obligations, including accrued investment income; and

 

(iii)      cash and cash equivalents.

 

(c)          For purposes of this Agreement, the “Closing Admitted Asset Value” shall mean the value of the Closing Admitted Assets determined as follows:

 

(i)        cash and cash equivalents shall be valued dollar for dollar; and

 

(ii)       marketable securities, including Statutory Deposits and U.S. Treasury obligations shall be valued as follows:

 

(1)       marketable securities which are listed on a national securities exchange shall be valued at their last sales price on the Closing Date or, if no sales occurred on the Closing Date, at the mean between the closing “bid” and “ask” prices on the Closing Date, plus, in either such case, accrued interest, if any; and

 

(2)       marketable securities which are not so listed shall be valued at their closing “bid” price, if held “long,” and at their 

 

5

 

closing “ask” price, if held “short,” plus, in either such case, accrued interest, if any.

 

Section 2.4.       Closing.

 

(a)          Subject to the satisfaction or waiver of the terms and conditions hereof, the consummation of the sale and purchase of the Shares provided for herein (the “Closing”) shall take place at the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York 10019, (i) on the third day, other than a Saturday, Sunday, or a day which banking institutions in the State of New York are authorized or obligated by law or executive order to close (a “Business Day”), following the date on which all conditions to the obligations of the parties to consummate the transactions contemplated hereby have been satisfied or waived (other than conditions with respect to actions the parties will take at the Closing, but subject to the satisfaction or waiver of all such conditions) or (ii) at such other place, date or time as Buyer and Seller shall mutually agree upon in writing.  The date on which the Closing occurs is referred to herein as the “Closing Date”.

 

(b)          At the Closing, Buyer shall pay to Seller, by wire transfer to a bank account designated in writing by Seller (at least three (3) Business Days prior to the Closing Date), the Estimated Purchase Price, as determined in accordance with Section 2.3, in immediately available funds.  Simultaneously, Seller shall deliver to Buyer a certificate or certificates representing the Shares, endorsed in blank for transfer or accompanied by duly executed blank stock powers with all appropriate stock transfer tax stamps affixed, together with such other instruments as shall reasonably be required by Buyer to vest fully in Buyer all right, title and interest in and to the Shares free and clear of any liens, encumbrances, mortgages, pledges, claims, charges, debts, liabilities, obligations, agreements, rights, options, warrants, restrictions, defects in title and security interests of any kind or nature whatsoever, whether legal or equitable, or any claim by any Person to any of the foregoing (“Encumbrances”) other than any Encumbrances created by, through or under, or arising as a result of the acts or omissions of, Buyer or any of its Affiliates or Representatives.  For purposes of this Agreement, (i) “Representatives” shall mean any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, financial advisors and third party administrators and (ii) “Person” shall mean an individual, corporation, partnership, joint venture, association, trust, unincorporated organization or other entity.

 

(c)          Seller and Buyer shall also deliver such other documents and instruments as shall be required of Seller and Buyer under the terms and provisions of this Agreement.  All such certificates, stock powers, documents and instruments shall be in form and content reasonably satisfactory to the other party and such other party’s counsel.

 

6

 

Section 2.5.       Purchase Price Adjustment.

 

(a)          Within thirty (30) days after the Closing Date, Seller shall provide to Buyer a certificate (the “Closing Certificate”) signed by the Treasurer or Chief Financial Officer of Seller setting forth as of the Closing: (i) a list of all Closing Admitted Assets (which, for the avoidance of doubt, shall take into account any distribution made to Seller pursuant to Section 5.13); (ii) the Closing Admitted Assets Value; (iii) the Purchase Price, determined with reference to the Closing Admitted Assets Value and taking into account any applicable adjustments contemplated by Section 2.2(b); and (iv) the difference, if any, between the Estimated Purchase Price and the Purchase Price, determined with reference to the Closing Admitted Assets Value and taking into account any applicable adjustments contemplated by Section 2.2(b).

 

(b)          After the receipt by Buyer of the Closing Certificate and until such time as the final Purchase Price is determined in accordance with this Section 2.5, upon reasonable request by Buyer, Seller shall provide to Buyer supporting documentation and other written information relating to the Closing Certificate and the calculations set forth thereon.   Unless Buyer, within thirty (30) days after receipt of the Closing Certificate, gives Seller a notice objecting thereto and specifying, in reasonable detail, the basis for each such objection and the amount in dispute (“Notice of Objection”), such Closing Certificate and the amount of the Closing Admitted Assets Value reflected therein shall be binding upon Buyer and Seller and the applicable payment required pursuant to subsection (e) below shall be made. If a timely Notice of Objection is received by Seller, then the Closing Certificate (as revised in accordance with Section 2.5(c) and Section 2.5(d)) shall become final and binding upon Buyer and Seller on the earlier of (i) the date Buyer and Seller resolve in writing any differences they have with respect to any matter specified in the Notice of Objection and (ii) the date any matters properly in dispute are finally resolved in writing by the Independent Accountant.

 

(c)          During the thirty (30) days immediately following the delivery of a Notice of Objection (the “Purchase Price Adjustment Consultation Period”), Seller and Buyer shall seek in good faith to resolve any disagreement that they may have with respect to the matters specified in the Notice of Objection.

 

(d)          If, at the end of the Purchase Price Adjustment Consultation Period, Seller and Buyer have been unable to resolve all disagreements that they may have with respect to the matters specified in the Notice of Objection, then Seller and Buyer shall submit all matters that remain in dispute with respect to the Notice of Objection to an independent certified public accounting firm in the United States of national recognition mutually agreed to in good faith by Seller and Buyer (the “Independent Accountant”).  For the avoidance of doubt, the Independent Accountant shall not review any items or make any determination with respect to any matters other than those matters that remain in dispute following the Purchase Price Adjustment Consultation Period and have been specifically submitted to the Independent Accountant for resolution. Buyer and Seller shall instruct the Independent Accountant not to assign a value to any item in dispute greater than the greatest value for such item assigned by Buyer, on the one hand, or Seller, on the other hand, or less than the smallest value for 

 

7

 

such item assigned by Buyer, on the one hand, or Seller, on the other hand.  Buyer and Seller shall also instruct the Independent Accountant to make its determination based solely on presentations by Buyer and Seller (i.e., not on the basis of an independent review).  The Closing Certificate and the amount of the Closing Admitted Asset Value reflected therein shall become final and binding on the parties hereto on the date the Independent Accountant delivers its final resolution in writing to Buyer and Seller (which final resolution shall be requested by the parties hereto to be delivered not more than forty five (45) days following submission of such disputed matters).  All of the fees and expenses of the Independent Accountant pursuant to this Section 2.5(d) shall be borne equally by Seller and Buyer.  During the review by the Independent Accountant, Buyer and Seller shall each make or cause to be made available to the Independent Accountant such individuals and such information, books, records and work papers, as may be required by the Independent Accountant to fulfill its obligations under this Section 2.5(d).  In acting under this Agreement, the Independent Accountant shall be entitled to the privileges and immunities of an arbitrator.

 

(e)          (i) In the event that the Estimated Purchase Price shall exceed the Purchase Price, as finally determined in accordance with this Section 2.5, Seller shall pay to Buyer an amount equal to such excess and (ii) in the event that the Purchase Price shall exceed the Estimated Purchase Price, as finally determined in accordance with this Section 2.5, Buyer shall pay to Seller an amount equal to such excess.  Any amount payable pursuant to this Section 2.5(e) shall be paid by wire transfer of immediately available funds within three (3) Business Days after the earlier of (A) Buyer’s failure to deliver a timely Notice of Objection pursuant to Section 2.5(b) and (B) the date all disputed items are resolved pursuant to Sections 2.5(c) and (d), in accordance with such wire instructions as may be specified by the party owed such payment.

 

Section 2.6.       Prorations.  Notwithstanding Seller’s assumption of the obligations and liabilities pursuant to the Assignment and Assumption Agreement and the parties’ arrangements set forth in the Administrative Services Agreement, to the extent that Seller has assumed the payment for, or prepaid, any items relating to the operation of the Company set forth on Schedule 2.6, but such items wholly or partially accrue to the benefit of the Company for any period following the Closing, Buyer shall reimburse Seller for any such payments as they relate to any period following the Closing.  Seller and Buyer each agrees to furnish the other party with such documents and other records as reasonably requested in order to confirm all adjustment and proration calculations made pursuant to this Section 2.6.

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Buyer, as of the date hereof and as of the Closing Date, as follows in this Article III.  Each such representation and warranty is qualified by the disclosure set forth in the numbered or lettered Schedule that correspond to such representation and warranty and shall be deemed to qualify and be included as a 

 

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disclosure for any other representation and warranty to which the relevance of such disclosure is readily apparent.

 

Section 3.1.       Organization; Existence and Authority of Seller.  Seller is a corporation duly organized and validly existing under the laws of the State of Illinois and in good standing with the Illinois Department of Insurance.  Seller possesses full corporate right, power and legal authority to own, lease and operate its assets and properties and to carry on its business as the same is being conducted and to execute, deliver and perform its obligations under this Agreement.  Seller possesses full corporate right, power and legal authority to execute and deliver this Agreement.  Each of Seller, the Company and each Affiliate of Seller that will execute any Related Agreement has full corporate right, power and legal authority to execute and deliver each such Related Agreement and the other agreements and instruments to be executed by it pursuant hereto and thereto, to perform each of the terms, covenants and agreements on its part to be performed hereunder and thereunder, and to make the representations and warranties on its part made hereunder and thereunder.  This Agreement, the Quota Share Reinsurance Agreement in the form thereof attached hereto as Exhibit A (the “Reinsurance Agreement”), the Policy and Claims Runoff Services Agreement in the form thereof attached hereto as Exhibit B (the “Services Agreement”), the Assignment and Assumption Agreement in the form thereof attached hereto as Exhibit C (the “Assignment and Assumption Agreement”), the Intellectual Property Assignment in the form thereof attached hereto as Exhibit D (the “Intellectual Property Assignment”) and the Section 336(e) Tax Election Agreement in the form thereof attached hereto as Exhibit E (the “Section 336(e) Tax Election Agreement” and, collectively with the Reinsurance Agreement, the Services Agreement, the Assignment and Assumption Agreement and the Intellectual Property Agreement, the “Related Agreements”) and such other agreements and instruments as are to be executed and delivered by Seller or any Affiliate of Seller pursuant hereto and thereto, and the performance hereof and thereof, have been, or when executed and delivered shall have been, duly authorized by all necessary corporate action and are, or will be, duly and validly executed and delivered by Seller and each Affiliate of Seller (including the Company) that is a party thereto.  Assuming due authorization, execution and delivery of by the other parties thereto and hereto, this Agreement and the Related Agreements constitute, or shall constitute, the legal, valid and binding obligations of Seller or such Affiliate, enforceable against Seller or such Affiliate in accordance with their terms, except that (a) such enforcement may be limited by applicable bankruptcy, insolvency, moratorium or other similar laws in effect relating to or affecting the enforcement of the rights of creditors generally or the enforcement of the rights of creditors of insurance companies generally, and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.  As used in this Agreement, “Affiliate” means, as to any specified Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with such first Person.  For purposes of this definition, “control” of a Person means another Person’s power, direct or indirect, to direct or cause the direction of the management and policies of such first Person whether by ownership of voting stock, by contract or otherwise.

 

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Section 3.2.       Organization; Good Standing; Corporate Books and Records of the Company.

 

(a)          The Company is a stock insurance company, duly organized and validly existing under the laws of the State of Illinois and in good standing with the Illinois Department of Insurance, with all requisite power to own, lease and operate its assets and properties.  The Company is duly licensed, qualified and admitted to do business under the laws of each jurisdiction in which the Company is required to be so qualified and is in good standing in all such jurisdictions, except where the failure to be so licensed, qualified and admitted to do business and in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (it being understood that any representation and warranty given by Seller regarding Insurance Qualifications shall not be given pursuant to this Section 3.2, but shall solely be given pursuant to Section 3.9 (Insurance Qualifications)).  Except as set forth on Schedule 3.2(a)(1), the Company is not and, to the Knowledge of Seller, has not been a “commercially domiciled insurer” under the laws of any jurisdiction, and has not been treated as domiciled in a jurisdiction other than its jurisdiction of incorporation.  As used in this Agreement, “Knowledge of Seller”, “Seller’s Knowledge” and other iterations of the foregoing mean the actual knowledge of those individuals set forth on Schedule 3.2(a)(2), in each case, after reasonable inquiry of the relevant individual with operational responsibility for the matter or question at hand.

 

(b)          Seller has made available to Buyer (i) the stock ledger and minute books of the Company that are in the possession or control of Seller and (ii) true, accurate and complete copies of the articles of incorporation and bylaws of the Company as amended to date, which have been approved by applicable regulatory authorities (to the extent required).  Such stock ledger and minute books are true, accurate and complete in all material respects.  Such books and records have been maintained in all material respects in accordance with good business and bookkeeping practices and all applicable requirements of Applicable Law.

 

Section 3.3.       Capitalization and Delivery of the Shares.

 

(a)          The authorized capital stock of the Company consists of 5,100,000 shares of common stock, $7.00 par value per share, 600,000 of which are issued and outstanding.  The Shares have been duly authorized and validly issued and are fully paid and non-assessable.  Except as set forth in this Section 3.3(a), no class of equity securities, preferred stock, bonds, debentures, notes, other evidences of indebtedness for borrowed money or other securities of any kind of the Company (except for the Shares) is authorized, issued or outstanding.

 

(b)          There is no right, subscription, warrant, call, unsatisfied preemptive right, option, convertible or exercisable security or other agreement or commitment of any kind, matured or unmatured, contingent or otherwise, to purchase, exchange, transfer or otherwise receive from any Person (including, without limitation, the Company) any shares of the capital stock or any other security of the Company, and the Company has no obligation of any kind to issue any additional securities.  There is no 

 

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agreement or understanding providing for, restricting or otherwise affecting the transfer, voting, or dividend rights of any shares of the capital stock or any other security of the Company or otherwise allowing any Person the right to vote with the shareholders of the Company.

 

Section 3.4.       No Violation; Approvals; Filings.

 

(a)          Assuming compliance with Section 3.4(b), the execution and delivery of this Agreement, the Related Agreements, and the other agreements and instruments to be executed by Seller, the Company and the other Affiliates of Seller, as applicable, pursuant hereto and thereto, and the performance of all of the transactions contemplated herein and therein, do not and will not (i) violate or breach any applicable law, statute, rule, ruling, determination, ordinance, regulation, opinion, order or judgment of any governmental authority, administrative body or, agency or court, domestic or foreign, or any decision, judgment, order, writ, injunction or decree of any such governmental authority, administrative body or agency or court (“Applicable Law”), (ii) violate or conflict with the articles of incorporation or bylaws of Seller or the Company, or any organizational documents of any Affiliate of Seller that will be executing a Related Agreement or (iii) with or without notice or the passage of time or both, violate, conflict with or result in a breach of any provision of, or constitute a default (or an event which, with the giving of notice, the passage of time or otherwise would constitute a default) under or entitle any party to terminate, accelerate or cause a breach or default of, or result in the creation of any Encumbrance (other than any Permitted Encumbrance) upon any of the properties or assets of the Company under, or create any right of acceleration, termination, vesting, payment, exercise, suspension, revocation or cancellation or the loss of any right or benefit under any contract, mortgage, lien, lease, agreement, indenture, trust, instrument, order, judgment or decree to which Seller, any Affiliate of Seller or the Company is a party or which is binding upon Seller, any Affiliate of Seller or the Company or upon any of the assets of any of the foregoing, except, in the case of clauses (i) and (iii) above, as would not reasonably be expected to result in a material adverse effect on (A) the ability of the Company to conduct insurance business in the jurisdictions where the Company is licensed pursuant to the Insurance Qualifications as of the date hereof (other than the effects of any actions expressly required by this Agreement) or (B) on the ability of Seller or the Company, or any Affiliate of Seller that will be executing a Related Agreement, to perform fully their obligations under this Agreement or the Related Agreements or to effect the transactions contemplated hereby and thereby (a “Material Adverse Effect”).

 

(b)          Except as set forth in Schedule 3.4(b), none of Seller, any Affiliate of Seller or the Company is required to obtain any consent, approval or authorization from or to make any filings with any governmental agency, body, or authority with regard to execution, delivery and performance of this Agreement (including the transfer of the Shares pursuant hereto), the Related Agreements or such other agreements or documents as are to be or have been executed by Seller, any Affiliate of Seller or the Company pursuant hereto and thereto, or the consummation of the transactions contemplated herein or therein (“Seller’s Approvals”).

 

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Section 3.5.       Title to the Shares; Subsidiaries and Affiliates.

 

(a)          Seller owns, of record and beneficially, and has good and valid title to, all of the Shares.  All Shares are held by Seller free and clear of any Encumbrances.

 

(b)          Upon delivery to Buyer of the certificate or certificates representing the Shares pursuant to this Agreement, together with appropriately executed stock powers with respect thereto, Buyer will acquire good and valid title to the Shares, free and clear of any and all Encumbrances other than any Encumbrances created by, through or under, or arising as a result of the acts or omissions of, Buyer or any of its Affiliates or Representatives.

 

(c)          The Company does not have any Subsidiaries.  For the purposes of this Agreement, “Subsidiary” shall mean, with respect to any specified Person, any other Person in which such other Person (or any other Subsidiary of such Person) (i) is a general partner (in the case of a partnership) or managing member (in the case of a limited liability company) of such first Person, (ii) is entitled to elect at least a majority of the board of directors, board of managers or similar governing body of such first Person or (iii) owns, directly or indirectly, through one or more intermediaries, 50% or more of the outstanding voting securities, equity securities, profits interest or capital interest of such first Person.

 

(d)          As of the Closing Date, the Company will not directly or indirectly own any equity interest or any right (contingent or otherwise) to any such interest in any corporation, association, individual, partnership, trust or other business organization or combination thereof other than the Closing Admitted Assets.

 

Section 3.6.       Financial Statements.

 

(a)          Seller has delivered to Buyer copies of the Company’s annual statutory statements, including the statutory financial statements and accompanying independent auditors’ report of KPMG LLP, as submitted to the Illinois Department of Insurance for the years ended December 31, 2012, 2013 and 2014 and the Company’s quarterly statutory statements, including the unaudited quarterly statutory financial statements, as submitted to the Illinois Department of Insurance for the quarterly period ending March 31, 2015 (collectively, the “Company Statutory Financial Statements”).  Subject, in the case of the quarterly financial statement, to normal recurring year-end adjustments that would not be material, the Company Statutory Financial Statements fairly present in all material respects the financial condition, the results of operations, changes in equity and changes in financial position of the Company as of and for the respective dates and periods indicated therein, in accordance with accounting practices prescribed by the Illinois Department of Insurance, applied on a consistent basis (“SAP”).  Except as indicated therein, all assets reflected as admitted assets on the Company Statutory Financial Statements comply in all material respects with all Applicable Laws with respect to admitted assets.  There are no permitted practices utilized in the preparation of the Company Statutory Financial Statements.  No material weakness, 

 

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significant deficiency or material required adjustment has been identified by (i) the Company’s auditor in connection with the delivery of its final audit opinion, (ii) the Illinois Department of Insurance or (iii) any other governmental authority, in each case with respect to the Company Statutory Financial Statements that has not been cured or otherwise resolved to the satisfaction of such auditor, the Illinois Department of Insurance or other governmental authority (as applicable).

 

(b)          Seller has delivered to Buyer copies of the annual statutory statements, including the statutory financial statements and the accompanying independent auditors’ report of KPMG LLP, of RLI, as submitted to the Illinois Department of Insurance for the years ended December 31, 2012, 2013 and 2014.

 

Section 3.7.       Obligations and Liabilities.   Except (a) as set forth in Schedule 3.7, (b) for liabilities reinsured pursuant to the Reinsurance Agreement, (c) liabilities assumed pursuant to the Assignment and Assumption Agreement and (d) for Taxes (which shall be governed by Section 3.8 and Article XII), at the Closing there will be no obligations, liabilities or claims of or against the Company of any kind or nature, whether absolute, contingent, accrued or otherwise or whether due or to become due, including but not limited to those arising out of or relating to insurance or reinsurance contracts, state insurance guaranty funds and residual market mechanisms or otherwise, whether contingent or absolute, direct or indirect, known or unknown, matured or unmatured, which will not have been assumed or reinsured pursuant to this Agreement or the Related Agreements.

 

Section 3.8.       Taxes.  Except as set forth on Schedule 3.8:

 

(a)          All income and other material Tax Returns required to have been filed by or with respect to the Company have been timely filed (taking into account all relevant extensions of time to file) in the manner required by Applicable Law and all such Tax Returns were true and correct in all material respects when filed.  All income and other material amounts of Taxes imposed on the Company that are due and payable have been timely paid in the manner required by Applicable Law (taking into account all relevant extensions of time to pay), except for Taxes that are being contested in good faith through appropriate proceedings.

 

(b)          The Company has no liability for the Taxes of any Person (other than the Company or members of the RLI Group) under Treasury Regulations Section 1.1502-6 (or a corresponding provision of state tax law), by contract, as a successor, as a transferee, or by statute.

 

(c)          The most recent audited financial statements for the Company reflect no reserve for Taxes, were prepared in accordance with SAP, and were true, correct and complete in all material respects as of and for the respective dates and periods indicated therein.

 

(d)          No deficiency for any material amount of Tax has been proposed, asserted or assessed by a Taxing Authority in writing against the Company that has not 

 

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been satisfied by payment, settled or withdrawn, except for Taxes that are being contested in good faith through appropriate proceedings.

 

(e)          There is no tax audit, examination, suit or other tax proceeding pending with respect to a material amount of Taxes of the Company, including any claim by any Taxing Authority in a jurisdiction in which the Company has not filed a Tax Return that the Company may be subject to Tax by such jurisdiction.

 

(f)           There are no outstanding waivers extending the statutory period of limitations on assessment or payment of material amounts of Taxes due from the Company.

 

(g)          There are no Tax liens on any assets of the Company, except for (A) statutory liens for Taxes not yet due and payable or (B) Taxes that are being contested in good faith through appropriate proceedings.

 

(h)          All Taxes which the Company is required by law to withhold or to collect for payment have been duly withheld and collected and have been paid to the appropriate Taxing Authority or set aside or reserved on the books of the Company.

 

(i)           The Company has not been a party to any distribution described in Section 355 of the Code.

 

(j)           The Company does not have a permanent establishment in any foreign country, as defined in any applicable tax treaty or convention between the United States and such foreign country.

 

(k)          The Company has not engaged in any “listed transaction” as defined in Section 1.6011-4 of the Treasury Regulations.

 

(l)           Seller and the Company are members of an “affiliated group” within the meaning of Section 1504(a) of the Code of which RLI Corp. is the common parent (the “RLI Group”); such affiliated group will continue through the Closing Date to file consolidated federal income tax returns that will include the Company; and the Seller is eligible to make an election under Section 336(e) of the Code with respect to the Company.

 

(m)         No Closing Admitted Asset is an interest in any joint venture, partnership, or limited liability company.

 

(n)          The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any Tax periods or portions thereof beginning after the Closing Date (the “Post-Closing Tax Periods”) as a result of any: (i) change in method of accounting for a Pre-Closing Tax Period; (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed in a Pre-Closing Tax Period; (iii) intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision 

 

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of state, local or foreign income Tax law); (iv) installment sale or open transaction disposition made in a Pre-Closing Tax Period; or (v) prepaid amount received in a Pre-Closing Tax Period.

 

Section 3.9.       Insurance Qualifications.

 

(a)          Except for Insurance Qualifications that first become Rescinded Insurance Qualifications after the date hereof, if any, and except as set forth in Schedule 3.9, the Company has not had, since December 31, 2010 any Insurance Qualification revoked, restricted (other than as originally issued) or suspended, or any “cease and desist” order issued with regard to any Insurance Qualification or with regard to any of the business or operations of the Company, nor since December 31, 2010, to Seller’s Knowledge has the Company been involved in any proceeding to revoke, restrict or suspend any Insurance Qualification or subject any Insurance Qualification to any “cease or desist” order, nor is any proceeding pending or to Seller’s Knowledge threatened against the Company, which would have that effect.

 

(b)          Schedule 3.9 sets forth a list of each jurisdiction in which the Company has, as of the date hereof, a valid, effective and subsisting certificate, license or other document issued by the commissioner of insurance or other regulatory official or similar body evidencing the authority of the Company to carry on and transact insurance business as an authorized insurer within such official’s, or body’s jurisdiction (each, an “Insurance Qualification,” and collectively, the “Insurance Qualifications”); provided that the term “Insurance Qualification” shall not include or refer to any license, permit or approval for any specific lines of business. Except as set forth on Schedule 3.9, and subject to the existence of any Rescinded Insurance Qualification that first became a Rescinded Insurance Qualification after the date hereof, the Company has full requisite corporate and other right, power and legal authority to carry on and transact all the kinds of insurance business permitted by its Insurance Qualifications in each such jurisdiction in which it has an Insurance Qualification, and to own, lease and operate its assets, properties and business both as now carried on and as permitted to be carried on pursuant to each such Insurance Qualification.

 

(c)          The Company is not required by Applicable Law to be licensed, qualified or admitted in any jurisdiction (other than those listed in Schedule 3.9) to carry on and transact its insurance business as currently conducted or to own, lease and operate its assets, properties and business as currently conducted.

 

(d)          As of the Closing Date (i) the Company will not be bound by any agreement between the Company, on the one hand, and any agent, broker, producer or intermediary, on the other hand, that is a distributor of products of the Company (“Agency Agreement”) or (ii) for any Agency Agreement that is not terminated, or amended to release the Company from such Agency Agreement with respect to the Company, Seller or an Affiliate of Seller (but not the Company) will have assumed all rights, liabilities and obligations under such Agency Agreement pursuant to the Assignment and Assumption Agreement.

 

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(e)          As of the Closing Date (i) the Company will not be bound by any reinsurance agreements or treaties between the Company and any reinsurer or ceding insurer (“Reinsurance Treaties”) or (ii) for any Reinsurance Treaty that is not terminated, or amended to release the Company from such Reinsurance Treaty with respect to the Company, Seller or an Affiliate of Seller (but not the Company) will have assumed all rights, liabilities and obligations under such Reinsurance Treaty pursuant to the Reinsurance Agreement.

 

(f)           The Company has paid all guaranty fund assessments that are due, or claimed or asserted by any insurance regulatory authority to be due from the Company.

 

(g)          To Seller’s Knowledge, (i) since its formation, the Company has been engaged solely and exclusively in insurance business (which includes, without limitation, the administration of insurance claims on behalf of third parties), and (ii) since December 31, 2010, the Company has conducted no insurance business or other business in any jurisdiction other than the jurisdictions listed in Schedule 3.9 with respect to which it would be required to have an insurance license or permit from any insurance or other governmental or regulatory authority.

 

Section 3.10.    Title to Assets; Liens and Encumbrances.

 

(a)          As of the Closing Date, the Company will have no assets, except for (i) the Insurance Qualifications, (ii) the Closing Admitted Assets, (iii) any intellectual property or similar rights (other than Seller Trademarks), (iv) the Company’s articles of incorporation and books and records, (v) the Related Agreements and (vi) other assets of de minimis value in the aggregate.  As of the Closing Date, the Company will have valid legal title to, free and clear of any Encumbrances other than Permitted Encumbrances, at least the minimum amount of assets required by the insurance regulator in each jurisdiction in which the Company holds an Insurance Qualification for the Company to be in compliance as a licensed insurer in such jurisdiction as of the Closing Date.  The Company has good and marketable title to all of the Closing Admitted Assets, free of any Encumbrances, other than any Encumbrance: (A) incurred on the Statutory Deposits made with state insurance departments as required by such departments, including as set forth on Schedule 3.10(a), (B) for Taxes that are not yet due and payable, (C) set forth on or described in the notes to the Statutory Statements; (D) arising by operation of Applicable Law; (E) that will be released prior to or at the Closing; or (F) created by, through or under, or arising as a result of the acts or omissions of, Buyer or any of its Affiliates or Representatives (each of (A) through (F), a “Permitted Encumbrance”).  Schedule 3.10(a) identifies all of the Statutory Deposits owned by the Company as of the second Business Day immediately prior to the date hereof.

 

(b)          Schedule 3.10(b) sets forth a list of all admitted assets owned by the Company as of the second Business Day immediately prior to the date hereof.

 

Section 3.11.    Contracts and Commitments.

 

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(a)          Except for (i) any surety or fidelity bond, insurance policy, binder, slip, contract or product issued or assumed by the Company (“Insurance Contracts”) and (ii) the Related Agreements, the Agency Agreements and the Reinsurance Treaties, Schedule 3.11(a) sets forth each existing, oral or written, contract, lease, commitment, binder, waiver or agreement of any kind to which the Company is a party or by or to which the Company or any of its assets or properties is bound or subject, which (A) is currently in effect and has neither terminated nor expired in accordance with its terms and (B) for which the Company has undischarged obligations (“Non-Insurance Contracts”).  Seller has furnished or made available to Buyer true, accurate and complete copies of the Non-Insurance Contracts.  As of the Closing Date, (A) the Company will not be bound by any Non-Insurance Contract or (B) for any Non-Insurance Contract that is not terminated, or amended to release the Company from all of its obligations and liabilities thereunder, Seller or an Affiliate of Seller (but not the Company) will have assumed all rights, liabilities and obligations under such Non-Insurance Contract pursuant to the Assignment and Assumption Agreement or other assumption arrangement.

 

(b)          Except as set forth in Schedule 3.11(b), to Seller’s Knowledge, the Company has not issued or renewed any insurance policy or reinsurance contract since March 31, 2008.

 

(c)          Except as set forth on Schedule 3.11(c), the Company is not party to any agreement or arrangement, whether verbal or written, with any of its directors or officers.

 

Section 3.12.    Legal Proceedings.

 

(a)          Except as set forth in Schedule 3.12(a) and except for any Actions related to Insurance Contracts in the ordinary course of business as currently conducted by the Company (“Ordinary Course of Business”), there are no complaints (consumer or otherwise), claims, actions, suits, arbitrations, hearings, proceedings or investigations, whether at law, in equity or admiralty, before any court, arbitrator, governmental department, commission, board, agency or instrumentality, domestic or foreign (collectively, “Actions”), pending or, to the Seller’s Knowledge, threatened (i) against the Company or its business or any property of the Company or any individual in his or her capacity as a director or officer of the Company, or the ability of the Company to conduct or transact any insurance business, or (ii) against Seller or any Affiliate of Seller (other than the Company) that would prevent the consummation of the transactions contemplated by this Agreement or the Related Agreements.

 

(b)          There are no Actions pending in which the Company is either a plaintiff or (if not a formal proceeding) an aggrieved party or claimant and there are no orders, decrees or injunctions issued in favor of the Company, except with respect to cross claims, counterclaims and claims for subrogation, indemnity, salvage or contribution and declarations of coverage or other Actions arising out of the claims-handling activities of the surety and fidelity business of the Company.

 

Section 3.13.    Compliance with Law.

 

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(a)          The Company is, and since December 31, 2010 has been, in compliance in all material respects with Applicable Law.  To Seller’s Knowledge, the Company is not under investigation by any governmental authority with respect to any material violation of Applicable Law.

 

(b)          Neither the Company nor, to Seller’s Knowledge, any officer, director, employee or authorized agent on behalf of the Company, has made any unlawful payment to, or entered into any written or oral understanding or agreement to make any unlawful payment to, any governmental or quasi-governmental official, or to any other Person.

 

(c)          The Company has filed all material reports, data, registrations, filings, other information and applications required to be filed with or otherwise provided to governmental authorities with jurisdiction over the Company or its business, properties or assets, and all required regulatory approvals in respect thereof are in full force and effect.  All such regulatory filings were in compliance in all material respects with Applicable Laws, and no material deficiencies have been asserted by any such governmental authorities with respect to such regulatory filings that have not been resolved.

 

(d)          Seller has delivered or otherwise made available to Buyer copies of all material written correspondence with governmental authorities (including email correspondence) within its possession or control and that pertain to the conduct of the Company’s business since December 31, 2010.

 

Section 3.14.    Absence of Certain Changes.  Except as contemplated by this Agreement or as set forth on Schedule 3.14, between December 31, 2013 and the date of this Agreement, the Company has not:

 

(a)          incurred any obligation or liability (absolute or contingent) except for obligations or liabilities incurred in the Ordinary Course of Business;

 

(b)          sold or transferred any assets or property or cancelled any debts or claims, except for sales of investment assets and in the Ordinary Course of Business;

 

(c)          made any loan or advance to, or guaranteed the obligations of, any individuals, firms, corporations or other entities;

 

(d)          declared, made, set aside or paid any dividend, distribution or payment on, or any purchase or redemption of, any shares of any class of its capital stock or made any commitments therefor;

 

(e)          made any change in its accounting methods or practices, or made any change in depreciation or amortization policies or rates adopted by it;

 

(f)           except in the Ordinary Course of Business, entered into or amended any material contract or other material agreement;

 

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(g)          entered into any agreement pursuant to which it has agreed to refrain from competing with any party;

 

(h)          except for investment assets acquired (i) in the Ordinary Course of Business or (ii) in connection with the Closing in order to comply with the terms and conditions of this Agreement, made any acquisition of any of the assets, properties, capital stock or business of any other Person;

 

(i)           suffered or had any material adverse change, event or condition in its business, results of operations, assets, condition (financial or otherwise), or in the manner in which it is conducting its business, or any other Material Adverse Effect;

 

(j)           issued, granted, sold or otherwise disposed of any of its capital stock or other securities, or options or rights to acquire its capital stock or securities;

 

(k)          written up, written down or written off the value of any material amount of assets, except in the Ordinary Course of Business; or

 

(l)           entered into any agreement or understanding to do any of the acts or things described in this Section 3.14.

 

Section 3.15.    Bank Accounts; Powers of Attorney.  Schedule 3.15 is a list of (a) each bank or depository in or with which the Company maintains an account or safe deposit box and with respect to Statutory Accounts the corresponding number of each Statutory Account and the names of all persons holding check signing authority with respect thereto and (b) except for any insurance regulatory authorities or other governmental entities or persons who may be designated as representatives for service of process, any person holding a power of attorney from the Company.   A true and complete copy of each such power of attorney has been made available to Buyer.

 

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Section 3.16.    Employees and Labor Relations.

 

(a)          A true, accurate and complete list of all directors and officers of the Company is set forth on Schedule 3.16(a).  The Company does not have any full-time, part-time, temporary, leased, per diem or other employees (collectively, “Employees”) or any natural persons providing services to the Company as consultants or independent contractors or in any similar capacity.  The Company is and has at all times been in compliance in all material respects with all Applicable Laws relating to employment, employment practices, wages, hours, collective bargaining, unemployment insurance, worker’s compensation, equal employment opportunity, discrimination, immigration, the payment and withholding of Taxes, termination of employment, occupational safety and health standards and similar foreign, state or local Applicable Laws. The Company has no obligation or liability of any kind to, or in respect of, any past or present director or officer or any past Employee, consultant or independent contractor and no payment or benefits will become payable to any such person as a result of the transactions contemplated hereby (either alone on in conjunction with any other event).

 

(b)          The Company does not sponsor, maintain, contribute to, have any obligation to contribute to, participate in or have liability (including, without limitation, potential or contingent liability under Title IV of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), with respect to, any employee benefit or compensation plan, program, policy, agreement or arrangement (collectively, “Plans”), whether or not subject to ERISA, and each Plan that has in the past six (6) years been applicable to the Company or any past Employees was established, maintained and administered in all material respects in compliance with all Applicable Laws and its terms and no unsatisfied liability or obligation of the Company of any kind exists under any such Plan.

 

(c)          The Company is not, and has not been, subject to or bound by any union or collective bargaining agreements.

 

Section 3.17. Property.  As of the Closing Date, the Company will not own or lease any real property.

 

Section 3.18.    Intellectual Property.  Except for any trademarks, trade names, service marks (whether registered or not) that contain or are confusingly similar with “RLI” or “Mt. Hawley” (“Seller Trademarks”) (which as of the Closing will remain the property of Seller and its Affiliates (other than the Company)), the Company owns, licenses or otherwise possesses legally enforceable rights to use, all patents, trademarks, trade names, service marks, copyrights, technology, know-how, trade secrets, software programs or applications, data and databases, and tangible or intangible proprietary information or materials that are used in the business of the Company as currently conducted in all material respects, and all of such intellectual property constitute sufficient intellectual property rights to conduct the business of the Company as currently conducted and, to Seller’s Knowledge, such intellectual property is not, and has not been, infringing or misappropriating any material intellectual property rights of a third party.  

 

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To the Seller’s Knowledge, all patents and registered trademarks, trade names, service marks, trade secrets and copyrights owned by the Company, if any, are valid.

 

Section 3.19.    Insurance Policies.  Schedule 3.19 contains a list of all policies of insurance maintained by the Company of the date hereof with respect to its properties and the conduct of its business.

 

Section 3.20.    Ratings.  As of the date hereof, the financial strength rating of Seller is rated A+ by A.M. Best Company, Inc. (“A.M. Best”), and A.M. Best has not announced that it has such ratings under surveillance or review.

 

Section 3.21.    Brokers and Finders.  Except for Mergers & Acquisition Services, Inc., no broker or finder has acted directly or indirectly on behalf of Seller in connection with this Agreement or the transactions contemplated hereby, and except for Mergers & Acquisition Services, Inc., no broker or finder is entitled to any broker or finder’s fee or other commission in connection with the transactions contemplated by this Agreement.  The fees of Mergers & Acquisition Services, Inc., with respect to the transactions contemplated hereby are the sole and exclusive obligations of Seller.

 

Section 3.22.    Disclaimer.  Except for the representations and warranties contained in this Article III, none of Seller or its Affiliates or any of its respective Representatives makes any other representation or warranty of any kind or any nature whatsoever, oral or written, express or implied, with respect to Seller or any of its Affiliates (including the Company), or the transactions contemplated by this Agreement.  Except for the representations and warranties contained in this Article III, Seller disclaims, on behalf of itself and its Affiliates (including the Company) and its and their respective Representatives any other representations and warranties (and liability or obligation therefor), whether made by Seller or its Affiliates (including the Company) or its or their respective Representatives or any other Person.

 

ARTICLE IV.

 

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller as of the date hereof and as of the Closing Date as follows:

 

Section 4.1.       Organization; Existence and Authority of Buyer.  Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the Commonwealth of Puerto Rico.  Buyer possesses full limited liability company right, power and legal authority to own, lease and operate its assets and properties and to carry on its business as the same is being conducted.  Buyer and each Affiliate of Buyer that will execute any other agreement or instrument to be executed by such Affiliate pursuant hereto have full limited liability company right, power and authority to execute and deliver, as applicable, this Agreement and such other agreements and instruments, to perform each of the terms, covenants, undertakings, and agreements on its part to be performed, and to make the representations and warranties on its part 

 

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made, pursuant hereto and thereto.  This Agreement and such other agreements and instruments as are to be executed and delivered by Buyer or one of its Affiliates, and the performance hereof and thereof, have been, or when executed shall have been, duly authorized by all necessary limited liability company action and are, or will be, duly and validly executed and delivered by Buyer and such Affiliates and constitute, or shall constitute, the legal, valid and binding obligations of Buyer and such Affiliates, enforceable against Buyer and such Affiliates in accordance with their terms except that (a) such enforcement may be limited by applicable bankruptcy, insolvency, moratorium or other similar laws in effect relating to or affecting the enforcement of the rights of creditors generally, and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

 

Section 4.2.       Investment Representation.  Buyer is acquiring the Shares for its own account without a view to the distribution or sale thereof and without any violation of the Securities Act of 1933, as amended.

 

Section 4.3.       No Violation; Approvals; Filings.

 

(a)          Assuming compliance with Section 4.3(b), the execution and delivery of this Agreement, the Related Agreements and the other agreements and instruments to be executed by Buyer or an Affiliate of Buyer pursuant hereto and thereto, and the performance of all of the transactions contemplated herein and therein, do not and will not (i) violate or breach any Applicable Law, (ii) violate or breach the certificate of incorporation or bylaws of Buyer or such Affiliate of Buyer, or (iii) with or without notice or the passage of time or both, violate, conflict with or result in a breach of any provision of, or constitute a default (or an event which, with the giving of notice, the passage of time or otherwise would constitute a default) under or entitle any party to terminate, accelerate or cause a breach or default of, or result in the creation of any Encumbrance upon any of the properties or assets of Buyer or such Affiliate of Buyer under, or create any right of acceleration, termination, vesting, payment, exercise, suspension, revocation or cancellation or the loss of any right or benefit under any contract, mortgage, lien, lease, agreement, indenture, trust, instrument, order, judgment or decree to which Buyer or such Affiliate of Buyer is a party or which is binding upon Buyer or such Affiliate of Buyer or upon any of Buyer’s or such Affiliate’s assets, except, in the case of clauses (i) and (iii) above, as would not reasonably be expected to result in a material adverse effect on the ability of Buyer or such Affiliate of Buyer to perform its obligations under this Agreement or the Related Agreements or consummate the transactions contemplated hereby or thereby.

 

(b)          Except as set forth in Schedule 4.3(b), Buyer is not required to obtain any consent, approval or authorization from or to make any filings with any governmental agency, body, or authority with regard to execution, delivery and performance of this Agreement or such other agreements or documents as are to be executed by Buyer pursuant hereto, or the consummation of the transactions contemplated herein or therein (“Buyer’s Approvals”).

 

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Section 4.4.       Brokers and Finders.  Except for TAG Financial Institutions Group, LLC, no broker or finder has acted directly or indirectly on behalf of Buyer in connection with this Agreement or the transactions contemplated hereby, and except for TAG Financial Institutions Group, LLC, no broker or finder is entitled to any broker or finder’s fee or other commission in connection with the transactions contemplated by this Agreement.  Any fees of TAG Financial Institutions Group, LLC, with respect to the transactions contemplated hereby are the sole and exclusive obligations of Buyer.

 

Section 4.5.       Financial Ability.  Buyer has delivered to Seller a true, complete and correct copy of the executed equity commitment letter, dated as of May 27, 2015 among Buyer and the investors thereto (the “Equity Commitment Letter”), pursuant to which, upon the terms and subject to the conditions set forth therein, the investors thereto have committed to invest the cash amount in Buyer set forth in its Equity Commitment Letter (the “Equity Financing”).  The Equity Commitment Letter has not been amended, modified or replaced prior to the date of this Agreement, and, as of the date hereof, to the knowledge of buyer, the commitments contained in the Equity Commitment Letter has not been withdrawn or rescinded in any respect.  As of the date hereof,  the Equity Commitment Letter (x) is in full force and effect, and (y) is a legal, valid, binding and enforceable obligation of Buyer and, to the knowledge of Buyer, the other parties thereto, in each case except that (a) such enforcement may be limited by applicable bankruptcy, insolvency, moratorium or other similar laws in effect relating to or affecting the enforcement of the rights of creditors generally, and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.  Other than as set forth in the Equity Commitment Letter, there are no conditions related to the funding of the full amount of the Equity Financing (including any “flex” provisions).  There is no other agreement relating to the Equity Financing to which Buyer or any of its Affiliates is a party that would, or would reasonably be expected to, (i) impair the validity of the Equity Commitment Letter, (ii) reduce the aggregate amount of the Equity Financing or (iii) materially delay or prevent the Closing.  Assuming Buyer is otherwise obligated to effect the Closing as set forth in Article IX hereof and the satisfaction of the conditions of the Equity Commitment Letter, upon receipt of the proceeds contemplated by the Equity Commitment Letter, Buyer will have access as of the Closing Date to sufficient funds to purchase the Shares on the terms and conditions contemplated by this Agreement, to consummate the other transactions contemplated by this Agreement and to pay all associated costs and expenses required to be paid by Buyer.

 

Section 4.6.       Investigation.  Buyer acknowledges and agrees that it (a) has made its own inquiry and investigation into, and, based thereon, has formed an independent judgment concerning, the Company and (b) has been furnished with or given adequate access to such information about the Company as it has requested.

 

Section 4.7.       Disclaimer.  Except for the representations and warranties contained in this Article IV, none of Buyer or its Affiliates or any of its respective Representatives makes any other representation or warranty of any kind or any nature whatsoever, oral or written, express or implied, with respect to Buyer or any of its 

 

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Affiliates, or the transactions contemplated by this Agreement.  Except for the representations and warranties contained in this Article IV, Buyer disclaims, on behalf of itself and its Affiliates and its and their respective Representatives any other representations and warranties (and liability or obligation therefor), whether made by Buyer or its Affiliates or its or their respective Representatives or any other Person.

 

ARTICLE V.

 

COVENANTS

 

Section 5.1.       Conduct of Business.  Except (a) as set forth on Schedule 5.1, (b) as otherwise contemplated by this Agreement, (c) with the prior written consent of Buyer, or (d) as required by Applicable Law, during the period commencing on the date hereof and ending on the Closing Date (the “Interim Period”), Seller shall (x) use commercially reasonable efforts to cause the Company to operate in the Ordinary Course of Business, including activities incident to and appropriate for running off its Insurance Contract portfolio and (y) cause the Company to:

 

(i)        preserve and maintain its corporate existence;

 

(ii)       use commercially reasonable efforts to preserve and maintain each of the Insurance Qualifications;

 

(iii)      keep accurate records and books of account;

 

(iv)      comply in all material respects with Applicable Law, including making all filings with insurance regulatory authorities in a timely manner;

 

(v)       furnish directly to Buyer copies of any filings made with any insurance or other regulatory official, agency or body or as otherwise required under any Applicable Law, as soon as practicable and in any event within five (5) Business Days after their filing;

 

(vi)      deliver to Buyer promptly upon receipt copies of all written communications from state regulatory authorities with respect to the Insurance Qualifications;

 

(vii)     not engage in any activity or business of any kind or nature, including but not limited to, issuing, amending or renewing any policies of insurance or reinsurance, except for activity incident to the runoff of the surety bond portfolio held by the Company as of the date of the Agreement;

 

(viii)    not issue any shares of capital stock or issue any right, warrant, call, preemptive right, option, appreciation right, phantom right, or other agreement or commitment of any kind, material or 

 

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immaterial, contingent or otherwise, which provides that any Person may receive from any Person any shares of the capital stock, or any other security of the Company; and not make or enter into any agreement or understanding providing for, restricting or otherwise affecting the transfer, voting or dividend rights of any shares of the capital stock or any other security of the Company;

 

(ix)      not reclassify or change the rights of any capital stock of the Company;

 

(x)       not incur, suffer or permit any Encumbrance upon the Shares;

 

(xi)      not incur any new indebtedness and not guarantee any obligations of others;

 

(xii)     except to the extent required by Applicable Law, or consistent with past practices or in the Ordinary Course of Business, not (A) amend any Tax Return previously filed by or on behalf of the Company; (B) make, change or rescind any election filed by or on behalf of the Company relating to Taxes; (C) make any change to any of the Company’s methods, policies or practices of Tax accounting or methods of reporting income or deductions for Tax purposes from those employed in the preparation of its most recently filed Tax Returns; (D) request a ruling relating to Taxes; or (E) enter into any closing agreements with any Taxing Authority, in each case, that solely relates to the Company and will be binding on the Company subsequent to the Closing Date;

 

(xiii)    not amend its articles of incorporation or bylaws;

 

(xiv)    not lease, license, mortgage, pledge or subject to any Encumbrance, other than Permitted Encumbrances or, except in connection with the Closing in order to comply with the terms and conditions of this Agreement, sell, any assets, properties or rights of the Company;

 

(xv)     not make or agree to make any distribution of cash or other assets or properties of the Company by way of dividend, distribution, redemption or otherwise;

 

(xvi)    not enter into any agreement, contract or understanding of any kind, whether oral or written, except in connection with the investigation, settlement and/or payment of any claim under or the termination, commutation, compromise and/or a release with respect to any debts, liabilities, contracts and obligations that will be (or would be, if not resolved or terminated prior to the Closing) Assumed Liabilities (as defined under the Assignment and Assumption Agreement);

 

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(xvii)   not acquire or agree to acquire in any manner any assets or securities other than in the Ordinary Course of Business;

 

(xviii)  not make any change in its accounting methods or practices;

 

(xix)    not authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation, dissolution, rehabilitation, restructuring or other reorganization of the Company, provided, however, that this restriction will not apply with respect to any deemed plan of liquidation that is made under federal income tax law in connection with the Section 336(e) Election;

 

(xx)     not adopt a new Plan or hire any Employees, independent contractors or consultants;

 

(xxi)    not merge or consolidate with or acquire the business of any other corporation or business organization; and

 

(xxii)   not agree, whether in writing or otherwise, to do any of the foregoing.

 

Section 5.2.       Approvals.

 

(a)          Seller covenants and agrees that during the Interim Period it will promptly file for and use commercially reasonable efforts to obtain Seller’s Approvals.  Buyer covenants and agrees that during the Interim Period it will promptly file for and use commercially reasonable efforts to obtain Buyer’s Approvals.  Seller and Buyer shall provide information and communications to governmental or regulatory authorities as such governmental or regulatory authorities may reasonably request in connection with this Agreement and the Related Agreements and obtaining Seller’s Approvals and Buyer’s Approvals.  Each of Seller and Buyer (i) shall provide to the other copies of all non confidential portions of filings, applications and other material written communication, in substantially the form to be filed with or submitted to governmental or regulatory authorities in connection with this Agreement, the Related Agreements or in connection with obtaining Seller’s Approvals and Buyer’s Approvals at least five (5) days prior to such filing, submission or communication, (ii) shall consider in good faith the comments of the other party in respect of such filings, applications and communications and (iii) shall thereafter keep the other party apprised of the status of such filings, applications and communications. Each of Seller and Buyer shall pay all amounts required to be paid by it in obtaining the Seller’s Approvals and Buyer’s Approvals, respectively. Subject to Applicable Law relating to the sharing of information, Buyer and Seller shall notify and keep each other advised as to, and provide copies of any communication it or any of its Affiliates receives from any governmental or regulatory authority relating to the matters subject to this Agreement.  To the extent that either party participates in any meeting with any governmental or regulatory authorities relating to matters that are the subject of this Agreement, such party shall use commercially 

 

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reasonable efforts to consult with the other party in advance, and to the extent permitted by such authorities, give the other party an opportunity to attend and participate at such meeting.

 

(b)          Notwithstanding the foregoing or any other provision of this Agreement to the contrary, nothing in this Agreement will be deemed to require Buyer to consent to a condition or burden imposed by a governmental authority in connection with the granting of any of the Seller’s Approvals or Buyer’s Approvals if such condition or burden (i) seeks to prohibit or limit the ownership, or materially limit the operation, by Buyer or the Company of the business or assets of the Company (including any Insurance Qualification) or to compel the Company, Buyer or its Affiliates to dispose of or hold separate any portion of their business or assets as a result of the transactions contemplated by this Agreement, (ii) seeks to impose any limitation on the ability of Buyer or its Affiliates to exercise full rights of direct or indirect ownership of or control over the Company or its assets or materially limit the control of the Company’s operations or (iii) would place a material financial or material operational burden on Buyer; provided, however, that any requirement by the Illinois Department of Insurance that the Buyer (x) make a capital contribution to increase the Company’s statutory surplus to an amount not in excess of $21 million or (y) hire any personnel or procure any resources or functions reasonably required to sustain the proposed business plan of the Company filed with the Form A application, shall not be deemed a condition or burden pursuant to clauses (i) through (iii) of this Section 5.2(b).  Notwithstanding anything to the contrary, nothing in this Agreement will be deemed to require Seller to consent to a condition or burden imposed by a governmental authority in connection with the granting of any of the Seller’s Approvals or Buyer’s Approvals if such condition or burden would be materially adverse to Seller, including a request to make any financial accommodation to the Company or Buyer (whether by contributing capital to the Company, entering into a capital maintenance agreement for the benefit of the Company or Buyer, or otherwise).

 

(c)          Notwithstanding anything herein to the contrary, Buyer shall use its commercially reasonable efforts to cause an application of “Form A – Statement of Acquisition of Control of a Domestic Insurer” (“Form A”) to be filed with the Illinois Department of Insurance in respect of the transactions contemplated by this Agreement as soon as possible following the date of this Agreement, but in no event later than ten (10) days following the date of this Agreement, and thereafter, if required, cause any amendments to the Form A application and other required or appropriate filings to be made, and shall at all times between the date hereof and the Closing, subject to Section 5.2(b), take such other actions as are required by Buyer to obtain Form A approval from the Illinois Department of Insurance and all other Buyer’s Approvals.

 

(d)          Seller and Buyer shall use commercially reasonable efforts to obtain any other consents and approvals and make any other notifications that may be required in connection with the transactions contemplated by this Agreement and the Related Agreements; provided, however, that no party shall be required to compensate, other than any de minimis payments or consideration, any third party in order to obtain such third party’s consent or approval.

 

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Section 5.3.       Cooperation.  Subject to the terms and conditions hereof, (a) each party hereto shall cooperate with the other party hereto, and Seller shall cause the Company to cooperate with Buyer, in connection with consummating the transactions contemplated by this Agreement, and (b) each of the parties hereto agrees, and Seller shall cause the Company, to use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under Applicable Laws and regulations to consummate and make effective the transactions contemplated by this Agreement.

 

Section 5.4.       Notification of Changes.  During the Interim Period, each party shall give the other prompt notice after it has obtained knowledge of (a) any fact or circumstance which renders untrue, incorrect or misleading in any material respect any of the representations and warranties made in this Agreement, whether as of the date such representation and warranty was made or as of the date such knowledge was obtained, (b) any failure to comply with or satisfy in any material respect any covenant, condition or agreement which it is to comply with or satisfy under this Agreement, and (c) any material adverse change affecting its ability to perform its obligations under this Agreement.

 

Section 5.5.       Right of Access and Inspection; Preparation of Financial Statements.

 

(a)          During the Interim Period, Seller shall cause the Company to provide to Buyer and its representatives information concerning the Company as Buyer or any of such representatives may reasonably request (which request must specify a reason for such information that is reasonably related to the consummation of the transactions contemplated hereby); provided, however, that Seller shall not be required to cause the Company (A) to furnish information that is outside the scope of such request or contains or relates to proprietary information or trade secrets of Seller or its Affiliates (other than the Company) or (B) to make available portions of any documents which portions in the opinion of counsel are subject to the attorney-client privilege.  Following the Closing, each party will, in connection with the preparation of the financial statements of the Company, provide to the other party reasonable access to necessary information within its control.

 

(b)          Between the date hereof and the Closing Date, Seller shall cause the Company to, consistent with its operation in the Ordinary Course of Business, prepare and file on a timely basis, the statutory financial statements of the Company for any year or quarter ended prior to the Closing for which statutory financial statements are due on or before the Closing Date, in each case including all exhibits, interrogatories, schedules and any actuarial opinions, affirmations, certifications or other supporting documents filed in connection therewith, a copy of which shall be promptly provided to Buyer.

 

(c)          All statements described in this Section 5.5 shall be prepared in accordance with SAP consistent with past practices and on the forms prescribed or permitted by the Illinois Department of Insurance and the insurance regulator in each 

 

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other jurisdiction in which the Company is required to file a quarterly or annual statement.

 

(d)          Following the Closing Date, Buyer shall, and shall cause the Company to, provide to Seller and its Representatives information concerning the Company as Seller or any of such Representatives may reasonably request to assist Seller in connection with any compliance, reporting, accounting, Tax or regulatory matter (including for purposes of preparing any statutory financial statements or statutory financial information) or third party Action, and Buyer shall cooperate in good faith fully with Seller and its Representatives to furnish, at Seller’s expense, such books and records and make available; provided that such access does not unreasonably interfere with the conduct of the business of Buyer or the Company; provided, further, Seller shall not have access to information that is subject to an attorney-client or other legal privilege that might be impaired by such disclosure.

 

Section 5.6.       Confidentiality of Information.

 

(a)          All books, records, data and information (collectively, the “Confidential Information”) furnished by Seller or the Company, on the one hand, or Buyer, on the other hand, to each other in connection with the transactions contemplated by this Agreement shall be considered “Elevation Material” subject to the terms of that certain Confidentiality Agreement dated December 12, 2014 between the Company and CBCG Insurance Holdings, Inc. (the “Confidentiality Agreement”), which shall continue in full force in effect until the Closing, at which time the parties hereto shall cause the Confidentiality Agreement to be terminated with no liability on the part of any party thereto except for liabilities that arose prior to the Closing.  If for any reason the transactions contemplated by this Agreement are not consummated, the Confidentiality Agreement shall continue in full force and effect in accordance with its terms.

 

(b)          Neither Buyer nor Seller shall issue (or permit their respective Affiliates to issue) any press release or other public statement concerning the transactions contemplated by this Agreement without first providing the other party with a written copy of the text of such release or statement, and obtaining such other party’s written consent respecting such release or statement, which consent shall not be unreasonably withheld or delayed, except as may be required by Applicable Law, the Securities Exchange Commission or the New York Stock Exchange, but with reasonable advance notice to the other party.  For the avoidance of doubt, Seller and its Affiliates, including RLI Corp., may make all required filings, statements and releases with the Securities Exchange Commission and the New York Stock Exchange without prior consent of Buyer, but with reasonable advance notice for any filings, statements or releases related to this Agreement.

 

Section 5.7.       Intercompany Agreements and Accounts.  Except as set forth on Schedule 5.7 or as contemplated by this Agreement or any Related Agreement, as of the Closing Date, Seller shall, or shall cause the Company to terminate, settle or otherwise extinguish any and all liabilities, obligations, payments, contracts, commitments, reinsurance treaties or other arrangements or understandings between the Company and 

 

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Seller or any Affiliate of Seller (including, for the avoidance of doubt, any director, officer or employee of Seller or any Affiliate of Seller, and any immediate family member of any of the foregoing), which may be effected by way of an amendment of such contract, commitment, reinsurance treaty or other arrangement or understanding terminating and releasing the Company from such contract, commitment, reinsurance treaty or other arrangement or understanding.

 

Section 5.8.       Rescinded Insurance Qualifications.

 

(a)          In the event that, between the date hereof and the Closing, any Insurance Qualification (but, for the avoidance of doubt, disregarding any permit, license or approval of any specific lines of business with respect to such Insurance Qualification) is rescinded, terminated, revoked, nonrenewed, suspended or otherwise restricted or impaired so as not to permit the Company to conduct insurance business in the applicable jurisdiction as contemplated by such Insurance Qualification (a “Rescinded Insurance Qualification”), Seller shall (a) promptly notify Buyer of such Rescinded Insurance Qualification and (b) use its commercially reasonable efforts (but without any obligation to expend any material funds or to initiate, or increase the activities of, any insurance operations) to cure any condition causing such Insurance Qualification to be a Rescinded Insurance Qualification as promptly as practicable.  In the event that the condition causing any Insurance Qualification to be a Rescinded Insurance Qualification is lifted or otherwise cured, Seller shall promptly provide to Buyer appropriate documentary evidence of the status of the Company’s authority to transact insurance business on a licensed basis in the applicable jurisdiction.  In the event that (i) five or more Insurance Qualifications are, and remain, Rescinded Insurance Qualifications as of the Closing Date or (ii) any Insurance Qualification set forth on Schedule 5.8(a) is, and remains, Rescinded Insurance Qualification as of the Closing Date, a “Rescinded Insurance Event” shall be deemed to have occurred.

 

Section 5.9.       Authority; Bank Accounts.

 

(a)          Following the date hereof and prior to the Closing, Buyer shall open and establish its own general bank and investment accounts for the benefit of the Company.  Buyer acknowledges and agrees that any account held or used by the Company prior to the Closing, other than any non-transferrable statutory accounts (“Statutory Accounts”), will not be available for use by the Company, Buyer or any other Affiliate of Buyer after the Closing.

 

(b)          At the Closing, Seller shall provide or cause to be provided to Buyer, resignations, appropriately executed signature cards and all other documentation needed in preparation for closing or transferring signature authority for any Statutory Accounts.  Seller shall, and shall cause its Affiliates to, use its commercially reasonable efforts to cooperate with and assist Buyer in obtaining, subsequent to the Closing, any statutory or regulatory approvals required to enable the Company to make the appropriate closings or transfers, including transfers of signature authorization, and in providing all notices thereof as may be required by appropriate governmental authorities with respect to any Statutory Accounts.  From and after the Closing, no agent or officer of Seller or 

 

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any of its Affiliates may take any action with respect to any such Statutory Account other than as may be expressly authorized in writing by Buyer.

 

Section 5.10.    Deposits.  If the statutory deposits required by the insurance regulators of the jurisdictions in which the Company has Insurance Qualifications are not maintained in compliance with such requirements at any time prior to the Closing Date, Seller shall cause the Company promptly to comply with any such statutory deposit requirements.

 

Section 5.11.    Agency Agreements; Non-Insurance Contracts and Reinsurance Treaties.  Subject to Section 5.7 as it relates to intercompany agreements, Buyer and Seller acknowledge and agree that Seller shall use commercially reasonable efforts to cause the Company to cause each of the Agency Agreements, the Reinsurance Treaties and the Non-Insurance Agreements to be terminated or amended, or assigned to Seller or an Affiliate of Seller (other than the Company), as of or prior to the Closing, to effect a release of the Company and all of the Company’s obligations and liabilities thereunder.  To the extent that any of the Agency Agreements, the Reinsurance Treaties or Non-Insurance Contracts have not been terminated or amended, or assigned to Seller or an Affiliate of Seller (other than the Company), and the Company is not fully released from its obligations and liabilities thereunder, as of the Closing Date, any rights, liabilities and obligations under such contracts shall be assumed by Seller or an Affiliate of Seller (other than the Company) pursuant to the Assignment and Assumption Agreement, the Reinsurance Agreement or other assumption arrangement.

 

Section 5.12.    Assets of the Company.  Between the date hereof and the Closing, Seller shall cause the Company to sell or dispose of all assets and properties of the Company (except for assets of de minimis value in the aggregate and the assets set forth in clauses (i) through (v)), such that as of the Closing, the assets of the Company shall solely consist of (i) the Insurance Qualifications, (ii) the Closing Admitted Assets, (iii) any intellectual property or similar rights (other than Seller Trademarks), (iv) the Company’s articles of incorporation and books and records and (v) the Related Agreements.

 

Section 5.13.    Minimum Statutory Surplus.  Subject to the approval of applicable insurance regulators, Seller shall cause the Company to make a dividend distribution to Seller, prior to Closing, in order to reduce the Company’s statutory surplus to an amount that is not (a) less than the sum of $50,000 plus the highest minimum capital and surplus requirement of each jurisdiction in which the Company holds an Insurance Qualification and (b) more than the sum of $150,000 plus the highest minimum capital and surplus requirement of each jurisdiction in which the Company holds an Insurance Qualification.

 

Section 5.14.    Intellectual Property Assignment and Application to Change Name.

 

(a)          Buyer acknowledges and agrees that it is not purchasing or acquiring any right, title or interest to any Seller Trademark.  Prior to or at the Closing, Seller shall cause the Company to transfer pursuant to the Intellectual Property 

 

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Assignment all right, title and interest that the Company may have in any Seller Trademarks to Seller or an Affiliate of Seller.

 

(b)          (i) Within two (2) Business Days following the Closing Date, Buyer shall, at its own expense file any applications and related documents with applicable regulatory authorities in the State of Illinois to change the name of the Company to another name selected by the parties in good faith prior to the Closing, which does not include, contain or are confusingly similar with any Seller Trademark and (ii) within thirty (30) calendar days following the receipt of all approvals of such regulatory authorities, Buyer shall, at its own expense, use its commercially reasonable efforts (A) to file any applications and related documents with other applicable regulatory authorities to change the name of the Company to such name selected by the parties and (B) to remove all Seller Trademarks appearing on materials used by the Company in its business.  Buyer shall thereafter use commercially reasonable efforts to pursue diligently the process to ensure that such name change and removal of Seller Trademarks are effected, including providing to Seller a copy of the filed name change application.  The application and related documents required in order to change the name of the Company shall be prepared by the parties in collaboration prior to the Closing.  Such collaboration shall include the opportunity for each party to review and comment on the application and related documentation required to effect such name change.

 

Section 5.15.    Insurance.  From and after the Closing Date, the Company shall cease to be insured by Seller’s or its Affiliates’ corporate insurance policies or by any of their self-insured programs to the extent that such insurance policies or programs cover the Company; provided, however, that Seller and its Affiliates may, at its sole discretion, after the Closing Date continue to provide tail coverage for the Company for any period prior to the Closing Date.

 

Section 5.16.    Post-Closing Insurance Qualifications.  Following the Closing, with respect to Insurance Qualifications for which Applicable Laws require the Company to renew existing business, Buyer will use commercially reasonable efforts to maintain the Insurance Qualifications during all periods when Company’s bonds and insurance policies are in effect (and being serviced under the Services Agreement), until they are no longer in force, transferred, terminated or otherwise no longer operative.

 

Section 5.17.    Financing.  Buyer shall not, without the prior written consent of Seller, permit the Equity Commitment Letter to be amended, modified, replaced or terminated, and Buyer shall, and shall cause its Affiliates to, use reasonable best efforts to do all things necessary to obtain the proceeds of the Equity Financing no later than the date on which the Closing is required to occur pursuant to Section 2.4, on the terms and conditions set forth in the Equity Commitment Letter.

 

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ARTICLE VI.

 

SURVIVAL

 

Section 6.1.       Survival.  Each of the representations and warranties made by Seller in Article III and Buyer in Article IV of this Agreement shall survive the Closing for a period of twenty (20) months after the Closing Date; provided that the representations and warranties set forth in (i) Section 3.1 (Organization; Existence and Authority of Seller), Section 3.2(a) (Organization; Good Standing of the Company), Section 3.3 (Capitalization and Delivery of the Shares), Section 3.5 (Title to Shares; Subsidiaries and Affiliates), Section 3.8(l) (Taxes) and Section 3.21 (Brokers and Finders) (“Seller Fundamental Representations”), and (ii) Section 4.1 (Organization; Existence and Authority of Buyer) and Section 4.4 (Brokers and Finders) (“Buyer Fundamental Representations”) shall continue in full force and effect in perpetuity and the representations and warranties set forth in Section 3.8 (Taxes) (other than Section 3.8(l)) shall terminate sixty (60) days after the expiration of the applicable statute of limitations.  The covenants and agreements set forth in this Agreement that by their terms apply or are required to be performed in their entirety on or prior to the Closing shall survive the Closing for a period of twenty (20) months, and the covenants and agreements set forth in this Agreement that by their terms are to be performed in whole or in part after the Closing, shall survive the Closing for the period provided in such covenant or agreement or until fully performed.

 

ARTICLE VII.

 

INDEMNITIES

 

Section 7.1.       Indemnification of Buyer.  From and after Closing, Seller shall defend, indemnify and hold harmless Buyer and its shareholders, Affiliates, officers, directors, employees, agents and assigns from and against any and all liabilities, claims, liens, obligations, damages, losses, costs and expenses (including fines, assessments (including guaranty fund assessments), penalties and reasonable investigatory, accountant’s and attorney’s fees and disbursements) (“Losses”) arising out of or related to:

 

(a)          the breach, failure or inaccuracy of any representation or warranty made by Seller in this Agreement;

 

(b)          the failure of Seller to perform any of the covenants or agreements of Seller contained in this Agreement;

 

(c)          any Agency Agreement;

 

(d)          the conduct of the Company’s business at any time before the Closing or any actions taken or omissions made at any time prior to the Closing; or

 

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(e)          Buyer’s compliance with Section 5.16 to the extent such compliance results in expenditures by Buyer or the Company that neither Buyer nor the Company otherwise would have incurred in the ordinary course of business;

 

provided, however, that Seller shall have no liability under Section 7.1(a) (other than liability for Losses arising of or related to the breach, failure or inaccuracy of a Seller Fundamental Representations as to which this proviso shall not apply) unless the aggregate of all Losses for which Seller would, but for this proviso, be liable under Section 7.1(a), exceeds on a cumulative basis an amount equal to point twenty-five percent (0.25%) of the Purchase Price taking into account any applicable adjustments contemplated by Section 2.2(b) (the “Indemnification Threshold”) and then from the first dollar. In any event, the maximum amount for which Seller shall be liable in the aggregate under Section 7.1(a) (other than liability for Losses arising out of or related to the breach, failure or inaccuracy of a Seller Fundamental Representation as to which this proviso shall not apply) shall not exceed the Purchase Price taking into account any applicable adjustments contemplated by Section 2.2(b) (the “Indemnification Cap”); provided, further, notwithstanding the foregoing, the Indemnification Cap shall not apply to any payment by Seller with respect to remedies for fraud or willful misconduct.

 

Section 7.2.       Indemnification of Seller.  From and after the Closing, Buyer shall defend, indemnify and hold harmless Seller and its shareholders, Affiliates, officers, directors, employees, agents and assigns from and against any Loss arising out of or related to:

 

(a)          the breach, failure or inaccuracy of any representation or warranty made by Buyer in this Agreement;

 

(b)          the failure by Buyer to perform any of the covenants or agreements of Buyer contained in this Agreement; or

 

(c)          except as may be provided in the Related Agreements, any claim or Action that relates solely to the conduct of the business of the Company after the Closing;

 

provided, however, that Buyer shall have no liability under Section 7.2(a) (other than liability for Losses arising out of or related to the breach, failure or inaccuracy of a Buyer Fundamental Representations as to which this proviso shall not apply) unless the aggregate of all Losses for which Buyer would, but for this proviso, be liable under Section 7.2(a), exceeds on a cumulative basis an amount equal to the Indemnification Threshold and then from the first dollar. In any event, the maximum amount for which Buyer shall be liable in the aggregate under Section 7.2(a) (other than liability for Losses arising out of or related to the breach, failure or inaccuracy of a Buyer Fundamental Representation as to which this proviso shall not apply) shall not exceed the Indemnification Cap; provided, further, notwithstanding the foregoing, the Indemnification Cap shall not apply to any payment by Buyer with respect to remedies for fraud or willful misconduct.

 

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Section 7.3.       Notice.  Buyer, on the one hand, and Seller, on the other hand, each agree to promptly notify the other if they believe that they have incurred or may incur a Loss for which indemnification may be asserted under this Article VII.  Such notice shall specify in reasonable detail the facts and circumstances of such asserted Loss.  Failure to provide notice in accordance with this Section 7.3 shall not be deemed a waiver of the right of the party seeking indemnification (the “Indemnitee”) to indemnification other than to the extent that such failure prejudices the defense of the claim by the indemnifying party (the “Indemnitor”). Thereafter, upon written request by the Indemnitor, the Indemnitee shall as promptly as practicable provide the Indemnitor with copies of all notices and documents providing the basis for such claim.

 

Section 7.4.       Determination of Right to Indemnification.  The determination of the right of either Buyer or Seller to indemnification under this Agreement with respect to any Loss shall be finally determined by Buyer and Seller jointly; provided, that if Buyer and Seller cannot make such a joint determination either party may commence litigation with respect to such disagreement in a court in the State of New York in compliance with Section 14.7.

 

Section 7.5.       Determination of Amount of Indemnification.  The amount of any asserted Loss for which Buyer or Seller seeks indemnification pursuant to this Article VII shall be finally determined as follows:

 

(a)          Subject to Section 7.5(b), such determination shall be made jointly by Buyer and Seller; provided, that if Buyer and Seller cannot make such a joint determination either party may commence litigation with respect to such disagreement in a court in the State of New York.

 

(b)          In the case of any Loss arising out of or resulting from a liability or obligation to, or claim, action or suit by, any party seeking monetary relief other than the Indemnitee, the Indemnitor shall give written notice to the Indemnitee within thirty (30) days after its receipt of the notice given pursuant to Section 7.3, that the Indemnitor disputes and intends to defend the liability, obligation, claim, action or suit giving rise to such Loss or potential Loss.  In such event the Indemnitor shall have the right to assume control of the defense and litigate or otherwise contest (at the expense of the Indemnitor) such liability, obligation, claim, action or suit with counsel selected by the Indemnitor; provided that, the Indemnitee will in any event have the right to participate in the defense thereof at its own cost.  The Indemnitor and Indemnitee shall, in any case, cooperate in such litigation or other contest and shall keep each other advised of the progress and disposition thereof.  The Indemnitor may not settle any such Loss without Indemnitee’s written consent (which consent shall not be unreasonably withheld) unless such settlement includes only the payment of money by the Indemnitor and the execution and delivery of appropriate releases including a complete release of the Indemnitee.  Upon the final adjudication of any such liability, obligation, claim, action or suit, the amount of the Loss attributable thereto shall be then determined pursuant to (a) above.  If the Indemnitor does not promptly assume the defense of any such liability, obligation, claim, action or suit within thirty (30) days following notice thereof, the Indemnitee will be entitled to assume and control the defense thereof at the reasonable expense of 

 

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the Indemnitor and without prejudice to the ability of the Indemnitee to enforce its claim for indemnification against the Indemnitor hereunder.  Whether or not the Indemnitor has assumed control or the defense of such third party claim, action or suit, the Indemnitee shall not admit liability, pay or settle any such claim, action or suit without the prior written approval of the Indemnitor (which consent shall not be unreasonably, withheld, delayed or conditioned).

 

Section 7.6.       Adjustments to Indemnification Amounts.  Buyer and Seller agree to treat any indemnification payments under this Article VII and any payments under Article XII as an adjustment to the Purchase Price for all Tax purposes.  The amount of any indemnification payment in respect of any Losses or Taxes subject to indemnification under Section 7.1, 7.2 or Article XII shall be limited to the amount of any Losses or Taxes, as the case may be, that remain after the deduction therefrom of any insurance recoveries relating to the Loss or Tax giving rise to the indemnification claim actually realized by and paid to the Indemnitee.  For the avoidance of doubt, and to the extent an indemnification payment is not permitted under Applicable Law to be treated as an adjustment to the Purchase Price, the amount of such indemnification payment will be increased to the extent necessary so that, after the payment of any Taxes due with respect to the receipt of such indemnification payment, the Indemnitee receives an amount equal to the sum it would have received had no such Tax been payable with respect to such indemnification payment.  In the event any fact or circumstance results in an adjustment to the Purchase Price, such fact or circumstance shall not entitle Buyer to indemnification hereunder in addition to such adjustment to the Purchase Price.  Notwithstanding anything to the contrary herein, under no circumstance shall Buyer or its Affiliates be entitled to, any payment or indemnification of Losses that have been satisfied through another right to indemnification under this Agreement, reduction of the Purchase Price or the assumption of liability by Seller or its Affiliates under the Related Agreements, or any other duplicative payment or credit.

 

Section 7.7.       Tax Matters.  Anything in this Article VII to the contrary notwithstanding, except for Section 7.6 which shall apply to Article XII, the rights and obligations of the parties with respect to indemnification for any and all Tax matters shall be solely governed by Article XII and shall not be subject to the provisions of this Article VII.

 

Section 7.8.       Limitations on Indemnification.  The rights and remedies of any party in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement will in no way be limited by the fact that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach.  The representations, warranties and covenants of Seller, and Buyer’s rights to indemnification with respect thereto, will not be affected or deemed waived by reason of any investigation made by or on behalf of Buyer (including by any of its advisers, consultants or representatives) or by reason of the fact that Buyer or any of such advisers, consultants or representatives knew or should have known that any such representation or warranty is, was or might be inaccurate.

 

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Section 7.9.       Losses.  Buyer and Seller agree that Losses shall be limited to actual monetary damages only and shall not include punitive or exemplary damages; provided, that damages actually paid to a claimant in respect of a third party claim shall not be limited in any manner.

 

Section 7.10.    Mitigation.  To the extent required by Applicable Law, an Indemnitee shall mitigate the amount of its Losses upon and after becoming aware of any facts or circumstances that would reasonably be expected to result in any Losses that are indemnifiable hereunder.

 

Section 7.11.    Exclusive Remedy.  Except for remedies for fraud or willful misconduct and for breaches of non-performance of provisions in this Agreement for which the remedy of specific performance is available pursuant to Section 14.8, from and after the Closing, the indemnifications provided under this Article VII and Article XII shall be the sole and exclusive remedy based on, attributable to or resulting from any misrepresentation or the breach or inaccuracy of any representation or warranty contained in this Agreement or the failure to comply with any covenant or agreement contained in this Agreement.

 

ARTICLE VIII.

 

CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER TO CLOSE

 

Section 8.1.       Seller’s Conditions.  The obligation of Seller to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction, on or before the Closing Date, of each of the following conditions, any one or more of which may be waived in whole or in part in writing at the sole discretion of Seller (it being understood that if Seller elects to proceed with the Closing, the occurrence of the Closing shall be deemed to constitute a waiver of any of the following conditions not previously satisfied or waived):

 

(a)          (i) All Buyer Fundamental Representations contained in this Agreement that are (A) qualified by materiality, shall be true and correct in all respects and (B) that are not qualified by materiality, shall be true and correct in all material respects, in each case as of the date hereof and as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case they shall be true and correct as of such earlier date) and (ii) all other representations and warranties of Buyer contained in this Agreement shall be true and correct as of the date of this Agreement and on and as of the Closing Date with the same force and effect as though made on the Closing Date (without regard to any express qualifier therein as to materiality), except to the extent such representations and warranties expressly relate to an earlier date (in which case they shall be true and correct as of such earlier date) and except for breaches of such representations and warranties that, in the aggregate, would not reasonably be expected to have a material adverse effect on the ability of Buyer to perform the obligations required to be performed by it at the Closing.  Buyer shall have performed and complied in all material respects with all of the covenants and agreements required by or pursuant to this Agreement to be performed or complied with by it on or 

 

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prior to the Closing Date.  On the Closing Date, Buyer shall have delivered to Seller a certificate, dated as of the Closing Date, signed by a senior officer of Buyer, as to the satisfaction of the conditions set forth in this Section 8.1(a).

 

(b)          Buyer shall have delivered or caused to be delivered to Seller all the items set forth in Article XI.

 

(c)          Approval from the Illinois Department of Insurance of the Form A application to be filed by Buyer pursuant to this Agreement and the other Buyer’s Approvals and Seller’s Approvals shall have been obtained and shall be in full force and effect without conditions that, if satisfied, undertaken or complied with, would reasonably be expected to have any of the effects set forth in Section 5.2(b) as applicable to Seller.

 

(d)          There shall not be outstanding any temporary restraining order, preliminary or permanent injunction or other order issued by any governmental authority or other legal restraint or prohibition preventing the consummation of the Closing or the execution, delivery and performance of this Agreement.

 

ARTICLE IX.

 

CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER TO CLOSE

 

Section 9.1.       Buyer’s Conditions.  The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction, on or before the Closing Date, of each of the following conditions, any one or more of which may be waived in whole or in part in writing at the sole discretion of Buyer (it being understood that if Buyer elects to proceed with the Closing, the occurrence of the Closing shall be deemed to constitute a waiver of any of the following conditions not previously satisfied or waived):

 

(a)          (i) All Seller Fundamental Representations contained in this Agreement that are (A) qualified by materiality, shall be true and correct in all respects and (B) that are not qualified by materiality, shall be true and correct in all material respects, in each case as of the date hereof and as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case they shall be true and correct as of such earlier date) and (ii) all other representations and warranties of Seller contained in this Agreement shall be true and correct as of the date of this Agreement and on and as of the Closing Date with the same force and effect as though made on the Closing Date (without regard to any express qualifier therein as to materiality or Material Adverse Effect), except to the extent such representations and warranties expressly relate to an earlier date (in which case they shall be true and correct as of such earlier date) and except for breaches of such representations and warranties that, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  Seller shall have performed and complied, in all material respects, with all of the covenants and agreements required by or pursuant to this Agreement to be performed or complied with by it on or prior to the Closing Date.  On the Closing Date, Seller shall 

 

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have delivered to Buyer a certificate, dated as of the Closing Date, signed by a senior officer of Seller, as to the satisfaction of the conditions set forth in this Section 9.1(a).

 

(b)          Seller shall have delivered or caused to be delivered to Buyer all the items set forth in Article X.

 

(c)          Approval from the Illinois Department of Insurance of the Form A application to be filed by Buyer pursuant to this Agreement and the other Buyer’s Approvals and Seller’s Approvals shall have been obtained and shall be in full force and effect without conditions that, if satisfied, undertaken or complied with, would reasonably be expected to have any of the effects set forth in Section 5.2(b) as applicable to Buyer.

 

(d)          There shall not be outstanding any temporary restraining order, preliminary or permanent injunction or other order issued by any governmental authority or other legal restraint or prohibition preventing the consummation of the Closing or the execution, delivery and performance of this Agreement.

 

(e)          Between the date of this Agreement and the Closing Date, no Material Adverse Effect shall have occurred.

 

(f)           Between the date of this Agreement and the Closing Date, no material adverse change shall have occurred with respect to the properties and assets or the condition, financial or otherwise, of Seller (for the purposes of this Section 9.1(f), “material adverse change” shall mean a decline in Seller’s financial strength rating to A or below by A.M. Best).

 

(g)          There shall not have been and continue to be a Rescinded Insurance Event.

 

ARTICLE X.

 

DELIVERIES OF SELLER

 

Section 10.1.    Seller’s Closing Deliveries.  At the Closing, Seller shall deliver, or cause to be delivered, to Buyer the following:

 

(a)          A certificate or certificates representing the Shares, together with duly executed stock powers in form appropriate for transfer of the Shares to Buyer, with all appropriate stock transfer tax stamps attached.

 

(b)          A receipt duly executed by a senior officer Seller acknowledging receipt by Seller of the Purchase Price.

 

(c)          The written resignation of all officers, directors and statutory agents of the Company (except for Insurance Commissioners who are designated agents for service of process for the Company), which resignations shall be dated and effective as of or prior to the Closing.

 

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(d)          Evidence reasonably satisfactory to Buyer of all Seller’s Approvals.

 

(e)          A copy of the articles of incorporation of the Company, certified as being true, correct and complete by the appropriate regulatory authority and dated within five (5) Business Days of the Closing Date.

 

(f)           The Company’s bylaws, stock and minute books and corporate seal, to the extent in the possession of Seller or any of its Affiliates.

 

(g)          The Insurance Qualifications, to the extent evidenced by a document or other instrument.

 

(h)          The certificate contemplated by Section 9.1(a), duly executed by a senior officer of Seller.

 

(i)           For each Insurance Qualification, a Certificate of Deposit dated within forty five (45) days of the Closing Date if the Company is required to maintain deposits in such jurisdiction (unless such jurisdiction will not issue such a certificate, in which event, the deposit will be evidenced by a certificate executed by a senior officer of Seller).

 

(j)           Counterparts of each Related Agreement to be delivered at the Closing by Seller or an Affiliate of Seller (including the Company), duly executed by Seller or such Affiliate (including the Company).

 

(k)          An affidavit certifying that Seller is not a foreign person in a form that satisfies the requirements of Section 1445 of the Code, dated as of the Closing Date.

 

(l)           A list of all Agency Agreements and Reinsurance Treaties that, to Seller’s Knowledge, have not been terminated as of or prior to the Closing Date.

 

(m)         Evidence reasonably satisfactory to Buyer of the termination, settlement or extinguishment of any and all liabilities, obligations, payments, contracts, commitments, reinsurance treaties or other arrangements or understandings required to be terminated, settled or extinguished pursuant to Section 5.6.

 

(n)          The resignations, appropriately executed signature cards and all other documentation required to be delivered to Buyer upon Closing pursuant to Section 5.9.

 

(o)          All other documents, instruments and writings as may reasonably be requested by Buyer in order to carry out the purposes of this Agreement and the Related Agreements and the transactions contemplated hereby and thereby.

 

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ARTICLE XI.

 

DELIVERIES OF BUYER

 

Section 11.1.    Buyer’s Closing Deliveries.  At the Closing, Buyer shall deliver, or cause to be delivered, to Seller the following:

 

(a)          The Purchase Price pursuant to Section 2.2.

 

(b)          A receipt duly executed by Buyer acknowledging receipt by Buyer of the Shares.

 

(c)          Counterparts of each Related Agreement to be delivered at the Closing by Buyer or an Affiliate of Buyer (in each case if applicable) duly executed by Buyer or such Affiliate (in each case if applicable).

 

(d)          Evidence reasonably satisfactory to Seller of all Buyer’s Approvals.

 

(e)          The certificate contemplated by Section 8.1(a), duly executed by a senior officer of Buyer.

 

(f)           A draft application for name change of the Company as provided by Section 5.14(b).

 

(g)          All other documents, instruments and writings as may reasonably be requested by Seller in order to carry out the purposes of this Agreement and the Related Agreements and the transactions contemplated hereby and thereby.

 

ARTICLE XII.

 

TAX MATTERS

 

Section 12.1.    Tax Indemnities.

 

(a)          Seller shall be liable for, and shall indemnify, defend and hold harmless Buyer, the Company and their Affiliates (each a “Tax Indemnitee”) from and against, (i) all liability for Taxes of the Company for (A) any tax period or portion thereof ending on or prior to the Closing Date (including (x) any transaction occurring in the Pre-Closing Tax Period and (y) all Taxes of the Seller, the Company and any other member of the RLI Group resulting from any actual or deemed election pursuant to Section 336(e) of the Code (or any comparable election pursuant to state, local or foreign Tax Law) made with respect to the Company pursuant to Section 12.8(a) of this Agreement) and, (B) with respect to any Straddle Period, the portion of such Straddle Period ending on or prior to (and including) the Closing Date (the periods referred to in Section 12.1(a)(i)(A) and Section 12.1(a)(i)(B), together, the “Pre-Closing Tax Period”), (ii) all liability for Taxes imposed on the Company pursuant to Treasury Regulations Section 1.1502-6 or any comparable provision of state, local or foreign law with respect to any tax period 

 

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ending on or before (and including) the Closing Date that are imposed on the Company as a result of the Company having been included as a member of a group that filed its Tax Returns on a combined, consolidated or unified basis, (iii) the breach, failure or inaccuracy of any representation or warranty in Section 3.8, (iv) all liability for Taxes with respect to the reinsured contracts and reinsured liabilities as set forth under the Reinsurance Agreement and Taxes with respect to the Assumed Liabilities as set forth in the Assignment and Assumption Agreement, (v) all liability for Taxes that are imposed on the Company with respect to the Pre-Closing Tax Period as a transferee, successor, by contract or by statute or regulation; (vi) any conveyance Taxes allocable to Seller under Section 12.4; and (vii) all reasonable out-of-pocket attorneys’ and accountants’ fees and expenses incurred in connection with any action, suit or proceeding relating to a successful claim for indemnity pursuant to this Section 12.1(a); provided, however, that Seller shall not be liable for or pay, and shall not indemnify, defend or hold harmless the Tax Indemnitees from and against any Taxes of the Company relating to any transactions occurring or agreements entered into after the Closing (collectively, the “Excluded Taxes”).

 

(b)          Except as specifically provided in Section 12.1(a) and except as provided in the Reinsurance Agreement and the Assignment and Assumption Agreement, Buyer shall be liable for, and shall indemnify, defend and hold harmless Seller and its Affiliates (each a “Seller Tax Indemnitee”) from and against, (i) all Excluded Taxes, (ii) all Losses and liability for Taxes resulting from Buyer’s breach of the covenants set forth in this Agreement, (iii) any conveyance Taxes allocable to Buyer under Section 12.4 and (iv) all reasonable out-of-pocket attorneys’ and accountants’ fees and expenses incurred in connection with any action, suit or proceeding relating to a successful claim for indemnity pursuant to this Section 12.1(b).

 

(c)          In the case of Taxes of the Company that are payable with respect to any Tax period beginning on or before the Closing Date and ending after the Closing Date (a “Straddle Period”), the portion of any such Tax that is allocable to the Pre-Closing Tax Period shall be:

 

(i)        in the case of Taxes that are either (A) based upon or related to income or receipts or (B) imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible) (other than conveyances pursuant to this Agreement, as provided in Section 12.4), deemed equal to the amount which would be payable (after giving effect to amounts which may be deducted from or offset against such Taxes) under an interim closing of the books method as of the Closing Date and the parties hereto shall elect to do so if permitted by applicable law; and

 

(ii)       in the case of Taxes imposed on a periodic basis with respect to the assets of the Company, or otherwise measured by the level of any item, deemed to be the amount of such Taxes for the entire Straddle Period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately 

 

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preceding period), multiplied by a fraction the numerator of which is the number of days in the Straddle Period ending on the Closing Date and the denominator of which is the number of days in the entire Straddle Period.

 

(d)          Except as otherwise provided herein, any credit, refund or other offset against Taxes resulting from an overpayment of Taxes (and associated interest) for a Straddle Period shall be allocable between the portion of the Straddle Period ending on the Closing Date and the portion of the Straddle Period beginning after the Closing Date based upon the method employed in Section 12.1(c) taking into account the type of Tax to which the credit or refund relates.  All other credits, refunds or other offsets against Taxes that relate to, result from or arise out of (i) tax periods ending on or prior to the Closing Date, (ii) Taxes for which Seller is liable pursuant to the provisions of Section 12.1(a) or (iii) amounts paid by the Company, Seller or any Affiliate of Seller to a guaranty fund or other solvency fund prior to the Closing Date shall be for the account of Seller, and if received or used by the Buyer, the Company or any Affiliate of the Buyer or the Company, the Buyer shall pay to the Seller the amount of such refund, credit or other offset against Taxes (including any interest received thereon) no later than 10 days after receiving such refund or 10 days after paying the Tax which reflects or takes into account such credit or other offset against Tax.  All credits, refunds or other offsets against Taxes of the Company for any tax period beginning after the Closing Date shall be for the account of Buyer and if received or used by Seller, Seller shall pay to Buyer (or the Company, if requested by Buyer) the amount of such refund, credit or other offset against Taxes (including any interest received thereon) no later than 10 days after receiving such refund or 10 days after paying the Tax which reflects or takes into account such credit or other offset against Tax.

 

(e)          Except as required by Applicable Law, Seller and Buyer agree that no Excluded Tax or item that gives rise to or relates to an Excluded Tax shall be allocable to the Pre-Closing Tax Period, and all such matters and items shall be allocable to Tax periods (or the portions thereof) commencing after the Closing Date.

 

(f)           In the event of an indemnity claim by a Tax Indemnitee pursuant to Section 12.1(a) or by a Seller Tax Indemnitee pursuant to Section 12.1(b), payment shall be made no later than ten (10) days after (i) a mutual agreement between Buyer and Seller or (ii) a final determination is rendered by the appropriate Taxing Authority or court with respect to the matter for which a claim for indemnity has been made pursuant to Section 12.1(a) or Section 12.1(b).

 

Section 12.2.    Preparation of Tax Returns, etc.

 

(a)          Seller shall prepare and timely file or cause the Company to prepare and timely file all Tax Returns of the Company for Tax periods ending on or before the Closing Date.  The Company shall cooperate with Seller with respect to the preparation and filing of all such Tax Returns and shall provide to Seller all materials reasonably requested by Seller that are relevant to the preparation or filing of such Tax Returns.  Subject to Section 12.1(b), Seller shall pay or cause the Company to pay all 

 

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Taxes relating to such Tax Returns within the time and in the manner required by Applicable Law.  Notwithstanding any provision in this Agreement to the contrary, Seller shall prepare all consolidated, unitary, combined or similar Tax Returns that include the Company and Seller or any Affiliate of Seller no matter when such Tax Returns are required to be filed, and neither Buyer nor any Affiliate of Buyer (including the Company) shall have any rights to review, comment or (except as provided in Section 12.3(b)) otherwise obtain a copy of such Tax Returns.

 

(b)          The parties hereto acknowledge and agree that Buyer shall control the preparation and timely filing of all Tax Returns of the Company for any Tax period that ends after the Closing Date (the “Post-Closing Returns”), and subject to Section 12.1(a) Buyer shall pay or cause to be paid all Taxes shown to be due on such Tax Returns within the time and manner required by Law.  All such Tax Returns for Straddle Periods shall be prepared in accordance with past practices, unless otherwise required by Applicable Law.  Seller shall cooperate with Buyer and the Company and its Affiliates in the preparation of Post-Closing Returns that involve Straddle Periods and shall provide assistance (at the cost of the Company) as reasonably requested by Buyer.  With respect to any Tax Return for a Straddle Period or which reflects or reports an amount of Tax for which Seller may be liable under Section 12.1(a), Buyer shall provide to Seller and its authorized representative a copy of such completed Tax Return and a statement (with which Buyer will make available supporting schedules and information) providing with specificity the amount and calculation of the Tax shown on such Tax Return for which Buyer claims Seller is responsible pursuant to Section 12.1(a) no later than thirty (30) days prior to the due date (including any extension thereof) for the filing of such Tax Return, and Seller and its authorized representative shall have the right to review and comment on such Tax Return and statement prior to the filing of such Tax Return.  If Seller notifies Buyer in writing that it objects to any items contained in such Tax Return, Buyer and Seller shall proceed to attempt in good faith to resolve the disputed items and, if they are unable to settle such disputes within fifteen (15) days after Seller has sent its notice of disagreement, the disputed items shall be submitted to and resolved by the Independent Accountant.  Upon resolution of all disputed items, the relevant Tax Return and statement shall be adjusted to reflect such resolution, and such resolution shall be binding upon the parties (including the Company) without further adjustment.  The fees and expenses of the Independent Accountant shall be shared equally by the Seller and Buyer.  Except to the extent of a dispute between Seller and Buyer, if a Tax Return that is required to be filed by Buyer or Seller includes or reports a liability for Taxes for which the other party is responsible pursuant to Section 12.1, such non-filing party shall pay to the filing party the amount of liability for Taxes that the parties have mutually agreed is owed by the non-filing party after taking into account Section 12.1(d) of this Agreement no later than three (3) business days prior to the date such Tax Return is required to be filed (taking into account all filing extensions available with respect to such filing).

 

Section 12.3.    Tax Cooperation and Exchange of Information.

 

(a)          Seller and Buyer shall after the Closing:  (i) assist (and cause their respective Affiliates to assist) the other party in preparing and filing any Tax Returns relating to the Company, (ii) cooperate fully in preparing for any audits, investigations or 

 

44

 

inquiries of, or disputes or other proceedings with any Taxing Authority or with respect to any matters with respect to Taxes of or relating to the Company for which Seller may be liable pursuant to Section 12.1(a) or Buyer may be liable pursuant to Section 12.1(b) and (iii) make available to any Taxing Authority as reasonably requested all information, records and documents relating to Tax matters (including Tax Returns that include only the Company) of or relating to the Company.  Buyer and Seller shall keep any information obtained under this Section 12.3 confidential except (x) as may be necessary in connection with the filing of Tax Returns or claims for refund or the conduct of any audit, litigation or other proceeding with respect to Taxes or (y) with the consent of Seller or Buyer, as the case may be, hereto.

 

(b)          Notwithstanding any provision in this Agreement to the contrary, neither Seller nor any Affiliate thereof shall be required to provide a Tax Indemnitee or any representative thereof with any joint, consolidated, combined, group or unitary Tax Returns or information, papers or documents related thereto that include the Company and Seller or any Affiliate of Seller.

 

Section 12.4.    Conveyance Taxes.  All transfer, documentary, sales, use, registration and other such Taxes (including all applicable real estate transfer or gains Taxes and stock transfer Taxes) and any penalties, interest and additions to such conveyance Taxes and fees incurred in connection with the transactions contemplated hereby shall be paid equally by Buyer and Seller; provided, however, that Seller shall be solely liable for and shall indemnify Buyer, the Company and their Affiliates with respect to any conveyance Taxes imposed upon or with respect to the transactions contemplated by the Reinsurance Agreement and the Assignment and Assumption Agreement and any transactions undertaken prior to the Closing to ensure that the Company only owns Closing Admitted Assets at the time of the Closing.  Buyer and Seller shall cooperate in the preparation and filing of all Tax Returns, reports and forms related thereto.

 

Section 12.5.    Contests.

 

(a)          After the Closing Date, Buyer shall notify Seller in writing of the proposed assessment or the commencement of any Tax audit or administrative or judicial proceeding or of any demand or claim on Buyer and its Affiliates or the Company which, if determined adversely to the taxpayer, could reasonably likely be grounds for indemnification by Seller under Section 12.1(a) or result in an adjustment to a Tax position or Tax liability that would have an adverse effect on Seller.  Such notice shall contain factual information (to the extent known to Buyer and its Affiliates or the Company) describing the asserted Tax liability in reasonable detail and shall include copies of any notice or other document received from any Taxing Authority in respect of any such asserted Tax liability, and Buyer shall continue to cooperate with Seller and provide Seller with any additional information related thereto as it becomes available to Buyer or its Affiliates.

 

(b)          In the case of a Tax audit, contest, inquiry, investigation, or administrative or judicial proceeding (a “Contest”) that involves a Pre-Closing Tax Period, Seller shall have the sole right, at its expense, to control the conduct of such 

 

45

 

Contest, provided that, in the event that any such proceeding is reasonably likely to result in an adjustment to Tax that would have an adverse effect on Buyer or any of its Affiliates, (i) Seller shall permit Buyer to participate in the proceeding to the extent the adjustment may affect the Tax liability of Buyer or any of its Affiliates for a period ending after the Closing Date and (ii) such Contest shall not be settled or otherwise compromised without the prior written consent of Buyer, which consent shall not be unreasonably withheld or delayed.

 

(c)          In case of a Contest that relates to a Straddle Period, the party that is liable for the issue pursuant to the terms of Section 12.1 shall control the defense of the Contest but shall reasonably cooperate and communicate with the other party; provided, however, that if the Contest involves issues relating to potential adjustments or assessments for which both Seller (pursuant to the terms of Section 12.1) and Buyer or the Company could be liable, (i) each party may participate in the Contest and (ii) the Contest shall be controlled by the party that would bear the burden of the greater portion of the sum of the adjustment and such party shall reasonably cooperate and communicate with the other party; provided, however, that no such Contest shall be settled or compromised without the written consent of the party not controlling the defense of such Contest, such consent to not be unreasonably withheld or delayed.

 

(d)          With respect to any Contest not addressed in clauses (b) and (c) above and subject to clause (e), Buyer shall have the sole right, at its expense, to control the conduct of such Contest, provided that, in the event that any such proceeding is reasonably likely to result in an adjustment to Tax that would have an adverse effect on Seller or any of its Affiliates and such proceeding relates solely to a matter that involves only the Company, (i) Buyer shall permit Seller to participate in the proceeding to the extent the adjustment may affect the Tax liability of Seller or any of its Affiliates for a period ending on the Closing Date and (ii) such Contest shall not be settled or otherwise compromised without the prior written consent of Seller, which consent shall not be unreasonably withheld or delayed.

 

Section 12.6.    Tax Covenants.

 

(a)          Neither Buyer nor any Affiliate of Buyer shall amend, refile or otherwise modify, or cause or permit the Company to amend, refile or otherwise modify, any Tax election or Tax Return with respect to any Tax period (or portion of any tax period) ending on or prior to the Closing Date without the prior written consent of Seller, which consent shall not be unreasonably withheld or delayed.

 

(b)          All tax sharing, tax allocation or similar agreements that are primarily intended to provide for the allocation or sharing of Taxes entered into by the Company with Seller or any Affiliates of Seller (which, to be clear, does not include this Agreement, the Reinsurance Agreement or the Assignment and Assumption Agreement) and all powers of attorney granted by the Company with respect to Tax matters shall be terminated with respect to the Company as of the Closing Date, and such agreements or powers of attorney shall have no further force or effect and no party to such agreements 

 

46

 

shall have any liability to the Company and the Company shall have no liability under such agreements thereafter.

 

(c)          Notwithstanding any provision in this Agreement to the contrary, neither Buyer nor the Company shall carry back any Tax attributes of the Company to tax periods ending on or before the Closing Date.

 

Section 12.7.    Miscellaneous.

 

(a)          For Tax purposes, unless otherwise required by law, the parties hereto agree to treat all payments made under this Article XII and under any other indemnity provisions contained in this Agreement, and any payments in respect of any breaches of representations, warranties, covenants or agreements hereunder, as adjustments to the Purchase Price.

 

(b)          Except for Sections 7.6, which shall apply to Taxes, this Article XII shall be the sole provision governing indemnities for Taxes under this Agreement.

 

Section 12.8.    Section 336(e) Election.

 

(a)          Seller agrees to make an election under Section 336(e) of the Code and the Treasury Regulations thereunder (and under any comparable provision of state, local or foreign law for which a separate election is permissible) (collectively, the “Section 336(e) Election”) with respect to the sale of the Shares contemplated by this Agreement and to cause the Company to enter into the Section 336(e) Tax Election Agreement, pursuant to which the parties agree to make the Section 336(e) Election with respect to the deemed disposition of the stock of the Company arising from the Section 336(e) Election with respect to the sale of the Shares.

 

(b)

 

(i)        Seller and the Company shall make the Section 336(e) Election with respect to the sale of the Shares contemplated by this Agreement and with respect to the deemed disposition of the stock of the Company arising from the Section 336(e) Election with respect to the sale of the Shares and shall comply with all requirements set forth in Treasury Regulations § 1.336-2(h) and all other applicable requirements under all other applicable Tax laws, in each case, in connection with the Section 336(e) Election;

 

(ii)       Buyer and Seller (x) agree to cooperate in good faith with each other in connection with the making of the Section 336(e) Election, including the exchange of information and the preparation of the Section 336(e) election statement described in Treasury Regulations § 1.336-2(h)(5) and the asset allocation statement described in Treasury Regulations § 1.336-2(h)(7) and (y) agree (and agree to cause the Company) to report the transfers under this Agreement consistent with such elections and shall take no 

 

47

 

position contrary thereto unless required to do so by applicable law pursuant to a determination as defined in Section 1313(a) of the Code;

 

(iii)      Seller shall be responsible for the preparation of Section 336(e) election statement in accordance with Treasury Regulations § 1.336-2(h) and other applicable documentation in accordance with other applicable Tax laws and shall deliver such statement and documentation to Buyer at least 45 days prior to the date such statement or documentation is required to be filed for Buyer’s review and approval; and

 

(iv)      The Purchase Price, liabilities of the Company and other relevant items shall be allocated in accordance with Treasury Regulations §§ 1.338-6 and 1.338-11.  Prior to the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Allocation Statement”), allocating the Purchase Price (plus assumed liabilities and other relevant items, to the extent properly taken into account) among the assets of the Company.  If, within ten (20) days after the Closing Date, Buyer notifies Seller in writing that Buyer objects to the allocation set forth in the Allocation Statement, Buyer and Seller shall use commercially reasonable efforts to resolve such dispute within twenty (20) days.  In the event that Buyer and Seller are unable to resolve such dispute within such twenty (20) days, Buyer and Seller shall jointly retain the Independent Accountant to resolve the disputed items.  Upon resolution of the disputed items, the allocation reflected on the Allocation Statement shall be adjusted to reflect such resolution.  The costs, fees and expenses of the Independent Accountant shall be borne equally by Buyer and Seller.

 

Section 12.9.    Certain Definitions Relating to Taxes.  For purposes of this Agreement:

 

(a)          “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(b)          “Tax Return” shall mean any federal, state, local or foreign (including any other governmental subdivision or Taxing Authority) tax return, declaration, report, form, claim for refund or information return or similar statement relating to Taxes (including elections, declarations, amendments, schedules, information returns or attachments thereto) required to be filed with a Taxing Authority.

 

(c)          “Taxes” shall mean all federal, state, local or foreign taxes, charges, fees, imposts, payments in lieu, levies and governmental fees or other similar assessments or charges that are collected or administered by a Taxing Authority, including income, gross receipts, capital, profits, sales, premiums, use, ad valorem, value 

 

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added, transfer, franchise, profits, alternative or add-on minimum, business organization, single business, margin, turnover, inventory, capital stock, license, bulk, production, recording, registration, mortgage, stamp, real estate excise, withholding, payroll, wages, employment, Social Security, Medicare, unemployment, excise, title, severance, stamp, occupation, real property, personal property, environmental, intangible property and estimated taxes, customs duties, import duties, tariffs and all interest, penalties, fines, additions to tax or additional amounts imposed by any Taxing Authority with respect thereto.

 

(d)          “Taxing Authority” shall mean any federal, national, provincial, state, local or foreign government, or any subdivision, agency, commission or authority thereof that is primarily responsible for exercising tax regulatory, enforcement, or collection authority.

 

ARTICLE XIII.

 

TERMINATION

 

Section 13.1.    Termination of this Agreement.  This Agreement may be terminated prior to the Closing Date:

 

(a)          by mutual written consent of Buyer and Seller;

 

(b)          by either Buyer, on the one hand, or Seller, on the other hand, if the Closing has not occurred on or before one hundred and eighty (180) days after the date hereof (the “Outside Date”) (provided that, the right to terminate this Agreement under this Section 13.1(b) shall not be available to any party whose breach of any representation or warranty or failure to fulfill any covenant or agreement under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date);

 

(c)          by Buyer if Seller has breached any representation, warranty, covenant or agreement contained in this Agreement such that the conditions set forth in Section 9.1(a) would not be satisfied as of any date following the date of this Agreement; provided, however that Buyer may not terminate this Agreement pursuant to this Section 13.1(c) unless any such breach has not been cured within sixty (60) days after written notice thereof by Buyer to Seller informing Seller of such breach and requesting termination;

 

(d)          by Seller if Buyer has breached any representation, warranty, covenant or agreement contained in this Agreement such that the conditions set forth in Section 8.1(a) would not be satisfied as of any date following the date of this Agreement; provided, however that Seller may not terminate this Agreement pursuant to this Section 13.1(d) unless any such breach has not been cured within sixty (60) days after written notice thereof by Seller to Buyer informing Buyer of such breach and requesting termination; or

 

49

 

(e)          by either Buyer, on the one hand, or Seller, on the other hand, if (i) there shall be a final, non-appealable order of a federal, state or foreign court in effect preventing consummation of the transactions contemplated hereby; or (ii) there shall be any final action taken, or any final statute, rule, regulation or order enacted, promulgated or issued or deemed applicable to the transactions contemplated hereby by any governmental authority that would make consummation of the transactions contemplated hereby illegal.

 

Section 13.2.    Effects of Termination.  If this Agreement is terminated prior to the Closing as described in Section 13.1, then this Agreement shall become null and void and of no further force and effect without any liability of the parties hereunder, and all further obligations of the parties under this Agreement will terminate, except that the provisions of Section 5.6 (Confidentiality of Information), Article XIV (Miscellaneous) and this Section 13.2 shall survive any such termination.  Nothing herein shall relieve any party from liability for any fraud or willful misconduct.

 

ARTICLE XIV.

 

MISCELLANEOUS

 

Section 14.1.    Further Assurances and Cooperation.  Following the date hereof, Seller and Buyer shall each execute and deliver such documents and take such other actions as shall be reasonably requested by the other party to carry out the transactions contemplated by this Agreement.  Each party covenants and warrants that it shall, whenever and as often as it shall be reasonably requested to do so by the other party to this Agreement, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all such further documents and instruments as may be reasonably necessary or expedient and proper in order to complete any and all of the conveyances, transfers, sales and assignments herein provided for, and to effectuate the intent and purposes of this Agreement and the Related Agreements.

 

Section 14.2.    Cooperation and Assistance.  In the event and as long as any party is actively contesting or defending against any third party Action, after the Closing Date and upon request, each of the parties hereto shall cooperate with the other, at the requesting party’s expense, in furnishing information, testimony and other reasonable assistance if such third party Action involves any of the parties hereto or the Company and is based upon contracts, arrangements, events or actions (a) related to the transactions contemplated by this Agreement or the Related Agreements or (b) related to the Company and were in effect or occurred on or prior to the Closing Date.  Each of the parties shall make available to the other any contracts, forms or other records of the Company that the Company or such other party may be required to produce or review in connection with such Action after the Closing; provided, however, that neither Seller nor Buyer shall be required to make available portions of any documents which portions in the opinion of counsel are subject to the attorney-client privilege.  Notwithstanding the foregoing, the parties agree that this Section 14.2 shall not have any effect with respect to any matters relating to Taxes or Tax Returns, cooperation with respect to which shall be governed solely by Section 12.3.

 

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Section 14.3.    Notices.  Any notice, request or other communication to be given hereunder shall be in writing and shall be deemed to have been duly given or made if (a) delivered personally, (b) sent by registered or certified mail, postage prepaid, by overnight courier with written confirmation of delivery or (c) by email conspicuously marked, as follows (or at such other address for a party as shall be specified by like notice):

 

If to Buyer:

 

Clear Blue Financial Holdings, LLC

252 Ponce de León Avenue

Citibank Tower, 12th Floor

San Juan, PR 00918

Tel No.:  (787) 522-2000

Attn: Natalia Ramirez

Email: nramirez@edgelegalpr.com

 

With a copy to Buyer’s counsel (which shall not constitute notice):

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue, New York, NY 10019

Tel No.:  212 728 8616

Attn: Michael Groll

Email: MGroll@willkie.com

 

If to Seller:

 

Mt. Hawley Insurance Company

9025 North Lindbergh Drive

Tel No.:  (309) 692-1000
 Attn: Daniel Kennedy, General Counsel

Email: Dan.Kennedy@rlicorp.com

 

With a copy to Seller’s counsel (which shall not constitute notice):

 

Mayer Brown LLP

71 South Wacker Drive, Chicago, IL 60606

Tel No.:  (312) 782 0600

Attn:  Edward S. Best

Email:  ebest@mayerbrown.com

 

Section 14.4.    Expenses; Attorneys’ Fees.  Except as otherwise provided in this Agreement, each party shall bear its own expenses and attorneys’ fees, and Seller shall bear the expenses and attorneys’ fees of the Company incurred prior to Closing in connection with the negotiation and preparation of this Agreement and the Related Agreements.

 

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Section 14.5.    Entire Agreement; No Modification.  This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings (other than the Confidentiality Agreement), both written and verbal, among the parties with respect to the subject matter hereof.  This Agreement shall not be amended or modified except by a writing signed by each of the parties hereto.

 

Section 14.6.    Waiver of Breach.  The waiver by a party of a breach or violation by another party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach or violation by any party of the same or any other provision of this Agreement.  No such waiver shall be effective unless in writing signed by the party claimed to have made the waiver and delivered to the other party.

 

Section 14.7.    Consent to Jurisdiction.  Each of the parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the state and federal courts located in the State of New York for the purposes of enforcing this Agreement.  If any action is brought in a state court, the parties shall take such actions as are within their control to cause any matter contemplated hereby to be assigned to the United States District Court for the Southern District of New York.  In any action, suit or other proceeding, each of the parties hereto irrevocably and unconditionally waives and agrees not to assert by way of motion, as a defense or otherwise any claims that it is not subject to the jurisdiction of the above courts, that such action or suit is brought in an inconvenient forum or that the venue of such action, suit or other proceeding is improper.  Each of the parties hereto also agrees that any final and unappealable judgment against a party hereto in connection with any action, suit or other proceeding shall be conclusive and binding on such party and that such award or judgment may be enforced in any court of competent jurisdiction, either within or outside of the United States.  A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment.

 

Section 14.8.    Specific Performance.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that, without the necessity of posting bonds or other undertaking, the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Agreement in any court referenced in Section 14.7 having jurisdiction, this being in addition to any other remedy to which such party is entitled at law or in equity.  In the event that any Action is brought in equity to enforce the provisions of this Agreement, no party hereto shall allege, and each party hereto hereby waives the defense or counterclaim, that there is an adequate remedy at law.

 

Section 14.9.    Benefit of Parties; Assignment.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns.  No party hereto may assign to another Person any of its rights or obligations hereunder without the prior written consent of the other party hereto.

 

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Section 14.10. Exhibits, Schedules and Instruments.  The parties agree that each Exhibit, Schedule or other instrument attached to, or delivered pursuant to, this Agreement is a part of this Agreement as if fully set forth herein.

 

Section 14.11. Headings.  The headings of the sections and paragraphs of this Agreement are inserted for convenience of reference only and shall not constitute a part hereof.

 

Section 14.12. Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflict of laws therein.

 

Section 14.13. Multiple Counterparts.  This Agreement may be signed in any number of counterparts which taken together shall constitute one and the same instrument.  Delivery of an electronic counterpart shall be effective as manual delivery thereof.

 

Section 14.14. Unenforceability or Invalidity.  In the event that any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

 

Section 14.15. Third Parties.  Nothing expressed or implied in this Agreement is intended to or shall confer upon any person, firm or entity, other than the parties hereto and their respective successors and permitted assignees, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

Section 14.16. Interpretation.  Whenever the context requires, words used in the singular shall be construed to mean or include the plural and vice versa, and pronouns of any gender shall be deemed to include and designate the masculine, feminine or neuter gender.  The words “include,” “includes” and “including” and words of similar import shall be deemed to be followed by the words “without limitation.”  The phrases “the date of this Agreement,” “the date hereof” and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date set forth in the preamble of this Agreement.  Whenever the singular is used herein, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate.

 

Section 14.17. RLI Guaranty.  From and after the date hereof, RLI hereby irrevocably guarantees the full and punctual performance by Seller of all Seller’s obligations to be performed by Seller under this Agreement, including the obligation of Seller, if any, to indemnify Buyer and its Affiliates pursuant to Articles VII or XII; provided that RLI’s obligations pursuant to this Section 14.17 shall in no event exceed the maximum aggregate amount for which Seller may be liable under this Agreement.  This guaranty shall become effective upon the execution and delivery of this Agreement and shall continue in full force and effect until Seller’s obligations under this Agreement have been fully satisfied, at which time the guaranty provided under this Section 14.17 shall terminate and be of no further force or effect and RLI shall be released from any 

 

53

 

and all obligations and liabilities under this Agreement.  RLI agrees that its obligations hereunder shall be unconditional, irrespective of any circumstance which might otherwise constitute a legal or equitable discharge of a surety or a guarantor.

 

[Signature Page Follows]

 

54

 

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

 

	
 
    	
MT. HAWLEY INSURANCE   COMPANY
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas L. Brown
    
	
 
    	
 
    	
Name: Thomas L. Brown
    
	
 
    	
 
    	
Title: V.P., Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CLEAR BLUE FINANCIAL   HOLDINGS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jerome D. Breslin
    
	
 
    	
 
    	
Name: Jerome D. Breslin
    
	
 
    	
 
    	
Title: President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
solely for purposes of Section 14.17:
    
	
 
    	
 
    
	
 
    	
RLI INSURANCE COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas L. Brown
    
	
 
    	
 
    	
Name: Thomas L. Brown
    
	
 
    	
 
    	
Title: V.P., Chief Financial   Officer
    

 

[Signature Page to Stock Purchase Agreement]EX-10.1

 Exhibit 10.1 

Execution Version 
  

 
  

CUSIP Number: 74340YAP4 
 SENIOR
TERM LOAN AGREEMENT 
 dated as of May 28, 2015 

among 
 PROLOGIS, L.P.,

 as Borrower, 

PROLOGIS, INC., 
 as
Guarantor, 
 Various Lenders, 

BANK OF AMERICA N.A., 
 as
Administrative Agent, 
 and 

JPMORGAN CHASE BANK, N.A., 

as Syndication Agent 
 MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED, 
 Lead Arranger and Book Runner 

and 
 J.P. MORGAN SECURITIES
LLC, 
 Joint Lead Arranger and Joint Book Runner 
  

 
  

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE I DEFINITIONS AND INTERPRETATION
	  	 	1	  
	 Section 1.1
	 	 Defined Terms
	  	 	1	  
	 Section 1.2
	 	 Other Interpretive Provisions
	  	 	22	  
	 Section 1.3
	 	 Accounting Terms
	  	 	23	  
	 ARTICLE II COMMITMENTS AND LOANS
	  	 	24	  
	 Section 2.1
	 	 Commitments to make Loans
	  	 	24	  
	 Section 2.2
	 	 Borrowing of Loans; Conversions and Continuations
	  	 	24	  
	 Section 2.3
	 	 Prepayments
	  	 	25	  
	 ARTICLE III GENERAL PROVISIONS APPLICABLE TO LOANS
	  	 	26	  
	 Section 3.1
	 	 Minimum Amounts for Borrowings, Conversions, Continuations and Prepayments; Pro Rata Treatment
	  	 	26	  
	 Section 3.2
	 	 Automatic Termination of Commitments
	  	 	26	  
	 Section 3.3
	 	 Repayment of Loans
	  	 	26	  
	 Section 3.4
	 	 Interest
	  	 	26	  
	 Section 3.5
	 	 Fees
	  	 	27	  
	 Section 3.6
	 	 Computation of Interest and Fees
	  	 	27	  
	 Section 3.7
	 	 Evidence of Debt and Promissory Note
	  	 	28	  
	 Section 3.8
	 	 Payments Generally; Administrative Agent’s Clawback
	  	 	28	  
	 Section 3.9
	 	 Sharing of Payments
	  	 	30	  
	 Section 3.10
	 	 Extension of Maturity Date
	  	 	31	  
	 Section 3.11
	 	 Defaulting Lenders
	  	 	31	  
	 ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY
	  	 	32	  
	 Section 4.1
	 	 Taxes
	  	 	32	  
	 Section 4.2
	 	 Illegality
	  	 	35	  
	 Section 4.3
	 	 Inability to Determine Rates
	  	 	35	  
	 Section 4.4
	 	 Increased Costs Generally
	  	 	35	  
	 Section 4.5
	 	 Compensation for Losses
	  	 	37	  
	 Section 4.6
	 	 Mitigation Obligations; Replacement of Lenders
	  	 	38	  
	 Section 4.7
	 	 Survival
	  	 	38	  
	 ARTICLE V CONDITIONS PRECEDENT
	  	 	39	  
	 Section 5.1
	 	 Documents
	  	 	39	  
	 Section 5.2
	 	 Fees
	  	 	39	  
	 Section 5.3
	 	 Expenses
	  	 	39	  
	 Section 5.4
	 	 Bridge Agreement
	  	 	40	  
	 Section 5.5
	 	 Funding Deadline
	  	 	40	  
	 Section 5.6
	 	 Representations and Warranties
	  	 	40	  

  
 -i- 

 TABLE OF CONTENTS 

(continued) 
  

							
	 	 	 	  	Page	 
	 Section 5.7
	 	 Default
	  	 	40	  
	 Section 5.8
	 	 Loan Notice
	  	 	40	  
	 ARTICLE VI REPRESENTATIONS AND WARRANTIES
	  	 	40	  
	 Section 6.1
	 	 Existence, Qualification and Power; Compliance with Laws
	  	 	40	  
	 Section 6.2
	 	 Authorization; No Contravention
	  	 	40	  
	 Section 6.3
	 	 Governmental Authorization; Other Consents
	  	 	41	  
	 Section 6.4
	 	 Binding Effect
	  	 	41	  
	 Section 6.5
	 	 Financial Statements
	  	 	41	  
	 Section 6.6
	 	 Litigation
	  	 	41	  
	 Section 6.7
	 	 No Default
	  	 	42	  
	 Section 6.8
	 	 Ownership of Property
	  	 	42	  
	 Section 6.9
	 	 Environmental Compliance
	  	 	42	  
	 Section 6.10
	 	 Taxes
	  	 	42	  
	 Section 6.11
	 	 Pension Law Compliance
	  	 	42	  
	 Section 6.12
	 	 Margin Regulations; Investment Company Act
	  	 	43	  
	 Section 6.13
	 	 Disclosure
	  	 	43	  
	 Section 6.14
	 	 Compliance with Laws
	  	 	43	  
	 Section 6.15
	 	 Solvency
	  	 	44	  
	 Section 6.16
	 	 Plan Assets
	  	 	44	  
	 Section 6.17
	 	 REIT Status
	  	 	44	  
	 ARTICLE VII AFFIRMATIVE COVENANTS
	  	 	44	  
	 Section 7.1
	 	 Financial Statements
	  	 	44	  
	 Section 7.2
	 	 Certificates; Other Information
	  	 	45	  
	 Section 7.3
	 	 Notices
	  	 	46	  
	 Section 7.4
	 	 Payment of Obligations
	  	 	47	  
	 Section 7.5
	 	 Preservation of Existence, Etc
	  	 	47	  
	 Section 7.6
	 	 Maintenance of Properties
	  	 	47	  
	 Section 7.7
	 	 Maintenance of Insurance
	  	 	47	  
	 Section 7.8
	 	 Compliance with Laws
	  	 	47	  
	 Section 7.9
	 	 Books and Records
	  	 	47	  
	 Section 7.10
	 	 Inspection Rights
	  	 	47	  
	 Section 7.11
	 	 Use of Proceeds
	  	 	48	  
	 Section 7.12
	 	 REIT Status
	  	 	48	  
	 Section 7.13
	 	 Claims Pari Passu
	  	 	48	  
	 ARTICLE VIII NEGATIVE COVENANTS
	  	 	48	  

  
 -ii- 

 TABLE OF CONTENTS 

(continued) 
  

							
	 	 	 	  	Page	 
	 Section 8.1
	 	 Secured Indebtedness
	  	 	48	  
	 Section 8.2
	 	 Fundamental Changes
	  	 	48	  
	 Section 8.3
	 	 Restricted Payments
	  	 	49	  
	 Section 8.4
	 	 Change in Nature of Business
	  	 	49	  
	 Section 8.5
	 	 Transactions with Affiliates
	  	 	49	  
	 Section 8.6
	 	 Negative Pledge Agreements; Burdensome Agreements
	  	 	50	  
	 Section 8.7
	 	 Use of Proceeds
	  	 	50	  
	 Section 8.8
	 	 Financial Covenants
	  	 	50	  
	 Section 8.9
	 	 Anti-Corruption Laws
	  	 	51	  
	 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES
	  	 	51	  
	 Section 9.1
	 	 Events of Default
	  	 	51	  
	 Section 9.2
	 	 Remedies Upon Event of Default
	  	 	53	  
	 ARTICLE X ADMINISTRATIVE AGENT
	  	 	54	  
	 Section 10.1
	 	 Appointment and Authority
	  	 	54	  
	 Section 10.2
	 	 Rights as a Lender
	  	 	54	  
	 Section 10.3
	 	 Exculpatory Provisions
	  	 	54	  
	 Section 10.4
	 	 Reliance by Administrative Agent
	  	 	55	  
	 Section 10.5
	 	 Delegation of Duties
	  	 	55	  
	 Section 10.6
	 	 Resignation of Administrative Agent
	  	 	56	  
	 Section 10.7
	 	 Non-Reliance on Administrative Agent and Other Lenders
	  	 	56	  
	 Section 10.8
	 	 No Other Duties, Etc
	  	 	56	  
	 Section 10.9
	 	 Administrative Agent May File Proofs of Claim
	  	 	57	  
	 ARTICLE XI MISCELLANEOUS
	  	 	57	  
	 Section 11.1
	 	 Amendments, Etc
	  	 	57	  
	 Section 11.2
	 	 Notices; Effectiveness; Electronic Communication
	  	 	60	  
	 Section 11.3
	 	 No Waiver; Cumulative Remedies
	  	 	62	  
	 Section 11.4
	 	 Expenses; Indemnity; Damage Waiver
	  	 	62	  
	 Section 11.5
	 	 Payments Set Aside
	  	 	64	  
	 Section 11.6
	 	 Successors and Assigns
	  	 	64	  
	 Section 11.7
	 	 Treatment of Certain Information; Confidentiality
	  	 	67	  
	 Section 11.8
	 	 Right of Setoff
	  	 	67	  
	 Section 11.9
	 	 Interest Rate Limitation
	  	 	68	  
	 Section 11.10
	 	 Counterparts; Integration; Effectiveness
	  	 	68	  
	 Section 11.11
	 	 Severability
	  	 	68	  
	 Section 11.12
	 	 Replacement of Lenders
	  	 	68	  

  
 -iii- 

 TABLE OF CONTENTS 

(continued) 
  

							
	 	 	 	  	Page	 
	 Section 11.13
	 	 GOVERNING LAW; JURISDICTION; ETC
	  	 	69	  
	 Section 11.14
	 	 Waiver of Jury Trial.
	  	 	70	  
	 Section 11.15
	 	 USA Patriot Act Notice
	  	 	70	  
	 Section 11.16
	 	 Know Your Customers
	  	 	71	  
	 Section 11.17
	 	 Time of the Essence
	  	 	71	  
	 Section 11.18
	 	 ENTIRE AGREEMENT
	  	 	71	  
	 Section 11.19
	 	 No Fiduciary Duty
	  	 	72	  
	 Section 11.20
	 	 OFAC List
	  	 	72	  
	 Section 11.21
	 	 Electronic Execution of Assignments and Certain Other Documents
	  	 	73	  
	 ARTICLE XII GUARANTY BY GENERAL PARTNER
	  	 	73	  
	 Section 12.1
	 	 The Guaranties
	  	 	73	  
	 Section 12.2
	 	 Insolvency
	  	 	74	  
	 Section 12.3
	 	 Absolute and Unconditional Guaranty
	  	 	74	  
	 Section 12.4
	 	 Independent Obligation
	  	 	74	  
	 Section 12.5
	 	 Authorization
	  	 	74	  
	 Section 12.6
	 	 Reliance
	  	 	75	  
	 Section 12.7
	 	 Subordination
	  	 	76	  
	 Section 12.8
	 	 Waivers
	  	 	76	  
	 Section 12.9
	 	 Nature of Liability
	  	 	76	  

  
 -iv- 

 TABLE OF CONTENTS 

 

					
	 	 	 	  	Page
	SCHEDULES	 	 	  	 
			
	 2.1
	 	 Commitments and Percentages
	  	
	 6.6
	 	 Litigation
	  	
	 6.9
	 	 Environmental Matters
	  	
	 11.2
	 	 Administrative Agent’s Office; Certain Addresses for Notices
	  	
			
	EXHIBITS	 		  	
			
	         Form of	 	 	  	 
	 A
	 	 Loan Notice
	  	
	 B
	 	 Compliance Certificate
	  	
	 C
	 	 Assignment and Assumption
	  	

  
 i 

 SENIOR TERM LOAN AGREEMENT 

This SENIOR TERM LOAN AGREEMENT dated as of May 28, 2015 is among PROLOGIS, L.P., a Delaware limited partnership
(“Prologis”), PROLOGIS, INC., various Lenders (defined below) and BANK OF AMERICA, N.A., as Administrative Agent. 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: 

ARTICLE I 
 DEFINITIONS
AND INTERPRETATION 
 Section 1.1 Defined Terms. 

As used in this Agreement, the following terms shall have the meanings set forth below: 

“Adjusted EBITDA” means, for the Companies on a consolidated basis, net earnings before Preferred Dividends, plus amounts
that have been deducted, and minus amounts that have been added, for the following (without duplication): 
 (a)
Non-recurring losses (gains) from Dispositions of assets (excluding Dispositions to any Property Fund and Dispositions to third parties in connection with the Companies’ development business); 

(b) Losses (gains) resulting from foreign currency exchange effects of settlement of Indebtedness and mark-to-market
adjustments associated with (i) intercompany Indebtedness between Prologis and any of its Consolidated Subsidiaries and Unconsolidated Affiliates, (ii) third party Indebtedness of Prologis and its Consolidated Subsidiaries and
(iii) Swap Contracts (other than those entered into for purely speculative purposes); 
 (c) Arrangement fees, amendment
fees and costs incurred in connection with the negotiation, documentation and/or closing of the Global Credit Agreement and any amendment, supplement or other modification thereto; 

(d) Losses and charges from extraordinary, non-recurring and other unusual items (including fees and costs incurred in
connection with the negotiation, documentation and/or closing of each capital market offering, debt financing (including this Agreement) or amendments thereto, redemption or exchange of Indebtedness, business combination, acquisition, merger,
disposition, recapitalization and consent solicitation); 
 (e) Losses (gains) from early extinguishment of Indebtedness; and

 (f) Losses (earnings) attributable to Unconsolidated Affiliates; 

plus Allowed Unconsolidated Affiliate Earnings, plus all amounts deducted in calculating net earnings for Interest Expense (including cash and
non-cash amounts), minority interests, 

  

					
	 		1		Prologis, L.P. Term Loan Agreement

 
provisions for taxes based on income (including deferred income taxes), provisions for unrealized gains and losses, depreciation and amortization and the effect of any other non-cash item.
Notwithstanding the above, non-cash losses (gains) and any non-cash impairment of Investments, intangible assets, including goodwill, or other assets shall be added back to (in the case of write-downs, impairment charges and losses) or deducted from
(in the case of gains) Adjusted EBITDA to the extent deducted (added) in the calculation of net earnings or Adjusted EBITDA (but without duplication). 

“Administrative Agent” means Bank of America, in its capacity as administrative agent hereunder, or any successor in such
capacity. 
 “Administrative Agent’s Office” means Administrative Agent’s address and, as appropriate, account as
set forth on Schedule 11.2 or (subject to Section 11.2.4) such other address or account as Administrative Agent may from time to time notify to Prologis and Lenders. 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by Administrative Agent. 

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the Person specified. 
 “Aggregate
Commitments” means, prior to the making of the Loans, the aggregate amount of the Commitments of all Lenders. 

“Agreement” means this Senior Term Loan Agreement. 

“Allowed Unconsolidated Affiliate Earnings” means distributions (including “promote” or “carried
interest” distributions but excluding extraordinary or non-recurring distributions) received in cash from Unconsolidated Affiliates. 

“Applicable Margin” means, with respect to any Loan, the applicable percentage per annum set forth in the table below
opposite the applicable ratings of Prologis, determined in accordance with the following: If Prologis has at least two of such ratings, then the Applicable Margin will be based upon the highest such rating unless the difference between the highest
rating and the lowest rating is two or more rating levels, in which case the Applicable Margin will be based upon the rating level that is one level below the highest rating. If Prologis has only one such rating and it is a Moody’s Rating or an
S&P Rating, then such rating level shall apply. If Prologis has only a Fitch Rating or none of such ratings, then the highest Applicable Margin will apply. 

  

					
	 		2		Prologis, L.P. Term Loan Agreement

															
	 Level
	  	 Moody’s

Rating
	  	 S&P

Rating
	  	 Fitch

Rating
	  	Base Rate
Loans	 	 	Eurodollar Loans	 
	1	  	A3 or better	  	A- or better	  	A- or better	  	 	0.000	% 	 	 	0.925	% 
	2	  	Baa1	  	BBB+	  	BBB+	  	 	0.000	% 	 	 	1.000	% 
	3	  	Baa2	  	BBB	  	BBB	  	 	0.100	% 	 	 	1.100	% 
	4	  	Baa3	  	BBB-	  	BBB-	  	 	0.300	% 	 	 	1.300	% 
	5	  	Less than Baa3 or not rated	  	Less than BBB- or not rated	  	Less than BBB- or not rated	  	 	0.700	% 	 	 	1.700	% 

 Initially, the Applicable Margin shall be determined based upon Level 2. Thereafter, each change in the Applicable Margin
resulting from a publicly announced change in the Moody’s Rating, S&P Rating, or Fitch Rating, as applicable, shall be effective during the period commencing on the fifth Business Day following the date of the public announcement thereof
and ending on the date immediately preceding the effective date of the next such change. 
 “Arranger” means Merrill Lynch,
Pierce, Fenner & Smith Incorporated, in its capacity as lead arranger and book runner for the credit facility contemplated hereby. 

“Assignee Group” means two or more Qualified Institutions that are Affiliates of one another. 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and a Qualified Institution (with the
consent of any party whose consent is required by Section 11.6.2), and accepted by Administrative Agent, in substantially the form of Exhibit C or any other form (including electronic documentation generated by use of an
electronic platform) approved by Administrative Agent. 
 “Audited Financial Statements” means the audited consolidated
balance sheet of General Partner for the Fiscal Year ended December 31, 2014 and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, including the notes thereto. 

“Bank of America” means Bank of America, N.A. and its successors. 

“Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate
plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Administrative Agent as its “prime rate” and (c) the Eurodollar Rate. If at any time any rate described above is
not available, then the Base Rate shall be determined by reference to the rate or rates, as applicable, that are available. The “prime rate” is a rate set by Administrative Agent based upon various factors including Administrative
Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate. Any change in such rate announced by
Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change. 

  

					
	 	  	3	  	Prologis, L.P. Term Loan Agreement

 “Base Rate Loan” means any portion of a Loan that bears interest based on the
Base Rate. 
 “Borrower Materials” has the meaning specified in Section 7.2. 

“Borrowing” means a borrowing consisting of Loans of the same Type made, continued or converted on the same day and, in the
case of Eurodollar Loans, having the same Interest Period. 
 “Bridge Commitment Letter” means the Commitment Letter
regarding a $1,000,000,000 senior unsecured 364-day bridge term loan facility, dated April 17, 2015, between Morgan Stanley Senior Funding, Inc. and Prologis. 

“Business Day” means (a) any day other than a Saturday, a Sunday or another day on which commercial banks are authorized
to close under the Laws of, or are in fact closed in, the State of New York and (b) when used with reference a Eurodollar Loan, any day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank
eurodollar market. 
 “Capital Expenditures” means, for any period, an amount equal to $0.10 per square foot on the
aggregate of the portfolio square footage of General Partner and its Consolidated Subsidiaries most recently reported on a Form 10-Q or 10-K filed with the SEC by or on behalf of General Partner. 

“Capital Lease” means any capital lease or sublease that has been (or under GAAP should be) capitalized on the balance sheet
of the lessee. 
 “Capitalization Rate” means the percentage rates set forth below: 

(a) 5.50% with respect to all Properties located in Japan; 

(b) 6.75% with respect to all Properties located in Europe; and 

(c) 6.50% with respect to all Properties not located in Japan or Europe. 

“Cash Equivalents” means (a) direct obligations of the United States of America or any agency thereof, or obligations
fully guaranteed by the United States of America or any agency thereof; provided that such obligations mature within one year of the date of acquisition thereof, (b) commercial paper rated “A-1” (or higher) by S&P or
“P-1” (or higher) by Moody’s and, in each case, maturing not more than 180 days from the date of acquisition thereof, (c) time deposits with, and certificates of deposit and bankers’ acceptances issued by, any Global Lender
or any other United States bank having capital surplus and undivided profits aggregating at least $1,000,000,000, and (d) mutual funds whose investments are substantially limited to the foregoing. 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or
taking effect of any Law, (b) any change in any Law or in the administration, interpretation or application thereof by any Governmental Authority or (c) the 

  

					
	 		4		Prologis, L.P. Term Loan Agreement

 
making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the
contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated
by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, in each case shall be deemed to
be a “Change in Law,” regardless of the date enacted, adopted, promulgated or issued. 
 “Change of Control”
means an event or series of events by which: 
 (a) any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator
of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that
such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 25% or more of the equity securities of
General Partner entitled to vote for members of the board of directors or equivalent governing body of General Partner on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant
to any option right); 
 (b) during any period of 12 consecutive months, a majority of the members of the board of directors
or other equivalent governing body of General Partner cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or
equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a
result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of
directors); or 
 (c) General Partner shall cease to (i) be the sole general partner of Prologis, or (ii) own,
directly or indirectly, more than 50% of the Equity Interests of Prologis. 
 “Code” means the Internal Revenue Code of
1986. 
 “Commitment” means, with respect to any Lender, such Lender’s commitment to make a Loan hereunder. 

  

					
	 		5		Prologis, L.P. Term Loan Agreement

 “Companies” means General Partner and its Consolidated Subsidiaries; and
“Company” means any one of the Companies. 
 “Compliance Certificate” means a certificate substantially in
the form of Exhibit B. 
 “Consolidated Leverage Ratio” means, as of any date, the ratio of (a) all
Indebtedness of the Companies, on a consolidated basis, to (b) Total Asset Value; provided that for purposes of calculating the Consolidated Leverage Ratio, (i) total Indebtedness of the Companies shall be adjusted by deducting
therefrom an amount equal to the lesser of (A) total Indebtedness that by its terms is scheduled to mature on or before the date that is 24 months from the date of calculation and (B) Unrestricted Cash of the Companies and (ii) Total
Asset Value shall be adjusted by deducting therefrom the amount by which total Indebtedness is adjusted under clause (i). 

“Consolidated Subsidiary” means, with respect to any Person (a “Parent”), any other Person in which such
Parent directly or indirectly holds an Equity Interest and that would be consolidated in the preparation of consolidated financial statements of such Parent in accordance with GAAP. Any reference herein to a “Consolidated Subsidiary”
shall, unless otherwise specified, be a reference to a Consolidated Subsidiary of General Partner. 
 “Contractual
Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. 

“Credit Parties” means, collectively, Administrative Agent and each Lender. 

“Customary Recourse Exceptions” means, with respect to any Non-Recourse Debt, exclusions from the exculpation provisions with
respect to such Non-Recourse Debt for fraud, misapplication of cash, environmental claims, breach of representations or warranties, failure to pay taxes and insurance, and other circumstances customarily excluded by institutional lenders from
exculpation provisions and/or included in separate indemnification agreements in non-recourse financings of real estate. 
 “Debt
Service” means, for any Person for any period, the sum of the cash portion of Interest Expense (excluding, to the extent included therein, amortized fees previously paid in cash) plus any regularly scheduled principal payments on
Indebtedness; provided that Debt Service shall not include Excluded Debt Service. 
 “Debtor Relief Laws” means
Title 11 of the United States Code and all other applicable state or federal liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments or similar debtor relief Laws
of the United States or other applicable jurisdictions from time to time in effect and affecting rights of creditors generally. 

  

					
	 		6		Prologis, L.P. Term Loan Agreement

 “Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time or both, would be an Event of Default. 
 “Default Rate” means an
interest rate per annum equal to (a) in the case of a Base Rate Loan, the sum of (i) the Base Rate plus (ii) the Applicable Margin, if any, for Base Rate Loans, plus (iii) 2% per annum; and (b) in the case
of Eurodollar Loan, the interest rate (including any Applicable Margin) otherwise applicable to such Loan plus 2% per annum. 

“Defaulting Lender” means any Lender that: (a) has failed to pay to Administrative Agent or any other Lender any amount
(other than a de minimis amount) required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute or such failure has been cured; or (b) has, or has a direct or indirect parent
company that has, (i) become the subject of a bankruptcy or insolvency proceeding, (ii) had a receiver, conservator, trustee or custodian appointed for it, or (iii) taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in, any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in such Lender or any direct or indirect
parent company thereof by a Governmental Authority, so long as the ownership or acquisition of such Equity Interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the
enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contract or agreement made with such Lender. 

“Disposition” or “Dispose” means the sale, transfer, license, lease, contribution or other disposition
(including any sale and leaseback transaction, but excluding charitable contributions) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith. 
 “Disqualified Stock” means any Equity Interest of a Person that by its terms (or
by the terms of any Equity Interests into which it is convertible or for which it is exchangeable or exercisable) (a) matures or is subject to mandatory redemption, pursuant to a sinking fund obligation or otherwise on or prior to the Maturity
Date, (b) is convertible into or exchangeable or exercisable for a Liability or Disqualified Stock on or prior to the Maturity Date, (c) is redeemable on or prior to the Maturity Date at the option of the holder of such Equity Interest or
(d) otherwise requires any payments by such Person on or prior to the Maturity Date. 
 “Dollar” and
“$” mean lawful money of the United States. 
 “Environmental Laws” means all Federal, state, provincial,
local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or
the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems. 

  

					
	 		7		Prologis, L.P. Term Loan Agreement

 “Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of Prologis or any of its Affiliates directly or indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. 

“Equity Interests” means, with respect to any Person, all shares of capital stock of (or other ownership or profit interests
in) such Person, all warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person, and all other ownership, beneficial or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, in each case
to the extent then outstanding; provided that the convertible senior notes of Prologis shall not constitute Equity Interests unless such notes are converted into capital stock of Prologis. 

“ERISA” means the Employee Retirement Income Security Act of 1974. 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with Prologis within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code). 

“ERISA Event” means: (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by Prologis or any
ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal
under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by Prologis or any ERISA Affiliate from a Multiemployer Plan or receipt by Prologis or any ERISA Affiliate of notification that a Multiemployer Plan is in reorganization;
(d) the filing by Prologis or any ERISA Affiliate of a notice of intent to terminate any Pension Plan, the treatment of a Pension Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Pension Plan or Multiemployer Plan; or (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan. 
 “Eurodollar Loan” means any portion of a Loan that bears interest at a rate based on the Eurodollar
Rate. 
 “Eurodollar Rate” means: 

(a) for any Interest Period with respect to a Eurodollar Loan, the rate per annum equal to the London Interbank Offered Rate
(“LIBOR”) or a comparable or successor rate, which rate is approved by Administrative Agent, as published on the applicable Bloomberg screen page (or 

  

					
	 		8		Prologis, L.P. Term Loan Agreement

 
another commercially available source providing such quotations as reasonably designated by Administrative Agent and acceptable to Prologis from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and 

(b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at or about 11:00 a.m.,
London time determined two Business Days prior to such date for U.S. Dollar deposits with a term of one month commencing on that date; 

provided that to the extent a comparable or successor rate is approved by Administrative Agent in connection herewith, the approved rate shall be
applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably
determined by Administrative Agent. If the Eurodollar Rate for any Interest Period shall be less than zero, such rate shall be deemed to be zero for such Interest Period for all purposes of this Agreement. 

“Event of Default” has the meaning specified in Section 9.1. 

“Excluded Debt Service” means, for any period, any regularly scheduled principal payments on (a) any Indebtedness that
pays such Indebtedness in full, but only to the extent that the amount of such final payment is greater than the scheduled principal payment immediately preceding such final payment, and (b) any Indebtedness (other than Secured Debt) that is
rated at least Baa3 and BBB-, as the case may be, by at least two of S&P, Moody’s and Fitch. 
 “Excluded Taxes”
means, with respect to Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of Prologis hereunder, (a) taxes imposed on or measured by its overall net income (however denominated),
and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which such recipient is organized, in which its principal office is located, in which it is otherwise
conducting business (other than as a result of entering into or receiving payments under this Agreement) and subject to such taxes or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes
imposed by the United States, (c) except as provided in the following sentence, in the case of a Foreign Lender (other than an assignee pursuant to a request by Prologis under Section 11.12), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to
comply with Section 4.1.4, except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from Prologis with respect
to such withholding tax pursuant to Section 4.1.1 and (d) any Taxes imposed under FATCA. 
 “Exemption
Representation” has the meaning specified in Section 4.1.5(a). 

  

					
	 		9		Prologis, L.P. Term Loan Agreement

 “Existing Indenture” means the Indenture dated as of June 30, 1998 among
General Partner, Prologis and U.S. Bank National Association (as successor in interest to State Street Bank and Trust Company of California, N.A.), as Trustee. 

“Extension Effective Date” has the meaning specified in Section 3.10.2. 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement, regulations or official
interpretations thereof and any agreements entered into pursuant to Section 1471 (b) (1) of the Code. 
 “Federal
Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the immediately
preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if
necessary, to a whole multiple of 1/100 of 1%) charged to Administrative Agent on such day on such transactions as determined by Administrative Agent. 

“Fee Letter” means the fee letter entered into among Prologis and certain Credit Parties. 

“Fitch” means Fitch IBCA, Duff & Phelps, a division of Fitch, Inc. (or any successor thereof) or, if Fitch no longer
publishes ratings, then another ratings agency selected by Prologis and reasonably acceptable to Administrative Agent. 
 “Fitch
Rating” means the most recently-announced rating from time to time of Fitch assigned to any class of long-term senior, unsecured debt securities issued by Prologis, as to which no letter of credit, guaranty or third party credit support is
in place, regardless of whether any such Indebtedness has been issued at the time such rating was issued. 
 “Fixed Charge Coverage
Ratio” means, as of the last day of any fiscal quarter, the ratio of (a) (i) Adjusted EBITDA, minus (ii) Capital Expenditures, to (b) the sum of (i) Debt Service in respect of all Indebtedness,
plus (ii) Preferred Dividends, in each case for the Companies on a consolidated basis and for the four fiscal quarters ending on the date of determination. 

“Foreign Lender” means any Lender that is organized under the Laws of a jurisdiction other than the United States, a State or
territory thereof or the District of Columbia. 
 “FRB” means the Board of Governors of the Federal Reserve System of the
United States. 
 “Funding Date” means the date on which the Loans are made hereunder. 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting 

  

					
	 		10		Prologis, L.P. Term Loan Agreement

 
Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the
date of determination, consistently applied. 
 “General Partner” means Prologis, Inc., a Maryland corporation qualified as
a REIT. 
 “Global Credit Agreement” means the Global Senior Credit Agreement dated as of July 11, 2013 among
Prologis, General Partner, various affiliates thereof, various lenders and various agents, including Bank of America, as Global Administrative Agent, and any restatement thereof. 

“Global Lender” means a “Lender” under and as defined in the Global Credit Agreement. 

“Governmental Authority” means the government of the United States or any other nation, or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European Central Bank). 
 “Guarantee”
means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other
obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation,
(iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation,
or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or
in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. Guarantees shall not include contingent obligations under any Special
Limited Contribution Agreement (“SLCA”) in connection with certain of such Person’s contributions of Properties to Property Funds pursuant to which a Company is obligated to make additional capital contributions to the
respective Property Fund under certain circumstances unless the obligations under such SLCA are required under GAAP to be included in “liabilities” on the balance sheet of the Companies. The term “Guarantee” as a verb has a
corresponding meaning. 

  

					
	 		11		Prologis, L.P. Term Loan Agreement

 “Guaranteed Obligations” means the principal and interest (whether such interest
is allowed as a claim in a bankruptcy proceeding with respect to Prologis or otherwise) of each Loan made under this Agreement, together with all other obligations (including obligations that, but for the automatic stay under Section 362(a) of
the United States Bankruptcy Code, would become due) and liabilities (including indemnities, fees and interest thereon), direct or indirect, of Prologis to any Credit Party now existing or hereafter incurred under, arising out of or in connection
with this Agreement or any other Loan Document, including all costs, expenses and fees, including court costs and reasonable attorneys’ fees, arising in connection with the collection of any of the foregoing Guaranteed Obligations. 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes
or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law. 
 “Indebtedness” means for any Person, without duplication, all monetary obligations, excluding
trade payables and accrued expenses (including deferred tax liabilities except as expressly provided below) incurred in the ordinary course of business or for which reserves in accordance with GAAP or otherwise reasonably acceptable to
Administrative Agent have been provided, (a) of such Person (i) for borrowed money, (ii) evidenced by bonds, debentures, notes or similar instruments, (iii) to pay the deferred purchase price of property or services, except
(x) obligations incurred in the ordinary course of business to pay the purchase price of stock so long as such obligations are paid within customary settlement terms and (y) obligations to purchase stock (other than stock of Prologis or
any of its Consolidated Subsidiaries or Affiliates) pursuant to subscription or stock purchase agreements in the ordinary course of business, (iv) arising under Capital Leases to the extent included on a balance sheet of such Person,
(v) arising under Swap Contracts, excluding interest rate contracts entered into to hedge Indebtedness, net of obligations owed to such Person under non-excluded Swap Contracts, (vi) arising under any Guarantee of such Person (other
than (x) endorsements in the ordinary course of business of negotiable instruments or documents for deposit or collection, (y) indemnification obligations and purchase price adjustments pursuant to acquisition agreements entered into
in the ordinary course of business and (z) any Guarantee of Liabilities of a third party that do not constitute Indebtedness) and (vii) consisting of Settlement Debt or (b) secured by a Lien existing on any property of such Person,
whether or not such obligation shall have been assumed by such Person; provided that the amount of any Indebtedness under this clause (b) that has not been assumed by such Person shall be equal to the lesser of the stated amount
of such Indebtedness or the fair market value of the property securing such Indebtedness. The amount of any Indebtedness shall be determined without giving effect to any mark-to-market increase or decrease resulting from the purchase accounting
impact of corporate or portfolio acquisitions or any mark-to-market remeasurement of the amount of any Indebtedness denominated in a currency other than Dollars. Indebtedness shall not include obligations under any assessment, performance, bid or
surety bond or any similar bonding obligation. 
 “Indemnified Taxes” means Taxes other than Excluded Taxes. 

“Indemnitee” has the meaning specified in Section 11.4.2. 

  

					
	 		12		Prologis, L.P. Term Loan Agreement

 “Industrial Property” means a Property that is used for manufacturing,
processing, warehousing or retail purposes. 
 “Information” has the meaning specified in Section 11.7. 

“Interest Expense” means, for any Person for any period, without duplication, (a) such Person’s “net interest
expense” for such period as reported on such Person’s most recent financial statements plus (b) Restricted Payments of any kind or character with respect to, and other proceeds paid or payable in respect of, any Disqualified
Stock. 
 “Interest Payment Date” means: (a) as to any Eurodollar Loan (i) the last day of each Interest Period
applicable to such Loan, (ii) if any Interest Period for such Eurodollar Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period and (iii) the Maturity Date; and (b) as
to any Base Rate Loan, (i) the last Business Day of each March, June, September and December and (ii) the Maturity Date. 

“Interest Period” means, as to any Eurodollar Loan, the period commencing on the date such Eurodollar Loan is disbursed or
converted to or continued as a Eurodollar Loan and ending on the date seven days (to the extent available) or one, two, three or six months thereafter, as selected by Prologis in the applicable Loan Notice; provided that: 

(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such next succeeding Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding Business Day; 

(b) except in the case of an Interest Period of 7 days, any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and 

(c) no Interest Period shall extend beyond the scheduled Maturity Date. 

“Investment” means any investment in any Person, Property or other asset, whether by means of stock, purchase, loan, advance,
extension of credit, capital contribution or otherwise. The amount of any Investment shall be determined in accordance with GAAP; provided that the amount of the Investment in any Property shall be calculated based upon the undepreciated
Investment in such Property. 
 “IRS” means the United States Internal Revenue Service. 

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law. 

  

					
	 		13		Prologis, L.P. Term Loan Agreement

 “Lenders” means each Person listed on Schedule 2.1 as of the date hereof
and the successors and permitted assigns of any of the foregoing. 
 “Lending Office” means, as to any Lender, the office
or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as such Lender may from time to time notify Prologis and Administrative Agent. 

“Liabilities” means (without duplication), for any Person, (a) any obligations required by GAAP to be classified upon
such Person’s balance sheet as liabilities (excluding any deferred tax liabilities and any mark-to-market increase or decrease in debt from the purchase accounting impact of corporate or portfolio acquisitions and from the re-measurement of
intercompany indebtedness); (b) any liabilities secured (or for which the holder of the liability has an existing right, contingent or otherwise, to be so secured) by any Lien existing on property owned or acquired by that Person, whether or
not such obligation shall have been assumed by such Person, provided that the amount of any Liability under this clause (b) that has not been assumed by such Person shall be equal to the lesser of the stated amount of the
liabilities secured (or entitled to be secured) or the fair market value of the applicable property; and (c) any Guarantees of such Person of liabilities or obligations of others. 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other),
charge, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing, but excluding the interest of a lessor under an operating lease). 

“Loan” has the meaning specified in Section 2.1. 

“Loan Documents” means this Agreement and the Fee Letter. 

“Loan Notice” means a notice in the form of Exhibit A or such other form as may be approved by Administrative Agent
(including any form on an electronic platform or electronic transmission system as shall be approved by Administrative Agent), appropriately completed and signed by a Responsible Officer of Prologis. 

“Loan Parties” means General Partner and Prologis; and “Loan Party” means either of the foregoing. 

“Material Acquisition” means, during any 12 month period, the acquisition by any Company of one or more real property assets
(including interests in participating mortgages in which the interest therein is characterized as equity according to GAAP) or portfolios of such assets or operating businesses, each of which real property assets, portfolios of real property assets
or operating businesses, as the case may be, individually had a purchase price of not less than 3% of Total Asset Value and all of which real property assets, portfolio of real property assets or operating businesses collectively had an aggregate
purchase price of 7.5% or more of Total Asset Value. 

  

					
	 		14		Prologis, L.P. Term Loan Agreement

 “Material Adverse Effect” means an effect resulting from any circumstance or
event or series of circumstances or events, of whatever nature (but excluding general economic conditions), which does or could reasonably be expected to materially and adversely impair (a) the ability of the Loan Parties, taken as a whole, to
perform their respective obligations under the Loan Documents or (b) the ability of any Credit Party to enforce the Loan Documents against the Loan Parties. 

“Maturity Date” means May 27, 2016 or such later date to which the Maturity Date may be extended pursuant to
Section 3.10. 
 “Moody’s” means Moody’s Investors Service, Inc. (or any successor thereof) or, if
Moody’s no longer publishes ratings, another ratings agency selected by Prologis and reasonably acceptable to Administrative Agent. 

“Moody’s Rating” means the most recently-announced rating from time to time of Moody’s assigned to any class of
long-term senior, unsecured debt securities issued by Prologis, as to which no letter of credit, guaranty or third party credit support is in place, regardless of whether any of such Indebtedness has been issued at the time such rating was issued.

 “Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA to which
Prologis or any ERISA Affiliate makes or is obligated to make, or during the preceding five plan years has made or been obligated to make, contributions. 

“NOI” means, for any period and any Property, the difference (if positive) between (a) any rents (including rent with
respect to which a tenant received any free rent during such period, the amount of such free rent as if the same had been paid in cash by such tenant), proceeds (other than proceeds from Dispositions), expense reimbursements or income received from
such Property (but excluding security or other deposits, late fees, early lease termination or other penalties of a non-recurring nature), less (b) all costs and expenses (including interest on assessment bonds) incurred as a result of,
or in connection with, the development, operation or leasing of such Property (but excluding depreciation, amortization, Interest Expense (other than interest on assessment bonds) and Capital Expenditures). 

“Non-Consenting Lender” means any Lender that, within the preceding 60 days failed to agree to an amendment, waiver or
consent that was (a) requested by Prologis and (b) approved by Lenders holding at least 40% of the aggregate principal amount of all Loans (or, prior to the Funding Date, of the Aggregate Commitments). 

“Non-Industrial Property” means a Property that is not an Industrial Property. 

“Non-Recourse Debt” means Indebtedness with respect to which recourse for payment is limited to (a) specific Property or
Properties encumbered by a Lien securing such Indebtedness so long as there is no recourse to Prologis or General Partner, or (b) any Consolidated Subsidiary of Prologis or Unconsolidated Affiliate of Prologis (provided that if an entity
is a partnership, there is no recourse to Prologis or General Partner as a general partner of such partnership); 

  

					
	 		15		Prologis, L.P. Term Loan Agreement

 
provided that personal recourse of Prologis or General Partner for any such Indebtedness for Customary Recourse Exceptions shall not, by itself, prevent such Indebtedness from being
characterized as Non-Recourse Debt. For purposes of the foregoing and for the avoidance of doubt, (i) if the Indebtedness is partially guaranteed by Prologis or General Partner, then the portion of such Indebtedness that is not so guaranteed
shall still be Non-Recourse Debt if it otherwise satisfies the requirements in this definition, and (ii) if the liability of Prologis or General Partner under any such guaranty is itself limited to specific Property or Properties, then such
Indebtedness shall still be Non-Recourse Debt if such Indebtedness otherwise satisfies the requirements of this definition. 

“Non-U.S. Lender” means any Lender that is not organized under the Laws of a jurisdiction of the United States or is
otherwise not a resident of the United States for United States tax purposes. 
 “Obligations” means all advances to, and
debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Law naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. 
 “Organization
Documents” means: (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to
any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or
other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its
formation or organization and, if applicable, any certificate or articles of formation or organization of such entity. 
 “Other
Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan Document. 
 “Participant” has the meaning
specified in Section 11.6.4. 
 “PBGC” means the Pension Benefit Guaranty Corporation. 

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA),
other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by Prologis or any ERISA Affiliate or to which Prologis or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a
multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years. 

  

					
	 		16		Prologis, L.P. Term Loan Agreement

 “Percentage” means, with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) that the principal amount of such Lender’s Loan is of the aggregate principal amount of all Loans (or, prior to the making of the Loans, that such Lender’s Commitment is of the Aggregate
Commitments). 
 “Permitted Liens” means (a) pledges or deposits made to secure payment of worker’s compensation
(or to participate in any fund in connection with worker’s compensation insurance), unemployment insurance, pensions or social security programs, (b) encumbrances consisting of zoning restrictions, easements or other restrictions on the
use of real property, provided that such items do not materially impair the use of such property for the purposes intended and none of which is violated in any material respect by existing or proposed structures or land use, (c) Liens
for taxes not yet due and payable or being contested in good faith by appropriate proceedings diligently conducted, and for which reserves in accordance with GAAP or otherwise reasonably acceptable to Administrative Agent have been provided,
(d) Liens imposed by mandatory provisions of law such as for materialmen’s, mechanic’s, warehousemen’s and other like Liens arising in the ordinary course of business, securing payment of any Liability whose payment is not yet
due, (e) Liens on Properties where the applicable Company or Unconsolidated Affiliate is insured against such Liens by title insurance or other similar arrangements satisfactory to Administrative Agent, (f) Liens securing assessments or
charges payable to a property owner association or similar entity, which assessments are not yet due and payable or are being contested in good faith by appropriate proceedings diligently conducted, and for which reserves in accordance with GAAP or
otherwise reasonably acceptable to Administrative Agent have been provided, (g) Liens securing assessment bonds, (h) leases to tenants of space in Properties that are entered into in the ordinary course of business, (i) any netting or
set-off arrangement entered into by any Company in the normal course of its banking arrangements for the purpose of netting debit and credit balances or any set-off arrangement that arises by operation of law as a result of any Company opening a
bank account, (j) any title transfer or retention of title arrangement entered into by any Company in the normal course of its trading activities on the counterparty’s standard or usual terms, (k) Liens over goods and documents of
title to goods arising out of letter of credit transactions entered into in the ordinary course of business, (l) Liens securing Settlement Debt in an aggregate amount not at any time exceeding $250,000,000, (m) Liens that secure the
Obligations, (n) Liens that secure senior Indebtedness of General Partner or Prologis or any of their respective Consolidated Subsidiaries on a pari passu basis with the Lien described in clause (m), and (o) Liens that secure
Indebtedness of a Company to another Company. 
 “Person” means any natural person, corporation, limited liability company,
trust, joint venture association, company, partnership, Governmental Authority or other entity. 
 “Plan” means any
“employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by Prologis or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate. 

“Platform” has the meaning specified in Section 7.2. 

  

					
	 		17		Prologis, L.P. Term Loan Agreement

 “Preferred Dividends” means, for the Companies, on a consolidated basis, for any
period, Restricted Payments of any kind or character or other proceeds paid or payable with respect to any Equity Interests except for common equity (but excluding any Restricted Payments paid or payable to any Company). 

“Prologis” has the meaning specified in the introductory paragraph hereto. 

“Properties” means real estate properties (including land) owned by a Company or an Unconsolidated Affiliate or any trust of
which a Company or an Unconsolidated Affiliate is the sole beneficiary, and “Property” means any one of the Properties. 

“Property Fund” means an Unconsolidated Affiliate formed or sponsored by Prologis to hold Properties. 

“Qualified Institution” means (a) a Lender (other than a Defaulting Lender), (b) a bank, finance company, insurance
company or other financial institution that (i) has (or, in the case of a bank, is a subsidiary of a bank holding company that has) a rating of its senior debt obligations of not less than BBB+ by S&P or “Baa-1” by Moody’s or
a comparable rating by a rating agency acceptable to Administrative Agent and (ii) has total assets in excess of $10,000,000,000 or (c) any other Person approved by Prologis and Administrative Agent. 

“Recourse Debt” means, for any Person, any Indebtedness that is not Non-Recourse Debt. 

“Register” has the meaning specified in Section 11.6.3. 

“Registered Public Accounting Firm” has the meaning specified in the Securities Laws and shall be independent of Prologis as
prescribed by the Securities Laws. 
 “REIT” means a “real estate investment trust” for purposes of the
Code. 
 “Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors,
officers, employees, agents and advisors of such Person and of such Person’s Affiliates. 
 “Reportable Event” means
any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived. 

“Required Lenders” means, as of any date of determination, Lenders having more than 50% of the principal amount of all
outstanding Loans (or, prior to the Funding Date, of the Aggregate Commitments), provided that the Commitment of, and the portion of the outstanding Loans held by, any Defaulting Lender shall be excluded for purposes of making a determination
of Required Lenders. 
 “Responsible Officer” means the chief executive officer, the president, the chief financial
officer, a representative director, any vice president, the treasurer or any assistant treasurer of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Party so
designated by any of the foregoing officers in a notice 

  

					
	 		18		Prologis, L.P. Term Loan Agreement

 
to Administrative Agent or any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. 
 “Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Company, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Company’s stockholders,
partners or members (or the equivalent). 
 “S&P” means Standard & Poor’s Financial Services LLC, a
subsidiary of McGraw-Hill Financial, Inc. (or any successor thereof), or, if S&P no longer publishes ratings, then another ratings agency selected by Prologis and reasonably acceptable to Administrative Agent. 

“S&P Rating” means the most recently-announced rating from time to time of S&P assigned to any class of long-term
senior, unsecured debt securities issued by Prologis, as to which no letter of credit, guaranty or third party credit support is in place, regardless of whether any of such Indebtedness has been issued at the time such rating was issued. 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002. 

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal
functions. 
 “Secured Debt” means, for any Person, Indebtedness of such Person secured by any Liens (other than Permitted
Liens) in any of such Person’s Properties or other material assets. 
 “Securities Laws” means the Securities Act of
1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board. 

“Settlement Debt” means, for any Person, tax liabilities of such Person payable in installments in connection with a
settlement agreement with the relevant taxing authority. 
 “Solvent” means, as to a Person, that (a) the aggregate
fair market value of its assets exceeds its Liabilities, (b) it has sufficient cash flow to enable it to pay its Liabilities as they mature and (c) it does not have unreasonably small capital to conduct its businesses. 

“Stabilized Industrial Properties” means, as of any date, Industrial Properties that have a Stabilized Occupancy Rate as of
the first day of the most recent fiscal quarter of Prologis for which information is available. 

  

					
	 		19		Prologis, L.P. Term Loan Agreement

 “Stabilized Occupancy Rate” means, as of any date for any Property, that the
percentage of the rentable area of such Property leased pursuant to bona fide tenant leases, licenses or other agreements requiring current rent or other similar payments, is at least 90% or such higher percentage as Prologis requires internally,
consistent with past practices, to classify as a stabilized Property of the relevant type in the relevant market. 
 “Surviving
Obligation” means any contingent obligation arising under a provision of this Agreement that expressly survives termination hereof as to which no claim has been asserted. 

“Swap Contract” means (a) all rate swap transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts or any other similar
transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement or
any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement. 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any
legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender). 
 “Taxes” means
all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto. 

“Total Asset Value” means, as of any date for the Companies on a consolidated basis, the total (without duplication) of the
following: 
 (a) the quotient of (i) the sum of the most recent fiscal quarter’s NOI from Stabilized Industrial Properties
multiplied by four, divided by (ii) the applicable Capitalization Rate; provided that, notwithstanding the foregoing, (A) any Investments in Stabilized Industrial Properties acquired from Property Funds less than 24 months prior to
such date of determination shall be included at 100% of the undepreciated book value of such Property and (B) any other Investments in Stabilized Industrial Properties acquired less than 12 months prior to such date of determination shall be
included at 100% of the undepreciated book value of such Property; plus 

  

					
	 		20		Prologis, L.P. Term Loan Agreement

 (b) for any Transition Property, the greater of (i) the quotient of (a) the most recent
fiscal quarter’s NOI from such Property multiplied by four divided by (b) the applicable Capitalization Rate or (ii) 100% of the undepreciated book value of such Property; plus 

(c) the amount of all other Investments in Properties under construction, Non-Industrial Properties, notes receivable backed by real estate
and Properties subject to a ground lease with a Person that is not an Affiliate of Prologis, as lessee, each on an undepreciated book basis; plus 

(d) the book value of raw land; plus 

(e) the book value of the Companies’ Investments in Unconsolidated Affiliates; plus 

(f) the product of (i) management fee income of the Companies (prior to deduction of amortization related to investment management
contracts) for the most recent fiscal quarter multiplied by (ii) four, multiplied by (iii) eight; plus 
 (g) the value, if
positive, of the Companies’ Swap Contracts, excluding interest rate contracts entered into to hedge Indebtedness, net of obligations owing by the Companies under non-excluded Swap Contracts; plus 

(h) to the extent not included in clauses (a) through (g) above, (i) restricted funds that are held in escrow
pending the completion of tax-deferred exchange transactions involving operating Properties, (ii) infrastructure costs related to projects that a Company is developing on behalf of others, (iii) costs incurred related to future development
projects, including purchase options on land, (iv) the corporate office buildings of Prologis and its subsidiaries and (v) earnest money deposits associated with potential acquisitions; plus 

(i) cash and Cash Equivalents; minus 

(j) the amount, if any, by which the amount in clause (e) above exceeds 15% of the sum of clauses (a) through
(i) above. 
 For the avoidance of doubt, with respect to each of clauses (b) through (j) (other than clause (f))
above, impairments pursuant to GAAP shall be included. 
 “Transition Properties” means, as of any date, Industrial
Properties that have been completed but are not Stabilized Industrial Properties. 
 “Type” means, with respect to any
Loan, its character as a Base Rate Loan or a Eurodollar Loan. 
 “Unconsolidated Affiliate” means any Person in which
Prologis directly or indirectly holds Equity Interests but which is not consolidated under GAAP with Prologis on the consolidated financial statements of Prologis. 

  

					
	 		21		Prologis, L.P. Term Loan Agreement

 “Unencumbered Capital Expenditures” means, for any period, the total for such
period of the Capital Expenditures associated with all Unencumbered Properties (except for Unencumbered Properties where the tenant is responsible for capital expenditures). 

“Unencumbered Debt Service” means, for any period, the total for such period of all Debt Service in respect of all Unsecured
Debt of the Companies. 
 “Unencumbered Debt Service Coverage Ratio” means, as of the last day of any fiscal quarter, the
ratio of (a) Unencumbered NOI minus Unencumbered Capital Expenditures to (b) Unencumbered Debt Service, in each case for the four fiscal quarters ending on the date of determination. 

“Unencumbered NOI” means, for any period, the total for such period of (a) the NOI of all Unencumbered Properties;
provided that this clause (a) shall not include any NOI that is subject to any Lien (other than Permitted Liens); plus (b) the management fees of the Companies that are not subject to any Lien (other than Permitted
Liens) less related expenses; plus (c) Allowed Unconsolidated Affiliate Earnings that are not subject to any Lien (other than Permitted Liens); minus (d) the amount, if any, by which the sum of the amounts of clauses
(b) and (c) above exceeds 40% of the sum of the amounts of clauses (a), (b) and (c) above. 

“Unencumbered Property” means any Property that is (a) owned directly or indirectly by a Company, (b) not subject
to a Lien that secures Indebtedness of any Person (other than Permitted Liens) and (c) not subject to any negative pledge that would prohibit any pledge of such asset to Administrative Agent; provided that the provisions of
Section 1013 of the Existing Indenture, and any similar requirement for the grant of an equal and ratable lien in connection with a pledge of any asset to Administrative Agent, shall not constitute a negative pledge. 

“United States” and “U.S.” mean the United States of America. 

“Unrestricted Cash” means cash and Cash Equivalents that are not subject to any pledge, lien or control agreement, less
(a) $10,000,000, (b) amounts normally and customarily set aside by Prologis for operating capital and interest reserves and (c) amounts placed with third parties as deposits or security for contractual obligations. 

“Unsecured Debt” means, for any Person, Indebtedness of such Person that is not Secured Debt. 

Section 1.2 Other Interpretive Provisions. Unless otherwise specified herein: 

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context requires,
any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or 

  

					
	 		22		Prologis, L.P. Term Loan Agreement

 
modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words
“herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement in which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from
time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights. 
 (b) In the computation of periods of time from a specified date to a later specified date, the word
“from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and
including.” 
 (c) Section headings herein are included for convenience of reference only and shall not affect the
interpretation of this Agreement. 
 (d) Any reference to Laws of a jurisdiction of the United States shall include the United States
federal government, the District of Columbia and any State or territory of the United States. 
 Section 1.3 Accounting Terms.

 Section 1.3.1 Generally. All accounting and financial terms not specifically or completely defined herein shall be construed
in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from
time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. 

Section 1.3.2 Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or
requirement set forth herein, and either Prologis or Required Lenders shall so request, Administrative Agent, Lenders and Prologis shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of
such change in GAAP (subject to the approval of Required Lenders); provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) Prologis shall
provide to Administrative Agent and each Lender financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP. 
 Section 1.3.3 Consolidation of Variable Interest Entities. All references
herein to consolidated financial statements of the Companies or to the determination of any amount for the Companies on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that
Prologis is required to consolidate pursuant to FASB 

  

					
	 		23		Prologis, L.P. Term Loan Agreement

 
Interpretation No. 46 – Consolidation of Variable Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such variable interest entity were a Consolidated
Subsidiary as defined herein. 
 Section 1.3.4 Property Funds. Notwithstanding the foregoing, in the event of a change in GAAP
resulting in Property Funds being treated as Consolidated Subsidiaries under GAAP, such Property Funds shall continue to be considered Unconsolidated Affiliates. 

Section 1.4 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to United States
Central time (daylight or standard, as applicable). 
 ARTICLE II 

COMMITMENTS AND LOANS 

Section 2.1 Commitments to make Loans. Subject to the terms and conditions hereof, each Lender severally agrees to make a single
loan (each a “Loan”) to Prologis in Dollars on the Funding Date in amount equal to such Lender’s Commitment (or such lesser amount that constitutes such Lender’s Percentage of the aggregate principal amount of all Loans
requested by Prologis on the Funding Date). Each Loan shall be divided into tranches, each of which shall be a Base Rate Loan or a Eurodollar Loan, as further provided herein. Amounts borrowed under this Section 2.1 and repaid or prepaid
may not be reborrowed. 
 Section 2.2 Borrowing of Loans; Conversions and Continuations. 

Section 2.2.1 Request for Loans. Prologis shall give notice of the borrowing of the Loans hereunder, which may be given by:
(A) telephone or (B) a Loan Notice; provided that a telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a Loan Notice. The notice of borrowing must be received by the Administrative Agent not
later than 1:00 p.m. at least one Business Day prior to the date of borrowing, specifying the borrowing date, the aggregate principal amount of Loans requested, the Type(s) of Loans requested and, if any Borrowing is initially to be comprised of
Eurodollar Loans, the initial Interest Period therefor; provided that Prologis may only request Eurodollar Loans if Prologis shall have given at least three Business Days’ notice of such request and, if this Agreement is not yet
effective on the date of such notice, provided an executed funding indemnity letter reasonably satisfactory to Administrative Agent. 

Section 2.2.2 Disbursement of Loans. Promptly following its receipt of a notice of borrowing pursuant to
Section 2.2.1, Administrative Agent shall notify each Lender of the date of the proposed borrowing, the aggregate principal amount of Loans requested, the Type(s) of Loans requested, the initial Interest Period for any Eurodollar Loans
specified in the notice of borrowing, and the principal amount of such Lender’s Loan. On the requested borrowing date, each Lender shall make the amount of its Loan available to Administrative Agent in immediately available funds at
Administrative Agent’s Office not later than 11:00 a.m. Upon satisfaction of the conditions set forth in Article V, Administrative Agent shall make all funds so received available to Prologis in like funds as received by Administrative
Agent either by (a) crediting the account of Prologis on the books of Administrative Agent with the amount of such funds or (b) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) Administrative Agent by Prologis. 

  

					
	 		24		Prologis, L.P. Term Loan Agreement

 Section 2.2.3 Conversions and Continuations, Prologis may from time to time, by
irrevocable notice to Administrative Agent, which may be given by (x) telephone or (y) a Loan Notice; provided that any telephonic notice must be confirmed immediately by delivery to Administrative Agent of a Loan Notice,
(a) convert Base Rate Loans into Eurodollar Loans, (b) convert Eurodollar Loans into Base Rate Loans and (c) continue Eurodollar Loans for a new Interest Period. Each such of conversion or continuation must be received by
Administrative Agent not later than 11:00 a.m. (a) three Business Days prior to the requested date of any conversion to or continuation of, Eurodollar Loans and (c) one Business Day prior to the requested date of any conversion of
Eurodollar Loans to Base Rate Loans. Each conversion to or continuation of Loans shall be in a principal amount permitted by Section 3.1.1. Each notice of conversion or continuation (whether telephonic or written) shall specify
(i) whether Prologis is requesting a conversion to the other Type of Loans or a continuation of Eurodollar Loans, (ii) the requested date of conversion or continuation (which shall be a Business Day), (iii) the principal amount to be
converted or continued and (iv) in the case of a conversion to or a continuation of Eurodollar Loans, the duration of the Interest Period therefor. If Prologis fails to give a timely notice requesting a continuation of Eurodollar Loans, then
such Eurodollar Loans shall be continued as Eurodollar Loans with an Interest Period of one month beginning on the last day of the existing Interest Period for such Eurodollar Loans. If Prologis requests a conversion to or continuation of Eurodollar
Loans, but fails to specify an Interest Period therefor, it will be deemed to have specified an Interest Period of one month. 

Section 2.2.4 Certain Continuations and Conversions. Except as otherwise provided herein, a Eurodollar Loan may be continued only
on the last day of an Interest Period for such Eurodollar Loan. During the existence of a Default, the Required Lenders may at their option, by notice to Prologis (which notice may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 11.1), declare that no Eurodollar Loans may be converted to or continued as Eurodollar Loans (in which case all outstanding Eurodollar Loans shall convert to Base Rate Loans on the last day of the existing Interest
Period therefor). 
 Section 2.2.5 Notice of Rates. Administrative Agent shall promptly notify Prologis and each Lender of the
interest rate applicable to any Interest Period for Eurodollar Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, Administrative Agent shall notify Prologis and each Lender of any change in
Administrative Agent’s “prime rate” used in determining the Base Rate promptly following the public announcement of such change. 

Section 2.2.6 Number of Interest Periods. After giving effect to the borrowing hereunder and all subsequent conversions and
continuations, there shall not be more than 10 Interest Periods in effect hereunder. 
 Section 2.3 Prepayments. Prologis may,
upon notice to Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (a) such notice must be in a form acceptable to Administrative Agent (including
any form on an electronic platform or electronic transmission system as shall be 

  

					
	 		25		Prologis, L.P. Term Loan Agreement

 
approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer and be received by Administrative Agent not later than 11:00 a.m., (i) three Business Days
prior to any date of prepayment of Eurodollar Loans and (ii) on the date of prepayment of any Base Rate Loans; (b) each prepayment shall be on a Business Day and (c) any prepayment shall be in a principal amount permitted by
Section 3.1.2 or, if less, the entire principal amount of all Loans then outstanding. Each such notice shall specify the date and amount of such prepayment, the Type(s) of Loans to be prepaid and, if Eurodollar Loans are to be prepaid,
the Interest Period(s) of such Eurodollar Loans. Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Percentage of such prepayment. If such notice is given by Prologis,
then Prologis shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amount required pursuant to Section 4.5. Each prepayment shall be applied to the Loans of the Lenders ratably in accordance with their respective Percentages. 

ARTICLE III 
 GENERAL
PROVISIONS APPLICABLE TO LOANS 
 Section 3.1 Minimum Amounts for Borrowings, Conversions, Continuations and Prepayments; Pro
Rata Treatment. 
 Section 3.1.1 Borrowing, Conversion, Continuation Amounts. Each Borrowing shall at all times be
(including after giving effect to any conversion or continuation) in an amount equal to $10,000,000 or any higher whole multiple of $1,000,000. 

Section 3.1.2 Prepayment Amounts. Each prepayment shall be in an amount equal to $10,000,000 or any higher whole multiple of
$1,000,000. 
 Section 3.1.3 Pro Rata Treatment. After giving effect to the borrowing of Loans hereunder and any conversion,
continuation or prepayment, each Lender shall have a pro rata share (according to its Percentage) of each Borrowing. 
 Section 3.2
Automatic Termination of Commitments. The Aggregate Commitments shall be automatically and permanently terminate upon the making of the Loans on the Funding Date. 

Section 3.3 Repayment of Loans. The aggregate principal amount of all outstanding Loans shall be paid on the Maturity Date. 

Section 3.4 Interest. 

Section 3.4.1 Interest Rates. Subject to the provisions of Sections 3.4.2 and 11.9: 

(a) each Eurodollar Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the Applicable Margin; and 

  

					
	 		26		Prologis, L.P. Term Loan Agreement

 (b) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Margin. 
 Section 3.4.2 Rates Upon
Default. 
 (a) At any time and so long as an Event of Default pursuant to Section 9.1.1 exists, any Obligations not paid
when due shall bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. 

(b) Upon the written request of Required Lenders at any time and so long as any Event of Default exists, Prologis shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. 

(c) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand. 

Section 3.4.3 Interest Payment Dates. Interest on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any
Debtor Relief Law. 
 Section 3.5 Fees. 

Section 3.5.1 Upfront Fees. Prologis shall pay to Administrative Agent on the Funding Date for the account of each Lender, an
upfront fee in the amount separately agreed upon in writing with such Lender. 
 Section 3.5.2 Agency and Arrangement Fees.
Prologis shall pay to Arranger and Administrative Agent, such fees in the amounts and at the times specified in the Fee Letter. 

Section 3.5.3 Payment of Fees. All fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 Section 3.6 Computation of Interest and Fees. All computations of interest for Base Rate Loans shall be made on the basis of
a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which such Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which such Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall bear interest for one day. Each determination by Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent demonstrable error. 

  

					
	 		27		Prologis, L.P. Term Loan Agreement

 Section 3.7 Evidence of Debt and Promissory Note. 

Section 3.7.1 Recordkeeping. The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such
Lender and by Administrative Agent, in each case in the ordinary course of business. The accounts or records maintained by Administrative Agent and each Lender shall be rebuttable presumptive evidence of the amount of the Loans made by Lenders to
Prologis and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligations of Prologis to pay any amount owing with respect to the Obligations. In the event of any
conflict between the accounts and records maintained by Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of Administrative Agent shall control in the absence of manifest error. 

Section 3.7.2 Promissory Note. The provisions of this Section 3.7.2 constitute a
promissory note for the benefit of each Lender. In furtherance of the foregoing: 
 (a) Prologis hereby promises to pay to each Lender, in
accordance with the provisions of this Agreement, the principal amount of the Loan made by such Lender to Prologis, together with interest on the unpaid principal amount of such Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in this Agreement. 
 Section 3.8 Payments Generally; Administrative
Agent’s Clawback. 
 Section 3.8.1 All Payments Generally. All payments of principal and interest with respect to Loans
shall be made to Administrative Agent in Dollars for the ratable account of the Lenders and in immediately available funds at Administrative Agent’s Office, without condition or deduction for any counterclaim, defense, recoupment or setoff.

 Section 3.8.2 Time of Payments. 

(a) Except as otherwise expressly provided herein, all payments by Prologis hereunder shall be received by Administrative Agent not later than
12:00 noon on the date specified herein, and any payment received by Administrative Agent after such time shall be deemed received on the next succeeding Business Day (and any applicable interest shall continue to accrue). If any payment to be made
by Prologis shall become due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest on the amount paid. 

Section 3.8.3 Distribution of Payments. With respect to payments to be paid to Administrative Agent hereunder, Administrative
Agent will promptly distribute to each Lender its Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. 

Section 3.8.4 Application of Payments. All payments by Prologis hereunder shall be applied to such Obligations as Prologis shall
specify; provided that, during the existence of any Event of Default, all payments by or on behalf of Prologis hereunder shall be applied as follows: 

(a) First, to the payment of that portion of the Obligations constituting unpaid fees, indemnities, costs, expenses and other amounts (other
than principal or interest) payable to Administrative Agent in its capacity as such or any Related Party thereof, ratably among them in proportion to the respective amounts payable pursuant to this clause (a); 

  

					
	 		28		Prologis, L.P. Term Loan Agreement

 (b) Second, to the payment of all amounts paid by Lenders to Administrative Agent or any Related
Party thereof pursuant to Section 11.4.3 (to the extent Lenders have not previously been reimbursed therefor), ratably among them in proportion to the respective amounts payable pursuant to this clause (b); 

(c) Third, to the payment of that portion of the Obligations constituting unpaid fees, indemnities, costs, expenses and other amounts (other
than principal or interest) payable to any Person pursuant to Section 11.4.1, ratably among them in proportion to the respective amounts payable pursuant to this clause (c); 

(d) Fourth, to the payment of all amounts paid by Lenders to any Person pursuant to Section 11.4.3 (to the extent Lenders have not
previously been reimbursed therefor), ratably among them in proportion to the respective amounts payable pursuant to this clause (d); 

(e) Fifth, to the payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans, ratably among Lenders in
proportion to the respective amounts payable to them pursuant to this clause (e); 
 (f) Sixth, to the payment of the unpaid
principal of the Loans, ratably among Lenders in proportion to the respective amounts payable pursuant to this clause (f); 
 (g)
Seventh, to the payment of all remaining unpaid Obligations, ratably among the Credit Parties in proportion to the respective amounts payable pursuant to this clause (g); and 

(h) Last, the balance, if any, after payment in full of all Obligations, to such the Person that made such payment or as otherwise required by
Law. 
 Section 3.8.5 Funding by Lenders; Presumption by Administrative Agent. Unless Administrative Agent shall have received
notice from a Lender prior to the Funding Date that such Lender will not make available to Administrative Agent such Lender’s share of the Loans, Administrative Agent may assume that such Lender directly has made such share available on such
date in accordance with the requirements hereof and may, in reliance upon such assumption, make available to Prologis a corresponding amount. In such event, if a Lender has not in fact made its share of the Loans available to Administrative Agent,
then such Lender and Prologis severally agree to pay to Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from the date such amount is made available to Prologis to
the date of payment to Administrative Agent, at (a) in the case of a payment to be made by such Lender, the Federal Funds Rate and (b) in the case of a payment to be made by Prologis, the interest rate(s) applicable to the Loans. If
Prologis and such Lender shall pay such interest to Administrative Agent for the same or an overlapping period, Administrative Agent shall promptly remit to Prologis the amount of such interest paid by Prologis for such period. If such Lender pays
its share of the applicable Borrowing to Administrative Agent, then the amount so paid shall satisfy such Lender’s obligation with respect to such Borrowing. Any payment by Prologis pursuant to this Section shall be without prejudice to
any claim Prologis may have against a Lender that shall have failed to make a payment to Administrative Agent. 

  

					
	 		29		Prologis, L.P. Term Loan Agreement

 Section 3.8.6 Payments by Prologis; Presumptions by Administrative Agent. Unless
Administrative Agent shall have received notice from Prologis prior to the date on which any payment is due to Administrative Agent for the account of the Lenders hereunder that Prologis will not make such payment, Administrative Agent may assume
that Prologis has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to Lenders the amount due. In such event, if Prologis has not in fact made such payment, then each Lender severally agrees
to repay to Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from the date such amount is distributed to it to the date of payment to Administrative
Agent, at the Federal Funds Rate. A notice by Administrative Agent to any Lender or Prologis with respect to any amount owing under this Section 3.8.6 shall be conclusive, absent demonstrable error. 

Section 3.8.7 Failure to Satisfy Conditions Precedent. If any Lender makes available to Administrative Agent funds for its Loan as
provided herein, and such funds are not made available to Prologis by Administrative Agent because the conditions to such Loan set forth in Article V are not satisfied or waived in accordance with the terms hereof, Administrative Agent shall
promptly return such funds (in like funds as received from such Lender) to such Lender, plus interest thereon from the date funds were made available to Administrative Agent by such Lender to the date such amount is returned by Administrative
Agent to such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. 
 Section 3.8.8 Obligations
of Lenders Several. The obligations of Lenders hereunder to make their respective Loans and to any payments pursuant to Section 11.4.3 are several and not joint. The failure of any Lender to make its Loan or to make any payment under
Section 11.4.3 on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to make any Loan or to make
any payment under Section 11.4.3. 
 Section 3.8.9 Funding Source. Subject to Section 4.6.1,
(a) each Lender may, at its option, make all or a portion of its Loan available to Prologis by causing any foreign or domestic branch or Affiliate of such Lender to make such Loan or such portion; provided that any exercise of such
option shall not affect the obligation of Prologis in accordance with the terms of this Agreement; and (b) nothing herein shall be deemed to obligate any Lender to obtain the funds for its Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for its Loan in any particular place or manner. 

Section 3.9 Sharing of Payments. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on its Loan and, as a result thereof, such Lender shall receive payment of a proportion of its Loan and interest thereon greater than its Percentage of all payments on account of the principal of
and interest on all Loans, then such Lender shall (a) notify Administrative Agent of such fact and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such

  

					
	 		30		Prologis, L.P. Term Loan Agreement

 
other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by all Lenders ratably in accordance with their respective Percentages; provided that:

 (a) if any such participations are purchased and any portion of any payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and 

(b) the provisions of this Section shall not apply to (i) any payment made by Prologis pursuant to and in accordance with
the express terms of this Agreement, (ii) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in its Loan to any assignee or participant, other than to Prologis or any Affiliate thereof (as to
which the provisions of this Section shall apply) and (iii) any payment pursuant to Article IV. 
 Prologis consents to the foregoing and
agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against Prologis rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of Prologis in the amount of such participation. 
 Section 3.10 Extension of
Maturity Date. 
 Section 3.10.1 Request for Extension. Not earlier than 180 days or later than 30 days prior to the initial
Maturity Date, Prologis may, upon written notice to Administrative Agent (which shall promptly notify Lenders) and satisfaction of the conditions precedent set forth in Section 3.10.2, extend the Maturity Date for an additional year to
May 26, 2017. 
 Section 3.10.2 Extension Procedures. The extension of the Maturity Date contemplated by
Section 3.10.1 shall become effective on the date (the “Extension Effective Date”) on which the following conditions precedent have been satisfied: (a) Administrative Agent shall have received the written notice
referred to in Section 3.10.1 and (b) Prologis shall have paid to Administrative Agent, for the benefit of each Lender, an extension fee in an amount equal to 0.10% times the then-outstanding principal amount of such Lender’s Loan,
and Administrative Agent shall promptly remit such extension fee to each Lender upon receipt thereof; provided that if an Event of Default has occurred and is continuing on the date on which such conditions are satisfied, the Extension
Effective Date shall be the first date thereafter, if any, on or before the initial Maturity Date on which no Event of Default is continuing. Upon the satisfaction of the conditions precedent set forth in this Section 3.10.2 and the
occurrence of the Extension Effective Date, Administrative Agent shall promptly confirm to Prologis and Lenders such extension and the Extension Effective Date. 

Section 3.11 Defaulting Lenders. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a
Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law, such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this
Agreement shall be restricted as set forth in Section 11.1. 

  

					
	 		31		Prologis, L.P. Term Loan Agreement

 ARTICLE IV 

TAXES, YIELD PROTECTION AND ILLEGALITY 

Section 4.1 Taxes. 

Section 4.1.1 Payments Free of Taxes. All payments by or on account of any obligation of any Loan Party hereunder or under any
other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if any Loan Party shall be required by applicable Law to deduct any Indemnified Taxes (including
any Other Taxes) from such payments, then (a) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the applicable Credit
Party receives an amount equal to the sum it would have received had no such deductions been made, (b) such Loan Party shall make such deductions and (c) such Loan Party shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Law. 
 Section 4.1.2 Indemnification by Loan Parties. The applicable Loan
Party shall indemnify each Credit Party, within ten days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) paid or payable by such Credit Party on or with respect to any payment made to such Credit Party by or on account of such Loan Party hereunder or under any other Loan Document, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability
delivered to a Loan Party by a Lender (with a copy to Administrative Agent), or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent demonstrable error. 

Section 4.1.3 Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party
to a Governmental Authority, such Loan Party shall deliver to Administrative Agent the original or a copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to Administrative Agent. 
 Section 4.1.4 Status of Lenders. Any Lender that is entitled to
an exemption from or reduction of withholding tax under the law of the United States (including a disregarded entity (as defined in Treasury Regulation Section 301.7701-3 of the Code) owned by a resident of the United States or a qualified REIT
subsidiary (as defined in Section 856(i) of the Code)) or is otherwise subject to tax, or any treaty to which any such jurisdiction is a party or which otherwise benefits such Lender, with respect to payments hereunder or under any other Loan
Document shall deliver to Prologis (with a copy to Administrative Agent), at the time or times prescribed by applicable Law or reasonably requested by Prologis or Administrative Agent, such properly completed and executed documentation prescribed by
applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by Prologis or Administrative Agent, shall deliver such other documentation prescribed by
applicable Law or reasonably requested by Prologis or Administrative Agent as will enable Prologis or Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. 

  

					
	 		32		Prologis, L.P. Term Loan Agreement

 Without limiting the generality of the foregoing, any Non-U.S. Lender shall deliver to Prologis
and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of Prologis or
Administrative Agent, but only if such Non-U.S. Lender is legally entitled to do so), whichever of the following is applicable: 
 (a) duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party, 

(b) duly completed copies of Internal Revenue Service Form W-8ECI, 

(c) duly completed copies of Internal Revenue Service Form W-8IMY, 

(d) in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code,
(x) a certificate to the effect that such Non-U.S. Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of Prologis within the meaning of
Section 881(c)(3)(B) of the Code or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN, or 
 (e) any other form prescribed by applicable Law as a basis for
claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable Law to permit Prologis or Administrative Agent to determine the
withholding or deduction required to be made. 
 Without limiting the obligations of Lenders set forth above regarding delivery of certain
forms and documents to establish each Lender’s status for U.S. withholding tax purposes, each Lender agrees promptly to deliver to Administrative Agent or Prologis, as Administrative Agent or Prologis shall reasonably request, on or prior to
the Funding Date (or such other date as such Lender becomes a party to this Agreement), and in a timely fashion thereafter, such other documents and forms required by any relevant taxing authority under the Laws of any other jurisdiction, duly
executed and completed by such Lender, as are required under such Laws to confirm such Lender’s entitlement to any available exemption from, or reduction of, applicable withholding taxes in respect of all payments to be made to such Lender
outside of the U.S. by Prologis pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in such other jurisdiction. 

Each Lender shall promptly (i) notify Administrative Agent of any change in circumstances that would modify or render invalid any claimed
exemption from or reduction of Taxes or Other Taxes, and (ii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its
Lending Office) to avoid any requirement of applicable Law that Prologis make any deduction or withholding for taxes from amounts payable to such Lender. Additionally, Prologis shall promptly deliver to the applicable Credit Party, as such Credit
Party 

  

					
	 		33		Prologis, L.P. Term Loan Agreement

 
shall reasonably request, on or prior to the Funding Date, and in a timely fashion thereafter, such documents and forms required by any relevant taxing authorities under the Laws of any
jurisdiction, duly executed and completed by Prologis, as are required to be furnished by such Credit Party under such Laws in connection with any payment by such Credit Party of Indemnified Taxes or Other Taxes, or otherwise in connection with the
Loan Documents, with respect to such jurisdiction. 
 Section 4.1.5 Exemption Representation. 

(a) Each Lender represents and warrants (such Lender’s “Exemption Representation”) to Prologis that, as of the date of
this Agreement or, in the case of a Person that becomes a Lender after the Funding Date, as of the date such Person becomes a party hereto, except as specified in writing to Administrative Agent and Prologis prior to the date of the applicable
Exemption Representation, it is entitled to receive payments from Prologis hereunder without any reduction or withholding in respect of any Indemnified Taxes or Other Taxes and without any amount being required to be paid by Prologis pursuant to
Section 4.1.2. 
 (b) Notwithstanding any other provision of this Agreement, Prologis shall not be obligated to pay any amount
under this Section 4.1 to, or for the benefit of, any Lender to the extent that such amount would not have been required to be paid if (i) such Lender’s Exemption Representation had been accurate or (ii) such Lender had
complied with its obligations under Section 4.1.4. 
 Section 4.1.6 Treatment of Certain Refunds. If any Credit
Party determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section, it shall pay to
such Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Loan Party under this Section with respect to the Taxes giving rise to such refund), net of all reasonable
out-of-pocket expenses of such Credit Party, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that such Loan Party, upon the request of such Credit Party, agrees
to repay the amount paid over to such Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Credit Party in the event such Credit Party is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require any Credit Party to make available its tax returns (or any other information relating to its taxes that it deems confidential) to Prologis or any other Person. 

Section 4.1.7 FATCA. If a payment made to a Lender under any Loan Document would be subject to United States Federal
withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to
Prologis, at the time or times prescribed by Law and at such time or times reasonably requested by Prologis, such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by Prologis as may be necessary for Prologis to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under

  

					
	 		34		Prologis, L.P. Term Loan Agreement

 
FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 4.1.7, “FATCA” shall include any amendments
made to FATCA after the date of this Agreement. Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 4.1.7 expires or becomes inaccurate or obsolete in any respect, it shall promptly
update such form or certification or notify Administrative Agent and Prologis of its legal inability to do so. For purposes of determining withholding Taxes imposed under FATCA, the Loan Parties and Administrative Agent shall treat (and the Lenders
hereby authorize Administrative Agent to treat) the Obligations as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i). 

Section 4.2 Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has
asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Eurodollar Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell or to take deposits Dollars in the applicable interbank market, then, on notice thereof by such Lender to Prologis through Administrative Agent, any obligation of such Lender to make,
continue or convert Loans to Eurodollar Loans shall be suspended until such Lender notifies Administrative Agent and Prologis that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, Prologis shall, upon
demand from such Lender (with a copy to Administrative Agent), convert all Eurodollar Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor or on such earlier date on which such Lender may not lawfully
continue to maintain such Eurodollar Loans. Upon any such conversion, Prologis shall also pay accrued interest on the amount so converted. 

Section 4.3 Inability to Determine Rates. If the Required Lenders determine that (a) deposits in Dollars are not being
offered to banks in the London interbank market for the amount and Interest Period for any Borrowing of Eurodollar Loans, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for a requested Interest Period or (c)
the Eurodollar Rate for any requested Interest Period does not adequately and fairly reflect the cost to such Lenders of funding their Eurodollar Loans for the requested Interest Period, Administrative Agent will promptly so notify Prologis and each
Lender. Thereafter, the obligation of Lenders to make or maintain Eurodollar Loans for the applicable Interest Period shall be suspended until Administrative Agent (upon the instruction of Required Lenders) revokes such notice. Upon receipt of such
notice, Prologis may (i) revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Loans or (ii) if Prologis elects not to revoke such request, will be deemed to have converted such request into a request
for a Borrowing of or conversion to Base Rate Loans. 
 Section 4.4 Increased Costs Generally. 

Section 4.4.1 Increased Costs. If any Change in Law shall: 

(a) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or participated in by, any Credit Party (except any reserve requirement contemplated by Section 4.4.4, other than as set forth below); 

  

					
	 		35		Prologis, L.P. Term Loan Agreement

 (b) subject any Credit Party to any tax of any kind whatsoever with respect to this Agreement or
any Loan made by it, or change the basis of taxation of payments to such Credit Party in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 4.1 and the imposition of, or any change in the rate of, any
Excluded Tax); or 
 (c) impose on any Credit Party or the London interbank market any other condition, cost or expense affecting this
Agreement or the Loan made by such Credit Party; 
 and the result of any of the foregoing shall be to increase the cost to such Credit Party of making,
continuing, converting to or maintaining any Loan (or of maintaining its obligation to make any Loan), or to reduce the amount of any sum received or receivable by such Credit Party hereunder (whether of principal, interest or any other amount),
then, upon request of such Credit Party, Prologis will pay to such Credit Party such additional amount or amounts as will compensate such Credit Party for such additional costs incurred or reduction suffered. 

Section 4.4.2 Capital Requirements. If any Credit Party determines that any Change in Law affecting such Credit Party or any
Lending Office of such Credit Party or such Credit Party’s holding company, if any, regarding capital requirements or liquidity has or would have the effect of reducing the rate of return on such Credit Party’s capital or on the capital of
such Credit Party’s holding company, if any, as a consequence of this Agreement, the Commitment of such Credit Party or the Loan made by such Credit Party to a level below that which such Credit Party or such Credit Party’s holding company
could have achieved but for such Change in Law (taking into consideration such Credit Party’s policies and the policies of such Credit Party’s holding company with respect to capital adequacy), then from time to time Prologis will pay to
such Credit Party such additional amount or amounts as will compensate such Credit Party or such Credit Party’s holding company for any such reduction suffered. 

Section 4.4.3 Certificates for Reimbursement. Any Credit Party requesting compensation pursuant to this Section 4.4
shall deliver to Prologis (with a copy to Administrative Agent) a certificate setting forth in reasonable detail the basis for such request and a calculation of the amount necessary to compensate such Credit Party or its holding company, as the case
may be, as specified in Section 4.4.1 or 4.4.2 above, and any such certificate shall be conclusive absent demonstrable error. Prologis shall pay such Credit Party the amount shown as due on any such certificate within 15 days
after receipt thereof. 
 Section 4.4.4 Additional Reserve Requirements. Prologis shall pay to each Lender, (a) as long as
such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurodollar funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid
principal amount of each Eurodollar Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent demonstrable error), and
(b) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the funding of the Eurodollar Loans, such
additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive absent demonstrable error), which in each case shall be 

  

					
	 		36		Prologis, L.P. Term Loan Agreement

 
due and payable on each date on which interest is payable on such Loan, provided Prologis shall have received at least 15 days’ prior notice (with a copy to Administrative Agent)
of such additional interest or costs from such Lender. If a Lender fails to give notice 15 days prior to the relevant Interest Payment Date, such additional interest or costs shall be due and payable 15 days from receipt of such notice.

 Section 4.4.5 Limitations on Lender Claims. Notwithstanding the foregoing provisions of this Section 4.4, no
Lender shall be entitled to compensation for any cost, increased costs or liability resulting from a failure by such Lender to comply with any request from or requirement of any central banking or financial regulatory authority (whether or not
having the force of law, but if not having the force of law being a request of a nature with which banks generally are expected or accustomed to comply). 

Section 4.5 Compensation for Losses. Prologis agrees that it will, from time to time, compensate each Lender for and hold each
Lender harmless from any loss, cost or expense incurred by such Lender as a result of: 
 (a) any continuation, conversion, payment or
prepayment of any Eurodollar Loan of such Lender on a day other than the last day of the Interest Period for such Eurodollar Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); 

(b) any failure by Prologis (for a reason other than the failure of such Lender to make its Loan) to borrow, continue, convert prepay any
Eurodollar Loan of such Lender on the date or in the amount notified by Prologis; 
 (c) any assignment of a Eurodollar Loan of such Lender
on a day other than the last day of an Interest Period therefor as a result of a request by Prologis pursuant to Section 11.12; 
 including any
loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Eurodollar Loan or from fees payable to terminate the deposits from which such funds were obtained (but in each case excluding any loss of
anticipated profits). 
 For purposes of calculating amounts payable by Prologis to a Lender under this Section 4.5,
(A) each Lender shall be deemed to have funded each Eurodollar Loan made by it at the Eurodollar Rate for such Eurodollar Loan by a matching deposit or other borrowing in the offshore interbank market for a comparable amount and for a
comparable period, whether or not such Eurodollar Loan was in fact so funded; and (B) the losses and expenses of any Lender resulting from any event described in clause (a) above, any failure by Prologis to borrow or continue a
Eurodollar Loan as contemplated by clause (b) above or any assignment pursuant to clause (c) above shall not exceed the excess, if any, of (i) the amount of interest that would have accrued on the principal
amount of the applicable Eurodollar Loan had such event not occurred, at the Eurodollar Rate applicable (or that would have been applicable) to such Eurodollar Loan, for the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such
period at the interest rate that such Lender would bid, at the commencement of such period, for deposits in Dollars of a comparable amount and period from other banks in the London interbank eurodollar market. 

  

					
	 		37		Prologis, L.P. Term Loan Agreement

 Any Lender requesting compensation pursuant to this Section 4.5 shall deliver to Prologis (with a
copy to Administrative Agent) a certificate setting forth in reasonable detail a calculation of the amount demanded and any such certificate shall be conclusive absent demonstrable error. Prologis shall pay the applicable Lender the amount shown as
due on any such certificate within 15 days after receipt thereof. 
 Section 4.6 Mitigation Obligations; Replacement of Lenders.

 Section 4.6.1 Designation of a Different Lending Office. If any Credit Party requests compensation under
Section 4.4, or Prologis is required to pay any additional amount to any Credit Party or any Governmental Authority for the account of any Credit Party pursuant to Section 4.1, or if any Credit Party gives a notice pursuant
to Section 4.2, then such Credit Party shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the reasonable judgment of such Credit Party, such designation or assignment (a) would eliminate or reduce amounts payable pursuant to Section 4.1 or 4.4, as the case may be, in the future, or eliminate
the need for the notice pursuant to Section 4.2, and (b) in each case, would not subject such Credit Party to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Credit Party. Prologis hereby agrees
to pay all reasonable costs and expenses incurred by any Credit Party in connection with any such designation or assignment. 

Section 4.6.2 Delay in Requests. Failure or delay on the part of any Credit Party to demand compensation pursuant to
Section 4.1, 4.4 or 4.5 shall not constitute a waiver of such Credit Party’s right to demand such compensation; provided that Prologis shall not be required to compensate a Credit Party pursuant to any such
Section for any Indemnified Taxes, Other Taxes, increased cost, reduction in return, funding loss or other amount (any of the foregoing, a “Compensation Amount”) incurred or suffered more than six months prior to the date that
such Credit Party notified Prologis of the Change in Law or other event giving rise to such Compensation Amount and of such Credit Party’s intention to claim compensation therefor (except that, if the Change in Law or other event giving rise to
such Compensation Amount is retroactive, then the six month period referred to above shall be extended to include the period of retroactive effect thereof). 

Section 4.6.3 Replacement of Lenders. If any Lender requests compensation under Section 4.4, or if Prologis is
required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.1, Prologis may replace such Lender in accordance with Section 11.12. 

Section 4.7 Survival. All obligations under this Article IV shall survive termination of this Agreement and repayment of
all other Obligations hereunder. 

  

					
	 		38		Prologis, L.P. Term Loan Agreement

 ARTICLE V 

CONDITIONS PRECEDENT 
 The
obligation of each Lender to make its Loan is subject to satisfaction or waiver of the following conditions precedent: 

Section 5.1 Documents. Administrative Agent’s receipt (which may be by facsimile or electronic mail, followed promptly by
originals) of the following, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Funding Date (or, in the case of certificates of governmental officials, a recent date before the Funding Date) and each in form
and substance reasonably satisfactory to Administrative Agent and each Lender: 
 (a) executed counterparts of this Agreement; 

(b) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan
Party as Administrative Agent may reasonably require evidencing the identity, authority and capacity of the Responsible Officers thereof authorized to execute and deliver this Agreement; 

(c) such documents and certifications as Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or
formed in the jurisdiction of its organization or formation; 
 (d) a favorable opinion of Mayer Brown LLP, special counsel to the Loan
Parties, addressed to Administrative Agent and each Lender, as to such matters concerning the Loan Parties and this Agreement as Administrative Agent may reasonably request; 

(e) a certificate of a Responsible Officer of each Loan Party either (i) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by such Loan Party, and the validity against such Loan Party, of this Agreement, each of which consents, licenses and approvals shall be in full force and effect, or
(ii) stating that no such consents, licenses or approvals are so required; 
 (f) a certificate signed by a Responsible Officer of
Prologis certifying (i) that the conditions specified in Sections 5.6 and 5.7 have been satisfied; (ii) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or
would be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect; and (iii) the current Moody’s Rating, S&P Rating and Fitch Rating; and 

(g) such other assurances, certificates, documents, consents or opinions as Administrative Agent or Required Lenders reasonably may require.

 Section 5.2 Fees. Any fees required to be paid on or before the Funding Date shall have been paid. 

Section 5.3 Expenses. Unless waived by Administrative Agent, Prologis shall have paid all reasonable and documented fees,
charges and disbursements of counsel to Administrative Agent to the extent invoiced prior to the Funding Date. 

  

					
	 		39		Prologis, L.P. Term Loan Agreement

 Section 5.4 Bridge Agreement. Administrative Agent shall have received
evidence in form and substance reasonably satisfactory to Administrative Agent that all commitments of the lenders under the Bridge Commitment Letter shall have been terminated and all outstanding obligations owed with respect thereto, if any, shall
be paid in full. 
 Section 5.5 Funding Deadline. The Funding Date shall have occurred on or before June 30, 2015.

 Section 5.6 Representations and Warranties. The representations and warranties of each Loan Party contained in
Article VI or in any document furnished at any time under or in connection herewith, shall be true and correct in all material respects on and as of the Funding Date, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date. 

Section 5.7 Default. No Default shall exist or would result from the making of the Loans or the application of the proceeds
thereof. 
 Section 5.8 Loan Notice. Administrative Agent shall have received a Loan Notice in accordance with the
requirements hereof and, if applicable, an executed funding indemnity letter reasonably acceptable to Administrative Agent. 
 Without limiting the
generality of the provisions of Section 10.4, for purposes of determining compliance with the conditions specified in this Article V, each Lender that has signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Administrative Agent shall have received notice from such Lender prior to the
Funding Date specifying its objection thereto. 
 ARTICLE VI 

REPRESENTATIONS AND WARRANTIES 
 Each Loan
Party represents and warrants to the Credit Parties that: 
 Section 6.1 Existence, Qualification and Power; Compliance with
Laws. Such Loan Party (a) is duly organized or formed, validly existing and, to the extent applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority
and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party
and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case
referred to in clause (b)(i) or (c) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. 

Section 6.2 Authorization; No Contravention. The execution, delivery and performance by such Loan Party of each Loan Document to
which it is a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not: (a) contravene the terms of such Person’s Organization Documents; (b) conflict with or result in

  

					
	 		40		Prologis, L.P. Term Loan Agreement

 
any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such
Person or the properties of such Person or any of its Consolidated Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or
(c) violate any Law. Each Company is in compliance with all Contractual Obligations referred to in clause (b)(i), except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. 

Section 6.3 Governmental Authorization; Other Consents. No approval, consent, exemption, authorization or other action by, or
notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, such Loan Party of this Agreement or any other Loan Document
(excluding approvals, consents, exemptions and authorizations that have been obtained and are in full force and effect and those that, if not made or obtained, would not (a) materially and adversely affect the validity or enforceability of any
Loan Document or (b) result in a Default). 
 Section 6.4 Binding Effect. This Agreement has been duly executed and
delivered by each Loan Party. This Agreement constitutes a legal, valid and binding obligation of each Loan Party, enforceable against such Loan Party that is party thereto in accordance with its terms, subject to applicable Debtor Relief Laws and
general principles of equity. 
 Section 6.5 Financial Statements. 

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; (ii) fairly present the consolidated financial condition of General Partner as of the date thereof and its consolidated results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show (either in the text thereof or the notes thereto) all material Liabilities of General Partner and its Consolidated
Subsidiaries as of the date thereof. 
 (b) The unaudited consolidated balance sheet of General Partner and its Consolidated Subsidiaries
dated March 31, 2014, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the consolidated financial condition of General Partner as of such date and its consolidated results of operations for the period
covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments. 

Section 6.6 Litigation. As of the Funding Date, except as specifically disclosed in Schedule 6.6, there are no
actions, suits, proceedings, claims or disputes pending or, to the knowledge of any Loan Party after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against
any Company or against any Company’s properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect. 

  

					
	 		41		Prologis, L.P. Term Loan Agreement

 Section 6.7 No Default. No Company is in default under or with respect to any
Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by
this Agreement or any other Loan Document. 
 Section 6.8 Ownership of Property. Each Company has good record and marketable
title in fee simple to, or valid trust beneficiary interests or leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. 
 Section 6.9 Environmental Compliance. Each Company conducts in the
ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential Liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a
result thereof the Companies have reasonably concluded that, except as specifically disclosed in Schedule 6.9, such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. 
 Section 6.10 Taxes. Each Company has filed all Federal and other material state, provincial, and other Tax
returns and reports required to be filed, and has paid, collected, withheld and remitted all Federal and other material state, provincial, and other material Taxes, assessments, fees and other governmental charges levied or imposed upon it or its
properties, income or assets otherwise due and payable, or which it has been required to collect or withhold and remit, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP or such Taxes, the failure to make payment of which when due could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There is no proposed tax
assessment against any Company that would, if made, have a Material Adverse Effect. 
 Section 6.11 Pension Law Compliance. 

(a) Each Plan is in compliance in all material respects with the applicable provisions of applicable Laws. Each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination or opinion letter from the IRS, or such Plan is entitled to rely on an advisory or opinion letter issued with respect to an IRS approved master and prototype or
volume submitter plan, or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of Prologis, nothing has occurred which would prevent, or cause the loss of, such qualification.
Prologis and each ERISA Affiliate have made all required contributions to each Pension Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of
the Code has been made with respect to any such Pension Plan. 

  

					
	 		42		Prologis, L.P. Term Loan Agreement

 (b) There are no pending or, to the best knowledge of either Loan Party, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. Neither Loan Party has knowledge of any prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) or violation of the fiduciary responsibility rules (within the meaning of Section 404 or 405 of ERISA) with respect to any Plan that has resulted or could reasonably be expected to
result in a Material Adverse Effect. 
 (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) neither Prologis
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any Liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iii) neither Prologis
nor any ERISA Affiliate has incurred any unsatisfied, or reasonably expects to incur any, Liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such Liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither Prologis nor any ERISA Affiliate has engaged in a transaction that reasonably could be expected to be subject to Sections 4069 or 4212(c) of ERISA. 

Section 6.12 Margin Regulations; Investment Company Act. 

(a) No Loan Party is engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock. 

(b) No Loan Party is or is required to be registered as an “investment company” under the Investment Company Act of 1940. 

Section 6.13 Disclosure. Each Loan Party has disclosed to the Credit Parties all agreements, instruments and corporate or other
restrictions to which any Company is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any Loan Party to any Credit Party in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading in any material respect; provided that, with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to
be reasonable at the time. 
 Section 6.14 Compliance with Laws. Each Company is in compliance in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith
by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the 

  

					
	 		43		Prologis, L.P. Term Loan Agreement

 
aggregate, could not reasonably be expected to have a Material Adverse Effect. Without limiting the foregoing, each Company has instituted and maintained policies and procedures designed to
promote and achieve compliance with applicable anti-corruption Laws. 
 Section 6.15 Solvency. Each Loan Party is, and after
giving effect to all Obligations hereunder will be, Solvent. 
 Section 6.16 Plan Assets. The assets of each Company are not
“plan assets” as defined in 29 C.F.R. § 2510.3-101(a)(1), as modified by Section 3(42) of ERISA. 

Section 6.17 REIT Status. General Partner is qualified as a REIT. 

ARTICLE VII 
 AFFIRMATIVE
COVENANTS 
 So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation (other than Surviving Obligations) shall remain
unpaid or unsatisfied: 
 Section 7.1 Financial Statements. General Partner shall deliver, or cause to be delivered, to
Administrative Agent, in form and detail satisfactory to Administrative Agent: 
 (a) as soon as available, but in any event within 90 days
after the end of each fiscal year of General Partner and Prologis (commencing with the fiscal year ended December 31, 2015), a consolidated balance sheet of each of (i) General Partner and its Consolidated Subsidiaries and
(ii) Prologis and its Consolidated Subsidiaries, in each case as at the end of such fiscal year, and the related consolidated statements of income or operations, equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable detail, audited and accompanied by a report and opinion of a Registered Public Accounting Firm of nationally recognized standing reasonably acceptable to Administrative
Agent, which report and opinion shall be prepared in accordance with generally accepted auditing standards and applicable Securities Laws; and 

(b) as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of
General Partner and Prologis (commencing with the fiscal quarter ended June 30, 2015), a consolidated balance sheet of each of (i) General Partner and its Consolidated Subsidiaries and (ii) Prologis and its Consolidated Subsidiaries,
in each case as at the end of such fiscal quarter, and the related consolidated statements of income or operations for such fiscal quarter and for the portion of the fiscal year then ended, and equity and cash flows for the portion of the fiscal
year then ended, setting forth in each case in comparative form a balance sheet as of the end of the previous fiscal year and statements of income or operation and cash flows for the corresponding portion of the previous fiscal year, all in
reasonable detail, certified by a Responsible Officer of Prologis as fairly presenting the financial condition, results of operations, equity and cash flows of the Companies, subject only to normal year-end audit adjustments and the absence of
footnotes. 
 As to any information contained in materials furnished pursuant to Section 7.2(d), General Partner shall not be separately
required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of General Partner to furnish the information and materials described in clauses
(a) and (b) above at the times specified therein. 

  

					
	 		44		Prologis, L.P. Term Loan Agreement

 Section 7.2 Certificates; Other Information. General Partner shall deliver, or cause
to be delivered, to Administrative Agent, in form and detail satisfactory to Administrative Agent: 
 (a) concurrently with the delivery of
each set of financial statements referred to in Section 7.1(a), an opinion from a Registered Public Accounting Firm of nationally recognized standing to the effect that such financial statements were prepared in accordance with GAAP and
present fairly, in all material respects, the consolidated financial condition of General Partner and its Consolidated Subsidiaries, or Prologis and its Consolidated Subsidiaries, as applicable, as of the date thereof and the consolidated results of
operations of General Partner and its Consolidated Subsidiaries, or Prologis and its Consolidated Subsidiaries, as applicable, for the fiscal year then ended; 

(b) concurrently with the delivery of each set of financial statements referred to in Sections 7.1(a) and (b), a duly completed
Compliance Certificate signed by a Responsible Officer of General Partner; 
 (c) promptly after any request by Administrative Agent, copies
of any detailed audit reports, management letters or recommendations submitted to the board of directors of General Partner by independent accountants in connection with the accounts or books of any Company, or any audit of any Company; 

(d) promptly after filing, true, correct, and complete copies of all material reports or filings filed by or on behalf of any Company with any
Governmental Authority (including copies of each Form 10-K, Form 10-Q, and Form S-8 filed by or on behalf of any Company with the SEC); and 

(e) promptly, such additional information regarding the business, financial or corporate affairs of any Company, or compliance with the terms
of the Loan Documents, as Administrative Agent may from time to time reasonably request. 
 Documents required to be delivered pursuant to
Section 7.1(a) or (b) or Section 7.2(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which a Company posts such documents, or provides a link thereto, on its website on the internet at the website address listed on Schedule 11.2; or (ii) on which such documents are posted on its behalf
on an internet or intranet website, if any, to which each Credit Party has access (whether a commercial, third-party website or whether sponsored by Administrative Agent); provided that a Company shall notify Administrative Agent (by
facsimile or electronic mail) of the posting of any such documents and, if requested, provide to Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Except for Compliance Certificates,
Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by any Company with any such request for delivery,
and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents. 

  

					
	 		45		Prologis, L.P. Term Loan Agreement

 Each Loan Party hereby acknowledges that (a) Administrative Agent and/or Arranger will make available to
each Lender materials and/or information provided by or on behalf of the Loan Parties hereunder (collectively, “Borrower Materials”) by posting Borrower Materials on IntraLinks, SyndTrak or another similar electronic system (the
“Platform”) and (b) certain Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Loan Parties or their respective securities)
(each, a “Public Lender”). Each Loan Party hereby agrees that: (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” Loan Parties shall be deemed to have authorized each Credit Party to treat such Borrower Materials
as not containing any material non-public information with respect to General Partner and its Affiliates or their respective securities for purposes of United States Federal and state securities laws (provided that to the extent such Borrower
Materials constitute Information, they shall be treated as set forth in Section 11.7); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public
Investor;” and (z) Administrative Agent and Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public
Investor.” Notwithstanding the foregoing, the Loan Parties shall not have any obligation to mark any Borrower Materials “PUBLIC”. 

Section 7.3 Notices. General Partner shall promptly notify, or cause a Loan Party to notify, Administrative Agent: 

(a) of the occurrence of any Default; 

(b) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including: (i) breach or
non-performance of, or any default under, a Contractual Obligation of any Company; (ii) any dispute, litigation, investigation, proceeding or suspension between any Company and any Governmental Authority; or (iii) the commencement of, or
any material development in, any litigation or proceeding affecting any Company, including pursuant to any applicable Environmental Laws; 

(c) of the occurrence of any ERISA Event; 

(d) of any material change in accounting policies or financial reporting practices by any Company (except to the extent disclosed in financial
statements provided pursuant to Section 7.1, including the footnotes to such financial statements); and 
 (e) promptly upon
receipt by a Loan Party of notice thereof, and in any event within five Business Days after any change in the Moody’s Rating, the S&P Rating or the Fitch Rating, notice of such change. 

Each notice pursuant to this Section 7.3 shall be accompanied by a statement of a Responsible Officer of the applicable Loan Party setting forth
details of the occurrence referred to therein and stating what action such Loan Party has taken and proposes to take with respect thereto. Each notice pursuant to Section 7.3(a) shall describe with particularity any provision of this
Agreement or any other Loan Document that has been breached. Administrative Agent shall promptly notify Lenders of any notice received under this Section 7.3. 

  

					
	 		46		Prologis, L.P. Term Loan Agreement

 Section 7.4 Payment of Obligations. General Partner shall, and shall cause each other
Company to, pay and discharge as the same shall become due and payable, all its Liabilities (including tax Liabilities), except to the extent (a) the same are being contested in good faith by appropriate proceedings diligently conducted and
adequate reserves in accordance with GAAP are being maintained therefor or (b) the failure to pay and discharge such Liabilities could not reasonably be expected to result in a Material Adverse Effect. 

Section 7.5 Preservation of Existence, Etc. General Partner shall, and shall cause each other Company to: (a) preserve, renew
and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 8.2; (b) take all reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect. 

Section 7.6 Maintenance of Properties. General Partner shall, and shall cause each other Company to: (a) maintain, preserve
and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals and replacements
thereof, in each case except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. 

Section 7.7 Maintenance of Insurance. General Partner shall, and shall cause each other Company to, maintain insurance (giving
effect to reasonable and prudent self-insurance) according to reasonable and prudent business practices. 
 Section 7.8 Compliance
with Laws. General Partner shall, and shall cause each other Company to, comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in
such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect. Without limiting the foregoing, each Company shall maintain policies and procedures designed to promote and achieve compliance with applicable anti-corruption Laws. 

Section 7.9 Books and Records. General Partner shall, and shall cause each other Company to, maintain proper books of record and
account, in which true and correct entries are made that are sufficient to prepare General Partner’s and Prologis’ financial statements in conformity with GAAP consistently applied. 

Section 7.10 Inspection Rights. Upon reasonable request, and subject to Section 11.7, General Partner shall, and shall
cause each other Company to, allow Administrative Agent (or its 

  

					
	 		47		Prologis, L.P. Term Loan Agreement

 
Related Parties who may be accompanied by a Related Party of one or more Lenders) to inspect any of its properties, to review reports, files, and other records and to make and take away copies
thereof, and to discuss (provided that General Partner or the applicable other Company is given the opportunity to be present for such discussions) any of its affairs, conditions, and finances with its directors, officers, employees or
representatives from time to time upon reasonable notice, during normal business hours; provided that unless a Default has occurred and is continuing and except in the case of Administrative Agent and its Related Parties, such inspections
shall be at the applicable Credit Party’s sole cost and expense. 
 Section 7.11 Use of Proceeds. Prologis shall use the
proceeds of the Loans for general corporate purposes not in contravention of any Law or of any Loan Document. 
 Section 7.12 REIT
Status. General Partner shall, at all times, maintain its status as a REIT. 
 Section 7.13 Claims Pari Passu. Each Loan
Party shall ensure that at all times the claims of the Credit Parties under the Loan Documents rank at least pari passu with the claims of all its unsecured and unsubordinated creditors other than those claims that are preferred by Debtor
Relief Laws. 
 ARTICLE VIII 

NEGATIVE COVENANTS 
 So long as any Lender
shall have any Commitment hereunder or any Loan or other Obligation (other than Surviving Obligations) shall remain unpaid or unsatisfied: 

Section 8.1 Secured Indebtedness. General Partner shall not permit the ratio (expressed as a percentage) of (a) the aggregate
amount of all Secured Debt of the Companies outstanding as of the last day of any fiscal quarter, to (b) Total Asset Value as of such date, to exceed 40%. 

Section 8.2 Fundamental Changes. General Partner shall not, and shall not permit any other Company to, merge, dissolve, liquidate,
consolidate with or into another Person, except that, so long as no Default exists or would result therefrom: 
 (a) any Consolidated
Subsidiary may merge with Prologis, provided that Prologis shall be the continuing or surviving Person; 
 (b) any Consolidated
Subsidiary (other than Prologis) may merge with any one or more other Consolidated Subsidiaries (other than Prologis); 
 (c) any Company
(other than a Loan Party) may be voluntarily dissolved or liquidated under the laws of its jurisdiction of organization (excluding any Debtor Relief Law); and 

(d) any Company may merge, dissolve, liquidate or consolidate with or into another Person in connection with any transaction designed to
change the corporate, partnership, limited liability company or other structure of such entity, or otherwise change its corporate or other form, so long as (i) the succeeding or remaining entity assumes all of the assets and liabilities of such
Person and (ii) no Credit Party is adversely affected thereby. 

  

					
	 		48		Prologis, L.P. Term Loan Agreement

 Section 8.3 Restricted Payments. General Partner shall not, and shall not permit any
other Company to, declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, if an Event of Default pursuant to Section 9.1.1 exists, except that: 

(a) any Consolidated Subsidiary may at any time make Restricted Payments to any other Company and, solely to the extent distributions to other
holders of its Equity Interests are required by its Organization Documents, to such other holders of Equity Interests; 
 (b) any Company
may at any time declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Company; 

(c) any Company may at any time purchase, redeem or otherwise acquire Equity Interests issued by it with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common Equity Interests; 
 (d) Prologis may at any time pay cash
dividends and make other cash distributions to General Partner and, to the extent corresponding distributions to other holders of its Equity Interests are required by its Organization Documents, to such other holders of Equity Interests, and General
Partner may at any time pay cash dividends and make other cash distributions to the holders of its Equity Interests, in each case, in an amount not to exceed in the aggregate the greater of (i) 95% of the aggregate, cumulative “Funds from
Operations” (excluding non- cash impairment charges, write-downs or losses) of Prologis as reported to its shareholders in either the annual report of Prologis filed by or on behalf of Prologis with the SEC on a Form 10-K or any quarterly
investment package prepared for the holders of its Equity Interests after December 31, 2013, and (ii) the amount of Restricted Payments required to be paid in order for General Partner to eliminate its REIT taxable income and/or to
maintain its status as a REIT; and 
 (e) General Partner and any Company may at any time make non-cash Restricted Payments in connection
with employee, trustee and director stock option plans or similar employee, trustee and director incentive arrangements. 

Section 8.4 Change in Nature of Business. General Partner shall not, and shall not permit any other Company to, engage in any
material line of business substantially different from those lines of business conducted by the Companies on the date hereof or any business substantially related or incidental thereto. 

Section 8.5 Transactions with Affiliates. General Partner shall not, and shall not permit any other Company to, enter into any
transaction of any kind with any Affiliate of General Partner, whether or not in the ordinary course of business; provided that the foregoing restriction shall not apply to (a) transactions with existing shareholders of Consolidated
Subsidiaries and Unconsolidated Affiliates, (b) transactions in the ordinary course of business (i) on fair and reasonable terms substantially as favorable to such Company as would be obtainable by such Company at the time in a comparable
arm’s length transaction with a Person 

  

					
	 		49		Prologis, L.P. Term Loan Agreement

 
other than an Affiliate or (ii) that comply with the requirements of the North America Security Administrators Association’s Statement of Policy of Real Estate Investment Trusts,
(c) payments to or from such Affiliates under leases of commercial space on market terms, (d) payment of fees under asset or property management agreements under terms and conditions available from qualified management companies,
(e) intercompany Liabilities and other Investments between any Company and its Consolidated Subsidiaries and Unconsolidated Affiliates otherwise permitted pursuant to this Agreement, (f) transactions between Companies, and
(g) transactions otherwise permitted hereunder. 
 Section 8.6 Negative Pledge Agreements; Burdensome Agreements. 

(a) General Partner shall not, and shall not permit any other Company to, grant a Lien (other than Permitted Liens) to any Person on the Equity
Interests of any Company if the Unencumbered NOI of such Company is used in the calculation of Unencumbered Debt Service Coverage Ratio. 

(b) General Partner shall not, and shall not permit any other Company to, enter into any negative pledge or other agreement
with any other Person such that any Company shall be prohibited from granting to Administrative Agent, for the benefit of the Credit Parties, a first-priority Lien on the Equity Interests of any Company (other than General Partner) if the
Unencumbered NOI of such Company is used in the calculation of Unencumbered Debt Service Coverage Ratio; provided that the provisions of Section 1013 of the Existing Indenture and any similar requirement for the grant of an equal and
ratable lien in connection with a pledge of any property or asset to Administrative Agent, shall not constitute a negative pledge or any other agreement that violates this Section 8.6(b). 

(c) General Partner shall not, and shall not permit any other Company to, enter into any Contractual Obligation (other than this Agreement,
any other Loan Document or any other agreement or document evidencing or governing Indebtedness of a Consolidated Subsidiary) that limits the ability of any Consolidated Subsidiary to make Restricted Payments to any Company. 

Section 8.7 Use of Proceeds. Prologis shall not use the proceeds of the Loans, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose. 
 Section 8.8 Financial Covenants. 

Section 8.8.1 Consolidated Leverage Ratio. General Partner shall not permit the Consolidated Leverage Ratio, as of the last day of
any fiscal quarter, to exceed 0.60 to 1.0; provided that as of the last day of the four consecutive fiscal quarters immediately following any Material Acquisition, such ratio may exceed 0.60 to 1.0 so long as it does not exceed 0.65 to 1.0.

 Section 8.8.2 Fixed Charge Coverage Ratio. General Partner shall not permit the Fixed Charge Coverage Ratio, as of the last
day of any fiscal quarter, to be less than 1.50 to 1.0. 

  

					
	 		50		Prologis, L.P. Term Loan Agreement

 Section 8.8.3 Unencumbered Debt Service Coverage Ratio. General Partner shall not
permit the Unencumbered Debt Service Coverage Ratio, as of the last day of any fiscal quarter, to be less than 1.50 to 1.0. 

Section 8.9 Anti-Corruption Laws. Prologis shall not, directly or indirectly, use the proceeds of any Loan for any purpose that
would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, or other similar legislation in other jurisdictions. 

ARTICLE IX 
 EVENTS OF
DEFAULT AND REMEDIES 
 Section 9.1 Events of Default. Any of the following shall constitute an “Event of
Default”: 
 Section 9.1.1 Non-Payment. Prologis fails to pay (a) when and as required to be paid herein, any
amount of principal of any Loan, or (b) within three Business Days after the same becomes due, any interest on any Loan or any fee due hereunder, or (c) within five days after the same becomes due, any other amount payable hereunder or
under any other Loan Document. 
 Section 9.1.2 Specific Covenants. Any Loan Party fails to perform or observe any term,
covenant or agreement contained in any of Section 7.10, 8.1, 8.3 or 8.8. 
 Section 9.1.3 Other
Defaults. Either Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 9.1.1 or 9.1.2 above) contained in any Loan Document on its part to be performed or observed and such failure
continues for 30 days after the first to occur of (a) a Responsible Officer of a Loan Party obtaining knowledge of such failure or (b) General Partner’s receipt of notice from Administrative Agent of such failure; provided that
if such failure is of such a nature that can be cured but cannot with reasonable effort be completely cured within 30 days, then such 30 day period shall be extended for such additional period of time (not exceeding 90 additional days) as may be
reasonably necessary to cure such failure so long as the applicable Loan Party commences such cure within such 30 day period and diligently prosecutes same until completion. 

Section 9.1.4 Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made
by or on behalf of either Loan Party herein, in any other Loan Document or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made and, with respect to any
representation, warranty, certification or statement not known by such Loan Party at the time made or deemed made to be incorrect, the defect causing such representation or warranty to be incorrect when made (or deemed made) is not removed within 30
days after the first to occur of (a) a Responsible Officer of a Loan Party obtaining knowledge thereof or (b) written notice thereof from Administrative Agent to General Partner. 

Section 9.1.5 Cross-Default. 

(a) Any Company fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) of
any Recourse Debt (other 

  

					
	 		51		Prologis, L.P. Term Loan Agreement

 
than Indebtedness hereunder or under any other Loan Document and Indebtedness under Swap Contracts) having an aggregate principal amount (including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $100,000,000; or 
 (b) Any Company fails to observe or perform any other
agreement or condition relating to or in respect of any Recourse Debt or contained in any instrument or agreement evidencing, securing or relating to the same, or any other event (excluding voluntary actions by any applicable Company) occurs, the
effect of which default or other event is to cause Recourse Debt having an aggregate principal amount (including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $100,000,000, to be demanded or to
become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Recourse Debt to be made, prior to its stated maturity, or such Recourse Debt to become payable or
cash collateral in respect thereof to be demanded; or 
 (c) There occurs under any Swap Contract that constitutes Recourse Debt an Early
Termination Date (as defined in such Swap Contract) resulting from (i) any event of default under such Swap Contract as to which any Company is the Defaulting Party (as defined in such Swap Contract) or (ii) any Termination Event (as so
defined) under such Swap Contract as to which any Company is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by such Company as a result thereof is greater than $100,000,000 and such amount is not paid when
due. 
 Section 9.1.6 Insolvency Proceedings, Etc. Any Company institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any
material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for
60 calendar days; or any proceeding under any Debtor Relief Law relating to any Company or to all or any material part of its property is instituted without the consent of such Company and continues undismissed or unstayed for 60 calendar days, or
an order for relief is entered in any such proceeding. 
 Section 9.1.7 Inability to Pay Debts; Attachment. (a) Any Company
becomes unable (shiharai funou) or admits in writing its inability (shiharai teishi) or fails generally to pay its debts as they become due or (b) any writ or warrant of attachment or execution or similar process is issued or levied against all
or any material part of the property of any Company and is not released, vacated or fully bonded within 30 days after its issue or levy. 

Section 9.1.8 Judgments. There is entered against any Company (a) a final judgment or order for the payment of money in an
aggregate amount exceeding $100,000,000 (to the extent not covered by insurance as to which the insurer does not dispute coverage) or (b) any one or more non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case, (i) enforcement proceedings are commenced by any creditor upon such judgment or order or (ii) there is a period of ten consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect. 

  

					
	 		52		Prologis, L.P. Term Loan Agreement

 Section 9.1.9 ERISA. (a) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result in Liability of any Company under Title IV of ERISA to such Pension Plan, such Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000, or
(b) General Partner or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal Liability under Section 4201 of ERISA under a Multiemployer Plan
in an aggregate amount in excess of $5,000,000. 
 Section 9.1.10 Invalidity of Loan Documents. Any provision of any Loan
Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect (unless such cessation would
not affect the obligations of any applicable Loan Party or the rights and remedies of any Credit Party, in each case, in any material respect); or any Loan Party contests in any manner the validity or enforceability of any provision of any Loan
Document; or any Loan Party denies that it has any or further Liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document. 

Section 9.1.11 Change of Control. A Change of Control occurs. 

Section 9.1.12 Plan Assets. The assets of any Company at any time constitute “plan assets” as defined in 29 C.F.R. § 2510.3-101(a)(1), as modified by Section 3(42) of ERISA. 
 Section 9.2 Remedies
Upon Event of Default. If any Event of Default occurs and is continuing, Administrative Agent shall, at the request of, or may, with the consent of, Required Lenders, take any of the following actions: 

(a) declare the commitment of each Lender to make Loans to be terminated, whereupon such commitments and obligation shall be terminated; 

(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by each Loan Party; and 

(c) exercise on behalf of itself and each Lender all rights and remedies available to it and Lenders under the Loan Documents; 

provided that upon the occurrence of an actual or deemed entry of an order for relief with respect to Prologis under the United States Bankruptcy Code,
the obligation of each Lender to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without
further act of Administrative Agent or any Lender. 

  

					
	 		53		Prologis, L.P. Term Loan Agreement

 ARTICLE X 

ADMINISTRATIVE AGENT 

Section 10.1 Appointment and Authority. Each Lender hereby irrevocably appoints Bank of America to act on its behalf as
Administrative Agent hereunder and under the other Loan Documents and authorizes Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of Administrative Agent and Lenders, and no Loan Party shall have rights as a third party beneficiary of any of such
provisions. 
 Section 10.2 Rights as a Lender. Any Person serving as Administrative Agent shall have the same rights and powers
in its capacity as a Lender (if applicable) as any other Lender and may exercise the same as though it were not Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or the context
otherwise requires, include the Person serving as Administrative Agent hereunder in its individual capacity. Bank of America (or any successor Administrative Agent hereunder) and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in any kind of business with Prologis and its Affiliates as if Bank of America (or such successor) were not Administrative Agent hereunder and without any duty to account
therefor to Lenders. 
 Section 10.3 Exculpatory Provisions. Administrative Agent shall have no duties or obligations except
those expressly set forth herein and in the other Loan Documents and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, Administrative Agent: 

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing; 

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that Administrative Agent is required to exercise as directed in writing by Required Lenders (or such other number, percentage or group of Lenders as shall be expressly provided for herein
or in the other Loan Documents), provided that Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Administrative Agent to liability or that is contrary to any Loan
Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in
violation of any Debtor Relief Law; and 
 (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any
duty to disclose, or be liable for failure to disclose, any information relating to Prologis or any of its Affiliates that is communicated to or obtained by Administrative Agent or any of its Affiliates. 

  

					
	 		54		Prologis, L.P. Term Loan Agreement

 Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at
the request of Required Lenders (or such other number, percentage or group of Lenders as shall be necessary, or as Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.1
and 9.2) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. Administrative Agent shall not be deemed to have knowledge of any
Default unless and until notice describing such Default is given to Administrative Agent by a Loan Party or a Lender. 
 Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (1) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document (other than its own statements, warranties and representations),
(2) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (3) the performance or observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (4) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (5) the satisfaction of
any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent. 

Section 10.4 Reliance by Administrative Agent. Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, internet or intranet website posting or other distribution) believed by it to be genuine and
to have been signed, sent or otherwise authenticated by the proper Person. Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, Administrative Agent may presume that such condition is satisfactory
to such Lender unless Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. Administrative Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent
accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. 

Section 10.5 Delegation of Duties. Administrative Agent may perform any of its duties and exercise its rights and powers hereunder
or under any other Loan Document by or through any one or more sub-agents appointed by Administrative Agent. Administrative Agent and any such sub-agent may perform any of its duties and exercise its rights and powers by or through its Related
Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative Agent. Administrative Agent shall not be responsible to any Credit Party for the negligence or misconduct of any sub-agent except to the extent that a court of competent
jurisdiction determines in a final and non appealable judgment that such Agent acted with gross negligence or willful misconduct in the selection of such sub-agent. 

  

					
	 		55		Prologis, L.P. Term Loan Agreement

 Section 10.6 Resignation of Administrative Agent. Administrative Agent may at any
time give notice of its resignation to Lenders and Prologis. Upon receipt of any such notice of resignation, Required Lenders shall have the right, in consultation with Prologis, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of a bank with an office in the United States. If no such successor shall have been so appointed by Required Lenders and shall have accepted such appointment within 30 days after retiring Administrative Agent
gives notice of its resignation, then retiring Administrative Agent may, on behalf of Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if Administrative Agent shall notify Prologis
and Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by Administrative Agent on behalf of Lenders under the Loan Documents, the retiring Administrative Agent shall continue to hold such
collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through Administrative Agent shall instead be made by or to each Lender
directly, until such time as Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder and under the other
Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by Prologis to a successor Administrative Agent shall be the same as (but without duplication with) those payable to its predecessor unless
otherwise agreed between Prologis and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 11.4 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

 Section 10.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender acknowledges that it has, independently and
without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. 

Section 10.8 No Other Duties, Etc. Anything herein to the contrary notwithstanding, no Person named on the cover page hereof or
elsewhere herein as Syndication Agent, a Lead Arranger or a Book Runner shall have any powers, duties or responsibilities under this Agreement or any other Loan Document, except, if applicable, in its capacity as a Lender hereunder. 

  

					
	 		56		Prologis, L.P. Term Loan Agreement

 Section 10.9 Administrative Agent May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on either Loan Party) shall be entitled and empowered, by intervention in such proceeding or
otherwise: 
 (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, and
all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders and Administrative Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of Lenders and Administrative Agent and their respective agents and counsel and all other amounts due Lenders and Administrative Agent under Section 3.5 and 11.4) allowed in such judicial proceeding; and

 (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to Lenders, to pay to Administrative Agent any amount due to Administrative Agent under
Section 3.5 or 11.4. 
 Nothing contained herein shall be deemed to authorize Administrative Agent to authorize, consent to, accept or
adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding. 
 ARTICLE XI 

MISCELLANEOUS 

Section 11.1 Amendments, Etc. 

Section 11.1.1 Amendments Generally. Except as otherwise expressly provided herein, no amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by Prologis or any other Loan Party therefrom, shall be effective unless in writing signed by Required Lenders and Prologis or the applicable Loan Party, as the case may be, and
acknowledged by Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no amendment, waiver or consent shall: 

(a) extend or increase the Commitment (except for adjustments from time to time in accordance with this Agreement) of any Lender (or reinstate
any Commitment of any Lender terminated pursuant to Section 9.2) without the written consent of such Lender; 

  

					
	 		57		Prologis, L.P. Term Loan Agreement

 (b) postpone any date fixed by this Agreement or any other Loan Document for any scheduled
payment of principal, interest, fees or other amounts due to any Lender hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; 

(c) reduce the principal of, or the rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder or under
any other Loan Document, without the written consent of each Lender directly affected thereby; provided that only the consent of Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any
obligation of Prologis to pay interest at the Default Rate; 
 (d) change Section 3.8.4 or 3.9 in a manner that would
alter the pro rata sharing of payments required thereby without the written consent of each affected Lender; 
 (e) change any
provision of this Section 11.1, the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of the Lenders required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder without the written consent of each Lender; or 
 (f) authorize Administrative Agent to release
Prologis or General Partner from its obligations hereunder without the written consent of each Lender; 
 and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by Administrative Agent in addition to Lenders required above, affect the rights or duties of Administrative Agent under this Agreement or any other Loan Document. Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended, nor the principal amount of
the Loans owed to such Lender reduced, or the final maturity thereof extended, nor this sentence amended, in each case, without the consent of such Lender. 

In addition, notwithstanding any other provision of this Agreement, Prologis and Administrative Agent may, without the consent of any other Credit Party,
enter into such amendments to any provision of this Agreement or any other Loan Document as Administrative Agent may, in its reasonable opinion, determine to be necessary or appropriate to correct any ambiguity, omission or error herein or therein,
and, upon execution thereof by Prologis and Administrative Agent, any such amendment shall be binding on all of the parties hereto. 

Section 11.1.2 Amendments to Conforming Provisions. The provisions in Article VI, Article VII, Article VIII
and Article IX contain essentially the same provisions with respect to General Partner and, to the extent applicable, Prologis as those contained in the corresponding representations, warranties, covenants and events of default in each of the
Prologis Credit Agreements (as defined below) (including any defined term used in any such provision, the “Conforming Provisions”). If either Loan Party, Administrative Agent and/or one or more administrative agents under any of the
other Prologis Credit Agreements propose to modify, waive or restate, or request a consent or approval with respect to, any Conforming Provisions (and/or any related definition) in any Prologis Credit Agreement in writing (which may include a

  

					
	 		58		Prologis, L.P. Term Loan Agreement

 
written waiver of an existing actual or potential Default or Event of Default that is intended to be eliminated by such modification, waiver, restatement, consent or approval) (each, a
“Modification”), and either Loan Party or Administrative Agent requests corresponding changes to this Agreement, then such Modification shall be subject to the approval of the Requisite Lenders (as defined below) and, simultaneously
with approval of such Modification by Prologis or General Partner under any Prologis Credit Agreement and the Requisite Lenders, this Agreement shall be deemed modified or restated, or such waiver, consent or approval granted, as applicable, in an
manner consistent with such approved Modification; provided that (a) all Lenders shall have received notice of such proposed Modification and (b) no Modification shall result in any modification, waiver or restatement of, or consent
or approval with respect to, the provisions of Section 9.1.1. If requested by a Loan Party or Administrative Agent, the Loan Parties, Administrative Agent and each Lender shall execute and deliver a written modification, waiver or
restatement of, or consent or approval with respect to, this Agreement memorializing any Modification. In addition, Prologis will be obligated to pay to Administrative Agent and Lenders fees calculated in the same manner as any fees that Prologis or
any of its Affiliates pay to the agents and the lenders under the other Prologis Credit Agreements in connection with any such approved Modification (excluding any up-front fee, extension fee, or other similar fee paid in connection with an increase
in the commitment amount under or an extension of the term of the applicable Prologis Credit Agreement, except to the extent that there is a corresponding increase of the Commitments hereunder or extension of the term hereof). For the purposes of
this Section 11.1.2, “Prologis Credit Agreements” means (i) this Agreement, (ii) the Global Credit Agreement and (iii) any other credit agreement or loan agreement under which General Partner or Prologis
is a borrower or guarantor, which contains any financial covenants applicable to General Partner and/or Prologis that are substantially similar to the financial covenants set forth in the Global Credit Agreement to the extent, and for so long as,
General Partner designates such credit agreement or loan agreement as a Prologis Credit Agreement (provided that General Partner may revoke any such designation at any time in its sole discretion). For the avoidance of doubt, the term “Prologis
Credit Agreements” shall also include any refinancing or replacement of the foregoing agreements to the extent the representations, warranties, covenants and events of default are substantially similar to those included in the applicable
Prologis Credit Agreement being refinanced or replaced. As used in this Section 11.1.2, “Requisite Lenders” means, at any time, lenders (including the Lenders) having at least 51% of the aggregate amount of (i) all
commitments under all Prologis Credit Agreements with respect to which the commitments of the lenders thereunder are still in effect, and (ii) the aggregate unpaid principal amount of all loans outstanding under all Prologis Credit Agreements
with respect to which the commitments of the lenders thereunder are no longer in effect. For purposes of calculating the Requisite Lenders, (x) in the case of swingline loans, the amount of each lender’s funded participation interest in
such swingline loans shall be considered as if it were a direct loan and not a participation interest, and the aggregate amount of swingline loans owing to the swingline lender shall be considered as reduced by the amount of such funded
participation interests, and (y) in the case of letters of credit, the amount of each lender’s participation in any such letter of credit shall be considered as if it were a direct loan from such lender. 

Section 11.1.3 Amendments to Extend Maturity. Notwithstanding any other provision of this Agreement (and without limiting the
foregoing provisions of this Section 11.1 or the extension provisions set forth in Section 3.10), Prologis may, by written notice to Administrative Agent (which shall forward such notice to all Lenders) make an offer (a
“Loan Modification Offer”) 

  

					
	 		59		Prologis, L.P. Term Loan Agreement

 
to all Lenders to make one or more amendments or modifications to allow the maturity of the Loans and/or Commitments of the Accepting Lenders (as defined below) to be extended and, in connection
with such extension, to (a) increase the Applicable Margin and/or fees payable with respect to the applicable Loans and/or the Commitments of the Accepting Lenders and/or the payment of additional fees or other consideration to the Accepting
Lenders and/or (b) change such additional terms and conditions (to the extent not otherwise approved by the requisite Lenders under this Section 11.1) of this Agreement solely as applicable to the Accepting Lenders (such additional
changed terms and conditions to be effective only during the period following the original maturity date prior to its extension by such Accepting Lenders) (collectively, “Permitted Amendments”) pursuant to procedures reasonably
acceptable to each of Prologis and Administrative Agent. Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendments and (ii) the date on which such Permitted Amendments are requested to become effective
(which shall not be less than 15 days nor more than 90 days after the date of such notice). Permitted Amendments shall become effective only with respect to the Loans and/or Commitments of the Lenders that accept the Loan Modification Offer (such
Lenders, the “Accepting Lenders”) and, in the case of any Accepting Lender, only with respect to such Lender’s Loans and/or Commitments as to which such Lender’s acceptance has been made. Prologis, each Accepting Lender
and Administrative Agent shall enter into a loan modification agreement (the “Loan Modification Agreement”) and such other documentation as Administrative Agent shall reasonably specify to evidence (x) the acceptance of the
Permitted Amendments and the terms and conditions thereof and (y) the authorization of Prologis to enter into and perform its obligations under the Loan Modification Agreement. Administrative Agent shall promptly notify each Lender as to the
effectiveness of any Loan Modification Agreement. Each party hereto agrees that, upon the effectiveness of a Loan Modification Agreement, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the
existence and terms of the Permitted Amendment evidenced thereby and only with respect to the Loans and Commitments of the Accepting Lenders as to which such Lenders’ acceptance has been made. Prologis may effectuate no more than two Loan
Modification Agreements during the term of this Agreement. 
 Section 11.2 Notices; Effectiveness; Electronic Communication.

 Section 11.2.1 Notices Generally. Except in the case of notices and other communications expressly permitted to be given by
telephone (and except as provided in Section 11.2.2 below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail
or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows: 

(a) if to General Partner, Prologis or Administrative Agent, to the address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 11.2; and 
 (b) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire. 

  

					
	 		60		Prologis, L.P. Term Loan Agreement

 Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to
have been given when received; notices sent by facsimile shall be deemed to have been given when sent, if confirmation of receipt has been received (except that, if not given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in Section 11.2.2, shall be effective as provided in such
Section 11.2.2. 
 Section 11.2.2 Electronic Communications. Notices and other communications to Lenders hereunder
may be delivered or furnished by electronic communication (including e-mail and internet or intranet websites) pursuant to procedures approved by Administrative Agent; provided that the foregoing shall not apply to notices to any Lender
pursuant to Article II if such Lender has notified Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. Administrative Agent or Prologis may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. 

Unless Administrative Agent otherwise prescribes, (a) notices and other communications sent to an e-mail address shall be deemed received
upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or
other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (b) notices or
communications posted to an internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (a) of notification that such notice or
communication is available and identifying the website address therefor. 
 Section 11.2.3 The Platform. THE PLATFORM IS
PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR
OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall Administrative Agent, Arranger or any of their respective Related Parties (collectively, the “Agent Parties”) have any
liability to any Loan Party, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Loan Party’s, Administrative Agent’s or
Arranger’s transmission of Borrower Materials or notices through the Platform, any other electronic platform or electronic messaging service, or through the internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party or any of its 

 

  

					
	 		61		Prologis, L.P. Term Loan Agreement

 D-23120414 

 
Affiliates; provided that in no event shall any Agent Party have any liability to any Loan Party, any Lender or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages). 
 Section 11.2.4 Change of Address, Etc. Any Loan Party or
Administrative Agent may change its address or facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each Lender may change its address, facsimile or telephone number for notices and
other communications hereunder by notice to Prologis and Administrative Agent. In addition, each Lender agrees to notify Administrative Agent from time to time to ensure that Administrative Agent has on record (a) an effective address, contact
name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (b) accurate wire instructions for such Lender. Notwithstanding the foregoing, Administrative Agent shall not change
the location of Administrative Agent’s Office if such change would result in increased costs to Prologis. 
 Section 11.2.5
Reliance by Administrative Agent and Lenders. Administrative Agent and Lenders shall be entitled to rely and act upon any notice (including any telephonic Loan Notice) purportedly given by or on behalf of any Loan Party even if (a) such
notice was not made in a manner specified herein, was incomplete or was not preceded or followed by any other form of notice specified herein or (b) the terms thereof, as understood by the recipient, varied from any confirmation thereof. Each
Loan Party shall indemnify Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on any notice purportedly given by or on behalf of any
Loan Party. All telephonic notices to and other telephonic communications with Administrative Agent may be recorded by Administrative Agent, and each of the parties hereto consents to such recording. 

Section 11.3 No Waiver; Cumulative Remedies. No failure by any Lender or Administrative Agent to exercise, and no delay by any
such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Law. 

Section 11.4 Expenses; Indemnity; Damage Waiver. 

Section 11.4.1 Costs and Expenses. Prologis shall pay (a) all reasonable and documented out-of-pocket expenses incurred by
Administrative Agent and its Affiliates (including the reasonable and documented fees, charges and disbursements of counsel for Administrative Agent), in connection with (x) the syndication of the credit facilities provided for herein and the
preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents and (y) any amendment, modification or waiver of the provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated); provided that Prologis shall have no liability under clause (x) for any fees, charges or disbursements of any counsel other than Haynes and Boone, LLP and any other counsel selected by
Administrative Agent and approved by Prologis (such approval not to be unreasonably withheld or delayed) and (b) all reasonable and documented out-of-pocket expenses incurred by 

  

					
	 		62		Prologis, L.P. Term Loan Agreement

 
Administrative Agent or any Lender (including the reasonable and documented fees, charges and disbursements of any counsel for Administrative Agent or any Lender), and shall pay all reasonable
and documented fees and time charges for attorneys who may be employees of Administrative Agent or any Lender, in connection with the enforcement or protection of its rights (i) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (ii) in connection with the Loans, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations arising hereunder. 

Section 11.4.2 Indemnification by Prologis. Prologis shall indemnify Administrative Agent (and any sub-agent thereof), Arranger,
each Lender and each Related Party of any of the foregoing Persons (each such Person, an “Indemnitee”) against, and hold each Indemnitee harmless from, all losses, claims, damages, liabilities and related expenses (including the
reasonable and documented fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all reasonable and documented fees and time charges and disbursements for attorneys who may be
employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by either Loan Party arising out of, in connection with or as a result of (a) the execution or delivery of this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby or,
in the case of Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (b) any Loan, the use or proposed use of the proceeds therefrom, (c) any
actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Company, or any Environmental Liability related in any way to any Company, or (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Prologis or any other Loan Party, and regardless of whether any Indemnitee is a party thereto,
in all cases whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or any
of its Related Parties or (y) result from a claim brought by Prologis or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if Prologis or such
other Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. 

Section 11.4.3 Reimbursement by Lenders. To the extent that Prologis for any reason fails to indefeasibly pay any amount required
under Section 11.4.1 or 11.4.2 to be paid by it to Administrative Agent (or any sub-agent thereof) or any Related Party thereof, each Lender severally agrees to pay to Administrative Agent (or such sub-agent) or such Related
Party, as the case may be, such Lender’s Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by or asserted against Administrative Agent (or any such sub-agent) in its capacity as such, or against any such Related Party acting for Administrative Agent (or any such
sub-agent) in connection with such capacity. The obligations of Lenders under this Section 11.4.3 are subject to the provisions of Section 3.9. 

  

					
	 		63		Prologis, L.P. Term Loan Agreement

 Section 11.4.4 Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable Law, no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising
out of, in connection with or as a result of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby or any Loan or the use of the proceeds thereof. No Indemnitee
shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement
or the other Loan Documents or the transactions contemplated hereby or thereby except to the extent that such damages are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnitee. 
 Section 11.4.5 Payments. All amounts due under this Section shall be payable
not later than ten Business Days after demand therefor. 
 Section 11.4.6 Survival. The agreements in this Section shall
survive the resignation of Administrative Agent, the replacement of any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of the Obligations. 

Section 11.5 Payments Set Aside. To the extent that any payment by or on behalf of any Loan Party is made to Administrative Agent
or any Lender or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other Person in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to
pay to Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a
rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

 Section 11.6 Successors and Assigns. 

Section 11.6.1 Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns, except that no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations 

  

					
	 		64		Prologis, L.P. Term Loan Agreement

 
hereunder except (a) to a Qualified Institution in accordance with the provisions of Section 11.6.2, (b) by way of participation in accordance with the provisions of
Section 11.6.4 or (c) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.6.6 (and any other attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and permitted assigns, Participants to the extent provided in
Section 11.6.4 and, to the extent expressly contemplated hereby, the Related Parties of Administrative Agent and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. 

Section 11.6.2 Assignments by Lenders. Any Lender may at any time assign to one or more Qualified Institutions all or a portion of
its rights and obligations under this Agreement (including all or a portion of its Commitment and its Loan; provided that 
 (a)
except in the case of an assignment from a Lender to any affiliate of such Lender or to another Lender (other than, in each case, Defaulting Lenders), Administrative Agent and, unless an Event of Default has occurred and is continuing, Prologis each
shall have provided its prior written consent thereto (each such consent not to be unreasonably withheld or delayed); 
 (b) except in the
case of an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loan or in the case of an assignment to a Lender or an Affiliate of a Lender, the aggregate amount of the Commitment or, if the Commitment is not then
in effect, the principal outstanding balance of the Loan of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000, unless Administrative Agent, and, so long as no Event of Default has occurred and is continuing, Prologis otherwise
consents (each such consent not to be unreasonably withheld or delayed); provided that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Qualified Institution (or
to a Qualified Institution and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met; 

(c) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations
with respect to the Commitment or Loan assigned; and 
 (d) the parties to each assignment shall execute and deliver to Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of $3,500 payable to Administrative Agent (which fee is not an obligation of any Loan Party), and the Qualified Institution, if it is not a Lender, shall deliver to
Administrative Agent an Administrative Questionnaire. 
 Subject to acceptance and recording thereof by Administrative Agent pursuant to
Section 11.6.3, from and after the effective date specified in each Assignment and Assumption, the Qualified Institution thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this 

  

					
	 		65		Prologis, L.P. Term Loan Agreement

 
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of, and be subject to the
obligations in, Sections 4.1, 4.4, 4.5 and 11.4 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 11.6.4. 

Section 11.6.3 Register. Administrative Agent, acting solely for this purpose as an agent of Prologis, shall maintain at
Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender
hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and Prologis, Administrative Agent and Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by any party hereto at any reasonable time and from time to time upon reasonable prior notice. 

Section 11.6.4 Participations. Any Lender may at any time, without the consent of, or notice to, any Loan Party or Administrative
Agent, sell participations to any Person (other than a natural person or Prologis or any of Prologis’ Affiliates) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or its Loan; provided that (a) such Lender’s obligations under this Agreement shall remain unchanged, (b) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (c) Loan Parties, Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to Section 11.1.1 that affects such Participant. Subject to Section 11.6.5, Prologis agrees that each Participant shall be entitled to the benefits of,
and be subject to the obligations in, Sections 4.1, 4.4 and 4.5 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.6.2. To the extent permitted by Law,
each Participant also shall be entitled to the benefits of Section 11.8 as though it were a Lender, provided such Participant agrees to be subject to Section 3.9 as though it were a Lender. 

Section 11.6.5 Limitation upon Participant Rights. A Participant shall not be entitled to receive any greater payment under
Section 4.1 or 4.4 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with Prologis’
prior written consent. A 

  

					
	 		66		Prologis, L.P. Term Loan Agreement

 
Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 4.1 unless Prologis is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of Prologis, to comply with Section 4.1.4 as though it were a Lender. 

Section 11.6.6 Certain Pledges. Any Lender may at any time pledge or assign a security interest in any of its rights under this
Agreement to secure obligations of such Lender to a Federal Reserve Bank or the central bank of any other country in which such Lender is organized; provided that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute such pledgee or assignee for such Lender as a party hereto. 
 Section 11.7 Treatment of Certain
Information; Confidentiality. Each Credit Party agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it or its Affiliates (including any self-regulatory authority, such as the National Association of Insurance Commissioners),
(c) to the extent required by applicable Laws or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any actual or
prospective assignee of or Participant in any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to a Prologis and its obligations,
(g) with the consent of Prologis or (h) to the extent such Information becomes publicly available other than as a result of a breach of this Section. 

For purposes of this Section, “Information” means all information received from any Loan Party or any Company relating to any Loan Party or
any Company or any of their respective businesses, other than any such information that is available to the applicable Credit Party on a nonconfidential basis from a source other than any Loan Party or any Company. 

Each Credit Party acknowledges that (1) the Information may include material non-public information concerning any Loan Party or any Company, as the case
may be, (2) it has developed compliance procedures regarding the use of material non-public information and (3) it will handle such material non-public information in accordance with applicable Law, including Federal and state securities
Laws. 
 Section 11.8 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, after obtaining the prior written consent of Administrative Agent, to the fullest extent permitted by applicable Law, to set off and apply all deposits (general or special, time or
demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or such Affiliate to or for the credit or the account of any Loan Party against any of the obligations
of such Loan Party now or hereafter 

  

					
	 		67		Prologis, L.P. Term Loan Agreement

 
existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and
although such obligations of such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender and
its Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or its Affiliates may have. Each Lender agrees to notify Prologis and Administrative Agent promptly after any
such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application. 

Section 11.9 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid
or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If Administrative Agent or any Lender shall receive interest in an amount
that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to Prologis. In determining whether the interest contracted for, charged or received by
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder. 

Section 11.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties
hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Article V, this Agreement shall become effective when Administrative
Agent shall have received counterparts hereof that, when taken together, bear the signatures of each party hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement. 
 Section 11.11 Severability. If any provision of this Agreement or any other Loan
Document is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provision with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provision.
The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

Section 11.12 Replacement of Lenders. If (a) any Lender requests compensation under Section 4.4,
(b) Prologis is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.1 or (c) any Lender is a Defaulting Lender or a Non-Consenting Lender, then
Prologis may, at its sole expense and 

  

					
	 		68		Prologis, L.P. Term Loan Agreement

 
effort, upon notice to such Lender and Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.6), all of its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment);
provided that: 
 (i) Prologis shall have paid to Administrative Agent the assignment fee specified in
Section 11.6.2; 
 (ii) such Lender shall have received payment of an amount equal to the outstanding principal
of its Loans, accrued interest thereon and all other amounts payable to it hereunder (including any amounts under Section 4.5) from the assignee (to the extent of such outstanding principal and accrued interest) or Prologis (in the case
of all other amounts); 
 (iii) in the case of any such assignment resulting from a claim for compensation under
Section 4.4 or payments required to be made pursuant to Section 4.1, such assignment will result in a reduction in such compensation or payments thereafter; and 

(v) such assignment does not conflict with applicable Laws. 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Prologis to require such assignment and delegation cease to apply. 
 Section 11.13 GOVERNING LAW;
JURISDICTION; ETC. 
 Section 11.13.1 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK. 
 Section 11.13.2 SUBMISSION TO JURISDICTION. EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK, NEW YORK AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR IN SUCH FEDERAL COURT. EACH PARTY 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 AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT

  

					
	 		69		Prologis, L.P. Term Loan Agreement

 
THAT ANY CREDIT PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION. 
 Section 11.13.3 WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN SECTION
11.13.2. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. 

Section 11.13.4 SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 11.2. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. 

Section 11.14 Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY 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 AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 

Section 11.15 USA Patriot Act Notice. Each Lender that is subject to the Act (as defined below) and Administrative Agent (for
itself and not on behalf of any Lender) hereby notify the Loan Parties that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) it is required to
obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of each Loan Party and other information that will allow such Lender or Administrative Agent, as applicable, to identify such
Loan Party in accordance with the Act. 

  

					
	 		70		Prologis, L.P. Term Loan Agreement

 Section 11.16 Know Your Customers. 

Section 11.16.1 Loan Party Information. If: 

(a) any Change in Law; 
 (b) any
change in the status of any Loan Party after the date of this Agreement; or 
 (c) a proposed assignment or transfer by a Lender of any of
its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer; 
 requires Administrative Agent or
any Lender (or, in the case of paragraph (c) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available
to it, each Loan Party shall promptly upon the request of Administrative or such Lender (or prospective new Lender) supply, or procure the supply of, such documentation and other evidence as is reasonably requested by Administrative Agent or such
Lender (for itself or, in the case of the event described in paragraph (c) above, on behalf of any prospective new Lender) in order for Administrative Agent, such Lender or, in the case of the event described in paragraph
(c) above, such prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable Laws pursuant to the transactions contemplated in this
Agreement. 
 Section 11.16.2 Lender Information. Each Lender shall promptly upon the request of Administrative Agent supply, or
procure the supply of, such documentation and other evidence as is reasonably requested by Administrative Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all
applicable Laws pursuant to the transactions contemplated in the Loan Documents. 
 Section 11.16.3 Limitation on Assignments.
Notwithstanding Section 11.6, an assignment hereunder will only be effective on performance by Administrative Agent of all “know your customer” or other checks relating to any Person that it is required to carry out in relation
to such assignment, the completion of which Administrative Agent shall promptly notify to the assigning Lender and the applicable Qualified Institution. 

Section 11.16.4 Lender Responsibility. Nothing in this Agreement shall require Administrative Agent or Arranger to carry out any
“know your customer” or other checks in relation to any Person on behalf of any Lender, and each Lender confirms to Administrative Agent and Arranger that it is solely responsible for any such checks it is required to carry out and that it
may not rely on any statement in relation to such checks made by Administrative Agent or Arranger. 
 Section 11.17 Time of the
Essence. Time is of the essence of the Loan Documents. 
 Section 11.18 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. 

  

					
	 		71		Prologis, L.P. Term Loan Agreement

 Section 11.19 No Fiduciary Duty. In connection with all aspects of each transaction
contemplated hereby, each Loan Party acknowledges and agrees, and acknowledges its respective Affiliates’ understanding, that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection
therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between such Loan Party and its Affiliates, on the one hand, and Administrative
Agent, Arranger and Lenders, on the other hand, and such Loan Party is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents
(including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, each of Administrative Agent and Arranger is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary for such Loan Party or any of its Affiliates, stockholders, creditors or employees; (iii) neither Administrative Agent nor Arranger has assumed or will assume an advisory, agency or fiduciary responsibility
in favor of such Loan Party with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of
whether Administrative Agent or Arranger has advised or is currently advising such Loan Party or any of its Affiliates on other matters) and neither Administrative Agent nor Arranger has any obligation to such Loan Party or any of its Affiliates
with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) Administrative Agent, Arranger and their Affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of such Loan Party and its Affiliates, and neither Administrative Agent nor Arranger has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and
(v) Administrative Agent and Arranger have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and such Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. Each Loan Party hereby waives and releases, to the fullest extent permitted by
Law, any claim that it may have against Administrative Agent and Arranger with respect to any breach or alleged breach of agency or fiduciary duty. 

Section 11.20 OFAC List. 

(a) General Partner certifies to each Credit Party that it has not received notice that any Loan Party is listed on the most current Specially
Designated Nationals and Blocked Persons List issued by the U.S. Treasury Department Office of Foreign Assets Control as published at http://www.treasury.gov/ofac/downloads/t11sdn.pdf or at any replacement website or other replacement official
publication of such list (the “OFAC List”). Upon the request of Administrative Agent given at reasonable intervals, General Partner will update the foregoing information. 

  

					
	 		72		Prologis, L.P. Term Loan Agreement

 (b) Each Credit Party certifies to each Loan Party that it has not received notice that it is
listed on the most recent OFAC List. Upon the request of General Partner given at reasonable intervals, each Credit Party will update the foregoing information. 

Section 11.21 Electronic Execution of Assignments and Certain Other Documents. The words “execute,”
“execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including Assignment and Assumptions,
amendments or other modifications, the Loan Notices and waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by Administrative
Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the
case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state law based on
the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary, Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless
expressly agreed to by Administrative Agent pursuant to procedures approved by it. 
 ARTICLE XII 

GUARANTY BY GENERAL PARTNER 

Section 12.1 The Guaranties. In order to induce Lenders to enter into this Agreement and to extend credit hereunder and in
recognition of the direct benefits to be received by General Partner from the proceeds of the Loans, General Partner hereby absolutely, irrevocably and unconditionally guarantees, as primary obligor and not merely as surety, the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of all of the Guaranteed Obligations and the due performance and compliance with all terms, conditions and agreements contained in the Loan Documents by Prologis. If any of the
Guaranteed Obligations to Administrative Agent and/or any Lender become due and payable hereunder, General Partner unconditionally promises to pay such indebtedness to Administrative Agent and/or such Lender, as applicable, on demand, together with
all reasonable and documented expenses that may be incurred by Administrative Agent or such Lender in collecting such Guaranteed Obligations. If claim is ever made upon Administrative Agent and/or any Lender for repayment or recovery of any amount
or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (a) any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (b) any settlement or compromise of any such claim effected by such payee with any such claimant (including Prologis), then General Partner agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon General Partner, notwithstanding any revocation of the guaranty under this Article XII or any other instrument evidencing any liability of Prologis, and General Partner shall be and remain liable
to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee. 

  

					
	 		73		Prologis, L.P. Term Loan Agreement

 Section 12.2 Insolvency. Additionally, General Partner unconditionally and
irrevocably guarantees the payment of all of the Guaranteed Obligations, whether or not then due or payable, upon the occurrence of any event specified in Section 9.1.6 with respect to Prologis, and unconditionally promises to pay such
Guaranteed Obligations to the Credit Parties on demand. 
 Section 12.3 Absolute and Unconditional Guaranty. The guaranty
provided by General Partner under this Article XII is intended to be an irrevocable, absolute and continuing guaranty of payment and is not merely a guaranty of collection. This guaranty may not be revoked by General Partner. The liability of
General Partner hereunder is exclusive and independent of any security for or other guaranty of the Guaranteed Obligations, whether executed by General Partner, any other guarantor or any other Person, and the liability of General Partner hereunder
is not affected or impaired by (a) any direction as to application of payment by Prologis or any other Person; or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other Person as to the
Guaranteed Obligations; or (c) any payment on or in reduction of any such other guaranty or undertaking; or (d) any dissolution, termination or increase, decrease or change in personnel by Prologis; or (e) any payment made to any
Credit Party on the Guaranteed Obligations that such Credit Party repays to Prologis pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and General Partner waives any right to the
deferral or modification of its obligations hereunder by reason of any such proceeding. The guaranty and liability of General Partner hereunder shall remain in full force and effect (notwithstanding, without limitation, the dissolution of Prologis,
that at any time or from time to time no Guaranteed Obligations are outstanding or any other circumstance) until all Guaranteed Obligations have been paid in full. 

Section 12.4 Independent Obligation. The obligations of General Partner hereunder are independent of the obligations of Prologis,
any other guarantor and any other Person, and a separate action or actions may be brought and prosecuted against General Partner whether or not action is brought against Prologis, any other guarantor or any other Person and whether or not any of the
foregoing is joined in any such action or actions. General Partner waives, to the fullest extent permitted by Law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by Prologis or
other circumstance that operates to toll any statute of limitations as to Prologis shall operate to toll the statute of limitations as to General Partner’s obligations under this Article XII. 

Section 12.5 Authorization. General Partner authorizes the Credit Parties, without notice or demand (except as shall be required
by applicable statute and cannot be waived) and without affecting or impairing its liability hereunder, from time to time to: 
 (a) change
the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations (including any increase or decrease in the rate of interest thereon), any security
therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered; 

  

					
	 		74		Prologis, L.P. Term Loan Agreement

 (b) take and hold security for the payment of the Guaranteed Obligations and sell, exchange,
release, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst; 
 (c) exercise or refrain
from exercising any rights against Prologis or others or otherwise act or refrain from acting; 
 (d) release or substitute any one or more
endorsers, guarantors or other obligors; 
 (e) settle or compromise any of the Guaranteed Obligations, any security therefor or any
liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and subordinate the payment of any part thereof to the payment of any liability (whether due or not) of Prologis to its creditors other than
the Credit Parties; 
 (f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of Prologis to the Credit
Parties regardless of what liability or liabilities of Prologis or General Partner remain unpaid; 
 (g) consent to or waive any breach of,
or any act, omission or default under, this Agreement or any instrument or agreement referred to herein, or otherwise amend, modify or supplement this Agreement or any such other instrument or agreement; and/or 

(h) take any other action that would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of
General Partner from its liabilities under this Article XII; 
 it being understood that the foregoing shall not permit any action by Administrative
Agent or any Lender that is not otherwise permitted by this Agreement or any other Loan Document. 
 The Guaranteed Obligations shall not be affected by any
act of any Governmental Authority affecting Prologis, including any restrictions on the conversion of currency or repatriation or control of funds or any total or partial expropriation of the property of Prologis, or by economic, political,
regulatory or other events in any country where Prologis is located or doing business. 
 Section 12.6 Reliance. It is not
necessary for any Credit Party to inquire into the capacity or powers of Prologis or any officer, director, partner or agent acting or purporting to act on its behalf, and any Guaranteed Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder. 
 Section 12.7 Subordination. Any indebtedness of Prologis relating to
the Guaranteed Obligations now or hereafter owing to General Partner is hereby subordinated to the Guaranteed Obligations owing to the Credit Parties, and if Administrative Agent so requests at a time when an Event of Default exists, all such
indebtedness relating to the Guaranteed Obligations shall be collected, enforced and received by General Partner for the benefit of the Credit Parties and be paid over to Administrative Agent on behalf of the Credit Parties on account of the
Guaranteed Obligations, but without affecting or impairing in any manner the liability of General Partner 

  

					
	 		75		Prologis, L.P. Term Loan Agreement

 
under the other provisions of this Article XII. Without limiting the generality of the foregoing, General Partner hereby agrees with the Credit Parties that it will not exercise any right
of subrogation that it may at any time otherwise have as a result of the guaranty under this Article XII (whether contractual, under Section 509 of the United States Bankruptcy Code or otherwise) until, subject to the last sentence of
Section 12.1, all Guaranteed Obligations (other than Surviving Obligations) have been irrevocably paid in full in cash. 

Section 12.8 Waivers. 

(a) General Partner waives any right (except as shall be required by applicable statute and cannot be waived) to require any Credit Party to
(i) proceed against Prologis, any other guarantor or any other Person, (ii) proceed against or exhaust any security held from Prologis, any other guarantor or any other Person or (iii) pursue any other remedy in any Credit
Party’s power whatsoever. General Partner waives any defense based on or arising out of any defense of Prologis, any other guarantor or any other Person, other than payment in full of the Guaranteed Obligations, based on or arising out of the
disability of Prologis, any other guarantor or any other Person, or the validity, legality or unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of Prologis other than
payment in full of the Guaranteed Obligations. The Credit Parties may, at their election, foreclose on any security, if any, held by Administrative Agent or any other Credit Party by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable Law), or exercise any other right or remedy the Credit Parties may have against Prologis, any other guarantor or any other Person, or any
security, without affecting or impairing in any way the liability of General Partner hereunder except to the extent the Guaranteed Obligations have been paid. General Partner waives any defense arising out of any such election by the Credit Parties,
even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of General Partner against Prologis or any other Person or any security. 

(b) Except as otherwise expressly provided in this Agreement, General Partner waives all presentments, demands for performance, protests and
notices, including notices of any Event of Default, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of the guaranty hereunder, notices of the existence, creation or incurring of new or additional Guaranteed
Obligations, and notices of any Credit Party’s transfer or disposition of the Guaranteed Obligations, or any part thereof. General Partner assumes all responsibility for being and keeping itself informed of the financial condition and assets of
Prologis, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that it assumes and incurs hereunder, and agrees that no Credit Party shall have any duty to
advise it of information known to it regarding such circumstances or risks. 
 Section 12.9 Nature of Liability. It is the
desire and intent of General Partner and the Credit Parties that this Article XII shall be enforced against General Partner to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement
is sought. If, however, and to the extent that, the obligations of General Partner under this Article XII shall be adjudicated to be invalid or unenforceable for any reason (including because of any applicable state or federal law
relating to fraudulent conveyances or transfers), then the 

  

					
	 		76		Prologis, L.P. Term Loan Agreement

 
amount of the Guaranteed Obligations shall be deemed to be reduced and General Partner shall pay the maximum amount of the Guaranteed Obligations that would be permissible under applicable Law.

 [Signature pages follow] 

  

					
	 		77		Prologis, L.P. Term Loan Agreement

 Executed as of the date first written above. 

 

					
	PROLOGIS, L.P.,
	a Delaware limited partnership
		
	By:		Prologis, Inc., its sole general partner
			
			By:		 /s/ Gayle Starr

			Name:		Gayle Starr
			Title:		Senior Vice President
	
	PROLOGIS, INC.,
	a Maryland corporation
		
	By:		 /s/ Gayle Starr

	Name:		Gayle Starr
	Title:		Senior Vice President

 Executed as of the date first written above. 

 

			
	ADMINISTRATIVE AGENT:
	
	BANK OF AMERICA, N.A.,
	as Administrative Agent and a Lender
		
	By:		 /s/ Will T. Bowers, Jr.

	Name:		Will T. Bowers, Jr.
	Title:		Senior Vice President

 Executed as of the date first written above. 

 

			
	SYNDICATION AGENT:
	
	JPMORGAN CHASE BANK, N.A.,
	as Syndication Agent and a Lender
		
	By:		 /s/ Brendan Poe

	Name:		Brendan Poe
	Title:		Executive Director

 Executed as of the date first written above. 

 

			
	LENDERS:
	
	CITIBANK, N.A.,
	as a Lender
		
	By:		 /s/ John Rowland

	Name:		John Rowland
	Title:		Vice President

 Executed as of the date first written above. 

 

			
	GOLDMAN SACHS BANK USA,
	as a Lender
		
	By:		 /s/ Rebecca Kratz

	Name:		Rebecca Kratz
	Title:		Authorized Signatory

 Executed as of the date first written above. 

 

			
	MORGAN STANLEY BANK, N.A.,
	as a Lender
		
	By:		 /s/ Michael King

	Name:		Michael King
	Title:		Authorized Signatory

 Executed as of the date first written above. 

 

			
	WELLS FARGO BANK, NATIONAL ASSOCIATION,
	as a Lender
		
	By:		 /s/ Kevin A. Stacker

	Name:		Kevin A. Stacker
	Title:		Senior Vice President

 SCHEDULE 2.1 

COMMITMENTS AND PERCENTAGES 
  

									
	 Lender
	  	Commitment
(in Dollars)	 	  	Applicable Percentage	 
	 Bank of America, N.A.
	  	 	200,000,000	  	  	 	20.000000000	% 
	 JPMorgan Chase Bank, N.A.
	  	 	200,000,000	  	  	 	20.000000000	% 
	 Citibank, N.A.
	  	 	150,000,000	  	  	 	15.000000000	% 
	 Goldman Sachs Bank USA
	  	 	150,000,000	  	  	 	15.000000000	% 
	 Morgan Stanley Bank, N.A.
	  	 	150,000,000	  	  	 	15.000000000	% 
	 Wells Fargo Bank, National Association
	  	 	150,000,000	  	  	 	15.000000000	% 
		  	  
	  
	 	  	  
	  
	 
	 Total
		 	1,000,000,000	  		 	100.000000000	% 
		  	  
	  
	 	  	  
	  
	 

  
 Schedule
2.1 

 SCHEDULE 6.6 

LITIGATION 
 None.

  
 Schedule
6.6 

 SCHEDULE 6.9 

ENVIRONMENTAL MATTERS 

None. 

  
 Schedule
6.9 

 SCHEDULE 11.2 

ADMINISTRATIVE AGENT’S OFFICE; 

CERTAIN ADDRESSES FOR NOTICES 

PROLOGIS, GENERAL PARTNER and AFFILIATED BORROWERS: 

Prologis 
 Pier 1, Bay 1 

San Francisco, California 94111 
 Attn: Gayle Starr 

Fax: 415-394-9001 
 Telephone: 415-733-9473 

Electronic Mail: gstarr@prologis.com 
 Website Address:
www.prologis.com 
 ADMINISTRATIVE AGENT: 

Notices as Administrative Agent: 
 Bank of
America, N.A. 
 Agency Management 
 901 Main Street, 14th Floor 
 Mail Code: TX1-492-14-11 

Dallas, TX 75202 
 Attention: Sheri Starbuck 

Telephone: 214 209-3758 
 Telecopier: 214 290-8392 

Electronic Mail: sheri.starbuck@baml.com 
 Bank of America, N.A.

 Portfolio Management 
 901 Main Street, 64th Floor 
 Mail Code: TX1-492-64-01 

Dallas, TX 75202 
 Attention: Will T. Bowers 

Telephone: 214 209-0276 
 Telecopier: 214 209-0995 

Electronic Mail: will.t.bowers@baml.com 
 for payments and
Requests for Credit Extension: 
 Bank of America, N.A. 

901 Main Street, 14th Floor 

Mail Code: TX1-492-14-05 
 Dallas, TX 75202 

Attention: Nora Taylor 
 Telephone: 972-338-3778 

Telecopier: 214 290-9673 
 Electronic Mail: nora.j.taylor@baml.com

 Bank of America, NA 
 Dallas, Texas 

  
 Schedule 11.2 

			
	USD		Bank of America, N.A.
			ABA # 026009593
			New York, NY
			Acct. # 1292000883
			Attn: Corporate Credit Services
			Ref: Prologis LP

  
 Schedule 11.2 

 EXHIBIT A 

FORM OF LOAN NOTICE 
 Date:
            ,          
  

	To:	Bank of America, N.A., as Administrative Agent 

 Ladies and Gentlemen: 

Please refer to the Senior Term Loan Agreement, dated as of May [    ], 2015 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among Prologis, L.P. (“Prologis”), Prologis, Inc., the Lenders from time to time party thereto
and Bank of America, N.A., as Administrative Agent. 
 Prologis hereby requests (select one): 

 

	 ̈	The making of the Loans. 

  

	 ̈	A continuation of Eurodollar Rate Loans with an Interest Period ending on                     . 

 

	 ̈	A conversion of Loans that currently are [Base Rate Loans] [Eurodollar Loans with an Interest Period ending on
                    .] 

  

	1.	On                      (a Business Day). 

 

	2.	In the aggregate amount of                     . 

 

	3.	Comprised of                     . 

[Type of Loans requested] 
  

	4.	For Eurodollar Rate Loans: with an Interest Period of                     days/months. 

 

			
	PROLOGIS, L.P.
		
	By:		  

	Name:		  

	Title:		  

  
 Exhibit A 

 EXHIBIT B 

FORM OF COMPLIANCE CERTIFICATE 

Financial Statement Date:             ,
         
  

	To:	Bank of America, N.A., as Administrative Agent 

 Ladies and Gentlemen: 

Please refer to the Senior Term Loan Agreement, dated as of May [    ], 2015 (as amended, restated, extended, supplemented
or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among Prologis, L.P. (“Prologis”), Prologis, Inc. (“General
Partner”), the Lenders from time to time party thereto and Bank of America, N.A., as Administrative Agent. 
 The undersigned
Responsible Officer hereby certifies as of the date hereof that he/she is the                     
                             of General Partner, and that, as such, he/she is authorized to execute and
deliver this Certificate to Administrative Agent on the behalf of General Partner, for itself and as general partner of Prologis, and that: 

[Use following paragraph 1 for fiscal year-end financial statements] 

1. Attached hereto as Schedule 1-A are the year-end audited financial statements required by Section 7.1(a)(i) of the Agreement for the
fiscal year of General Partner ended as of the Financial Statement Date, together with the report and opinion of an independent certified public accountant required by such section. Attached hereto as Schedule 1-B are the year-end audited
financial statements required by Section 7.1(a)(ii) of the Agreement for the fiscal year of Prologis ended as of the Financial Statement Date, together with the report and opinion of an independent certified public accountant required by
such section. 
 [Use following paragraph 1 for fiscal quarter-end financial statements] 

1. Attached hereto as Schedule 1-A are the unaudited financial statements required by Section 7.1(b)(i) of the Agreement for the fiscal
quarter of General Partner ended as of the Financial Statement Date. Such financial statements fairly present the financial condition, results of operations, equity and cash flows of General Partner and its Consolidated Subsidiaries in accordance
with GAAP as at the Financial Statement Date and for the period then ending, subject only to normal year-end audit adjustments and the absence of footnotes. Attached hereto as Schedule 1-B are the unaudited financial statements required by
Section 7.1(b)(ii) of the Agreement for the fiscal quarter of Prologis ended as of the Financial Statement Date. Such financial statements fairly present the financial condition, results of operations, equity and cash flows of Prologis
and its Consolidated Subsidiaries in accordance with GAAP as at the Financial Statement Date and for the period then ending, subject only to normal year-end audit adjustments and the absence of footnotes. 

  
 Exhibit B 

 2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be
made under his/her supervision, a detailed review of the condition (financial or otherwise) of the Companies as of the Financial Statement Date and for the accounting period then ended with the purpose of determining whether the Companies were in
compliance with the Agreement as of the Financial Statement Date, and 
 [select one:] 

[to the best knowledge of the undersigned, no Default existed on such date.] 

—or— 

[the following is a list of Defaults that, to the best knowledge of the undersigned, existed on such date, together with a description of
the nature and status of each such Default:] 
 3. The financial covenant analyses and information set forth on Schedule 2 attached hereto
are true and accurate on and as of the date of this Certificate. 
 IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
            ,         . 
  

			
	PROLOGIS, INC.
		
	By:		  

	Name:		  

	Title:		  

	
	PROLOGIS, L.P.
		
	By:		PROLOGIS, INC., General Partner
		
	By:		  

	Name:		  

	Title:		  

  
 Exhibit B 

 For the Quarter/Year ended
                     
 SCHEDULE 1-A

 to the Compliance Certificate 

Financial Statements 

  
 Exhibit B 

 SCHEDULE 1-B 

to the Compliance Certificate 

Financial Statements 
 For the
Quarter/Year ended                     (“Statement Date”) 

  
 Exhibit B 

 SCHEDULE 2 

to the Compliance Certificate ($ in 000’s) 

The following covenant computations, together with the supporting schedules attached hereto, are true and correct: 

 

									
	a.		Consolidated Leverage Ratio.						
				
			Indebtedness of the Companies1		$	                    	  		(1)
				
			Total Asset Value2		$	                    	  		(2)
				
			Ratio of (1) to (2)		 	                    	  		
				
			Permitted Maximum		 	0.60 to 1.00	3 		
				
	b.		Fixed Charge Coverage Ratio.4						
				
			Adjusted EBITDA		$	                    	  		(1)
				
			Capital Expenditures		$	                    	  		(2)
				
			Subtotal (1) - (2)		$	                    	  		(3)
				
			Debt Service		$	                    	  		(4)
				
			Preferred Dividends		$	                    	  		(5)
				
			Subtotal (4) + (5)		$	                    	  		(6)
				
			Ratio of (3) to (6)		 	                    	  		
				
			Required Minimum		 	1.50 to 1.00	  		

  

	1 	Adjusted by deducting therefrom an amount equal to the lesser of (i) total Indebtedness of the Companies that by its terms is scheduled to mature on or before the date that is 24 months from the date of calculation
and (ii) Unrestricted Cash of the Companies. 

	2 	Adjusted by deducting therefrom the amount by which total Indebtedness is adjusted. 

	3 	As of the last day of the four consecutive fiscal quarters immediately following any Material Acquisition, such ratio may exceed 0.60 to 1.0 so long as it does not exceed 0.65 to 1.00. 

	4 	Calculated for the four fiscal quarters ending on the date of determination. 

  
 Exhibit B 

											
	c.		 Unencumbered Debt Service Coverage Ratio.5
								
				
			 NOI of Unencumbered Properties (see Schedule 3)6
		$	                    	  		 	(1	) 
				
			 Management fees of the Companies less related expenses7
		$	                    	  		 	(2	) 
				
			 Allowed Unconsolidated Affiliate Earnings8
		$	                    	  		 	(3	) 
				
			 Subtotal of (1) + (2) + (3)
		$	                    	  		 	(4	) 
				
			 Amount by which (2) + (3) exceeds 40% of (4)
		$	                    	  		 	(5	) 
				
			 Unencumbered NOI (Subtotal of (4) – (5))
		$	                    	  		 	(6	) 
				
			 Unencumbered Capital Expenditures9
		$	                    	  		 	(7	) 
				
			 Subtotal (6) - (7)
		$	                    	  		 	(8	) 
				
			 Unencumbered Debt Service
		$	                    	  		 	(9	) 
				
			 Ratio of (8) to (9)
								
				
			 Required Minimum
		 	1.50 to 1.00	  				
				
	d.		 Secured Indebtedness.
								
				
			 Secured Debt of the Companies
		$	                    	  				
				
			 Total Asset Value
		$	                    	  				
				
			 Percentage of Secured Debt over Total Asset Value
		 	                    	% 				
				
			 Maximum Permitted
		 	40	% 				
				
	e.		 Restricted Payments.
								
				
			 Funds from Operations
		$	                    	  		 	(1	) 
				
			 95% of (1)
		$	                    	  		 	(2	) 
				
			 Amount of Restricted Payments required to be paid in order for Prologis to eliminate its REIT taxable income and/or to maintain its
status as a REIT
		$	                    	  		 	(3	) 

  

	5 	Calculated for the four fiscal quarters ending on the date of determination. 

	6 	Not subject to any Lien (other than Permitted Liens). 

	7 	Not subject to any Lien (other than Permitted Liens). 

	8 	Not subject to any Lien (other than Permitted Liens). 

	9 	Except for Unencumbered Properties where the tenant is responsible for capital expenditures. 

  
 Exhibit B 

									
			 Permitted Maximum (greater of (2) and (3))
		$	                    	  		(4)10
				
			 Aggregate cash dividends and other cash distributions
		$	                    	  		(not to exceed (4) if an Event of Default exists)

 Date:                     

  
  

	10 	Excluding Restricted Payments otherwise permitted by Section 8.3 of the Agreement. 

  
 Exhibit B 

 For the Quarter/Year ended
                    (“Statement Date”) 

SCHEDULE 3 
 to the
Compliance Certificate ($ in 000’s) 
 Detailed Calculation of NOI of Unencumbered Properties 

  
 Exhibit B 

 EXHIBIT C 

ASSIGNMENT AND ASSUMPTION 
 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 respective meanings given to them in the Agreement (as defined below), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in the Annex 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. 

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 Agreement, as of the Effective Date inserted by Administrative Agent as contemplated below, (i) all of the Assignor’s rights and obligations as a
Lender under the Agreement and any document or instrument 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
Tranches identified below 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 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, but not limited to,
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 of [identify Lender]1] 

  

	3.	Borrower(s):                      

 

	4.	Administrative Agent: Bank of America, N.A., as the Administrative Agent under the Agreement 

  

	5.	Agreement: Senior Term Loan Agreement, dated as of May [    ], 2015 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement”; the terms defined therein being used herein as therein defined), among Prologis, L.P. (“Prologis”), Prologis, Inc., as guarantor, the Lenders from time to time party thereto and Bank of America, N.A.,
as Administrative Agent. 

  
  

	1 	Select as applicable. 

  
 Exhibit C 

	6.	Assigned Interest: 

  

							
	 	  	AGGREGATE AMOUNT OF
COMMITMENT/LOANS FOR
ALL LENDERS	  	AMOUNT OF
COMMITMENT/LOANS
ASSIGNED	  	CUSIP NUMBER
		  	$                    	  	$                    	  	
		  	$                    	  	$                    	  	
		  	$                    	  	$                    	  	

  

	[7.	Trade Date:                     ]2 

 

	8.	Qualifications. Annex 2 attached hereto sets forth the specific qualifications of the Assignee. 

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 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 	To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. 

  
 Exhibit C 

 [Consented to and]3 Accepted: 

 

			
	BANK OF AMERICA, N.A.
		
	By:		  

	Name:		  

	Title:		  

	
	[Consented to:]4
	
	PROLOGIS, L.P.
		
	By:		PROLOGIS, INC., General Partner
		
	By:		  

	Name:		  

	Title:		  

  
  

	3 	To be added only if the consent of Administrative Agent is required by the terms of the Agreement. 

	4 	To be added only if the consent of Prologis is required by the terms of the Agreement. 

  
 Exhibit C 

 ANNEX TO ASSIGNMENT AND ASSUMPTION 

PROLOGIS SENIOR TERM LOAN AGREEMENT 

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 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 Prologis, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or observance by Prologis, any of its Subsidiaries or Affiliates 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 Agreement, (ii) it meets all requirements of a Qualified Institution under the Agreement
(subject to receipt of such consents as may be required under the Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the 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 Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.1 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 Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Agreement, duly completed and
executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on 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, 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. Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by telecopy 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 C

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