Document:

BB&T

Loan
Agreement

 

	 		 
	 	Account
    Number	 

 

This
Loan Agreement (the “Agreement”) is made this 13th day of May, 2015 (the “Effective Date”)
by and between BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (“Bank”), and:

 

PATRIOT
TRANSPORTATION HOLDING, INC., a Florida corporation and FLORIDA ROCK & TANK LINES, INC., a Florida corporation
(collectively, “Borrower”), each having its chief executive office at 200 West Forsyth Street, 7th Floor,
Jacksonville, Florida 32202.

 

PATRIOT
TRANSPORTATION, INC., OF FLORIDA, a Florida corporation (individually “Guarantor” and collectively the “Guarantors”)
having its chief executive office at 200 West Forsyth Street, 7th Floor, Jacksonville, Florida 32202.

 

The
Borrower has applied to Bank for and the Bank has agreed to make, subject to the terms of this Agreement, the following loan
and/or Guidance Line of Credit (hereinafter sometimes referred to, singularly or collectively, if more than one, as “Loan”):

 

Guidance
Line of Credit (“Guidance Line of Credit”) in the maximum principal amount not to exceed Twenty-Five Million and
No/100 Dollars ($25,000,000.00) at any one time outstanding, The Guidance Line of Credit shall expire on the earlier of an Event
of Default and May 12, 2017 (such earlier date, the “Termination Date”). Subject to the terms and conditions of this
Agreement, Bank agrees to make loans (each such loan, a “Guidance Loan”) to Borrower from time to time up to, but
not including, the Termination Date, provided, however, in no event shall Bank be obligated to make a Guidance Loan if doing so
would, after giving effect thereto, cause the aggregate principal amount of all Guidance Loans to exceed the Guidance Line of
Credit or result in an Event of Default. The Guidance Line of Credit shall automatically expire and terminate on the Termination
Date. Within the foregoing limits and subject to the terms and conditions of this Agreement, Borrower may borrow, repay, and reborrow
the principal amount of the Guidance Loans at any time up to, but not including, the Termination Date. Borrower shall use the
proceeds of the Guidance Loans for the acquisition of transportation business or equipment and general company purposes of the
Borrower.

 

All
requests for Guidance Loans shall be in writing (such notice, the “Guidance Loan Takedown Request”) and shall (i)
specify the date for the making of the applicable Guidance Loan, which date must be a business day; (ii) specify the principal
amount of the applicable Guidance Loan to be made; (iii) specify Borrower’s election for a fixed interest rate or a floating
interest rate; (iv) instructions for the disbursement of the proceeds of such Guidance Loan; (v) be accompanied by a current Loan
Base Report, Covenant Compliance Certificate and a Collateral Identification Schedule; and (vi) include such other information
Bank may reasonably require from time to time. All Guidance Loans are subject to Availability.

 

The
Borrower shall pay to Bank, a fee equal to 0.250% of the amount of each Guidance Loan advanced under the Guidance Line of Credit
(the “Guidance Facility Fee”), which Guidance Facility Fee shall be due and payable with respect to each advance under
the Guidance Line of Credit on the closing date for such Guidance Loan (a “Guidance Loan Closing Date”).

The
Borrower shall pay the Bank, quarterly in arrears on the last day of each calendar quarter, an unused fee equal to 0.15% per annum
on the average daily unused amount of the Guidance Line of Credit for such calendar quarter calculated on the basis of a year
of 360 days for the actual number of days elapsed.

 

On
each Guidance Loan Closing Date, Borrower shall execute and deliver to the Bank a promissory note with addendum to promissory
note substantially in the form of Exhibit A, attached hereto and made a part hereof (each such note, together with
all of such notes, a “Guidance Note”), which Guidance Note, together with Bank’s records, shall evidence the
applicable Guidance Loan and interest accruing thereon. All Guidance Loans shall have a sixty (60) month maturity from the date
the Guidance Note is made and delivered, and shall provide for monthly fixed principal payments calculated using an 84 month amortization
period, plus monthly interest payments. All Guidance Loans shall bear interest at a per annum rate (the “Guidance Loan Interest
Rate”) equal to the One Month LIBOR plus the Applicable Margin (set forth below), unless Borrower elects a fixed rate of
interest which shall be determined by the Bank in reference to its standard internal cost of funds for the proposed Guidance Loan
at the time it receives Borrower’s Guidance Loan Takedown Request plus the Applicable Margin. All interest on any
Guidance Loan shall be calculated on the presumed basis of a year of 360 days, for the actual number of days elapsed. The Applicable
Margin shall be determined as follows:

 

	If
    Borrower’s Leverage Ratio is:	Then
                                         the Applicable Margin is:

         

	 

        ≥
        3.76:1.0 to 5:1.0
	 

        2.25%

         

	 

        ≥
2.51:1.0 to 3.75:1.0
	 

        2.0% 

         

    	 

    	 

    

 

BB&T

Loan
Agreement

 

 

	 

        ≥
        1.26:1.0 to 2.5:1.0

         
	 

        1.75%

         

	≤   1.25:1.0	1.5%

 

Each
Guidance Note shall be secured by a first and prior lien and security interest in the Borrower’s Collateral, and at each
Guidance Loan Closing Borrower shall execute and deliver to Bank a Security Agreement, substantially in the form of Exhibit
B, attached hereto and made a part hereof, Certificates of Title and such other evidence documenting the Bank’s
first priority security interest in the Collateral as security for the Guidance Note as Bank and its counsel shall require, including,
without limitation, registering the Bank’s security interest with the Department of Motor Vehicles, and/or any other entity
which issues the Certificates of Title for the Collateral, and Guarantor shall deliver a Guaranty. Borrower and Guarantor shall
also execute and deliver to Bank at each Guidance Loan Closing such other documentation as Bank and its counsel shall require
to more fully evidence the provisions of this Loan Agreement and to fully document the Guidance Note.

 

Yield
Protection. If at any time a change in any law or regulation (including without limitation the Dodd-Frank Wall Street Reform
and Consumer Protection Act and all rules, guidelines, or directives promulgated by the Bank for International Settlements, the
Basel Committee on Banking Supervision or other U.S. or foreign regulatory authorities pursuant to Basel III) or in the interpretation
thereof by any governmental authority having the authority to interpret or enforce the same shall make it unlawful for Bank to
make or maintain the Loan under the terms of this Agreement, Bank shall have the right to convert the applicable interest rate
on the loans to a rate based on the Prime Rate. Similarly, should Bank incur increased costs or a reduction in the amounts received
or receivable on the Loan because of any change in any applicable law, regulation, rule, guideline or order, including without
limitation the imposition, modification or applicability of any reserves, deposits or capital adequacy then Borrower shall pay
to Bank within ten (10) business days of demand, which demand shall contain the basis and calculations supporting such demand,
as may be required to compensate Bank for such increased costs or reductions in amounts to be received hereunder. Each determination
and calculation made by Bank shall, absent manifest error, be binding and conclusive on the parties hereto. All payments made
by Borrower hereunder or the other Loan Documents shall be made free and clear and without deduction of any present or future
taxes, levies, imposts, charges or withholdings other than taxes based on net income and franchise taxes imposed on Bank by the
law of the jurisdiction in which Bank is organized or transacting business.

 

The
Guidance Notes are collectively referred to herein as the “Note(s)” and shall include all extensions, renewals, modifications
and substitutions thereof. Bank may, at its sole discretion, effect payment of any sums past due under the Note(s) and any fees
or reimbursable expenses due by debiting Borrower’s operating or other deposit account with Bank.

 

Section
1 Conditions Precedent

 

The
Bank shall not be obligated to make any disbursement of Loan proceeds until all of the following conditions have been satisfied
by proper evidence, execution, and/or delivery to the Bank of the following items in addition to this Agreement, all in form and
substance satisfactory to the Bank and the Bank's counsel in their sole discretion:

USA
Patriot Act Verification Information: Information or documentation, including but not limited to the legal name, address,
tax identification number, driver’s license, and date of birth (if the Borrower is an individual) of the Borrower sufficient
for the Bank to verify the identity of the Borrower in accordance with the USA Patriot Act. Borrower shall notify Bank promptly
of any change in such information.

Note(s):
A Guidance Note duly executed by the Borrower.

Security
Agreement(s): A Security Agreement in which Borrower and any other owner of personal property collateral (a “Debtor”)
shall grant to Bank a first priority security interest in the personal property specified therein. (If Bank has or will have a
security interest in any collateral which is inferior to the security interest of another creditor, Borrower must fully disclose
to Bank any and all prior security interests, and Bank must specifically approve any such security interest which will continue
during the Loan.)

Certificates
of Title: Certificates of Title for each vehicle, trailer, or other titled personal property serving as collateral for the
Loan.

UCC
Financing Statements: Copies of UCC Financing Statements duly filed in Borrower’s or Debtor’s state of incorporation,
organization or residence, and in all jurisdictions necessary, or in the opinion of the Bank desirable, to perfect the security
interests granted in the Security Agreement(s), and certified copies of Information Requests identifying all previous financing
statements on record for the Borrower or other debtor, as appropriate from all jurisdictions indicating that no security interest
has previously been granted in any of the Collateral, unless prior approval has been given by the Bank.

Corporate
Resolution: A Certificate of Corporate Resolutions signed by the corporate secretary or certified officer containing resolutions
duly adopted by the Board of Directors of the Borrower and the Guarantor authorizing the execution, delivery, and performance
of the Loan Documents on or in a form provided by or acceptable to Bank.

Articles
of Incorporation: A copy of the Articles of Incorporation and all other charter documents of Borrower and Guarantor, all filed
with and certified by the Secretary of State of the State of the Borrower's incorporation.

 

    	 

    	 

    

BB&T

Loan
Agreement

 

By-Laws:
A copy of the By-Laws of the Borrower and Guarantor, certified by the Secretary of the Borrower as to their completeness and
accuracy.

Certificate
of Incumbency: A certificate of the Secretary of the Borrower and Guarantor certifying the names and true signatures of the
officers of the Borrower authorized to sign the Loan Documents.

Certificate
of Existence: A certification of the Secretary of State (or other government authority) of the State of the Borrower's Incorporation
or Organization as to the existence or good standing of the Borrower and its charter documents on file.

Opinion
of Counsel: An opinion of counsel for the Borrower satisfactory to the Bank and the Bank’s counsel, substantially in
the form of Exhibit C, attached hereto and made a part hereof.

Guaranty:
Guaranty Agreement, substantially in the form of Exhibit D, attached hereto and made a part hereof, duly executed
by the Guarantor.

Additional
Documents: Receipt by the Bank of other approvals, opinions, or documents as the Bank may reasonably request.

Appraisal(s):
Two (2) copies of an appraisal ordered by the Bank of the estimated market value of the personal property offered as collateral
for the Loan(s) referenced herein. The appraisal(s) must be addressed to the Bank and must conform to the Uniform Standards of
Professional Appraisal Practice (“USPAP”) adopted by the Appraisal Standards Board of the Appraisal Foundation. Any
deviation from the USPAP must be explained in the appraisal(s). The appraiser(s) must be licensed and/or certified if required
by applicable Federal Deposit Insurance Corporation regulations or state laws.

 

Section
2 Representations and Warranties

 

The
Borrower represents and warrants to Bank that:

 

2.01. 
Financial Statements. The balance sheet of the Borrower and its subsidiaries, if any, and the related Statements of Income
and Retained Earnings of the Borrower and its subsidiaries, the accompanying footnotes together with the accountant's opinion
thereon, and all other financial information previously furnished to the Bank, are true and correct and fairly reflect the financial
condition of the Borrower and its subsidiaries as of the dates thereof, including all contingent liabilities of every type, and
the financial condition of the Borrower and its subsidiaries as stated therein has not changed materially and adversely since
the date thereof. 

2.02. 
Name, Capacity and Standing. The Borrower’s exact legal name is correctly stated in the initial paragraph of the
Agreement.  If the Borrower and any of its subsidiaries, if any, is a corporation, general partnership, limited partnership,
limited liability partnership, or limited liability company, it is duly organized and validly existing under the laws of its respective
state of incorporation or organization; that it and/or its subsidiaries, if any, are duly qualified and in good standing in every
other state in which the nature of their business shall require such qualification, and are each duly authorized by their board
of directors, general partners or member/manager(s), respectively, to enter into and perform the obligations under the Loan Documents.

2.03. 
No Violation of Other Agreements. The execution and delivery of the Loan Documents, and the performance by the Borrower,
by any and all pledgors (whether the Borrower or Debtor (hereinafter sometimes referred to as the “Pledgor”)) or by
the Guarantor(s) thereunder will not violate any provision, as applicable, of its articles of incorporation, by-laws, articles
of organization, operating agreement, agreement of partnership, limited partnership or limited liability partnership, or,
of any law, other agreement, indenture, note, or other instrument binding upon the Borrower, any Pledgor or Guarantor(s),
or give cause for the acceleration of any of the respective obligations of the Borrower or Guarantor(s).

2.04. 
Authority. The execution, delivery and performance of this Agreement, the Note(s) and the other Loan Documents has been
duly authorized by all necessary and proper corporate or equivalent action. All authority from and approval by any federal, state,
or local governmental body, commission or agency necessary to the making, validity, or enforceability of this Agreement and the
other Loan Documents has been obtained.

2.05. 
Asset Ownership. The Borrower and each Pledgor has good and marketable title to all of the properties and assets reflected
on the balance sheets and financial statements furnished to the Bank, and all such properties and assets are free and clear of
mortgages, deeds of trust, pledges, liens, and all other encumbrances except as otherwise disclosed by such financial statements.

2.06. 
Discharge of Liens and Taxes. The Borrower and its subsidiaries, if any, have filed, paid, and/or discharged all taxes
or other claims which may become a lien on any of their respective properties or assets, excepting to the extent that such items
are being appropriately contested in good faith and for which an adequate reserve (in an amount acceptable to Bank) for the payment
thereof is being maintained.

2.07. 
Regulations U and X. None of the Loan proceeds shall be used directly or indirectly for the purpose of purchasing or carrying
any margin stock in violation of the provisions of Regulation U and Regulation X of the Board of Governors of the Federal Reserve
System.

2.08. 
ERISA. Each employee benefit plan, as defined by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
maintained by the Borrower or by any subsidiary of the Borrower or any corporate Guarantor meets, as of the date hereof, the minimum
funding standards of Section 302 of ERISA, all applicable requirements of ERISA and of the Internal Revenue Code of 1986, as amended,
and no “Reportable Event” nor “Prohibited Transaction” (as defined by ERISA) has occurred with respect
to any such plan.

 

    	 

    	 

    

BB&T

Loan
Agreement

 

2.09. 
Litigation. There is no claim, action, suit or proceeding pending, threatened or reasonably anticipated before any
court, commission, administrative agency, whether State or Federal, or arbitration which will materially adversely affect the
financial condition, operations, properties, or business of the Borrower, its subsidiaries, if any, any Guarantor, or any Pledgor,
or affect the ability of the Borrower or any Guarantor or any Pledgor to perform its obligations under the Loan Documents.

2.10. 
Other Agreements. The representations and warranties made by Borrower to Bank in the other Loan Documents are true and
correct in all respects on the date hereof 

2.11. 
Binding and Enforceable. The Loan Documents, when executed, shall constitute valid and binding obligations of the Borrower
and Guarantors respectively, and are enforceable in accordance with their terms, except as may be limited by bankruptcy,
insolvency, moratorium, or similar laws affecting creditors' rights generally.

2.12. 
Commercial Purpose. The Loan(s) are not “consumer transactions”, as defined in the Florida Uniform Commercial
Code, and none of the collateral was or will be purchased or held primarily for personal, family or household purposes.

2.13. 
No Violation of Wells Fargo Credit Facility. The execution and delivery of the Loan Documents, and the performance by the
Borrower, by any and all Pledgors or by the Guarantor(s) thereunder will not violate any provision of that certain 2015 Credit
Agreement dated as of January 30, 2015 by and between Patriot Transportation Holding, Inc. and Wells Fargo Bank, N.A. (the “Wells
Fargo Credit Facility” and together with all documents and agreements entered into in connection therewith as in effect
on the date of this Loan Agreement, the “Wells Fargo Credit Facility Loan Documents”).

 

Section
3 Affirmative Covenants

 

The
Borrower covenants and agrees that from the date hereof and until payment in full of all indebtedness and performance of all obligations
owed under the Loan Documents, Borrower shall:

3.01. 
Maintain Existence and Current Legal Form of Business.  (a) Maintain its existence and good standing in the state of its
incorporation or organization, (b) maintain its current legal form of business indicated above, and (c), as applicable, qualify
and remain qualified as a foreign corporation in each jurisdiction in which such qualification is required.

3.02. 
Maintain Records. Keep adequate records and books of account, in which complete entries will be made in accordance with
GAAP consistently applied, reflecting all financial transactions of the Borrower.

3.03. 
Maintain Properties. Maintain, keep, and preserve all of its properties (tangible and intangible) including the collateral
necessary or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted.

3.04. 
Conduct of Business. Continue to engage in an efficient, prudent, and economical manner in a business of the same general
type as now conducted.

3.05. 
Maintain Insurance. Maintain insurance with financially sound and reputable insurance companies acceptable to Bank in such
amounts and covering such risks as are usually carried by companies engaged in the same or a similar business, which insurance
may provide for reasonable deductible(s). The Bank shall be named as loss payee (Long Form) on all policies which apply to the
Bank's collateral, and the Borrower shall deliver certificates of insurance at closing evidencing same. All such insurance policies
shall provide, and the certificates shall state, that no policy will be terminated without 20 days prior written notice to Bank.

3.06. 
Comply With Laws. Comply in all respects with all applicable laws, rules, regulations, and orders including, without limitation,
paying before the delinquency of all taxes, assessments, and governmental charges imposed upon it or upon its property, and all
Environmental Laws.

3.07. 
Right of Inspection. Permit the officers and authorized agents of the Bank, at any reasonable time or times in the Bank's
sole discretion, and if no Event of Default then exists upon prior written notice to Borrower, to examine and make copies of the
records and books of account of, to visit the properties of the Borrower, and to discuss such matters with any officers, directors,
managers, members or partners, limited or general of the Borrower, and the Borrower's independent accountant as the Bank deems
necessary and proper.

3.08. 
Reporting Requirements. Furnish to the Bank: 

Financial
Statements: As soon as available and not more than forty-five (45) days after the end of the first, second and third quarters
of each fiscal year, balance sheets, statements of income, cash flow, and retained earnings for the period ended and a statement
of changes in the financial position, all in reasonable detail, and all prepared in accordance with GAAP consistently applied
and certified as true and correct by an officer, general partner or manager (or member(s)) of the Borrower, as appropriate.

Annual
Financial Statements:  As soon as available and not more than one hundred twenty (120) days after the end of each fiscal year,
balance sheets, statements of income, and retained earnings for the period ended and a statement of changes in the financial position,
all in reasonable detail, and all prepared in accordance with GAAP consistently applied. The financial statements must be of the
following quality or better: Audited.

    	 

    	 

    

 

BB&T

Loan
Agreement

 

Covenant
Compliance Certificate: On or before the forty-fifth (45th) day after the end of each quarter, a Covenant Compliance
Certificate of Borrower in the form attached hereto as Schedule EE signed by the President, Chief Executive Officer
or Chief Financial Officer of the Borrower.

Loan
Base Report: On or before the forty-fifth (45th) day after the end of each quarter, a Loan Base Report in a form
acceptable to Bank signed by the President, Chief Executive Officer or Chief Financial Officer of the Borrower, reflecting any
changes in the Eligible Equipment and the Availability.

Notice
of Litigation: Promptly after the receipt by the Borrower, or by any Guarantor of which Borrower has knowledge, of notice
or complaint of any action, suit, and proceeding before any court or administrative agency of any type which, if determined adversely,
could have a material adverse effect on the financial condition, properties, or operations of the Borrower or Guarantor, as appropriate.

Notice
of Default: Promptly upon discovery or knowledge thereof, notice of the existence of any event of default under this Agreement
or any other Loan Documents.

USA
Patriot Act Verification Information: Information or documentation, including but not limited to the legal name, address,
tax identification number, driver’s license, and date of birth (if the Borrower is an individual) of the Borrower sufficient
for the Bank to verify the identity of the Borrower in accordance with the USA Patriot Act. Borrower shall notify Bank promptly
of any change in such information.

Wells
Fargo Credit Facility Documents. Promptly upon execution and delivery to Wells Fargo, true and complete copies of any modifications,
amendments, restatements, and renewals of the Wells Fargo Credit Facility Loan Documents.

Other
Credit Facility Documents. Promptly upon execution and delivery to any lender or creditor who extends credit or loans to Borrower
other than Bank or Wells Fargo (but excluding trade creditors in the ordinary course of Borrower’s business), true and correct
copies of the loan and credit documents delivered in connection therewith, and upon modification, amendment, restatement and renewals
thereof, true and correct copies of such modification, amendment, restatement and renewal (collectively, the “Other Credit
Facility Documents”).

Other
Information: Such other information as the Bank may from time to time reasonably request.

3.09. 
Deposit Accounts. Open and maintain at least one deposit account with the Bank. 

3.10. 
Affirmative Covenants from other Loan Documents. All affirmative covenants contained in any Security Agreement, or other
security document executed by the Borrower which are described in Section 1 hereof are hereby incorporated by reference herein.

3.11.  Minimum
Collateral Value. Maintain a loan to value ratio whereby the Net Orderly Liquidation Value of the Collateral plus
the Interim Assigned Value of the Collateral equals or exceeds 118% of the aggregate outstanding principal balance of
the Guidance Notes (the “Minimum Collateral Value”), provided, however, if upon receipt of any updated appraisal
of the Collateral, Borrower does not meet the Minimum Collateral Value, Borrower shall have the right to add additional
Eligible Equipment to the Collateral at any time prior to the due date of the next succeeding Loan Base Report. In addition,
at any time during the term of this Agreement so long as no Event of Default exists, Borrower may add or remove Eligible
Equipment to and from the Collateral so long as it maintains the required Minimum Collateral Value. The value of any Eligible
Equipment which is added to or removed from the Collateral shall be its Net Orderly Liquidation Value, and to the extent that
any such Eligible Equipment was not appraised during the twelve (12) months preceding its addition or removal, such equipment
shall be valued at the Interim Assigned Value. 

3.12. 
Collateral Appraisals and Exams. From time to time, as deemed necessary by Bank in its reasonable discretion to monitor Collateral,
but no more than once a year, unless an Event of Default exists in which event there shall be no restrictions on frequency of
appraisals and Bank can exercise its sole discretion, Borrower hereby authorizes Bank or any agent, employee or representative
thereof to inspect, examine, and verify the Collateral, order and obtain appraisals of the Collateral, examine and make copies
of and make abstracts from all the records and books of account of, and visit the properties of, Borrower, and to discuss or communicate
the affairs, finances, and Collateral generally of Borrower with any of Borrower’s owners, officers, employees, directors,
shareholders, members or partners, as well as Borrower’s independent accountants and consultants or with respect to any
Collateral, any of its Account Debtors. Without expense to Bank, Bank may use any of Borrower’s personnel, premises and
equipment (including, without limitation, computer equipment, programs and computer readable media) as deemed reasonably necessary
by Bank to conduct such exam. Borrower shall pay to Bank for each appraisal of the Collateral and any exam, an examination fee
plus actual expenses such as, but not limited to, travel time, specialized equipment needed to count and/or value goods pledged
as Collateral, the use of outside firms to perform any exam as deemed necessary by Bank in its reasonable discretion to appraise
the Collateral and/or monitor the Collateral, with said reimbursement being represented by receipts and/or listing of expense(s)
submitted to Borrower by Bank along with Bank's invoice for reimbursement.

 

    	 

    	 

    

 

BB&T

Loan
Agreement

 

3.13. 
    Compliance with Wells Fargo Credit Facility Documents. Comply in all respects with the terms and provisions of the Wells
Fargo Credit Facility Documents.

Section
4 Guarantor(s) Covenants

 

Each
Guarantor covenants and agrees that from the date hereof and until payment in full of all indebtedness and performance of all
obligations owed under the Loan Documents, Guarantor shall:

4.01.     
Maintain Existence and Current Legal Form of Business. If Guarantor is a corporation, partnership, limited partnership,
limited liability partnership or limited liability company (a) maintain its existence and good standing in the state of its incorporation
or organization, (b) maintain its current legal form of business as shown on the guaranty agreement provided by Guarantor to Bank
in connection with the Loan, (c) without the Bank’s prior written consent, not change Guarantor’s name, or enter into
any merger, consolidation, reorganization or exchange of stock, ownership interests or assets, and (d) as applicable, qualify
and remain qualified as a foreign corporation, general partnership, limited partnership, limited liability partnership or limited
liability company in each jurisdiction in which such qualification is required. 

4.02.     
Maintain Properties. Guarantor shall not, without the prior written consent of Bank, sell, transfer or otherwise dispose
of all or substantially all of Guarantor's properties and assets (tangible or intangible), except in the ordinary course of business.

4.03.     
Comply With Laws. Comply in all respects with all applicable laws, rules, regulations, and orders including, without limitation,
paying before the delinquency thereof all taxes, assessments, and governmental charges imposed or assessed upon Guarantor or upon
Guarantor’s property, and with all Environmental Laws.

4.04.     
Reporting Requirements. Furnish to the Bank: 

Annual
Financial Statement(s): As soon as available and not more than one hundred twenty (120) days after the end of each fiscal
year of Guarantor, balance sheets, statements of income, and retained earnings for the period ended and a statement of changes
in financial position, on form(s) to be provided by the Bank, all in reasonable detail, and all prepared in accordance with GAAP
consistently applied; and, such financial statements must be of the following quality or better: Audited, provided, however, if
Guarantor does not prepare its own separate financial statements, but its financial statements are reflected on its parent’s
financial statement, Guarantor shall provide any consolidating statements and information together with the audited financial
statements of Guarantor’s parent.

Notice
of Litigation: Promptly after the receipt by Guarantor, or by Borrower of which Guarantor has knowledge, notice of any claim,
action, suit, and proceeding before any court or governmental agency of any type which, if determined adversely, could have a
material adverse effect on the financial condition, properties, or operations of the Guarantor or Borrower, as appropriate.

4.05.     
Transfer of Ownership. Not, without the prior written consent of the Bank: If Guarantor is a corporation, (a) issue, transfer
or sell any new class of stock, or (b) issue, transfer or sell, in the aggregate, from its treasury stock and/or currently authorized
but unissued shares of any class of partnership, limited partnership, limited liability partnership or limited liability company,
issue, transfer or sell any interest in Guarantor.

4.06.     
[intentionally deleted]

4.07.     
Other Information: Furnish such other information as the Bank may from time to time reasonably request.

4.08.     
Representations and Warranties.  Each Guarantor represents and warrants to Bank that: (i) if Guarantor is a corporation,
partnership, limited partnership, limited liability partnership, limited liability limited partnership, or limited liability company,
it is duly organized and validly existing under the laws of its respective state of incorporation or organization; that it and/or
its subsidiaries, if any, are duly qualified and in good standing in every other state in which the nature of their business shall
require such qualification, and are each duly authorized by their board of directors, general partners or member/manager(s), respectively,
to enter into and perform the obligations under its Guaranty Agreement, (ii) all financial statements and related information
furnished to Bank in connection with the Loan are true, correct and complete in all material respects, accurately represent the
financial condition of such Guarantor as of the date thereof, and no material adverse change in its financial condition has occurred
since the date thereof; (iii) it has full knowledge of the financial condition and business operations of the Borrower; and (iv)
there is no litigation pending or, to the knowledge of such Guarantor, threatened which if adversely decided would materially
impair its ability to honor and pay its obligations under its Guaranty Agreement. 

4.09.     
Eligible Contract Participant. Notwithstanding anything to the contrary herein, any person that does not qualify as an
Eligible Contract Participant (as defined in the Commodity Exchange Act, as amended) or otherwise does not qualify as an “indirect
proprietorship” pursuant to the rules of the Commodity Futures Trading Commission, shall not be deemed a party to any guaranty
of any Swap Obligation with Bank entered into or modified on or after October 12, 2012, and shall not be liable for any swap obligations
to Bank arising from such Swap Obligation. The foregoing exclusion shall have no effect on any other obligation of such person
to Bank under his Guaranty. “Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform
under any agreement, contract or transaction that constitutes a Swap Agreement (including any Hedge Agreement) within the meaning
of section 1a(47) of the Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.).

4.10.     
Keepwell. If at any time a Guarantor guarantees a Swap Obligation under any Hedge Agreement in connection with this Agreement,
such guarantor, to the extent he is an Eligible Contract Participant, as defined in Section 4.09 hereof, unconditionally and irrevocably
agrees to provide such funds or other support as needed by each other Guarantor to honor all of its obligations under any Hedge
Agreement in respect of any Swap Obligation, as defined in Section 4.09 hereof. The obligation of each Guarantor under this Section
4.10 shall remain in full force and effect until the Loan shall have been repaid in full and all commitments to make advances
hereunder have terminated. Each Guarantor intends that this Section 4.10 shall constitute a “keepwell, support or other
agreement” for the benefit of each other Guarantor for all purposes of section 1a(18)(A)(v)(II) of the Commodity Exchange
Act (7 U.S.C. Section 1 et seq.).

    	 

    	 

    

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Agreement

 

Section
5 Financial Covenants

The
Borrower covenants and agrees that from the date hereof until payment in full of the Loan and the performance of all obligations
under the Loan Documents, it shall at all times maintain the following financial covenants and ratios all in accordance with GAAP
unless otherwise specified:

Leverage
Ratio/Debt to Tangible Net Worth. Maintain a ratio of total book liabilities to Tangible Net Worth of not greater than 5.0
to 1.0 tested quarterly during the term of this Agreement. “Tangible Net Worth” is defined as net worth, plus obligations
contractually subordinated to debts owed to Bank, minus loans or advances to affiliated Persons, goodwill, contract rights, and
other assets representing claims on shareholders or affiliated Persons. Subject to the Bank’s review and approval in its
sole discretion, the Borrower may include pro forma financial statement information for any acquisition in this calculation.

Funded
Debt to EBITDA Ratio. Maintain a Funded Debt to EBITDA Ratio of not greater than 2.5:1.0, tested quarterly, on a trailing
twelve month basis, during the term of this Agreement. “Funded Debt to EBITDA Ratio” means the ratio of (a) all liabilities
and obligations which bear interest, to (b) the sum of net income plus interest expense plus taxes plus depreciation
plus amortization. Subject to the Bank’s review and approval in its sole discretion, the Borrower may include pro
forma financial statement information for any acquisition in this calculation. The current portion of long-term debt will be measured
as of the last day of the calculation period.

Fixed
Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of at least 1.15:1.0, tested quarterly, on a trailing
twelve month basis, during the term of this Agreement. “Fixed Charge Coverage Ratio” means the ratio of (a) the
sum of net income plus interest expense plus amortization plus lease expense and rent expense minus
dividends and distributions, to (b) the sum of the current portion of long term debt for the prior period plus
interest expense plus lease expense and rent expense. Subject to the Bank’s review and approval in its sole
discretion, the Borrower may include pro forma financial statement information for any acquisition in this calculation. The
current portion of long-term debt will be measured as of the last day of the calculation period.

Section
6 Negative Covenants

 

The
Borrower covenants and agrees that from the date hereof and until payment in full of all indebtedness and performance of all obligations
under the Loan Documents, the Borrower shall not, without the prior written consent of the Bank:

6.01.     Liens.
Create, incur, assume, or suffer to exist any lien upon or with respect to the Collateral, or the properties of any Pledgor
securing payment of the Loan, now owned or hereafter acquired, except:

		(a)	Liens
                                         and security interests in favor of the Bank;

		(b)	Liens
                                         for taxes not yet due and payable or otherwise being contested in good faith and for
                                         which appropriate reserves are maintained;

		(c)	Other
                                         liens imposed by law not yet due and payable, or otherwise being contested in good faith
                                         and for which appropriate reserves are maintained;

		(d)	[intentionally
                                         deleted];

		(e)	purchase
                                         money security interests on any property hereafter acquired, provided that such lien
                                         shall attach only to the property acquired.

6.02. 
   Debt. To the same extent set forth in the Wells Fargo Credit Facility Loan Documents, as same are amended, modified or
restated from time to time, or if the Wells Fargo Credit Facility no longer exists, to the same extent set forth in the Other
Credit Facility Loan Documents, Borrower shall not create, incur, assume, or suffer to exist any debt or enter into any capital
lease obligations except as permitted by the Wells Fargo Credit Facility Loan Documents and the Other Credit Facility Loan Documents.

6.03. 
    [intentionally deleted]

6.04. 
    Change of Legal Form of Business. Change Borrower’s name or the legal form of Borrower’s business as shown
above, whether by merger, consolidation, conversion or otherwise.

		(a)	[intentionally
                                         deleted]

6.05. 
    Dividends or Distributions; Acquisition of Capital Stock or Other Ownership Interests. Declare or pay any dividends or
distributions of any kind, or purchase or redeem, retire, or otherwise acquire any of Borrower’s capital stock or other
ownership interests, now or hereafter outstanding, except for (i) dividends not exceeding 66.6% of the consolidated net income
of Borrower and its subsidiaries subsequent to September 30, 2003, (ii) dividends payable solely in shares of any class of Borrower’s
common stock, (iii) dividends or distributions, purchase or redemption made by Borrower in any subsidiary or by any subsidiary
in Borrower, and (iv) cash redemptions of Borrower’s common stock, unless any such distribution would cause Borrower to
commit an event of default under Section 5 hereof.

 

    	 

    	 

    

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6.06. 
    [intentionally deleted]

6.07. 
    Guaranties. Assume, guarantee, endorse, or otherwise be or become directly or contingently liable for obligations of any
Person, except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary
course of business and guaranties made in connection with an asset acquisition by Borrower so long as no Event of Default then
exists or would occur after giving effect thereto.

6.08. 
    [intentionally deleted]

6.09. 
    Disposition of Assets. Sell, lease, transfer or otherwise dispose of, or permit any of its subsidiaries to sell, lease,
transfer or otherwise dispose of, any of its assets or properties except in the ordinary and usual course of its business.

6.10. 
    [intentionally deleted]

6.11. 
    Negative Covenants from other Loan Documents. All negative covenants contained in any Security Agreement, or other security
document executed by the Borrower which are described in Section 1 hereof or are otherwise in effect under any other loan to Borrower
are hereby incorporated by reference herein. 

 

Section
7 Hazardous Materials and Compliance with Environmental Laws

 

7.01.     [intentionally
deleted]

7.02.     Compliance.
Borrower agrees to comply with all applicable Environmental Laws, including, without limitation, all those relating to Hazardous
Materials, where noncompliance may have a significant negative effect on the Collateral. Borrower further agrees to provide Bank,
with immediate notice in writing of any violation of any Environmental Laws where noncompliance may have a significant negative
effect on the Collateral, and to pursue diligently to completion all appropriate and/or required remedial action.

7.03.     Remedial
Action; Indemnity: Borrower agrees to indemnify and hold Bank harmless from any and all loss or liability arising out of any
violation of the representations, covenants, and obligations contained in this Section 7. In addition, Bank shall have all rights
and remedies provided in other Loan Documents with respect to Hazardous Materials and violations of Environmental Laws.

 

Section
8 Events of Default

 

Subject
to the applicable notice and cure periods set forth below, the following shall be “Events of Default” by Borrower
or any Guarantor:

 

8.01.     Should
Borrower fail to make payment of any installment of principal or interest on any of the Note(s) within five (5) days of when due
or payable

8.02.     Should
any representation or warranty made in the Loan Documents prove to be false or misleading in any material respect when made.

8.03.     Should
any report, certificate, financial statement, or other document furnished prior to the execution of or pursuant to the terms of
this Agreement prove to be false, incomplete or misleading in any material respect when made.

8.04.     Should
the Borrower or any Guarantor default on the performance of any other obligation of indebtedness when due or in the performance
of any obligation incurred in connection with money borrowed.

8.05.     Should
the Borrower, any Guarantor or any Pledgor breach any covenant, condition, or agreement made under any of the Loan Documents
to which it is a party.

8.06.     Should
a custodian be appointed for or take possession of any or all of the assets of the Borrower or any Guarantor, or should the Borrower
or any Guarantor either voluntarily or involuntarily become subject to any insolvency proceeding, including becoming a debtor
under the United States Bankruptcy Code, any proceeding to dissolve the Borrower or any Guarantor, any proceeding to have a receiver
appointed, or should the Borrower or any Guarantor make an assignment for the benefit of creditors, or should there be an attachment,
execution, or other judicial seizure of all or any portion of the Borrower's or any Guarantor's assets, including an action or
proceeding to seize any Collateral or any funds on deposit with the Bank, and such seizure is not discharged within 30 days.

8.07.     Should
final judgment for the payment of money be rendered against the Borrower or any Guarantor which is not covered by insurance and
which would cause a material adverse change in Borrower’s or any Guarantor’s financial condition or business operations
in Bank’s sole discretion, and shall remain undischarged for a period of 30 days unless such judgment or execution thereon
be effectively stayed.

8.08.     Upon
the death of, or termination of existence of, or dissolution of, any Borrower, Pledgor or Guarantor;.

8.09.     Should
Bank determine that a Borrower or any Guarantor has suffered a material adverse change in its financial condition or its business
operations.

 

    	 

    	 

    

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8.10.     Should
any lien or security interest granted to Bank to secure payment of the Note(s) terminate, fail for any reason to have the priority
agreed to by Bank on the date granted, or become unenforceable, unperfected or invalid for any reason.

8.11.     Default
under any Hedge Agreement, as defined in Section 10.01.

8.12.     Should
Borrower assert for any reason that this Agreement or any provision hereof or any other Loan Document is invalid or unenforceable,
or should any Guarantor assert that that its Guaranty is invalid or unenforceable.

8.13.     Should
Borrower refuse to permit Bank to inspect, examine or verify the Collateral or the books and records in accordance with the Exam
provisions of set forth in this Agreement.

8.14.     Should
a Default or Event of Default occur under the Wells Fargo Credit Facility which is not cured under any applicable cure period
set forth thereunder.

8.15.     Should
the value of the Collateral or other collateral securing the Loan decline below the Minimum Collateral Value in violation of this
Agreement and Borrower does not within ten (10) days thereafter either (i) make a principal prepayment on the Loan, or (ii) grant
Bank a first priority perfected security interest in additional Eligible Equipment, in each case to the extent necessary to achieve
the Minimum Collateral Value.

Notice
and Right to Cure. Notwithstanding any provision contained in this Agreement, the Note(s) or any other Loan Document to the
contrary, in the event of a payment default, Bank’s right to accelerate the Note(s) shall be immediate and without notice.
With respect to any non-payment default under this Agreement that remains uncured beyond the Notice Period (defined below), the
Note(s) or the other Loan Documents which is curable, Bank’s right to accelerate the indebtedness evidenced by the Note(s)
shall be thirty (30) days from the first to occur of (i) the date that Borrower has knowledge of such default or (ii) Borrower’s
receipt of written notice from Bank of such default (such thirty (30) day period, the “Notice Period”). For the avoidance
of doubt, in no event shall any notice and right to cure be required or given for any event of default arising from any representation,
financial statement or report, certificate or other document made or furnished prior or pursuant to this Agreement which proves
to be false or misleading in any material respect when made; should Borrower or any Guarantor voluntarily become a debtor under
the Bankruptcy Code, become subject to any insolvency proceeding, make an assignment for the benefit of creditors or become subject
to any attachment, execution, or judicial seizure of its assets (including any funds on deposit with Bank); any failure to repay
the Loan at maturity; any commencement of the process of liquidation or dissolution; any proceeding commenced against it seeking
the forfeiture of any of the Collateral or other assets as a result of any criminal activity; the sale, conveyance, transfer or
encumbrance of the Collateral or a bulk sale transfer of Borrower’s personal property without the prior consent of Bank;
or upon the termination of any Guaranty Agreement by any Guarantor.

 

Section
9 Remedies Upon Default

 

Upon
the occurrence of any of the above listed Events of Default, and subject to any applicable notice and cure periods, if any, Bank
may at any time thereafter, at its option, take any or all of the following actions, at the same or at different times:

9.01.     Declare
the outstanding balance(s) of the Note(s) to be immediately due and payable, both as to principal and interest, late fees, and
all other amounts/expenditures without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly
waived by Borrower and each Guarantor, and such balance(s) shall accrue interest at the Default Rate as provided herein until
paid in full;

9.02.     Require
Borrower or Guarantor(s) to pledge additional collateral to Bank from the Borrower's or any Guarantor's assets and properties,
the acceptability and sufficiency of such collateral to be determined in Bank's sole discretion;

9.03.     Take
immediate possession of and/or foreclose upon any or all collateral which may be granted to Bank as security for the indebtedness
and obligations of Borrower or any Guarantor under the Loan Documents;

9.04.     Exercise
any and all other rights and remedies available to Bank under the terms of the Loan Documents and applicable law, including the
Florida Uniform Commercial Code;

9.05.     Any
obligation of Bank to advance funds to Borrower or any other Person under the terms of the Note(s) and all other obligations,
if any, of Bank under the Loan Documents shall immediately cease and terminate unless and until Bank shall reinstate such obligation
in writing.

 

Section
10 Miscellaneous Provisions

 

10.01.   Definitions.

“Availability”
shall mean (X) the lesser of (i) $25,000,000.00 and (ii) the Eligible Equipment Loan Value shown on the most recent Loan Base
Report furnished by Borrower to Bank, reduced by (Y) the aggregate outstanding principal balance on the Guidance Notes.

“Collateral”
shall mean the vehicles, trucks and semi-trailers owned by Borrower, for which Borrower has granted the Bank a first priority
security interest pursuant to a Security Agreement and for which the Bank’s security interest has been properly reflected
on the certificate of title and the Bank’s lien is otherwise fully perfected, and which is unencumbered other than the Bank’s
lien.

 

    	 

    	 

    

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“Collateral
Identification Schedule” shall mean a list of vehicles, trucks and semi-trailers owned by Borrower which Borrower proposes
to be Collateral for a Guidance Loan, which list shall accompany a Guidance Loan Takedown Request and shall include VIN numbers
and other specific identifying information for each proposed item of Collateral along with the item’s Net Orderly Liquidation
Value, or if such value is not available for any particular item, the Interim Assigned Value of such item.

“Default
Rate” shall mean a rate of interest equal to Bank's Prime Rate plus five percent (5%) per annum (not to exceed the legal
maximum rate) from and after the date of an Event of Default hereunder which shall apply, in the Bank's sole discretion, to all
amounts owing, on such date.

“Eligible
Equipment” shall mean those vehicles, trucks, trailers and other Equipment used in the commercial transportation of
petroleum and chemical products owned by Borrower which are unencumbered, which are not Ineligible Equipment.

“Eligible
Equipment Loan Value” shall mean the aggregate value of (i) 85% of the Net Orderly Liquidation Value plus (ii)
the Interim Assigned Value, in each case as applied to the Eligible Equipment.

“Environmental
Laws” shall mean all federal and state laws and regulations which affect or may affect the Borrower’s real property,
including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Sections 9601
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), the Federal Water Pollution Control Act
(33 U.S.C. Sections 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), and all applicable Florida environmental laws and regulations, as such laws or regulations have been amended
or may be amended.

“Hazardous
Materials” shall mean asbestos, oil, petroleum or other hydrocarbons, urea formaldehyde, PCBs, hazardous or nuclear
waste, toxic chemicals and substances, or other hazardous materials, as defined in applicable Environmental Laws.

“Hedge
Agreement” means agreement between Borrower and Bank, now existing or hereafter entered into, which provides for an
interest rate, credit, commodity, equity swap or other Swap Obligation, cap floor, collar, spot or forward foreign exchange transaction,
currency swap, cross-currency rate swap, currency option or any similar transaction or any combination of, or option with respect
to, these or similar transactions, for the purpose of hedging Borrower’s exposure to fluctuations in interest or exchange
rates, loan, credit, exchange, security or currency valuations or currency prices.

“Ineligible
Equipment” shall mean the following: (a) Equipment not legally owned by Borrower, (b) Equipment deemed by Bank, at its
sole discretion, to cause and/or represent unusual danger to the health and/or safety of individual(s) and/or the environment,
(c) Equipment which violates any federal law and/or laws of the city, county, or state where the Equipment is located or in which
it is used, (d) Equipment subject to a security interest, lien or other encumbrance in favor of any other Person other than Bank,
(e) Equipment which is no longer usable in Borrower’s normal course of business, and (f) Equipment which is not used in
the ordinary course of Borrower’s business, as Borrower operates its business on the date of this Agreement. Bank reserves
the right, upon notice, in its reasonable discretion, to amend the terms of the Ineligible Equipment at any time.

“Interim
Assigned Value” for any vehicle, truck or trailer owned by Borrower but not listed in the most recent appraisal obtained
by Bank to determine the Net Orderly Liquidation Value of Borrower’s equipment, shall mean the lesser of (i) 100% of such
item’s book value (using Semi-Truck Blue Book or such other book value agreed upon by Bank and Borrower) and (ii) 75% of
its purchase price if acquired since the date of the last appraisal.

“Loan
Base Report” shall mean a report on the Bank's standard form, or in a form otherwise acceptable to Bank, to be prepared,
signed, dated and delivered by Borrower in accordance with Bank's instructions, and submitted to Bank by Borrower at specified
intervals and/or occasions, and detailing pertinent information as regards the Eligible Equipment, the outstanding aggregate principal
balance on the Guidance Notes, the Guidance Line of Credit balance, and the Availability.

“Loan
Documents” shall mean this Agreement including any Schedule attached hereto, the Note(s), the Deed(s) of Trust,
the Mortgage(s), the Security Agreement(s), the Assignment(s) of Leases and Rents, all UCC Financing Statements, the Guaranty
Agreement(s), and all other documents, certificates, and instruments executed in connection therewith, and all renewals,
extensions, modifications, substitutions, and replacements thereto and therefore.

“Net
Orderly Liquidation Value” shall mean the estimated market value allocated to the Eligible Equipment in connection with
an orderly liquidation of the Eligible Equipment as set forth in a current appraisal of the Eligible Equipment prepared by a licensed
and/or certified appraiser, approved by the Bank, and shall be addressed to the Bank and must conform to the USPAP adopted by
the Appraisal Standards Board of the Appraisal Foundation.

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

“GAAP”
shall mean generally accepted accounting principles as established by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants, as amended and supplemented from time to time.

 

    	 

    	 

    

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“Prime
Rate” shall mean the rate of interest per annum announced by Bank from time to time and adopted as its Prime Rate, which
is one of several rate indexes employed by Bank when extending credit, and may not necessarily be Bank's lowest lending rate.

10.02.   Non-impairment.
If any one or more provisions contained in the Loan Documents shall be held invalid, illegal, or unenforceable in any respect,
the validity, legality, and enforceability of the remaining provisions contained therein shall not in any way be affected or impaired
thereby and shall otherwise remain in full force and effect.

10.03.   Applicable
Law. The Loan Documents shall be construed in accordance with and governed by the laws of the State of Florida.

10.04.   Waiver.
Neither the failure nor any delay on the part of Bank in exercising any right, power or privilege granted in the Loan Documents
shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise of
any other right, power, or privilege which may be provided by law.

10.05.   Modification.
No modification, amendment, or waiver of any provision of any of the Loan Documents shall be effective unless in writing and
signed by the Borrower and Bank.

10.06.   Payment
Amount Adjustment. In the event that any Loan(s) referenced herein is paid on a principal and interest basis, instead of a
principal plus interest basis, has a variable (floating) interest rate, and the interest rate increases, Bank, at its sole discretion,
may at any time adjust the Borrower's payment amount(s) to prevent the amount of interest accrued in a given period to exceed
the periodic payment amount or to cause the Loan(s) to be repaid within the same period of time as originally agreed upon.

10.07.   Stamps
and Other Fees. Borrower shall pay all federal or state stamp and recording taxes, or other fees or charges, if any are payable
or are determined to be payable by reason of the execution, delivery, or issuance of the Loan Documents or any security granted
to the Bank; and the Borrower and Guarantors agree to indemnify and hold harmless Bank against any and all liability in respect
thereof. Borrower shall pay all fees incurred by Bank for the appraisal of the Collateral obtained at any time after the date
of this Agreement which Bank requires pursuant to federal or state regulations, in connection with any event of default under
the Loan Documents or restructure of the Loan, any material damage to or condemnation of the Collateral, or in connection with
any foreclosure or forbearance. Such appraisal fees shall be payable on demand, shall accrue interest at the Default Rate following
demand and shall be secured by the Security Agreement and other security documents executed by Borrower or Pledgor.

10.08.   Attorneys’
Fees. In the event Borrower, any Guarantor or any Pledgor shall default in any of its obligations hereunder and the Bank finds
it necessary to employ an attorney to assist in the enforcement or collection of the indebtedness of the Borrower to the Bank,
to enforce the terms and provisions of the Loan Documents, to modify the Loan Documents, or in the event the Bank voluntarily
or otherwise should become a party to any suit or legal proceeding (including a proceeding conducted under the Bankruptcy Code),
the Borrower and Guarantors, jointly and severally, agree to pay all reasonable attorneys’ fees incurred by Bank and all
related costs of collection or enforcement that may be incurred by Bank. The Borrower and Guarantor shall be liable for such attorneys’
fees and costs whether or not any suit or proceeding is actually commenced.

10.09.
  Bank Making Required Payments. In the event Borrower shall fail to maintain insurance, pay taxes or assessments, costs
and expenses which Borrower is, under any of the terms hereof or of any Loan Documents, required to pay, or fail to keep any
of the properties and assets constituting collateral free from new security interests, liens, or encumbrances, except as
permitted herein, Bank may at its election make expenditures for any or all such purposes and the amounts expended together
with interest thereon at the Default Rate, shall become immediately due and payable to Bank, and shall have benefit of and be
secured by the collateral; provided, however, the Bank shall be under no duty or obligation to make any such payments
or expenditures.

10.10.   Right
of Offset. Any indebtedness owing from Bank to Borrower may be set off and applied by Bank on any indebtedness or liability
of Borrower to Bank, at any time and from time to time after maturity, whether by acceleration or otherwise, and without demand
or notice to Borrower. Bank may sell participations in or make assignments of any Loan made under this Agreement, and Borrower
agrees that any such participant or assignee shall have the same right of setoff as is granted to Bank herein.

10.11.   UCC
Authorization. Borrower authorizes Bank to file such UCC Financing Statements describing the collateral in any location deemed
necessary and appropriate by Bank.

10.12.   Modification
and Renewal Fees. Bank may, at its option, charge any fees for modification, renewal, extension, or amendment of any terms
of the Note(s) not prohibited by Florida law, and as otherwise permitted by law if Borrower is located in another state.

10.13.   Conflicting
Provisions. If provisions of this Agreement shall conflict with any terms or provisions of any of the Note(s) or security
document(s) or any schedule attached hereto, the provisions of such Note(s) or security document(s) or any schedule attached hereto,
as appropriate, shall take priority over any provisions in this Agreement.

10.14.   Notices.
Any notice permitted or required by the provisions of this Agreement shall be deemed to have been given when delivered in
writing to the City Executive or any Vice President of the Bank at its offices in Jacksonville, Florida, and to the Chief Executive
Officer of the Borrower at its offices in Jacksonville, Florida when sent by certified mail and return receipt requested.

10.15.   Consent
to Jurisdiction. Borrower hereby irrevocably agrees that any legal action or proceeding arising out of or relating to this
Agreement may be instituted in the Circuit Court in Duval County, Florida, or any United States District Court for Florida, or
in such other appropriate court and venue as Bank may choose in its sole discretion. Borrower consents to the jurisdiction of
such courts and waives any objection relating to the basis for personal or in rem jurisdiction or to venue which Borrower may
now or hereafter have in any such legal action or proceedings.

 

    	 

    	 

    

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10.16.   Counterparts.
This Agreement may be executed by one or more parties on any number of separate counterparts and all of such counterparts
taken together shall be deemed to constitute one and the same instrument.

10.17.   Entire
Agreement. The Loan Documents embody the entire agreement between Borrower and Bank with respect to the Loans, and there are
no oral or parole agreements existing between Bank and Borrower with respect to the Loans which are not expressly set forth in
the Loan Documents.

10.18.   Indemnity.
The Borrower and the Guarantors hereby jointly and severally agree to indemnify and hold Bank, its affiliates, their successors
and assigns and their respective directors, officer, employees and shareholders harmless from and against, any loss, damage lawsuit,
proceeding, judgment, cost, penalty, expense (including all reasonable in-house and outside counsel fees, whether or not suit
is brought, accountants’ fees and/or consultants’ fees) or liability whatsoever arising from or otherwise relating
to the closing, disbursement, administration, or repayment of the Loans, including without limitation: (i) Borrower’s or
Guarantors’ failure to comply with the terms of this Agreement and the other Loan Documents; (ii) the breach of any representation
or warranty made to Bank in this Agreement or in any other Loan Documents now or hereafter executed in connection with the Loans;
(iii) the violation of any covenants or agreements made for the benefit of the Bank and contained in this Agreement or any of
the other Loan Documents; provided, however, that the foregoing indemnification shall not be deemed to cover any such loss, damage,
lawsuit, proceeding, cost, expense or liability which is finally determined by a court of competent jurisdiction to result solely
from the Bank’s gross negligence or willful misconduct. This indemnity obligation shall survive the payment of the Loan
or the termination of this Agreement.

10.19.   Termination.
Bank may, at its option, terminate this Agreement at any time after the occurrence of an Event of Default hereunder. Prior
to the occurrence of an Event of Default hereunder, Borrower may at any time upon thirty (30) days’ prior written notice
to the other party terminate this Agreement; provided, that if any Guidance Loan or any obligation thereunder, remains outstanding,
then with respect to such outstanding Guidance Loan and obligations thereunder such termination shall not affect or impair any
lien or security interest in any Collateral or any right of Bank under this Agreement or the other Loan Documents, any obligation
of the Borrower under this Agreement or the other loan Documents, or any obligation of any Guarantor or Pledgor in connection
with the Guidance Loan.

10.20.   WAIVER
OF JURY TRIAL. UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS
OR CLAIMS ARISING OUT OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF
THE RELATIONSHIP BETWEEN THE UNDERSIGNED AND BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOAN AND ENTER
INTO THIS AGREEMENT. FURTHER, THE UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL,
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. NO
REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.

 

[Signatures
on Following Page]

    	 

    	 

    

Signature
Page

 

IN
WITNESS WHEREOF, the Bank, Borrower and Guarantor(s) have caused this Agreement to be duly executed under seal all as of the date
first above written.

 

	 	BORROWER:
	 	 
	WITNESS:	PATRIOT TRANSPORTATION HOLDING, INC.,
	 	a Florida corporation
	 	 	 
	 	 	By:	
	 	 	Title:	John D. Milton, Jr.
Executive Vice President
	 	 	 	 
	 	 	 	 
	 	 	 	  

	WITNESS:	 	FLORIDA ROCK &TANK LINES, INC.,
	 	 	a Florida corporation
	 	 	 	 
	 	 	By:	 
	 	 	 	John D. Milton, Jr.
	 	 	Title:	Executive Vice President
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	GUARANTOR:
	 	 	 	 
	WITNESS:	 	PATRIOT TRANSPORTATION, INC., OF FLORIDA,
	 	 	a Florida corporation
	 	 	 	 
	 	 	By:	 
	 	 	 	John D. Milton, Jr.
	 	 	Title:	Executive Vice President
	 	 	 	 
	 	 	 	 
	 	 	BANK:
	 	 	 	 
	WITNESS:	 	BRANCH BANKING AND TRUST COMPANY
	 	 	 	 
	 	 	By:	 
	 	 	 	Ryan G. Tiedeberg
	 	 	Title:	Sr. Vice President
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

 

 

 

 

    	 

    	 

    

Exhibit
“A”

Form
of Guidance Note

 

	Borrower:	PATRIOT
                    TRANSPORTATION HOLDING, INC., a Florida corporation

FLORIDA
ROCK & TANK LINES, INC., a Florida corporation

	 	 
	 	 	 	 	 	 
	Account Number:		 	 	 Note Number:	 
	 	 	 	 	 
	Address:	200 West Forsyth Street,
     7th Floor	BB&T	 	, Georgia
	 		 	 	 	 
	 	Jacksonville, Florida 32202	PROMISSORY NOTE	 Date:	 

 

 

PATRIOT
TRANSPORTATION HOLDING, INC., a Florida corporation, and FLORIDA ROCK & TANK LINES, INC., a Florida
corporation (individually and collectively, the “Borrower”) HEREBY REPRESENTS THAT THE LOAN EVIDENCED HEREBY IS
BEING OBTAINED FOR BUSINESS/COMMERCIAL OR AGRICULTURAL PURPOSES AND NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES. For
value received, each Borrower, jointly and severally, promises to pay to BRANCH BANKING AND TRUST COMPANY, a North
Carolina banking corporation (the “Bank”), or order, at any of Bank's offices in the above referenced city (or
such other place or places that may be hereafter designated by Bank), the sum of       
 Dollars ($     ) together with interest as provided herein in immediately available currency
of the United States of America.

 

	☐	Borrower shall pay a prepayment fee as set forth in the Prepayment Fee
    Addendum attached to this Promissory Note (“Note”).

  

Interest
shall accrue from the date hereof on the unpaid balance outstanding from time to time at the:

 

	☐	Fixed
rate of      %
per annum.
	☐	Variable rate of the Bank’s Prime Rate plus      
% per annum to be adjusted       as the Bank’s Prime Rate changes. If checked here☐,
the interest rate will not exceed a(n) ☐ fixed ☐ average maximum rate of      % or
a ☐ floating maximum rate of the greater of       % or the Bank’s Prime Rate;
and the interest rate will not decrease below a fixed minimum rate of       %. If an average maximum
rate is specified, a determination of any required reimbursement of interest by Bank will be made: ☐ when the Note is repaid
in full by Borrower ☐ annually beginning on      .
	☐	Fixed rate of      
% per annum through       which automatically converts on       to
a variable rate equal to the Bank’s Prime Rate plus        % per annum which shall be adjusted
      as such Prime Rate changes.
	☒	Variable rate as set forth in the Addendum to Promissory Note dated of even date herewith executed by Borrower.
	 	 
	Principal
and interest are payable as follows:

 

	☐	Principal (plus any accrued interest not otherwise scheduled herein)	}	is due in full at maturity on      .
	☐	Principal
plus accrued interest	 	 
	☒	Payable in consecutive     installments
of	☒ Principal		}	commencing on ___
	 	 	☐ Principal and Interest	 	 
	 	and continued on the same day of each calendar period thereafter, in      
equal payments of $     , with one final payment of all
remaining principal and accrued interest due on      .
	☒	Accrued interest is payable       
  commencing on        and continuing on the same day of each calendar period thereafter,
with one final payment of all remaining interest due on      .
	☐	Bank reserves the right in its sole discretion to adjust the fixed payment due
hereunder        on      
 and continuing on the same day of each calendar period thereafter, in order to maintain an amortization period of no more
than        months
from the date of this Note. Borrower understands the payment may increase if interest rates increase.
	☐	Prior
to an event of default, Borrower may borrow, repay, and reborrow hereunder pursuant to the terms of the Loan Agreement, hereinafter
defined.
	☐	     
	☐	Borrower
hereby authorizes Bank to automatically draft from its demand, deposit, or savings account(s) with Bank or other bank, any payment(s)
due under this Note on the date(s) due. Borrower shall provide appropriate account number(s) for account(s) at Bank or other bank.
	 	 
	☐	Documentary
stamp tax in the amount of $__________ and intangibles tax will be paid in connection with the recording of the Mortgage in the
official records of $__________ County, Florida, securing this Promissory Note.
	☐	Documentary
stamp tax in the amount of $___________________ has been or will be paid to the Florida Department of Revenue. Certificate of
Registration No. 56-1074313-19-001.
	☐	This
Promissory Note constitutes a consolidation of Note #_______________/ ________ and Note # ____________/ _______, each executed
by the Borrower. Documentary stamp taxes in the amounts of $____________ and $ _________ were previously paid  ☐ to the Florida
Department of Revenue and no additional documentary stamp taxes are required ☐ together with intangibles tax in connection with
the recording of a Mortgage (Book _______, Page ______ / Instrument # ___________) to the Clerk of Court of ______________ County,
Florida, and/or a Mortgage (Book _____, Page _____ / Instrument # ______ ) to the Clerk of Court of _______ County, Florida, or
a modification(s) thereof securing this Promissory Note, and no additional documentary stamp taxes are required. 
	☐	This
Promissory Note constitutes a consolidation and increase of Note # ______________ / _________ and Note # __________ / ___________,
each executed by the Borrower, and evidences a new advance in the amount of $ __________________. Documentary stamp taxes in the
amounts of $ _____________ and $ ______________ were previously paid ☐  to the Florida Department of Revenue and additional documentary
stamp taxes in the amount of $ _______ will be paid to the Florida Department of Revenue ☐  together with intangibles tax in
connection with the recording of a Mortgage (Book ______, Page ______ / Instrument # __________) to the Clerk of Court of _______________
County, Florida, and/or a Mortgage (Book _________, Page ________ / Instrument # ____________) to the Clerk of Court of ____________________
County, Florida or a modification(s) thereof securing this Promissory Note, and additional documentary stamp taxes in the amount
of $ _____________ together with appropriate intangibles tax will be paid to the Clerk of Court of _________________ County, Florida,
and/or _____________ County, Florida, in connection with the recording of a Mortgage(s) or a modification(s) thereof. 
	☐	This
Promissory Note constitutes a renewal and increase of Note # _______________/ ________ in the original amount of $ ____________.
Documentary stamp tax in the amount of $ _______________ was paid ☐ to the Florida Department of Revenue ☐ the Clerk of Court
of _________________ County, Florida, and additional documentary stamp tax in the amount of $ _______________ ☐ has been or
will be paid to the Florida Department of Revenue ☐ has been or will be paid to the Clerk of Court of ______________ County,
Florida in connection with the recording of a Mortgage or modification thereof securing this Promissory Note.
	☒ 	This
Promissory Note was executed, delivered and accepted outside of the State of Florida in accordance with the requirements of the
Florida Department of Revenue and no documentary stamp tax is required.
	☐	Florida
documentary stamp tax is not required.

 

    	 

    	 

    

Borrower
shall pay to Bank, or order, a late fee in the amount of five percent (5%) of any installment past due for ten (10) or more days.
When any installment payment is past due for ten (10) or more days, subsequent payments shall first be applied to the past due
balance. In addition, Borrower shall pay to Bank a returned payment fee if the Borrower or any other obligor hereon makes any
payment at any time by check or other instrument, or by any electronic means, which is returned to Bank because of nonpayment
due to nonsufficient funds.

 

All
interest shall be computed and charged for the actual number of days elapsed on the basis of a year consisting of three hundred
sixty (360) days. In the event periodic accruals of interest shall exceed any periodic fixed payment amount described above, the
fixed payment amount shall be immediately increased, or additional supplemental interest payments required on the same periodic
basis as specified above (increased fixed payments or supplemental payments to be determined in the Bank's sole discretion), in
such amounts and at such times as shall be necessary to pay all accruals of interest for the period and all accruals of unpaid
interest from previous periods. Such adjustments to the fixed payment amount or supplemental payments shall remain in effect for
so long as any interest accruals shall exceed the original fixed payment amount and shall be further adjusted upward or downward
to reflect changes in any variable interest rate; provided that unless elected otherwise above, the fixed payment amount shall
not be reduced below the original fixed payment amount. However, Bank shall have the right, in its sole discretion, to lower the
fixed payment amount below the original payment amount. Notwithstanding any other provision contained in this Agreement, in no
event shall the provisions of this paragraph be applicable to any promissory note which requires disclosures pursuant to the Consumer
Protection Act (Truth-In-Lending Act), 15 USC § 1601, et seq., as implemented by Regulation Z.

 

This
Note is executed and delivered by Borrower in connection with the following agreements (if any) between Borrower or other parties
owning collateral and Bank:

 

Mortgage(s)/
Deed(s) of Trust/ Security Deeds granted in favor of Bank as mortgagee/ beneficiary:

 

	☐ 	dated        in the maximum principal amount of $       
granted by      

	 	 
	 	Assignment
of Leases and Rents in favor of Bank as assignee/ beneficiary:
	 	 
	☐	dated
      executed by       
	 	 
	 	Security
Agreement(s) conveying a security interest to Bank:
	 	 
	☒ 	dated
 ______, 2015 given by Florida Rock & Tank Lines, Inc., a Florida corporation
	☐	dated       given
by      
	☐	Securities
Account Pledge and Security Agreement dated      ,
executed by      .

	☐	Control Agreement(s) dated      ,
covering    	☐ Deposit Account(s)	☐ Investment Property
	 	 	☐ Letter of Credit Rights	☐ Electronic Chattel Paper
	☐ 	Assignment of Certificate of Deposit, Security Agreement, and Power of Attorney (for Certificated Certificates of Deposit) dated      , executed by      .
	☐	Pledge
and Security Agreement for Publicly Traded Certificated Securities dated      ,
executed by      .
	☐	Assignment
of Life Insurance Policy as Collateral dated      ,
executed by      .
	☒	Loan
Agreement dated May 13, 2015, executed by
☒ Borrower and ☒
Guarantor(s).

 

All
of the terms, conditions and covenants of the above described agreements (the “Agreements”) are expressly made a part
of this Note by reference in the same manner and with the same effect as if set forth herein at length, and any holder of this
Note is entitled to the benefits of and remedies provided in the Agreements and any other agreements by and between Borrower and
Bank. In addition to Bank’s right of setoff and to any liens and security interests granted to Bank in the Agreements, the
Borrower hereby grants to Bank a security interest in all of its deposit accounts maintained with and investment property held
by Bank, which shall serve as collateral for the indebtedness and obligations evidenced by this Note.

 

No
delay or omission on the part of Bank or other holder hereof in exercising any right hereunder shall operate as a waiver of such
right or of any other right of such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or
waiver of the same or of any other right on any future occasion. Each Borrower under this Note regardless of the time, order or
place of signing waives presentment, demand, protest and notices of every kind and assents to any one or more extensions or postponements
of the time of payment or any other indulgences, to any substitutions, exchanges or releases of collateral if at any time there
be available to the holder collateral for this Note, and to the additions or releases of any other parties or persons primarily
or secondarily liable herefor.

Subject
to applicable notice and cure periods set forth below, or to the extent a notice and cure period is not set forth herein below,
any applicable notice and cure periods set forth in the Loan Agreement, the following shall constitute events of default hereunder:
Borrower’s failure to pay any part of the principal or interest within five (5) days of when due or to fully perform any
covenant or obligation under this Note, the Agreements or on any other liability to Bank by any one or more of the Borrower, by
any affiliate of the Borrower (as defined in 11 USC Section (101)(2)), or by any guarantor of this Note (said affiliate or guarantor
herein called “Obligor”); or should any financial statement, representation or warranty made to Bank by any Borrower
or any Obligor be found to be incorrect or incomplete in any material respect; or should any Borrower fail to furnish information
and documentation to the Bank sufficient to verify the identity of the Borrower as required under the USA Patriot Act; or should
Borrower commit an event of a default under any of the Agreements or under any other obligation of any of the Borrower or of any
Obligor; or should any Borrower or any Obligor die, terminate its existence, allow the appointment of a receiver for any part
of its property, make an assignment for the benefit of creditors; or should a proceeding under bankruptcy or insolvency laws be
initiated by or against any Borrower or any Obligor; or should Bank determine that Borrower or any Obligor has suffered a material
adverse change in its financial condition or business operations; or should there occur an attachment, execution, or other judicial
seizure of (A) all or any portion of the Borrower's or any Obligor's assets which secures this Note or (B) all or any material
portion of the Borrower’s or any Obligor’s assets, whether or not such assets secure this Note, including an action
or proceeding to seize any funds on deposit with the Bank, and such seizure is not discharged within 20 days; or should a final
judgment for the payment of money be rendered against any Borrower or any Obligor which (x) is not covered by insurance or debt
cancellation contract and (y) in Bank’s discretion would cause a material adverse change in Borrower’s or any Obligor’s
financial condition or to its business operations, or cause Borrower or any Obligor to fail to meet the financial covenants set
forth in the Loan Agreement after giving effect to such final judgment, and such judgment shall remain undischarged for a period
of 30 days unless such judgment or execution thereon is effectively stayed; or should any guarantor terminate any guaranty agreement
given in connection with this Note, then any one of the same shall
be a material default hereunder and this Note and other debts due the Bank by any Borrower shall immediately become due and payable
at the option of the Bank without notice or demand of any kind, which is hereby waived.

    	 

    	 

    

 

Notwithstanding
any provision contained in this Note or any other Agreements to the contrary, in the event of a payment default, Bank’s
right to accelerate the indebtedness evidenced by this Note shall be immediate and without notice to Borrower of such event of
default. With respect to any non-payment default under this Note or the other Agreements which is curable and remains uncured
beyond the Notice Period (as defined below), the Bank’s right to accelerate the indebtedness evidenced by this Note shall
be thirty (30) days from the first to occur of (i) the date that Borrower has knowledge of such default or (ii) Borrower’s
receipt of written notice from Bank of such default (such thirty (30) day period, the “Notice Period”). For the avoidance
of doubt, in no event shall any notice and right to cure be required or given for any event of default arising from: any financial
statement, report, certificate or other document furnished prior or pursuant to the Agreements which proves to be false or misleading
in any material respect; should Borrower or any Obligor voluntarily become a debtor under the Bankruptcy Code, become subject
to any insolvency proceeding, make an assignment for the benefit of creditors or become subject to any attachment, execution,
or judicial seizure of its assets (including ay funds on deposit with Bank); any failure to repay this Note at maturity; any commencement
of the process of liquidation or dissolution; any proceeding commenced against it seeking the forfeiture of all or any part of
the collateral securing this Note or other assets as a result of any criminal activity; the sale, conveyance, transfer or encumbrance
of any real property subject to a Mortgage/ Deed of Trust granted to Bank or a bulk sale transfer of any personal property collateral
which is subject to a security interest in favor of the Bank, without the prior consent of Bank; or upon the termination of any
Guaranty Agreement by any Guarantor or the death of any Guarantor.

From
and after any event of default hereunder, interest shall accrue on the sum of the principal balance then outstanding at the variable
rate equal to the Bank's Prime Rate plus 5% per annum (“Default Rate”) until such principal and interest have been
paid in full, provided that such rate shall not exceed at any time the highest rate of interest permitted by the laws of the State
of Florida; and further provided that such rate shall apply after judgment. In addition, upon default, the Bank may pursue its
full legal remedies under the Agreements and other remedies at law or equity, and the balance due hereunder may be charged against
any obligation of the Bank to any party including any Obligor. Bank shall not be obligated to accept any check, money order,
or other payment instrument marked “payment in full” on any disputed amount due hereunder, and Bank expressly reserves
the right to reject all such payment instruments. Borrower agrees that tender of its check or other payment instrument
so marked will not satisfy or discharge its obligation under this Note, disputed or otherwise, even if such check or payment
instrument is inadvertently processed by Bank unless in fact such payment is in fact sufficient to pay the amount due hereunder.

 

In
no event shall the total of all interest and charges payable under this Note, the Loan Agreement and any other documents executed
and delivered in connection herewith and therewith that are or could be held to be in the nature of interest exceed the highest
rate of interest permitted by the laws of the State of Florida. If for any circumstances whatsoever, the Bank receives any payment
that is or would be in excess of that permitted to be charged under the laws of the State of Florida, such payment shall have
been, and shall be deemed to have been, made in error and shall thereupon be applied to reduce the principal balance outstanding
on this Note.

 

Unless
otherwise required under a Loan Agreement, if applicable, and as long as any indebtedness evidenced by this Note remains outstanding
or as long as Bank remains obligated to make advances, the Borrower shall furnish annually an updated financial statement in a
form satisfactory to Bank, which, when delivered shall be the property of the Bank.

The
term “Prime Rate,” if used herein, means the rate of interest per annum announced by the Bank from time to time and
adopted as its Prime Rate at its executive offices in Winston-Salem, North Carolina. The Prime Rate is one of several rate indexes
employed by the Bank when extending credit, and not necessarily the lowest rate. Any change in the interest rate resulting from
a change in the Bank's Prime Rate shall become effective as of the opening of business on the effective date of the change. If
this Note is placed with an attorney for collection, the Borrower agrees to pay, in addition to principal, interest, and late
fees, if any, all costs of collection, including but not limited to all reasonable attorneys' fees incurred by Bank. All obligations
of the Borrower shall bind his heirs, executors, administrators, successors, and/or assigns. Use of the masculine pronoun herein
shall include the feminine and the neuter, and also the plural. If more than one party shall execute this Note, the term “Borrower”
as used herein shall mean all the parties signing this Note and each of them, and all such parties shall be jointly and severally
obligated hereunder. Wherever possible, each provision of this Note shall be interpreted in such a manner to be effective and
valid under applicable law, but if any provision of this Note shall be prohibited by or invalid under such law, such provision
shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Note. Each Borrower hereby waives all exemptions and homestead laws. The proceeds of the loan
evidenced by this Note may be paid to any Borrower.

From
time to time the maturity date of this Note may be extended, or this Note may be renewed in whole or in part, or a new note of
different form may be substituted for this Note, or the rate of interest may be modified, or changes may be made in consideration
of loan extensions, and the holder hereof, from time to time may waive or surrender, either in whole or in part any rights, guaranties,
security interests or liens, given for the benefit of the holder in connection with the payment and the securing of payment of
this Note; but no such occurrence shall in any manner affect, limit, modify, or otherwise impair any rights, guaranties or security
of the holder hereof not specifically waived, released, or surrendered in writing, nor shall the Borrower or any obligor be released
from liability by reason of the occurrence of any such event. The holder hereof, from time to time, shall have the unlimited right
to release any person who might be liable hereon, and such release shall not affect or discharge the liability of any other person
who is or might be liable hereon. No waivers and modifications shall be valid unless in writing and signed by Bank. The Bank may,
at its option, charge any fees for the modification, renewal, extension, or amendment of any of the terms of this Note unless
prohibited by Florida law. In case of a conflict between the terms of this Note and any Loan Agreement executed in connection
herewith, the priority of controlling terms shall be first this Note, then the Loan Agreement. This Note shall be governed by
and construed in accordance with the laws of Florida.

 

REQUIRED
INFORMATION FOR A NEW LOAN: To help the government fight the funding of terrorism and money laundering activities, federal law
requires Bank to obtain, verify and record information that identifies each person or entity obtaining a loan including the borrower's
legal name, address, date of birth, driver's license, organizational documents or other identifying documents.  

 

UNLESS
EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE BORROWER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING
OUT OF THIS NOTE OR ANY OF THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN
THE BORROWER AND BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOAN AND ENTER INTO THIS AGREEMENT. FURTHER,
THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT BANK WOULD NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR AGENT OF BANK,
NOR BANK’S COUNSEL, HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.

 

 

 

 

(SIGNATURES
ON FOLLOWING PAGE)

    	 

    	 

    

BB&T

PROMISSORY
NOTE SIGNATURE PAGE

 

 

	Borrower:	PATRIOT
                    TRANSPORTATION HOLDING, INC., a Florida corporation

FLORIDA
ROCK & TANK LINES, INC., a Florida corporation

	 	 
	 	 	 	 	 	 
	Account Number:		 	 	 Note Number:	 
	 	 	 	 	 
	Note Amount:	$	 	  Date:	 

 

 

 

Notice
of Right to Copy of Appraisal: If a 1-4 family residential dwelling is pledged as collateral for this Note, you, the Borrower,
have a right to a copy of the real estate appraisal report used in connection with your application for credit. If you wish to
receive a copy, please notify in writing the branch office where you applied for credit. You must forward your request to the
Bank no later than 90 days after the date of this Note. In your request letter, please provide your name, mailing address, appraised
property address, the date of this Note, and the Account and Note Numbers shown on the front of this Note.

 

IN
WITNESS WHEREOF, the Borrower, on the day and year first written above, has executed, or caused this Note to be executed by its
authorized officer or representative, under seal.

 

	WITNESS:	PATRIOT TRANSPORTATION HOLDING, INC.,
	 	a Florida corporation
	 	 	 
	 	 	By:	
	 	 	Enter Name
	 	Title:	Title
	 	 	 	 
	 	 	 
	 	 	 
	WITNESS:	FLORIDA ROCK & TANK LINES, INC.,
	 	a Florida corporation
	 	 	 
	 	 	By:	 
	 	 	Enter Name
	 	Title:	Title
	 	 	 	 

 

 

 

    	 

    	 

    

 

BB&T

 

ADDENDUM
TO PROMISSORY NOTE

 

 

THIS ADDENDUM TO
PROMISSORY NOTE (“Addendum”) is hereby made a part of the Promissory Note dated  , from PATRIOT TRANSPORTATION
HOLDING, INC., a Florida corporation and FLORIDA ROCK & TANK LINES, INC., a Florida corporation (jointly and severally,
“Borrower”) payable to the order of Branch Banking and Trust Company (“Bank”) in the principal
amount of $___  (including all renewals, extensions, modifications and substitutions thereof, the “Note”).

I.

DEFINITIONS.

1.1

Adjusted LIBOR
Rate means a rate of interest per annum equal to the sum obtained (rounded upwards, if necessary, to the next higher 1/100th
of 1.0%) by adding (i) the One Month LIBOR plus (ii) the Applicable Margin (as defined below) per annum, which shall be adjusted
[ ] monthly or [ X ] quarterly on the first day of each LIBOR Interest Period. The Adjusted LIBOR Rate shall be adjusted for any
change in the LIBOR Reserve Percentage so that Bank shall receive the same yield. The interest rate will in no instance exceed
the maximum rate permitted by applicable law and if checked here [_] the interest rate will not decrease below a fixed minimum
rate of ______%. If checked here [_] the interest rate will not exceed [_] a fixed maximum rate of _______% or [_] an average maximum
rate of  %. If an average maximum rate is specified, a determination of any required reimbursement of interest by Bank will
be made: [_] when the Note is repaid in full by Borrower or [_] annually beginning on __________. If the loan has been repaid prior
to this date, no reimbursement will be made. The Applicable Margin shall be determined as follows:

 

	If Borrower’s Leverage Ratio (as defined in the Loan Agreement) is:	
        Then the Applicable Margin
is: 

	 	 
	
         ≥ 3.76:1.0 to 5:1.0
	
         2.25% 

	 	 
	
         ≥ 2.51:1.0 to 3.75:1.0 
	
         2.0% 

	 	 
	
         ≥ 1.26:1.0 to 2.5:1.0 
	
         1.75% 

	 	 
	≤   1.25:1.0	1.5%

 

The Applicable Margin shall adjust quarterly
upon receipt of the Covenant Compliance Certificate required by the Loan Agreement, and if Borrower fails to deliver its Covenant
Compliance Certificate timely or such Certificate fails to include the applicable Leverage Ratio information, or such information
is otherwise incomplete, then the Applicable Margin shall be 2.25% until such time as the Certificate is submitted, corrected or
otherwise completed.

1.2

Business Day means
a day other than a Saturday, Sunday, legal holiday or any other day when the Bank is authorized or required by applicable law to
be closed.

1.3

LIBOR Advance
means the advances made by Bank to Borrower evidenced by this Note upon which the Adjusted LIBOR Rate of interest shall apply.

1.4

LIBOR Interest
Period means the period, as may be elected by the Borrower applicable to any LIBOR Advance, commencing on the date the Note
is first made (or the date of any subsequent LIBOR addendum to the Note) and (i) if adjusted monthly, ending on the day that is
immediately prior to the numerically corresponding day of each month thereafter or (ii) if adjusted quarterly, ending on the day
that is immediately prior to the numerically corresponding day of each quarter thereafter; provided that:

(a)

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

(b)

any LIBOR Interest
Period which begins on a day for which there is no numerically corresponding day in a subsequent month if adjusted monthly or in
a subsequent quarter if adjusted quarterly, shall end on the last Business Day of each subsequent month if adjusted monthly or
on the last Business Day of each subsequent quarter if adjusted quarterly.

1.5

LIBOR Reserve
Percentage means the maximum aggregate rate at which reserves (including, without limitation, any marginal supplemental or
emergency reserves) are required to be maintained under Regulation D by member banks of the Federal Reserve System with respect
to dollar funding in the London interbank market. Without limiting the effect of the foregoing, the LIBOR Reserve Percentage shall
reflect any other reserves required to be maintained by such member banks by reason of any applicable regulatory change against
(i) any category of liability which includes deposits by reference to which the Adjusted LIBOR Rate is to be determined or (ii)
any category of extensions of credit or other assets related to LIBOR.

1.6

One Month LIBOR
means the average rate quoted on Reuters Screen LIBOR01 Page (or such replacement page) on the determination date for deposits
in U. S. Dollars offered in the London interbank market for one month determined as of 11:00 am London time two (2) Business Days
prior to the commencement of the applicable LIBOR Interest Period; provided that if the above method for determining one month
LIBOR shall not be available, the rate quoted in The Wall Street Journal, or a rate determined by a substitute method
of determination agreed on by Borrower and Bank; provided, if such agreement is not reached within a reasonable period of time
(in Bank’s sole judgment), a rate reasonably determined by Bank in its sole discretion as a rate being paid, as of the determination
date, by first class banking organizations (as determined by Bank) in the London interbank market for U. S. Dollar deposits.

    	 

    	 

    

 

1.7

Standard Rate
means, for any day, a rate per annum equal to the Bank’s announced Prime Rate minus .25% per annum, and each change
in the Standard Rate shall be effective on the date any change in the Prime Rate is publicly announced as being effective.

II.

LOAN BEARING ADJUSTED
LIBOR RATE

2.1

Application of
Adjusted LIBOR Rate. The Adjusted LIBOR Rate shall apply to the entire principal balance outstanding of a LIBOR Advance for
any LIBOR Interest Period.

2.2

Adjusted LIBOR
Based Rate Protections.

(a)

Inability to Determine
Rate. In the event that Bank shall have determined, which determination shall be final, conclusive and binding, that by reason
of circumstances occurring after the date of this Note affecting the London interbank market, adequate and fair means do not exist
for ascertaining the One Month LIBOR on the basis provided for in this Note, Bank shall give notice (by telephone confirmed in
writing or by telecopy) to Borrower of such determination, whereupon (i) no LIBOR Advance shall be made until Bank notifies Borrower
that the circumstances giving rise to such notice no longer exist, and (ii) any request by Borrower for a LIBOR Advance shall be
deemed to be a request for an advance at the Standard Rate.

(b)

Illegality; Impracticability.
In the event that Bank shall determine, which determination shall be final, conclusive and binding, that the making, maintaining
or continuance of any portion of a LIBOR Advance (i) has become unlawful as a result of compliance by Bank with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any of the same not having the force of law even though
the failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would cause Bank material hardship,
as a result of contingencies occurring after the date of this Note materially and adversely affect the London interbank market
or Bank’s ability to make LIBOR Advances generally, then, and in any such event, Bank shall give notice (by telephone confirmed
in writing or by telecopy) to Borrower of such determination. Thereafter, (x) the obligation of Bank to make any LIBOR Advances
or to convert any portion of the loan to a LIBOR Advance shall be suspended until such notice shall be withdrawn by Bank, and
(y) any request by Borrower for a LIBOR Advance shall be deemed to be a request for an advance at the Standard Rate.

This Addendum shall
operate as a sealed instrument.

	WITNESS:	PATRIOT TRANSPORTATION HOLDING, INC.,
	 	a Florida corporation
	 	 	 
	 	 	By:	 
	 	 	Enter Name
	 	Title:	Title
	 	 		
	 	 	 
	 	 	 
	 	 	 
	WITNESS:	FLORIDA ROCK & TANK LINES, INC.
	 	a Florida corporation
	 	 	 
	 	 	By:	 
	 	 	 	Enter Name
	 	Title:	Title
	 	 	 	 

 

 

 

 

    	 

    	 

    

 Exhibit “B”

Form of Security Agreement

City:
Jacksonville, FL

 

BB&T SECURITY AGREEMENT

 

This Security
Agreement (“Security Agreement”) is made             , 2015, by and among PATRIOT TRANSPORTATION HOLDING, INC., a Florida
corporation and FLORIDA ROCK & TANK LINES, INC., a Florida corporation (collectively, “Debtor”), and Branch Banking
and Trust Company, a North Carolina banking corporation (“Secured Party”).

This Security Agreement is entered
into in connection with (check applicable items):

☒  (i)a
Loan Agreement dated May 13, 2015, under which the Secured Party has agreed to make a loan(s) and/or establish a line(s) of credit,
as same may be modified or amended from time to time (“Loan Agreement”);

☒  (ii) Promissory Notes of the
Debtor (sometimes referred to herein as the “Borrower”), made and delivered to the Secured Party from time to time
in accordance with the terms of the Loan Agreement (including all extensions, renewals, modifications and substitutions thereof,
the “Note”);

☒  (iii) a guaranty agreement
or agreements (whether one or more, the “Guaranty”) executed by the guarantors named therein (whether one or more,
the “Guarantors”) dated on or about the same date as this Security Agreement;

☐  (iv) a control agreement covering
the Debtor’s, Borrower’s, or any Guarantor’s Deposit Account(s), Investment Property, Letter-of-Credit Rights,
or Electronic Chattel Paper dated on or about the same date as this Security Agreement executed by the Debtor, the Borrower, and
any such Guarantor;

☐  (v) the sale by Debtor and
purchase by Secured Party of Accounts, Chattel Paper, Payment Intangibles and/or Promissory Notes; and/or

☐  (vi)  ____.

Secured Party and Debtor agree as follows:

I.            DEFINITIONS.

 

1.1        Collateral.
Unless specific items of personal property are described below, the Collateral shall consist of all now owned and hereafter
acquired and wherever located personal property of Debtor identified below, each capitalized term as defined in Article 9 of the
Florida Uniform Commercial Code (“UCC”)(check applicable items):

☐  (i)Accounts,
including all contract rights and health-care-insurance receivables;

☐  (i-a)The
Account(s), contract right(s) and/or Health-Care-Insurance Receivables specifically described as follows:______  .

☐  (ii)Inventory,
including all returned inventory;

☐  (ii-a)
The Inventory specifically described as follows: ______.

 ☐  (iii)Equipment,
including all Accessions thereto, and all manufacturers’ warranties, parts and tools therefore;

☐  (iii-a) The Equipment, including
all Accessions thereto, all manufacturer’s warranties therefore, and all parts and tools therefore, specifically described
as follows:   ______.

☐  (iv)Investment
Property, including the following certificated securities and/or securities account(s) specifically described as follows:   ______.

☐  (v)Instruments,
including all promissory notes and certificated certificates of deposit specifically described as follows:  ______.

 ☐  (vi)Deposit
Accounts with Secured Party specifically described below (list account number(s));

☐  (vi-a) The
Deposit Accounts with other financial institutions specifically described as follows (list financial institution and account number(s)
  ______.)

☐  (vii)Chattel Paper (whether tangible or electronic);

☐  (vii-a) The Chattel Paper
specifically described as follows:   ______.

☐  (viii)Goods,
including all Fixtures and timber to be cut, located or situated on the real property specifically described as follows (list legal
description as shown on deed including county and state):   ______..

☐  (ix)Farm
Products, including all crops grown, growing or to be grown, livestock (born and unborn), supplies used or produced in a farming
operation, and products of crops and livestock;

☐  (ix-a) The Farm Products
specifically described as follows:   ______.

☐  (x)As-Extracted
Collateral from the following location(s) (list legal description including county and state):   ______.

☐  (xi)The
Letter-of-Credit Rights under the following letter(s) of credit (list issuer, number and amount):   ______.

☐  (xii)
Documents of Title, including all warehouse receipts and bills of lading specifically described as follows:   ______.

 

    	 

    	 

    

   

☐  (xiii)Commercial
Tort Claim(s) more specifically described as follows: ______.

☐  (xiv)Money,
including currency and/or rare coins delivered to and in possession of the Secured Party specifically described as follows:  ______.

☐  (xv)Software
specifically described as follows: ______.

☐  (xvi)Manufactured
Home(s):

 

	

Model	

Year	

Serial Number 1	Doublewide 

Serial Number 2
	1. 	 	 	 
	2. 	 	 	 

☒  (xvii)Vehicles,
semi-trucks, cabs, tractor units and semi-trailers of Debtor more particularly described on the attached Schedule A
(the “Vehicles”) which Schedule may be amended and restated from time to time by the Secured Party and Debtor, initialed
or signed by each such party, and attached hereto.

☐  (xviii)General
intangibles, including all Payment Intangibles, copyrights, trademarks, patents, tradenames, tax refunds, company records (paper
and electronic), rights under equipment leases, warranties, software licenses, and the following, if any:  

☐  (xix)Supporting
Obligations;

 ☒  (xx)to
the extent not listed above as original collateral, all proceeds (cash and non-cash) and products of the foregoing.

1.2

Obligations.
This Security Agreement secures the following (collectively, the “Obligations”):

(i)

Debtor’s
or Borrower’s obligations under the Note, the Loan Agreement, and this Security Agreement, and in addition to the foregoing
obligations, if the Debtor is a Guarantor, its obligations under its Guaranty;

(ii)

all of Debtor’s
or Borrower’s present and future indebtedness and obligations to Secured Party including without limitation reimbursement
of drafts or drawings paid by Secured Party on any Commercial or Standby Letter of Credit issued on the account of the Debtor or
Borrower; and all indebtedness and obligations of Debtor or Borrower to Secured Party (or an affiliate of Secured Party) under
any interest rate swap transactions, interest rate cap and/or floor transactions, interest rate collar transactions, swap agreements
(as defined in 11 U.S.C. § 101) or other similar transactions or agreements, including without limitation any ISDA Master
Agreement executed by Debtor or Borrower and all Schedules and Confirmations entered into in connection therewith, hereinafter
collectively referred to as a Hedge Agreement.

(iii)

the repayment
of (a) any amounts that Secured Party may advance or spend for the maintenance or preservation of the Collateral, and (b) any other
expenditures that Secured Party may make under the provisions of this Security Agreement or for the benefit of Debtor or Borrower;

(iv)

all amounts
owed under any modifications, renewals, extensions or substitutions of any of the foregoing obligations;

(v)

all Default
Costs, as defined in Paragraph VIII of this Security Agreement; and

(vi)

any of the
foregoing that may arise after the filing of a petition by or against Debtor or Borrower under the Bankruptcy Code, even if the
obligations do not accrue because of the automatic stay under Bankruptcy Code § 362 or otherwise.

1.3

UCC.  Any term
used in the UCC and not otherwise defined in this Security Agreement has the meaning given to the term in the UCC.

II.

GRANT OF SECURITY
INTEREST.

Debtor grants a security interest in
the Collateral to Secured Party to secure the payment and performance of the Obligations.

III.

PERFECTION OF
SECURITY INTERESTS.

3.1

Filing of Security
Interests.

(i)

Debtor authorizes Secured
Party to execute on the Debtor’s behalf and file any financing statement (the “Financing Statement”) describing
the Collateral in any location deemed necessary and appropriate by Secured Party.

(ii)

Debtor authorizes Secured
Party to file a Financing Statement describing any agricultural liens or other statutory liens held by Secured Party.

(iii)

Secured Party shall
receive prior to the closing an official report from the Secretary of State of each Place of Business and the Debtor State, each
as defined below, collectively (the “Filing Reports”) indicating that Secured Party’s security interest is prior
to all other security interests or other interests reflected in the report.

3.2

Possession.

(i)

Debtor shall have possession
of the Collateral, except where expressly otherwise provided in this Security Agreement or where the Collateral consists of personal
property for which possession is permitted or required for perfection and Secured Party chooses to perfect its security interest
by possession in addition to the filing of a Financing Statement.

 

    	 

    	 

    

 

(ii)

Where Collateral is
in the possession of a third party, Debtor will join with Secured Party in notifying the third party of Secured Party’s security
interest and obtaining an acknowledgment from the third party that it is holding the Collateral for the benefit of Secured Party.

(iii)

Debtor shall deliver
original certificates of title for all portions of the Collateral which are Vehicles, together with a properly executed power of
attorney authorizing Secured Party to file and register its security interest in such Vehicles with the applicable Department of
Motor Vehicles.

3.3

Control Agreements.
Debtor will cooperate with Secured Party in obtaining a control agreement in form and substance satisfactory to Secured Party with
respect to Collateral consisting of (check appropriate items):

☐            Deposit Accounts
(for deposit accounts at other financial institutions);

☐            Investment
Property (for securities accounts, mutual funds and other uncertificated securities);

☐            Letter-of-credit
rights; and/or

☐            Electronic
chattel paper.

3.4

Marking of Chattel
Paper. If Chattel Paper is part of the Collateral, Debtor will not create any Chattel Paper without placing a legend on the
Chattel Paper acceptable to Secured Party indicating that Secured Party has a security interest in the Chattel Paper.

IV.

POST-CLOSING COVENANTS
AND RIGHTS CONCERNING THE COLLATERAL.

4.1

Inspection.
The parties to this Security Agreement may inspect any Collateral in the other party’s possession, at any time upon reasonable
notice.

4.2

Personal Property.
Except for items specifically identified by Debtor and Secured Party as Fixtures, the Collateral shall remain personal property
at all times, and Debtor shall not affix any of the Collateral to any real property in any manner which would change its nature
from that of personal property to real property or to a fixture.

4.3

Secured Party’s
Collection Rights. Secured Party shall have the right at any time to enforce Debtor’s rights against any of Debtor’s
account debtors and obligors solely with respect to the proceeds (cash and non-cash) and products of the Collateral.

4.4

Limitations on Obligations
Concerning Maintenance of Collateral.

(i)

Risk of Loss.
Debtor has the risk of loss of the Collateral.

(ii)

No Collection Obligation.
Secured Party has no duty to collect any income accruing on the Collateral or to preserve any rights relating to the Collateral.

4.5

No Disposition of
Collateral. Secured Party does not authorize, and Debtor agrees not to:

(i)

make any sales or leases
of any of the Collateral other than in the ordinary course of business;

(ii)

license any of the
Collateral; or

(iii)

grant any other security
interest in any of the Collateral.

4.6

Purchase Money Security
Interests. To the extent Debtor uses the Loan to purchase Collateral, Debtor’s repayment of the Loan shall apply on a
“first-in-first-out” basis so that the portion of the Loan used to purchase a particular item of Collateral shall be
paid in the chronological order the Debtor purchased the Collateral.

4.7

Insurance.
Debtor shall obtain and keep in force such insurance on the Collateral as is normal and customary in the Debtor’s
business or as the Secured Party may require, all in such amounts, under such forms of policies, upon such terms, for such
periods and written by such insurance companies as the Secured Party may approve. All policies of insurance will contain the
long-form Lender’s Loss Payable clause in favor of the Secured Party, and the Debtor shall deliver the policies or
complete copies thereof to the Secured Party. Such policies shall be noncancellable except upon thirty (30) days’ prior
written notice to the Secured Party. The proceeds of all such insurance, if any loss should occur, may be applied by the
Secured Party to the payment of the Obligations or to the replacement of any of the Collateral damaged or destroyed, as the
Secured Party may elect or direct in its sole discretion. The Debtor hereby appoints (which appointment constitutes a power
coupled with an interest and is irrevocable as long as any of the Obligations remain outstanding) Secured Party as its lawful
attorney-in-fact with full authority to make, adjust, settle claims under and/or cancel such insurance and to endorse the
Debtor’s name on any instruments or drafts issued by or upon any insurance companies.

V.

DEBTOR’S
REPRESENTATIONS AND WARRANTIES.

Debtor represents and warrants to Secured
Party:

5.1

Title to and transfer
of Collateral. It has rights in or the power to transfer the Collateral and its title to the Collateral is free of all adverse
claims, liens, security interests and restrictions on transfer or pledge except as created by this Security Agreement.

 

    	 

    	 

    

 

5.2

Location of Collateral.
All collateral consisting of goods (equipment, inventory, fixtures, crops, unborn young of animals, timber to be cut, manufactured
homes; and other tangible, movable personal property) is titled, or if not titled located (as such term is used in the UCC)
solely in the following States (the “Collateral States”): Florida and Georgia

5.3

Location, State
of Incorporation and Name of Debtor. Debtor’s:

(i)

chief executive office
(if Debtor has more than one place of business), place of business (if Debtor has one place of business), or principal residence
(if Debtor is an individual), is located in the following State and address (the “Place of Business”): 200 West
Forsyth Street, 7th Floor, Jacksonville, Florida 32202.

(ii)

state of incorporation
or organization is Florida (the “Debtor State”);

(iii)

exact legal name is
as set forth in the first paragraph of this Security Agreement.

5.4

Business or Agricultural
Purpose. None of the Obligations is a Consumer Transaction, as defined in the UCC and none of the Collateral has been or will
be purchased or held primarily for personal, family or household purposes.

VI.

DEBTOR’S
COVENANTS.

Until the Obligations are paid in full,
Debtor agrees that it will:

6.1

(i) (a) maintain its
existence and good standing in the state of its incorporation or organization, (b) maintain its current legal form of business,
and (c), as applicable, qualify and remain qualified as a foreign corporation in each jurisdiction in which such qualification
is required;

(ii) not (a) sell,
lease, transfer or otherwise dispose of, or permit any of its subsidiaries to sell, lease, transfer or otherwise dispose of, any
of its assets or properties except in the ordinary and usual course of its business, and (b) sell, convey, transfer or encumber
the Collateral or consummate a bulk sale transfer of Debtor’s personal property without the prior consent of Secured Party;

6.2

not change the Debtor
State of its registered organization;

6.3

not change Debtor’s
name without providing Secured Party with 30 days’ prior written notice, or change the legal form of Debtor’s business,
whether by merger, consolidation, conversion or otherwise; and

6.4

not change the state
of its Place of Business or, if Debtor is an individual, change his state of residence without providing Secured Party with 30
days’ prior written notice.

VII.

EVENTS OF DEFAULT.

The occurrence of any of the following
shall, at the option of Secured Party, be an Event of Default:

7.1

Any default or Event
of Default by Borrower or Debtor under the Note, Loan Agreement, Hedge Agreement or any of the other loan documents, and any Guaranty
or any of the other Obligations;

7.2

Subject to any applicable
notice and cure periods set forth in the respective document, Debtor’s failure to comply with any of the provisions of, or
the incorrectness of any representation or warranty contained in, this Security Agreement, the Note, the Loan Agreement, or in
any other document relating to the Obligations;

7.3

Transfer or disposition
of any of the Collateral, except as expressly permitted by this Security Agreement;

7.4

Attachment, execution
or levy on any of the Collateral;

7.5

Debtor voluntarily
or involuntarily becoming subject to any proceeding under (a) the Bankruptcy Code or (b) any similar remedy under state
statutory or common law;

7.6

Debtor shall fail to
comply with, or become subject to any administrative or judicial proceeding under any federal, state or local (a) hazardous waste
or environmental law where noncompliance may have a significant negative effect on the Collateral, (b) asset forfeiture or
similar law which can result in the forfeiture of the Collateral, or (c) other law where noncompliance may have a significant
negative effect on the Collateral; or

7.7

Secured Party shall
receive at any time following the closing a UCC filing report indicating that Secured Party’s security interest is not
prior to all other security interests or other interests reflected in the report.

VIII.

DEFAULT COSTS.

8.1

Should an Event of
Default occur, Debtor will pay to Secured Party all costs incurred by the Secured Party for the purpose of enforcing its rights
hereunder, including:

(i)

costs of foreclosure;

(ii)

costs of obtaining
money damages; and

(iii)

a reasonable fee for
the service of attorneys employed by Secured Party for any purpose related to this Security Agreement or the Obligations, including
without limitation consultation, drafting documents, sending notices or instituting, prosecuting or defending litigation or arbitration.

 

    	 

    	 

    

 

IX.

REMEDIES UPON
DEFAULT.

9.1

General. Upon
any Event of Default, Secured Party may pursue any remedy available at law (including those available under the provisions of the
UCC), or in equity to collect, enforce or satisfy any Obligations then owing, whether by acceleration or otherwise.

9.2.

Concurrent Remedies.
Upon any Event of Default, Secured Party shall have the right to pursue any of the following remedies separately, successively
or concurrently:

(i)

File suit and obtain
judgment and, in conjunction with any action, Secured Party may seek any ancillary remedies provided by law or at equity, including
levy of attachment and garnishment.

(ii)

Take possession of
any Collateral if not already in its possession without demand and without legal process. Upon Secured Party’s demand,
Debtor will assemble and make the Collateral available to Secured Party as it directs. Debtor grants to Secured Party the right,
for this purpose, to enter into or on any premises where Collateral may be located.

(iii)

Without taking possession,
sell, lease or otherwise dispose of the Collateral at public or private sale in accordance with the UCC.

X.

FORECLOSURE PROCEDURES.

10.1

No Waiver. No
delay or omission by Secured Party to exercise any right or remedy accruing upon any Event of Default shall (a) impair any
right or remedy, (b) waive any default or operate as an acquiescence to the Event of Default, or (c) affect any subsequent
default of the same or of a different nature.

10.2

Notices. Secured
Party shall give Debtor such notice of any private or public sale as may be required by the UCC.

10.3

Condition of Collateral.
Secured Party has no obligation to repair, clean-up or otherwise prepare the Collateral for sale.

10.4

No Obligation to
Pursue Others.  Secured Party has no obligation to attempt to satisfy the Obligations by collecting them from any other person
liable for them and Secured Party may release, modify or waive any collateral provided by any other person to secure any of
the Obligations, all without affecting Secured Party’s rights against Debtor. Debtor waives any right it may have to require
Secured Party to pursue any third person for any of the Obligations.

10.5

Compliance With
Other Laws. Secured Party may comply with any applicable state or federal law requirements in connection with a disposition
of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

10.6

Warranties.
Secured Party may sell the Collateral without giving any warranties as to the Collateral and may specifically disclaim any warranties
of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the
Collateral.

10.7

[intentionally deleted]

10.8

Purchases by Secured
Party. In the event Secured Party purchases any of the Collateral being sold, Secured Party may pay for the Collateral by crediting
some or all of the Obligations of the Debtor.

10.9

No Marshalling.
Secured Party has no obligation to marshal any assets in favor of Debtor, or against or in payment of:

(i)

the Note,

(ii)

any of the other Obligations,
or

(iii)

any other obligation
owed to Secured Party, Borrower or any other person.

XI.

MISCELLANEOUS.

11.1

Assignment.

(i)

Binds Assignees.
This Security Agreement shall bind and shall inure to the benefit of the successors and assigns of Secured Party, and shall
bind all heirs, personal representatives, executors, administrators, successors and permitted assigns of Debtor.

(ii)

No Assignments by
Debtor. Secured Party does not consent to any assignment by Debtor except as expressly provided in this Security Agreement.

(iii)

Secured Party Assignments.
Secured Party may assign its rights and interests under this Security Agreement. If an assignment is made, Debtor shall render
performance under this Security Agreement to the assignee. Debtor waives and will not assert against any assignee any claims, defenses
or set-offs which Debtor could assert against Secured Party except defenses which cannot be waived.

11.2

Severability.
Should any provision of this Security Agreement be found to be void, invalid or unenforceable by a court or panel of arbitrators
of competent jurisdiction, that finding shall only affect the provisions found to be void, invalid or unenforceable and shall not
affect the remaining provisions of this Security Agreement.

 

    	 

    	 

    

 

11.3

Notices. Any
notices required by this Security Agreement shall be deemed to be delivered when a record has been (a) deposited in any United
States postal box if postage is prepaid, and the notice properly addressed to the intended recipient, (b) received by telecopy,
(c) received through the Internet, and (d) when personally delivered.

11.4

Headings. Section
headings used in this Security Agreement are for convenience only. They are not a part of this Security Agreement and shall
not be used in construing it.

11.5

Governing Law.
This Security Agreement is being executed and delivered and is intended to be performed in the State of Florida shall be construed
and enforced in accordance with the laws of the State of Florida, except to the extent that the UCC provides for the application
of the law of the Debtor State.

11.6

Rules of Construction.

(i)

No reference to “proceeds”
in this Security Agreement authorizes any sale, transfer, or other disposition of the Collateral by the Debtor except in the
ordinary course of business.

(ii)

“Includes”
and “including” are not limiting.

(iii)

“Or” is
not exclusive.

(iv)

“All” includes
“any” and “any” includes “all.”

11.7

Integration and
Modifications.

(i)

This Security Agreement
is the entire agreement of the Debtor and Secured Party concerning its subject matter.

(ii)

Any modification to
this Security Agreement must be made in writing and signed by the party adversely affected.

11.8

Waiver. Any
party to this Security Agreement may waive the enforcement of any provision to the extent the provision is for its benefit.

11.9

Further Assurances.
Debtor agrees to execute any further documents, and to take any further actions, reasonably requested by Secured Party to evidence
or perfect the security interest granted herein or to effectuate the rights granted to Secured Party herein.

11.10

WAIVER
OF TRIAL BY JURY. UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY
OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS SECURITY AGREEMENT OR ANY LOAN DOCUMENT EXECUTED IN CONNECTION HEREWITH OR OUT
OF THE CONDUCT OF THE RELATIONSHIP BETWEEN THE UNDERSIGNED AND SECURED PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
SECURED PARTY TO MAKE THE LOAN TO DEBTOR OR BORROWER. FURTHER, THE UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT
OF SECURED PARTY, NOR SECURED PARTY’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SECURED PARTY WOULD NOT
SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION IN THE EVEN OF LITIGATION. NO REPRESENTATIVE OR AGENT OF SECURED
PARTY, NOR SECURED PARTY’S COUNSEL, HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.

 

[SIGNATURES
ON THE FOLLOWING PAGE]

    	 

    	 

    

 

SIGNATURE PAGE

 

 

The parties have signed this Security Agreement
under seal as of the day and year first above written.

	WITNESS:	PATRIOT TRANSPORTATION HOLDING, INC.,
	 	a Florida corporation
	 	 	 
	 	 	By:	
	 	 		Enter Name
	 	 	Title:	Title
	 	 	 	 
	 	 	 	 
	 	 	 	  

	WITNESS:	 	FLORIDA ROCK &TANK LINES, INC.,
	 	 	a Florida corporation
	 	 	 	 
	 	 	By:	 
	 	 	 	Enter Name
	 	 	Title:	Title
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	GUARANTOR:
	 	 	 	 
	WITNESS:	 	PATRIOT TRANSPORTATION, INC., OF FLORIDA,
	 	 	a Florida corporation
	 	 	 	 
	 	 	By:	 
	 	 	 	Enter Name
	 	 	Title:	Title
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	BANK:
	 	 	 	 
	WITNESS:	 	BRANCH BANKING AND TRUST COMPANY
	 	 	 	 
	 	 	By:	 
	 	 	 	Ryan G. Tiedeberg
	 	 	Title:	Sr. Vice President
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

    	 

    	 

    

 

 

Schedule A

Vehicles

[LIST OF EQUIPMENT TO BE INSERTED
FROM COLLATERAL IDENTIFICATION SCHEDULE 

AS AGREED UPON BY DEBTOR AND SECURED PARTY]

 

	

New/Used	

Year/Make	

Model/Body Type	VIN Number/

VIN Number/Serial Number
	1. 	     	     	     
	2. 	     	     	     
	3. 	     	     	     
	4. 	     	     	     
	5.      	     	     	     
	6.      	     	     	     
	7.      	     	     	     
	8.      	     	     	     
	9.      	     	     	     
	10.      	     	     	     
	11.      	     	     	     
	12.      	     	     	     
	13.      	     	     	     
	14.      	     	     	     
	15.      	     	     	     
	16.      	     	     	     
	17.      	     	     	     
	18.      	     	     	     
	19.      	     	     	     
	20.      	     	     	     
	21.      	     	     	     
	22.      	     	     	     
	23.      	     	     	     

 

 

    	 

    	 

    

 

Exhibit “C”

Form of Opinion Letter

 

 

[LETTERHEAD
OF BORROWER’S COUNSEL] 

[Date of Closing]

 

Branch Banking and Trust Company

200 West Forsyth Street, Suite 200

Jacksonville, Florida 32202

Attention: Ryan G. Tiedeberg, Sr. Vice President

Re:
$25,000,000 Guidance Loan Facility

Ladies and Gentlemen:

       We
have acted as counsel to PATRIOT TRANSPORTATION HOLDING, INC., a Florida corporation, and FLORIDA ROCK & TANK LINES, INC.,
a Florida corporation (individually and collectively, “Borrower”), and PATRIOT TRANSPORTATION, INC., OF FLORIDA, a
Florida corporation (“Guarantor”), in connection with that certain guidance line of credit facility in the principal
amount of Twenty-Five Million and No/100 Dollars ($25,000,000.00) (the “Loan”) from BRANCH BANKING AND TRUST COMPANY,
a North Carolina banking corporation (“Bank”), to Borrower.

BACKGROUND

For
purposes of rendering this opinion, we have examined the following documents, all dated of even date herewith, unless otherwise
noted below:

(i)

Loan
Agreement (“Loan Agreement”) between Borrower and Bank and joined by Guarantor dated as of May 13, 2015;

(ii)

Promissory
Note (“Note”) by Borrower in favor of Bank;

(iii)

Security
Agreement (“Security Agreement”) between Borrower and Bank under which the Borrower granted to Bank a security interest
in certain of the Borrower’s personal property and vehicles, semi-trucks, cabs, tractor units and semi-trailers described
therein (“Personal Property”) as security for the Loan;

(iv)

An
undated UCC Financing Statement (“Financing Statement”) to be filed with the office of the Secretary of State of Florida;

(v)

Guaranty
Agreement (“Guaranty”) executed by the Guarantor;

(vi)

Written
Consent of the Board of Directors of each Borrower, which contains such Borrower’s authority to borrow and to execute the
Loan Documents (“Borrower Consents”); and

(vii)

Written
Consent of the Board of Directors of Guarantor, which contains the Guarantor’s authority to guaranty and to execute the Guaranty
(“Guarantor Consent”).

For
purposes of this opinion, the Loan Agreement, the Note, the Security Agreement, the Financing Statement, the Borrower Consents
and the Guarantor Consent are collectively called the “Loan Documents”. All capitalized terms used herein and not otherwise
defined herein shall have the same meanings given them in the Loan Agreement.

We
have also reviewed and relied upon such certificates of Borrower and Guarantor as to factual matters, certificates of public officials
and other instruments, documents and agreements as we have deemed necessary or appropriate to enable us to render the opinions
set forth below.

 

    	 

    	 

    

 

ASSUMPTIONS

In
rendering this opinion, we have assumed, with your express permission and without independent verification or investigation, each
of the following:

(a)

All
natural persons executing the Loan Documents and the Guaranty are legally competent to do so; all signatures on all documents
submitted to us (other than the signatures of Borrower and Guarantor) are genuine; all documents submitted to us as originals
are authentic; and all documents submitted to us as copies conform to the original documents, which themselves are authentic;

(b)

To the extent that any Loan
Document or the Guaranty imposes any obligations upon Bank, the Loan Documents and the Guaranty are valid and binding obligations
of Bank, enforceable against Bank in accordance with their respective terms.

(c)

The documentary stamp tax
required by the State of Florida due on each promissory note or other written obligation to pay in connection with this Loan has
been duly paid.

OPINIONS

Based
upon the foregoing assumptions and subject to the qualifications, limitations and exceptions set forth herein, we are of the opinion
that:

1.

Borrower
is a corporation duly organized and validly existing in good standing under the laws of the State of Florida with full corporate
power to borrow money and to execute, deliver and perform the obligations set forth in the Loan Documents, and to grant liens and
security interests in the Personal Property to secure the Loan. In rendering our opinion that the Borrower is ‘validly existing
in good standing” we have relied on a Certificate of Status dated ____________, 201__, from the Florida Secretary of State.

2.

The
execution and delivery of the Loan Documents have been duly authorized by all necessary corporate action on the part of Borrower.

3.

Each
of the Loan Documents has been duly executed and delivered by Borrower and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.

4.

Guarantor
is a corporation duly organized and validly existing in good standing under the laws of the State of Florida with full corporate
power to execute, deliver, undertake and perform the obligations set forth in its Guaranty. In rendering our opinion that such
Guarantor is “validly existing in good standing” we have relied on a Certificate of Status dated _____________, 201__,
from the Florida Secretary of State.

5.

The
execution, delivery and performance of its Guaranty have been duly authorized by all necessary corporate action on the part of
Guarantor.

6.

The
Guaranty has been duly executed and delivered by Guarantor and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms.

7.

The
Loan Documents and the performance by Borrower of its obligations thereunder do not conflict with, or result in a violation of
its Articles of Incorporation and Bylaws. To the best of our knowledge, the execution, delivery and performance of the Loan Documents
by Borrower (a) do not and will not violate or conflict with any order, writ, injunction or decree of any court, administrative
agency or any other governmental authority applicable to Borrower or the Personal Property or any agreement, including, without
limitation, any credit or guaranty agreement, by which it is bound, and (b) will not result in the creation or imposition of any
lien, charge or encumbrance upon any of its assets, except as set forth or contemplated by the terms of the Loan Documents.

8.

The
Guaranty and the performance by Guarantor of its obligations thereunder do not conflict with or result in a violation of its Articles
of Incorporation and Bylaws. To the best of our knowledge upon inquiry, the execution, delivery and performance by each Guarantor
of its obligations under the Guaranty do not and will not violate or conflict with any order, writ, injunction or decree of any
court, administrative agency or any other governmental authority applicable to such Guarantor, or with any agreement, including,
without limitation, any credit or guaranty agreement, by which any Guarantor is bound.

9.

To
the best of our knowledge, there is no action, suit or proceeding at law or in equity, or by or before any governmental instrumentality
or agency or arbitral body now pending, or overtly threatened against Borrower, any Guarantor or the Personal Property, except
which has been expressly disclosed to Bank prior to the date hereof.

10.

The
Loan, as described and set forth in the Loan Documents, does not violate any existing laws of the State of Florida relating to
interest or usury and will not violate any such law by virtue of any fluctuations in any base, prime, index or equivalent rate
or rates in which interest charges may be based under the Loan Documents.

11.

The Security
Agreement creates for the benefit of Bank a valid security interest in the Personal Property owned by Borrower which consists of
types or items of personal property to which the Uniform Commercial Code of the State of Florida (“UCC”) is applicable
and in which a security interest may be created thereunder. The filing of the Financing Statement in such office will perfect the
security interest in the Personal Property owned by Borrower and described in the Financing Statement which consists of types or
items of personal property to which the UCC is applicable and in which a security interest may be perfected by filing of financing
statements in the State of Florida. The security interest granted to Bank in the portion of the Personal Property which is covered
by certificates of title will be perfected upon the notation on the face of each certificate of title
issued by the Florida Department of Motor Vehicles. 

 

    	 

    	 

    

 

QUALIFICATIONS

The opinions
set forth herein are subject to the following qualifications:

(A)

Enforceability
of the Loan Documents and the Guaranty may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar state or federal debtor relief laws from time to time in effect and which affect the enforcement of
creditors’ rights or the collection of debtors’ obligations in general, (ii) general principles of equity, the application
of which may deny Bank certain of the rights and remedies granted to Bank under the Loan Documents or the Guaranty, including the
rights to specific performance, injunctive relief and the appointment of a receiver, and (iii) general principles of commercial
reasonableness and good faith to the extent required of Bank by applicable law;

(B)

Certain
remedies, waivers and other provisions of the Loan Documents and Guaranty may not be enforceable, but such unenforceability will
not render the Loan Documents or the Guaranty invalid as a whole or preclude (i) the judicial enforcement of the obligation of
Borrower to repay the principal, together with interest thereon, as provided in the Note or the obligation of any Guarantor to
repay such principal and interest as provided in the Guaranty, and (ii) either the judicial or nonjudicial foreclosure of the Security
Agreement. Provisions that may be unenforceable due to public policy concerns may include, but are not limited to, issues related
to the waiver of procedural, substantive or constitutional rights or other legal or equitable rights, including, without limitation,
and the right of statutory or equitable redemption; the confession or consent to any judgment; the consent by Borrower or the Guarantor
to the jurisdiction of any court or to service of process in any particular manner; forum selection clauses; disclaimers or limitations
of liabilities; discharges of defenses; the exercise of self-help or other remedies without judicial process; and the waiver of
accountings for rent or sale proceeds.

(C)

We
express no opinion as to the enforceability of any provisions of any of the Loan Documents or the Guaranty which impose liquidated
damages, penalties, forfeitures, or that appoint Bank or others as the agent or attorney-in-fact for Borrower or any Guarantor.

(D)

With
respect to the Guaranty, we express no opinion as to the enforceability of any provision of any Guaranty against the estate of
a deceased or incompetent Guarantor to the extent of advances made on the Loan after any Guarantor’s death or incompetency;

(E)

We
express no opinion as to the effectiveness of any provisions of the Loan Documents that provide for the assignment or transfer
of any permits, licenses or similar rights of Borrower;

(F)

In
connection with the opinion set forth in paragraph 11 above, we call your attention to the following:

(i)

The
security interest of Bank in the Personal Property perfected by filing a financing statement requires the filing of continuation
statements duly executed by Bank within the period of six (6) months prior to the expiration of five (5) years from the date of
filing of the Financing Statement;

(ii)

Under
certain circumstances described in §679.3151 of the UCC, the rights of a secured party to enforce a perfected security interest
in proceeds of collateral may be limited;

(iii)

Under
certain circumstances described in §679.320 of the UCC, purchasers of collateral may take the same free and clear of a perfected
security interest; and

(iv)

Pursuant
to §679.508 of the UCC perfection of the security interest of Bank in the Personal Property will be terminated as to any property
acquired by Borrower more than four (4) months after the date Borrower changes its name or identity so as to make the filed Financing
Statement seriously misleading unless new appropriate financing statements indicating the new name or identity of Borrower are
properly filed before the expiration of such four month period.

(G)

In
rendering the opinions set forth in paragraphs 7, 8 and 9 above we have, with your permission, advised you only as to such knowledge
as we have obtained from (a) the certificates of Borrower and Guarantor and our examination of any documents referred to therein
(including, without limitation, a review of the Wells Fargo Credit Facility Documents); and (b) inquiries of Guarantor and officers,
partners, members and any responsible employees of Borrower and each corporate, partnership or limited liability company Guarantor
and lawyers presently in our firm whom we have determined are likely, in the ordinary course of their respective duties, to have
knowledge of the transactions contemplated by the Loan Documents, the Guaranty and the matters covered by this opinion. Except
to the extent otherwise set forth above, for purposes of this opinion, we have not made an independent review of any agreements,
instruments, writs, orders, judgments, rules or other regulations or decrees which may have been executed by or which may now be
binding upon Borrower or any Guarantor or which may affect the Personal Property, nor have we undertaken to review our internal
files or any files of Borrower or any Guarantor relating to transactions to which Borrower or any Guarantor may be a party, or
to discuss their transactions or business with any other lawyers in our firm or with any officers, partners or any employees of
Borrower or any Guarantor.

 

    	 

    	 

    

 

(H)

We
are admitted to practice only in the State of Florida and we express no opinion as to matters under or involving the laws of any
jurisdiction other than the United States of America and the State of Florida and its political subdivisions. This opinion is rendered
solely to Bank in connection with the Loan and may not be relied upon by any other party (except counsel to Bank) or for any other
purposes other than the purposes herein stated without our prior written consent.

 

	 	Yours
truly,
	 	 
	 	NELSON
MULLINS RILEY & SCARBOROUGH, LLP

 

    	 

    	 

    

 

Exhibit “D”

Form of Guaranty

BB&T

GUARANTY AGREEMENT

 

	BRANCH BANKING AND TRUST COMPANY	Date:	
                                  , 2015

 

As an inducement to Branch Banking and
Trust Company (“Bank”), to extend credit to and to otherwise deal with PATRIOT TRANSPORTATION HOLDING, INC.,
a Florida corporation and FLORIDA ROCK & TANK LINES, INC., a Florida corporation (collectively, “Borrower”),
and in consideration thereof, the undersigned (the “Guarantor” and each of the undersigned Guarantors, jointly and
severally, if more than one) hereby unconditionally guarantees to Bank and its successors and assigns the due and punctual payment
of any and all notes, drafts, debts, ACH obligations and liabilities, primary or secondary (whether by way of endorsement or otherwise),
of Borrower, at any time, whether now existing or hereafter incurred with or held by Bank, together with interest, as and when
the same become due and payable, and whether by acceleration or otherwise (collectively, the “Obligations”), in accordance
with the terms of the Obligations including all renewals, extensions and modifications thereof. This Guaranty is a guarantee of
payment and not of collection.

To secure the Obligations, the Guarantor
hereby grants to bank a security interest in all of the Guarantor’s deposit accounts maintained with Bank, and Bank shall
also at all times have the right of set-off against any such deposit account in the same manner and to the same extent that the
right of set-off may exist against the Borrower. The Guarantor hereby subordinates any and all indebtedness of Borrower now or
hereafter owed to the Guarantor to the Obligations, and agrees with Bank that the Guarantor shall not demand payment of principal
or interest from Borrower, shall not claim any offset or other reduction of the Obligations because of any such indebtedness and
shall not take any action to obtain any of the security described in and encumbered by the documents evidencing Obligations (“Loan
Documents”); provided, however, that, if Bank so requests, such indebtedness shall be collected, enforced and received by
the Guarantor as trustee for Bank and shall be paid over to Bank on account of the Obligations, but without reducing or affecting
any manner the liability of the Guarantor under the other provisions of this Guaranty Agreement.

Guarantor understands and agrees that
an Obligation may be accepted or created with Bank at any time and from time to time without notice to Guarantor and Guarantor
hereby expressly waives presentment, demand, protest, and notice of dishonor of any such Obligation. Bank may receive and accept
as collateral from time to time any securities or other property for the Obligations, and may surrender, compromise, exchange and
release such collateral or any part thereof at any time without notice and without in any manner affecting the obligation and liability
of the Guarantor hereunder. Bank shall have no obligation to protect, perfect, secure or insure any security interests, liens or
encumbrances in any collateral now or hereafter held for the Obligations.

Notwithstanding anything to the contrary
herein, any person that does not qualify as an Eligible Contract Participant (as defined in the Commodity Exchange Act, as amended)
or otherwise does not qualify as an “indirect proprietorship” pursuant to the rules of the Commodity Futures Trading
Commission, shall not be deemed a party to any guaranty of any swap agreement with Bank entered into or modified on or after October
12, 2012, and shall not be liable for any swap obligations to Bank arising from such swap agreement. The foregoing exclusion shall
have no effect on any other obligation of such person to Bank under this Guaranty.

In the event of the occurrence of a “Default”
or “Event of Default’ otherwise related to the Obligations or evidenced or secured by any of the other Loan Documents
or relating to the transactions contemplated by the Loan Documents, all rights powers and remedies available to Bank in such event
shall be non-exclusive and cumulative of all other rights, powers and remedies provided thereunder or hereunder or by law or in
equity. Accordingly, the Guarantor hereby authorizes and empowers Bank upon the occurrence of Default or Event of Default under
the Note(s) or Loan Documents, at its sole discretion, and except as otherwise provided herein, without notice to Guarantor, to
exercise and cause to be exercised any right or remedy which Bank may have, including, but not limited to, judicial foreclosure,
non-judicial foreclosure by exercise of power of sale, acceptance of a deed or assignment in lieu of foreclosure, appointment of
a receiver to collect rents and profits, exercise of remedies against personal property, or enforcement of any assignment of leases,
rents, profits, accounts and certificates of deposit, or any other security, whether real, personal or tangible or intangible.
At any public or private sale of any security or collateral for any indebtedness or any part hereof guaranteed hereby, whether
by foreclosure or otherwise, Bank, may in its discretion, purchase all of any part of such security or collateral so sold or offered
for sale for its own account and may apply against the amount bid therefor the balance due it pursuant to the Note(s) or any of
the other Loan Documents without prejudice to Bank’s remedies hereunder against Guarantor for deficiencies or if allowed
by applicable law. If the Obligations are partially paid by reason of the election of Bank, its successors, endorsees or assigns,
to pursue any of the remedies available to Bank or if the Obligations are otherwise partially paid, then this Guaranty shall nevertheless
remain in full force and effect, and the Guarantor shall remain liable for the entire balance of the Obligations, even though any
rights which Guarantor may have against Borrower may be destroyed or diminished by the exercise of any such remedy.

This obligation of the Guarantor hereunder
shall be a primary and not a secondary obligation and liability, payable immediately upon demand without recourse first having
been obtained by Bank against the Borrower or any other guarantor or obligor, and without first resorting to any collateral held
by Bank for the Obligations. The Guarantor hereby waives the benefit of all provisions of law, for stay or delay of execution or
sale of any property or other satisfaction of judgment against the Guarantor until judgment is obtained against the Borrower and
execution thereon returned unsatisfied, or until it is determined that the Borrower has no property or assets available for the
satisfaction of the Obligations, or until any other proceedings can be completed. Guarantor hereby agrees to indemnify Bank for
all costs of collection, including but not limited to the costs of repossession, appraisal, foreclosure, all attorneys’ fees
reasonably incurred and all court costs incurred by Bank should Bank first be required by the Guarantor to resort to any collateral
held by the Bank or to obtain execution or other satisfaction of a judgment against the Borrower for the Obligations. The Guarantor
further agrees that the Guarantor is responsible for any part of the Obligations which have been paid by the Borrower to Bank and
which the Bank is subsequently required to return to the Borrower or a trustee for the Borrower in any bankruptcy or insolvency
proceeding. Guarantor agrees that it shall not have any right of subrogation, reimbursement or indemnity whatsoever, nor any right
of recourse to bank’s collateral for Obligations unless and until all of Obligations of the Borrower have been paid in full.
The Guarantor hereby waives, to the extent avoidable under any provision of the Bankruptcy Code, any right arising upon payment
by the Guarantor of any obligation under this Guaranty to assert a claim against the bankruptcy estate of the Borrower.

 

    	 

    	 

    

 

In addition to the other waivers set
forth elsewhere in this Guaranty, the Guarantor hereby waives and agrees not to assert or take advantage of (a) if allowed by applicable
law, the defense of the statute of limitations in any action hereunder or for the collection of the Obligations or the performance
of any Obligation; (b) any defense that may arise by reason of the incapacity, lack of authority, death or disability of Guarantor,
Borrower, or any other party or entity, or the failure of Bank to file or enforce a claim against the estate (either in administration,
bankruptcy or any other proceeding) of Borrower or any other party or entity; (c) any defense based upon the failure of Bank to
give notice of the existence, creation, or incurring of any new or additional indebtedness or obligation or the failure of Bank
to give notice of any action or non-action on the part of any other party whosoever, in connection with any Obligation, including
without limitation the release of any other guarantor; (d) any defense based upon an election of remedies by Bank which destroys
or otherwise impairs any subrogation rights of Guarantor to proceed against Borrower for reimbursement, or both; (e) any defense
based upon failure of Bank to commence an action against Borrower or any other guarantor of the Obligations; (f) any duty on the
part of Bank to disclose to the Guarantor any fact that is may know or hereafter know regarding Borrower; (g) acceptance or notice
of acceptance of this Guaranty by Bank; (h) as stated above, notice of presentment and demand for payment or performance of the
Obligations or performance of any except as otherwise required in this Guaranty; (i) as set forth above, protest and notice of
dishonor or of default to the Guarantor or to any other party with respect to the indebtedness or performance of obligations hereby
guaranteed; (j) except as otherwise provided herein, any and all other notices whatsoever to which the Guarantor might otherwise
be entitled; (k) any defense based on lack of due diligence by the Bank and the collection, protection or realization upon any
collateral securing the Obligations; (l) any transfer by Borrower of all or any part of the security for the Obligations; and (m)
any other legal or equitable defenses whatsoever to which the Guarantor might be entitled, to the extent permitted by law, unless
such defenses are based upon the willful misconduct of the Bank.

Check applicable box:

☒This Guaranty is unlimited and
applies to all indebtedness of Borrower, whether now existing or hereafter arising, including without limitation (a) all obligations
of the Borrower to Bank in connection with any transfer of funds through the ACH System, and (b) all obligations of the Borrower
to Bank in connection with that certain Loan Agreement dated of even date herewith by and between Borrower and Bank, the guidance
loan extended to Borrower thereunder and any and all loans arising therefrom or made pursuant thereto.

☐This Guaranty applies to all indebtedness
of Borrower evidenced by that certain promissory note number   dated   (including all extensions, renewals, modifications
and substitutions thereof) in the principal amount of $ .

☐This Guaranty is limited to an
amount of $  plus accrued interest, late fees, costs of collection (including attorneys’ fees) and all other obligations
and indebtedness which may accrue or be incurred with respect to the Borrower’s indebtedness and obligations to Bank.

To secure the payment of all Obligations
and in addition to the security interest granted to Bank in its deposit accounts, the Guarantor hereby grants a security interest
and lien in the following property owned by the Guarantor:

	N/A

(the “Collateral”).

The Guarantor agrees to execute and deliver
to Bank any security agreement, deed of trust, mortgage, UCC financing statement, or other document required by the Bank in order
to perfect and protect its security interest or lien in the Collateral. This document shall constitute a security agreement under
the Uniform Commercial Code of Florida (“Code”), and in addition to having all other legal rights and remedies, the
Bank shall have all rights and remedies of a secured party under the Code.

This Guaranty shall inure to the benefit
of Bank, its successors and assigns, and the owners and holders of any of the Obligations, and shall remain in force until a written
notice revoking it has been received by Bank; but such revocation shall not release Guarantor from liability to Bank, its successors
and assigns, or the owners and holders of any of Obligations, for any Obligation of the Borrower which is hereby guaranteed and
then in existence or from any renewals, extensions or modifications thereof in whole or in part, whether such renewals, extensions
or modifications are made before or after such revocation, with or without notice to the Guarantor. The Guarantor waives presentment,
demand, protest and notices of every kind and assents to any one or more extensions, modifications, renewals or postponements of
the time or amount of payment or any other indulgences given to Borrower. The Guarantor shall be responsible for and shall reimburse
the Bank for all costs and expenses (including reasonable attorneys’ fees) incurred by the Bank in connection with the enforcement
of this Guaranty or the protection or preservation of any right or claim of the Bank in connection herewith, including without
limitation costs and expenses incurred by the Bank in connection with its attempts to collect the Obligations.

If the Borrower is a corporation, this
instrument covers all indebtedness, obligations and liabilities to Bank purporting to be made or undertaken on behalf of such corporation
by any such officer or agent of said corporation without regard to the actual authority of such officer or agent. The term “corporation”
shall include associations of all kinds and all purported corporations, whether correctly and legally chartered and organized.

The Guarantor hereby warrants and represents
to Bank that: (i) this Guaranty is enforceable against it in accordance with its terms; (ii) the execution and delivery of this
Guaranty does not violate or constitute a breach of any agreement to which the Guarantor is a party; (iii) there is no litigation,
claim, action or proceeding pending or, to the best knowledge of Guarantor, threatened against it which would materially adversely
affect the financial condition of Guarantor or its ability to fulfill its obligations hereunder; (iv) that it has knowledge of
the Borrower’s financial condition and affairs; and (v) unless otherwise required in a Loan Agreement, if applicable, as
long as any Obligations remain outstanding or as long as Bank remains obligated to make advances, the Guarantor shall furnish annually
an updated financial statement in a form satisfactory to Bank, which, when delivered shall be the property of Bank.

This Guaranty is
made in and shall be construed in accordance with the laws and judicial decisions of the State of Florida. The Guarantor agrees
that any dispute arising out of this Guaranty shall be adjudicated in either the state or federal courts of Florida and in no other
forum. For that purpose, the Guarantor hereby submits to the jurisdiction of the state and/or federal courts of Florida. The Guarantor
waives any defense that venue is not proper for any action brought in any federal or state court in the State of Florida.

 

    	 

    	 

    

 

UNLESS EXPRESSLY
PROHIBITED BY APPLICABLE LAW, GUARANTOR HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS GUARANTY
OR ANY OF THE LOAN DOCUMENTS EXECUTED BY THE BORROWER IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN
THE BORROWER OR GUARANTOR AND BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO EXTEND CREDIT TO BORROWER. GUARANTOR HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS REPRESENTED THAT BANK WOULD NOT SEEK TO ENFORCE
THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION AND THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS THE AUTHORITY
TO WAIVE, CONDITION OR MODIFY THIS PROVISION.

 

 

 

 

[signature on following page]

 

    	 

    	 

    

 

GUARANTY SIGNATURE PAGE

 

 

Witness the signature and seal of the undersigned Guarantor.

 

	WITNESS:	 	PATRIOT TRANSPORTATION, INC., OF FLORIDA, a	 
	 	 	Florida corporation	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	(SEAL)
	 	 	Name:	 	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

 

	STATE OF FLORIDA        )
	COUNTY OF_________________ ) to-wit:
	 
	
         

        I HEREBY CERTIFY, that on this _____
        day of ____________, 201__, before me, the undersigned, a Notary Public of the State aforesaid, personally appeared __________________,
        the __________________ of PATRIOT TRANSPORTATION, INC., OF FLORIDA, a Florida corporation, on behalf of the corporation, who ☐ is personally known to me or ☐   has produced  as identification, and executed the foregoing instrument for the purposes
        therein contained.

        

 

	 	 
	[NOTARY SEAL]	Print Name:_________________________________________
	 	Notary Public, State of Florida

 

 

 

    	 

    	 

    

 

SCHEDULE “EE” TO BB&T
LOAN AGREEMENT

OFFICER COMPLIANCE CERTIFICATE

 

This certificate
(the “Certificate”) is delivered pursuant to Section 3.08 of the Loan Agreement dated May 13, 2015, between PATRIOT
TRANSPORTATION HOLDING, INC., a Florida corporation and FLORIDA ROCK & TANK LINES, INC., a Florida corporation
(the “Bank”), as the same may be amended or supplemented from time to time, being herein referred to as the Loan
Agreement. All capitalized terms used in this Certificate which are defined in the Loan Agreement are used in this Certificate
with the same meanings given such terms in the Loan Agreement.

I hereby certify,
to the best of my knowledge and belief and in my representative capacity on behalf of the Borrower, to the Bank as follows:

1.

			I am the duly elected or appointed and acting _______________________________ (Title) of the
                                                                            Borrower.

2.

			I have reviewed the financial statements of the Borrower as of and for the period
                                                                             ending ______________________ attached hereto as Exhibit I, which were prepared in accordance with GAAP,
                                                                             consistently applied, and are true and correct in all material aspects and fairly present the financial position and results
                                                                             and operations of the Borrower.

3.

			The Representations and Warranties set forth in Section 2 of the Loan Agreement are true and
                                                                            correct as of the date hereof.

4.

			I further certify that the Borrower is in compliance (unless otherwise specified) with all
                                                                             covenants set forth in Sections 3, 5 and 6 of the Loan Agreement and any Schedules thereto, and specifically the
                                                                             covenants listed below.

 

	Required by Loan Agreement	 	Actual	 	
        In Compliance?

Yes/No

	
        Maximum Funded Debt to EBITDA (tested quarterly)

         
	2.5	To	1.0	 	     	 	☐  Yes  ☐  No
	 	 	 	 	 	 	 	 
	
        Maximum Debt to Tangible Net Worth ratio (tested quarterly)

         
	5.0	To	1.0	 	 	 	☐  Yes  ☐  No
	 	 	 	     	 	 
	Fixed Charge Coverage Ratio (tested quarterly, on a trailing twelve month basis)	 	1.15	To	1.0	 	     	 	☐  Yes  ☐  No
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

 

5.

			As of the date hereof, no Default or Event of Default under Section 8 of the Loan
                                                                            Agreement and any Schedules thereto has occurred (except as specified on Exhibit II, attached hereto, which Exhibit
                                                                            II also sets forth any corrective action taken or proposed to be taken with respect to such Default or Event of
                                                                            Default).

6.

			As of  the date hereof, (A) no Default or Event of Default has occurred under the Wells
                                                                              Fargo                                                                               Credit Facility and (B) Borrower has not
                                                                              received any notices from the Lender under the Wells Fargo Credit Facility of
                                                                              any Default, Event of Default or the waiver of any Default or Event of Default (except as specified on Exhibit
                                                                              III, attached hereto).

 

 

    	 

    	 

    

 

In Witness Whereof, I have caused
this Officer Compliance Certificate and Schedule EE to Loan Agreement to be executed and delivered to the Bank this ___ day of
____________, 201__.

	WITNESS:	PATRIOT TRANSPORTATION HOLDING, INC., a Florida corporation
	 	 	 
	 	 	By:	
	 	 	Print name:	
	 	 	Title:	 
	 	 	 	 
	 	 	 	 
	WITNESS:	 	FLORIDA A ROCK & TANK LINES, INC., a Florida
    corporation
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	 	 

 

 

 

 Attach Exhibit I, II and III, if applicableExhibit 10.1

 

 

Amended & Restated Master Services Agreement

This Amended & Restated Master Services Agreement (the “Agreement”) is entered into and effective as of March 31, 2015 (the “Effective Date”) by and among:

	1.	SS&C Technologies, Inc., a corporation incorporated under the laws of the State of Delaware (“SS&C”);

	2.	Each of the collective investment vehicles listed in Schedule C (each a “Fund” and collectively, the “Funds”); and

	3.	Ceres Managed Futures LLC, a limited liability company organized under the laws of the State of Delaware in its capacity as (a) either (i) the general partner of those Funds organized as limited partnerships or (ii) the managing member of those funds organized as limited liability companies and (b) the commodity pool operator of each Fund (“Ceres”).

The Funds and Ceres may be referred to collectively as “Client.”  SS&C and Client may be referred to individually as a “Party” or collectively as “Parties.”

1.            Definitions; Interpretation

1.1            As used in this Agreement, the following terms have the following meanings:

(a)            “Action” means any civil, criminal, regulatory or administrative lawsuit, arbitration or proceeding, in each case, made, asserted, commenced by any person (including any Government Authority), regardless of the legal, equitable or other theory.

(b)            “Affiliate” means, with respect to any person, any other person that is controlled by, controls, or is under common control with such person and “control” of a person means: (i) ownership of, or possession of the right to vote, more than 25% of the outstanding voting equity of that person or (ii) the right to control the appointment of the board of directors or analogous governing body, management or executive officers of that person.

(c)            “Business Day” means a day on which the New York Stock Exchange is open for business.

(d)            “Claim” means any Action arising out of the subject matter of, or in any way related to, this Agreement, its formation or the Services.

(e)            "Client Data" means all data of Client, including data related to securities trades and other transaction data, investment returns, issue descriptions, and the like, and all output and derivatives thereof, necessary to enable SS&C to perform the Services.

(f)            “governing documents” means the constitutional documents of an entity and, with respect to a Fund, all minutes of meetings of the board of directors or analogous governing body and of Fund investors, and any offering memorandum, subscription materials and other disclosure documents utilized by a Fund in connection with the offering of any of its securities to investors, all as amended from time to time.

(g)            “Government Authority” means any relevant administrative, judicial, executive, legislative or other governmental entity, department, agency, commission, board, bureau or court, and any other regulatory or self-regulatory organizations, in any country or jurisdiction.

(h)            “Losses” means any and all compensatory, direct, indirect, special, incidental, consequential, punitive, exemplary, enhanced or other damages, settlement payments, attorneys’ fees, costs, damages, charges, expenses, or other losses of any kind.

(i)            “person” means any natural person or corporate or unincorporated entity or organization and that person’s personal representatives, successors and permitted assigns.

(j)            “Services” means the services listed in Schedule A.

(k)            “SS&C Associates” means SS&C and each of its Affiliates, members, shareholders, directors, officers, partners, employees, agents, successors or assigns.

(l)            “SS&C Property” means all hardware, software, source code, data, report designs, spreadsheet formulas, information gathering or reporting techniques, know-how, technology and all other property commonly referred to as intellectual property used by SS&C in connection with its performance of the Services.

 

 

Page 1 of 20

 

1.2            Other capitalized terms used in this Agreement but not defined in this Section 1 shall have the meanings ascribed thereto.

1.3            Section and Schedule headings shall not affect the interpretation of this Agreement.

1.4            Words in the singular include the plural and words in the plural include the singular.  The words “including,” “includes,” “included” and “include”, when used, are deemed to be followed by the words “without limitation.”  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “hereof,” “herein” and “hereunder” and words of analogous import shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  “Law” includes applicable statutes, rules, regulations, interpretations and orders of any Government Authority.

1.5            The Parties’ duties and obligations are governed by and limited to the express terms and conditions of this Agreement, and shall not be modified, supplemented, amended or interpreted in accordance with, any industry custom or practice, or any internal policies or procedures of any Party.  The Parties have mutually negotiated the terms hereof and, accordingly, there shall be no presumption of law relating to the interpretation of contracts against the drafter.

2.            Services and Fees

2.1            SS&C will perform the Services in consideration of the fees, expenses and related payment terms listed in Schedule B.  SS&C shall be under no obligation or duty to perform any service or take any action unless it is specifically listed in Schedule A and no obligations or duties (including, fiduciary or analogous duties) other than those specifically provided for herein shall be implied.

2.2            In carrying out its duties pursuant to this Agreement, some or all Services may be delegated by SS&C to one or more of its Affiliates, with the prior written approval of Client.  If SS&C delegates any Services, such delegation shall not relieve SS&C of its duties and obligations hereunder and SS&C shall remain responsible to Client for the actions of such Affiliates in the course of performing any Services.

3.            Management and Client Responsibilities

3.1            The management and control of each Fund is vested exclusively with Ceres, subject to the terms and provisions of such Fund’s governing documents.  Ceres will make all decisions, perform all management functions relating to the operation of each Fund and authorize all transactions.  Without limiting the foregoing, Ceres, on behalf of each Fund shall:

(a)            Designate properly qualified individuals to oversee the record-keeping and administrative Services provided by SS&C;

(b)            Evaluate the results of the Services performed.  Review and approve all reports, analyses and books and records resulting from the Services and promptly inform SS&C of any errors it is in a position to identify;

(c)            Evaluate the accuracy of the Services; and

(d)            Provide SS&C with timely information required by SS&C in order to perform the Services and its duties hereunder.

3.2            Each Client is solely and exclusively responsible for ensuring that it complies with law and its governing documents.  SS&C is not responsible for monitoring Client’s compliance with (i) law, (ii) their respective governing documents or (iii) any investment restrictions or compliance with the investment restrictions.

3.3            Notwithstanding anything in this Agreement to the contrary, SS&C (i) shall be entitled, without further enquiry, for all purposes in relation to dealings with all persons, to rely on the authenticity and accuracy of any and all information and communications of whatever nature and howsoever received by SS&C in good faith, in connection with the performance of the Services and its duties hereunder, and (ii) shall not be responsible or liable to any person for any Losses arising by virtue of any such information or communication not being authentic and/or accurate.

3.4            Client shall promptly notify SS&C of any material Action against it.

 

Page 2 of 20

 

3.5            Client shall deliver, and procure that its various agents deliver, to SS&C, all Client Data and the then most current version of all Fund governing documents and any agreement between Fund and Ceres.  Client shall arrange with each such agent that SS&C will not have to enter any agreements with that person in order for SS&C to provide the Services.

4.            Term

4.1            The initial term of this Agreement will be from the Effective Date through December 31, 2016.  Thereafter, this Agreement will automatically renew for successive terms of 1 year each.  After December 31, 2016 either Party may terminate this Agreement as of a calendar quarter end upon 180 days’ written notice.    In the event of the termination of this Agreement, SS&C shall provide exit assistance by promptly supplying Client Data to the Client or any other party designated by the Client in formats already prepared in the course of providing the Services; provided that all fees and expenses have been paid.  In the event that Client wishes to retain SS&C to perform additional transition services, including providing data and reports in new formats, Client and SS&C shall agree in writing to the additional services and related fees and expenses in advance.

5.            Termination

5.1            In addition to the provisions of Section 4, either Party may, by written notice to the other Party, terminate this Agreement if any of the following events occur:

(a)            The other Party breaches any material term, condition or provision of this Agreement, which breach, if capable of being cured, is not cured within thirty (30) calendar days after the non-breaching Party gives the other Party written notice of such breach.

(b)            The other Party terminates or suspends its business.  If any such event occurs, termination will become effective immediately or on the date stated in the written notice of termination, which date shall not be greater than ninety (90) days after the event.  Termination of this Agreement for any reason shall not affect: (i) any liabilities or obligations of either Party arising before such termination (including payment of fees and expenses) or (ii) any damages or other remedies to which a Party may be entitled for breach of this Agreement or otherwise.

5.2            Sections 6, 8, 9, 10, 11, 12 and 15 of this Agreement shall survive the termination of this Agreement.  To the extent any services that are Services are performed by SS&C for Client after the termination of this Agreement all of the provisions of this Agreement except Schedule A shall survive the termination of this Agreement for so long as those services are performed.

5.3            Ceres shall notify SS&C in writing at least twenty (20) days in advance of the date that it wishes to have an additional fund join this Agreement and become a Fund hereunder.  Any such notification shall be provided as described in Schedule D.  No entity shall become a Party hereunder without the consent of SS&C, which consent shall not be unreasonably withheld or delayed (including with respect to the fees payable with respect to that entity).

6.            Limitation of Liability and Indemnification

6.1            Notwithstanding anything in this Agreement to the contrary, SS&C Associates shall not be liable to Client for any action or inaction of any SS&C Associate except to the extent of Losses resulting from the gross negligence, willful misconduct or fraud of SS&C in the performance of SS&C’s duties or obligations under this Agreement.  The maximum amount of liability of SS&C Associates to Client for Losses arising out of the subject matter of, or in any way related to, this Agreement, except to the extent of Losses resulting from the, willful misconduct or fraud of SS&C Associates in the performance of SS&C’s duties or obligations under this Agreement, shall not exceed (a) if such Losses occur in the first sixty (60) months  after the Effective Date (the “Initial Period”), an amount equal to the product of (i) the actual amount of fees paid by Client to SS&C during the Initial Period divided by the number of months that have elapsed in the Initial Period and (ii) sixty (60) and (b) if such Losses occur after the Initial Period, the fees paid by Client to SS&C under this Agreement for the most recent sixty (60) months immediately preceding the date of the event giving rise to the Claim or, if the Agreement had been effective for less than 60 months, the fees payable since the Effective Date times a number equal to 60 months divided by the months since the Effective Date..  For the avoidance of doubt, the maximum of liability of SS&C Associates for Losses arising from the willful misconduct or fraud of SS&C Associates shall be to the maximum extent permissible by law.

6.2            For the avoidance of doubt, SS&C shall not be liable for indirect, special, incidental, consequential, punitive, exemplary or enhanced or other similar damages (including lost profits and diminution of value) arising out of the subject matter of this Agreement, whether they were foreseeable, whether or not advised of their possibility and notwithstanding the failure of any agreed or other remedy of its essential purpose.  Any fines or penalties assessed on a Party by a Government Authority under applicable law arising out of the other party’s breach of this Agreement are direct damages.

 

 

Page 3 of 20

6.3            To the maximum extent permissible by law, Client shall indemnify and hold harmless the SS&C Associates from and against any third party claims, liabilities, costs and expenses (including legal fees to enforce this provision) that the SS&C Associates suffer, incur, or pay as a result of any Claim except to the extent they result from the gross negligence, willful misconduct or fraud of SS&C Associates.  SS&C will promptly notify Client of any such Claim and will reasonably cooperate with Client in the defense of such Claim, at Client’s expense.

6.4            To the maximum extent permissible by law, SS&C shall indemnify and hold harmless the Client and each of its Affiliates, members, shareholders, directors, officers, partners, employees, agents, successors or assigns from and against any third party claims, liabilities, costs and expenses (including legal fees to enforce this provision) that they suffer, incur, or pay as a result of a Claim arising out of or relating to the provision or utilization of any Services or any portion thereof that constitutes an infringement, violation, contravention or breach of any patent, copyright, trademark, license or other intellectual property right of any third party.  Client will promptly notify SS&C of any such Claim and will reasonably cooperate with SS&C in the defense of such Claim, at SS&C’s expense.

6.5            A Party indemnifying under Sections 6.3 or 6.4 will have the right to conduct the defense of any such Claim and all negotiations for its settlement or compromise except that the other Party may in its sole discretion participate in the defense of any such Claim at the indemnifying Parties’ expense.  Notwithstanding the foregoing, a Party may not, without the other Party’s prior written consent, settle, compromise or consent to the entry of any judgment in any such Claim, unless such settlement, compromise or consent: (i) includes an unconditional release of the relevant Parties that are being indemnified from all liability arising out of such Claim and (ii) is solely monetary in nature and does not include a statement as to, or an admission of fault, culpability or failure to act by or on behalf of, any Parties that is being indemnified or otherwise adversely affect any such Party.  If a Party fails to appoint an attorney within ten (10) days after the other Party has notified it of an indemnifiable Claim, or after it becomes aware of such Claim, whichever is earlier, the other Party will have the right to select and appoint an alternative attorney and the reasonable cost and expense thereof will be paid by it.

7.            Representations and Warranties

7.1            Each Party represents and warrants to each other Party that:

(a)            It is a legal entity duly created, validly existing and in good standing under the law of the jurisdiction in which it is created, and is in good standing in each other jurisdiction where the failure to be in good standing would have a material adverse effect on its business or its ability to perform its obligations under this Agreement;

(b)            It has all necessary legal power and authority to own, lease and operate its assets and to carry on its business as presently conducted and as it will be conducted pursuant to this Agreement and will comply in all material respects with all law to which it may be subject;

(c)            It has all necessary legal power and authority to enter into this Agreement and to perform its obligations hereunder, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary actions on its part, and performance hereunder does not violate the terms of any contract, covenant or agreement between it and any unrelated third party;

(d)            The person signing on its behalf has the authority to contractually bind it to the terms and conditions in this Agreement and that this Agreement constitutes a legal, valid and binding obligation of it, enforceable against it in accordance with its terms;

(e)            It is not a party to, and is not bound or affected by or subject to, any instrument, agreement, charter or by-law provision, law or judgment which would be contravened or breached as a result of the execution or performance of this Agreement; and

(f)            To the best of its knowledge and belief, it is not the subject of any Action that would prevent it from performing its obligations under this Agreement.

 

 

Page 4 of 20

7.2            The General Partner of each Fund represents and warrants to SS&C that it has actual authority to provide instructions and directions on behalf of Fund and that all such instructions and directions are consistent with the governing documents of Client and other corporate actions of Client.

7.3            The Fund represents and warrants to SS&C that (i) it is not registered or required to be registered as an investment company under the U.S. Investment Company Act of 1940, as amended, and (ii) if its securities are publicly registered or required to be publicly registered in the U.S. or the EU, that fact is disclosed in the Fund’s offering documents.

7.4            SS&C represents and warrants that:

(a)            All Services will be performed with reasonable care, skill and diligence in a professional and workmanlike manner using suitably qualified and experienced personnel and with the necessary number of people to meet deadlines;

(b)            None of the Services nor the provision or utilization thereof as contemplated under this Agreement, do or will infringe, violate, or in any manner contravene or breach or constitute the unauthorized use or misappropriation of any intellectual property rights of any third party;

(c)            No deliverables provided in the course of the provision of the Services will contain, and SS&C will not insert in those deliverables any computer code (i) designed to disrupt, disable, harm, or otherwise impede the operation of the software or firmware or any computer or network (referred to as “viruses” or “worms”) and/or (ii) that would disable the software or firmware or any computer or network or impair in any way their operation based on the elapsing of a period of time, the exceeding of an authorized number of copies, or the advancement to a particular date or other numeral (referred to as “time bombs”, “time locks”, or “drop dead” devices); and/or (iii) that would permit SS&C or any third party to access the software or firmware or any computer or network system (referred to as “traps”, “access codes” or “trap door” devices) of Client or its Affiliates;

(d)            It shall use reasonable efforts to provide the Services contemplated under this Agreement in compliance with applicable law; and

(e)            SS&C and SS&C's shareholders, directors, officers, and employees, and SS&C's agents or representatives, if any, will comply with applicable anti-corruption laws.

8.            Client Data

8.1            Client will provide or ensure that other persons provide all Client Data to SS&C in an electronic format that is as specified in advance by SS&C (or as otherwise agreed in writing).  SS&C shall not be responsible or liable for the accuracy, completeness, integrity or timeliness of any Client Data provided to SS&C by Client or any other person.  All Client Data shall remain the property of the applicable Client.  Client Data shall not be used or disclosed by SS&C other than in connection with providing the Services and as permitted under Section 11.4.

8.2            SS&C will provide data backup and shall maintain and store Client Data used in the accounting books and records of Fund for a rolling period of seven (7) years starting from the date the Services commenced for Client.

9.            Data Protection

9.1            From time to time SS&C may obtain access to certain personal information or sensitive personal information of Client or of Fund investors or prospective investors (“Personal Information”).  For purposes of protecting Personal Information and/or data and for compliance with (i) Title V of the Gramm-Leach-Bliley Act of 1999 or any successor federal statute to that act, and the rules and regulations thereunder, all as may be amended or supplemented from time to time, (ii) the European Union’s Data Protection Directive (95/46/EC) or Data Protection Act 1998 or any implementing or related legislation of any member state in the European Economic Area (the “EEA Data Protection Laws”), (iii) the Australia Privacy Act 1988, and (iv) any other applicable laws concerning Personal Information, in the event that SS&C has access to or acquires individually identifiable information, SS&C will comply with the terms and conditions set forth in Schedule D.

10.            SS&C Property

10.1            SS&C Property is and shall remain the property of SS&C or, when applicable, its Affiliates or suppliers.  Neither Client nor any other person shall acquire any license or right to use, sell, disclose, or otherwise exploit or benefit in any manner from, any SS&C Property.  Client shall not (unless required by law or pursuant to legal process or a request from any applicable Government Authority) either before or after the termination of this Agreement, disclose to any person not authorized by SS&C to receive the same, any information concerning the SS&C Property and shall use commercially reasonable efforts to prevent any such disclosure by Client.

 

 

Page 5 of 20

11.            Confidentiality

11.1            Each Party undertakes that it shall not at any time disclose to any person any confidential information concerning the business, affairs, customers, clients or suppliers of the other Party or its Affiliates, including any Personal Information (all such confidential information together referred to herein as the “Confidential Information”), except as permitted by this Section 11.

11.2            Each Party may disclose the other Party’s Confidential Information:

(a)            In the case of Client, to each of its Affiliates, members, shareholders, directors, officers, partners, employees and agents, and in the case of SS&C, to each other SS&C Associate, in each case who need to know such information for the purposes of carrying out the Party’s obligations under this Agreement.  Each Party shall ensure that all persons to whom the Party discloses the other Party’s Confidential Information comply with this Section 11; and

(b)            As may be required by law or pursuant to legal process; provided that the disclosing Party (i) where reasonably practicable, where required or requested by a Government Authority with jurisdiction over the Party and to the extent legally permissible, provides the other Party with prompt written notice of the required disclosure so that the other Party may seek a protective order or take other analogous action, (ii) discloses no more of the other Party’s Confidential Information than reasonably necessary and (iii) reasonably cooperates with actions of the other Party in seeking to protect its Confidential Information at that Party’s expense.

11.3            Neither Party shall use the other Party’s confidential information for any purpose other than to perform its obligations under this Agreement.  Each Party may retain a record of the other Party’s Confidential Information for the longer of seven (7) years or as required by law. Upon termination or expiration of this Agreement or upon the disclosing Party’s written request and where practicable, the receiving Party will return to the disclosing Party all copies of the disclosing Party’s Confidential Information already in the receiving Party’s possession or within its control.  Alternatively, with the disclosing Party’s prior written consent, the receiving Party may destroy such Confidential Information using means to protect against unauthorized access to or use of the information, including, where appropriate, burning, shredding, or pulverizing such information, or by taking such other means as to assure that such information may not be recoverable following its disposal. In such case, an officer of the receiving Party will certify in writing to the disclosing Party that all such Confidential Information has been so destroyed. Notwithstanding the foregoing, the receiving Party may retain copies of such Confidential Information as required by applicable law, or, to the extent such copies are electronically stored in accordance with the receiving Party's retention or back-up policies or procedures (including those regarding electronic communication), so long as such Confidential Information is kept confidential as required under this Agreement.

11.4            SS&C’s ultimate parent company is subject to U.S. federal and state securities laws and may make disclosures as necessary to comply with such laws.  Upon the prior consent of the applicable Client (which may be withheld at the Client’s absolute discretion), SS&C shall have the right to identify such Client in connection with its marketing-related activities and in its marketing materials as a client of SS&C.  Client shall have the right to properly identify SS&C and to describe the Services and the material terms of this Agreement in the offering documents of any Fund.  This Agreement shall not prohibit SS&C from using any Client data (including Client Data) in tracking and reporting on SS&C’s clients generally or making public statements about such subjects as its business or industry; provided that Client is not named in such public statements without its prior written consent.

11.5            Security Event; Security Notification.

(a)            During the term of the Agreement, SS&C will comply with its Information Security Policy, the Executive Summary of which has been provided to the Client.  SS&C shall promptly provide Client a copy thereof at any time.

(b)            In the event that SS&C learns or has reason to believe that, (i) Confidential Information has been disclosed or accessed by an unauthorized party, (ii) SS&C’s facilities associated with such Confidential Information have been accessed by an unauthorized party or (iii) Client’s Confidential Information has otherwise been lost or misplaced, SS&C will promptly give notice of such event to Client.

 

 

Page 6 of 20

(c)            In the event that SS&C learns or has reason to believe that with respect to the Services there (i) has been a breach of its security practices or systems, or (ii) is a weakness in SS&C’s security practices or systems, in each instance irrespective of cause, to the extent such breach or weakness could reasonably be expected to (y) allow unauthorized access to Confidential Information or SS&C’s facilities associated with such Confidential Information or (z) adversely impact the Services, to the extent permitted by law SS&C will promptly give notice of such event to Client.

(d)            In the event that SS&C has access to or acquires individually identifiable information in relation to this Agreement, the following shall apply: SS&C acknowledges that upon unauthorized access to or acquisition of such individually identifiable information within SS&C custody or control (a “Security Event”), the law may require that SS&C notify the individuals whose information was accessed or disclosed that a Security Event has occurred.  SS&C must notify Client promptly if SS&C learns or has reason to believe a Security Event has occurred.  Except to the extent prohibited by mandatory applicable law, SS&C agrees that it will not notify any individual until SS&C first consults with Client and Client has had an opportunity to review the notification SS&C proposes to issue to individuals and given its express consent to the same.

(e)            The notices required under (a), (b) and (c) of this Section 11.5 shall be given in accordance with Section 12.  Such notice shall contain material details of the security issue that are known at the time of notification, except to the extent prohibited by mandatory applicable law or subject to a request by law enforcement or other government agency to withhold such notice.  SS&C shall (i) promptly take appropriate steps to contain and control the security issue to prevent unauthorized access or further unauthorized access (as applicable) to or misuse of the Confidential Information; and (ii) continue to provide information relating to the investigation and resolution of the security issue until it has been resolved.  SS&C will maintain appropriate processes for evidence collection, analysis and remediation of any security related incident as well as postmortems and resulting actions taken or proposed with timelines for completion and will make such information available to Client at its reasonable request.  SS&C will cooperate fully with Client or its investigator in investigating and responding to each successful or attempted security breach including allowing prompt access to SS&C’s facility by Client or its investigator to investigate.

12.            Notices

12.1           Except as otherwise provided herein, all notices required or permitted under this Agreement or required by law shall be effective only if in writing and delivered: (i) personally, (ii) by registered mail, postage prepaid, return receipt requested, (iii) by receipted prepaid courier, (iv) by any confirmed facsimile or (v) by any electronic mail, to the relevant address or number listed below (or to such other address or number as a Party shall hereafter provide by notice to the other Parties).  Notices shall be deemed given when received by the Party to whom notice is required to be given.

	 	
If to SS&C (to each of):

	 
	 	 	 
	 	
SS&C Technologies, Inc.

	
SS&C Technologies, Inc.

	 	
80 Lamberton Road

	
80 Lamberton Road

	 	
Windsor, Connecticut  06095

	
Windsor, Connecticut  06095

	 	
Attention:  Chief Operating Officer

	
Attention:  General Counsel

	 	
Fax:  +1 860.298.4969

	
Fax:  +1 860.298.4969

	 	
E-mail:  notices@sscinc.com

	
E-mail:  SSCGlobeOpNotices@sscinc.com

	 	
If to Client (to any of):

	 
	 	 	 
	 	
Morgan Stanley – Managed Futures Fund Administration

522 Fifth Avenue, 7th Floor

New York, NY  10036

	
Morgan Stanley – Legal & Compliance

522 Fifth Avenue

New York, NY  10036

Attention: Philip Levy

	 	
Attention:  Steven Ross

	
Tel:  +1 212.296-6081

	 	
Tel:        +1 212.761.7706

	
Fax:  +1 914-750-0316

	 	
E-mail:  Steven.Ross@morganstanley.com

	
E-mail:  Philip.Levy@morganstanley.com

 

Page 7 of 20

13.            Audit

13.1            On an annual basis SS&C shall provide Client with a copy of its independent audit reports including International Standard on Assurance Engagements No. 3402 (ISAE 3402) Assurance Reports on Controls at a Service Organization or Statement on Standards for Attestation Engagements No. 16 (SSAE 16) Reporting on Controls at a Service Organization) and reviews of its data processing environment within a reasonable time after such reports are completed, and shall make all work papers regarding such audits available to the appropriate regulatory agencies, if any, having jurisdiction over SS&C’s provision of Services hereunder.  Within thirty (30) days following Client’s request, the Parties shall meet to discuss the frequency, scope and level of detail of SS&C’s internal and independent audits.  SS&C shall use commercially reasonable efforts to incorporate Client’s comments into the requirements for its next and subsequent independent audits.  With reasonable notice and during usual business hours Client may on five (5) Business Days’ notice conduct audits and reviews of relevant SS&C facilities, systems business records policies procedures, internal practices, system procedures on SS&C’s premises with respect to the Services at Client’s cost.  In addition, SS&C will provide Client with the non-confidential results of a security audit contemplated by the Information Security Policy to be performed no less than annually.  This security audit will be at no expense to Client and will test the compliance with the SS&C’s security standards and procedures with respect to Client.  Client will have the ability to bring in a third party (who may not be a competitor of SS&C), subject to such third party being subject to appropriate obligations of confidentiality in its agreement with Client, or use its own staff for an independent security audit.  If Client chooses to conduct its own security audit, it will be at Client’s expense.

14.            Intentionally Left Blank

15.            Miscellaneous

15.1            Amendment; Modification.  This Agreement may not be amended or modified except in writing signed by an authorized representative of each Party.

15.2            Assignment.   Neither party will assign its rights or obligations under this Agreement without the prior written consent of the other party and any attempt to do so without such consent will be null and void.  Notwithstanding the foregoing and anything to the contrary otherwise set forth in this Agreement, either Party may assign (or assume and assign) its rights or obligations under this Agreement, in whole or in part, to any of its Affiliates or to any entity (i) that acquires all or substantially all of the Party’s assets; (ii) that is otherwise a successor in interest to the Party (including any such assignment, or such assumption or assignment, of this Agreement by the Party and assumption of this Agreement by a trustee (or any entity or governmental authority serving a similar purpose) in connection with any bankruptcy or other insolvency proceeding with respect to the Party and/or its Affiliates); or (iii) to which Client has outsourced substantially all, or major segments of, the activities covered under this Agreement, provided that in no event shall such assignment to an outsourcer relieve a Party of its obligations under this Agreement.  Each Party hereby consents to any such assignment (or assumption, whether or not assigned) in connection with any bankruptcy or other insolvency proceeding with respect to the Party and/or its Affiliates.  This Agreement will be binding upon the parties and their respective legal successors and permitted assigns.

15.3            Choice of Law; Choice of Forum.  This Agreement shall be interpreted in accordance with and governed by the laws of the State of New York.  Each Party irrevocably agrees that the courts of the State of New York and the United States District Court for the Southern District of New York shall have exclusive jurisdiction to settle any Claim.  The Parties submit to the exclusive jurisdiction of such courts and waive to the fullest extent permitted by law all rights to a trial by jury.

15.4            Counterparts; Signatures.  This Agreement may be executed in counterparts, each of which when so executed will be deemed to be an original.  Such counterparts together will constitute one agreement.  Signatures may be exchanged via facsimile or electronic mail and shall be binding to the same extent as if original signatures were exchanged.

15.5            Entire Agreement.  This Agreement (including any schedules, attachments, amendments, and addenda hereto) contains the entire agreement of the Parties with respect to the subject matter hereof and supersedes all previous communications, representations, understandings and agreements, either oral or written, between the Parties with respect thereto.  No SS&C Associate has authority to bind SS&C in any way to any oral covenant, promise, representation or warranty concerning this Agreement, the Services or otherwise.  This Agreement amends and restates the Master Services Agreement dated March 31, 2015 between SS&C Technologies, Inc. and Ceres Managed Futures LLC, on behalf of the Funds.

 

 

Page 8 of 20

15.6            Force Majeure.  SS&C will not be responsible for any Losses of Client or Client’s property in SS&C Associates’ possession or for any failure to fulfill its duties hereunder if such Loss or failure is caused, directly or indirectly, by war, terrorist or analogous action, the act of any Government Authority or other authority, riot, civil commotion, rebellion, storm, accident, fire, lockout, strike, power failure, computer error or failure, delay or breakdown in communications or electronic transmission systems, or other analogous events.  SS&C shall use commercially reasonable efforts to minimize the effects of any such event.

15.7            Non-Exclusivity.  The duties of SS&C hereunder shall not preclude SS&C from providing services of a comparable or different nature to any other person.  Client understands that SS&C may have relationships with providers of technology, data or other services to Client and SS&C may receive economic or other benefits in connection with Client’s activities.

15.8            No Partnership.  Nothing in this Agreement is intended to, or shall be deemed to, constitute a partnership or joint venture of any kind between any of the Parties.

15.9            No Solicitation.  Client agrees that, during the term of this Agreement and for a period of twelve (12) months after termination of this Agreement, it will not directly or indirectly solicit the services of, or otherwise attempt to employ or engage any employee of SS&C or its Affiliates without the consent of SS&C; provided, however, that the foregoing shall not prevent Client from soliciting employees through general advertising not targeted specifically at any or all SS&C Associates.  If Client hires any SS&C Associate during the term of this Agreement or the period of twelve (12) months after the termination of this Agreement, Client shall be responsible for any damages or other remedies to which SS&C may be entitled, including fees and expenses (including recruiters’ fees) incurred by SS&C or its Affiliates in hiring replacement personnel.

15.10            No Warranties.  Except as expressly listed herein, SS&C makes no warranties, whether express, implied, contractual or statutory with respect to the Services.  SS&C disclaims all implied warranties of merchantability and fitness for a particular purpose with respect to the Services.  All warranties, conditions and other terms implied by law are, to the fullest extent permitted by law, excluded from this Agreement.

15.11            Severance.  If any provision (or part thereof) of this Agreement is or becomes invalid, illegal or unenforceable, the provision shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable.  If such modification is not practical, the relevant provision shall be deemed deleted.  Any such modification or deletion of a provision shall not affect the validity, legality and enforceability of the rest of this Agreement.  If a Party gives notice to another Party of the possibility that any provision of this Agreement is invalid, illegal or unenforceable, the Parties shall negotiate to amend such provision so that, as amended, it is legal, valid and enforceable and achieves the intended commercial result of the original provision.

15.12            Testimony.  If SS&C is required by a third party subpoena or otherwise, to produce documents, testify or provide other evidence regarding the Services, this Agreement or the operations of Fund in any Action to which Client is a party or otherwise related to Client, Client shall reimburse SS&C for all out of pocket costs and expenses, for legal representation, that SS&C reasonably incurs in connection therewith, except for costs and expenses resulting solely from the gross negligence, willful misconduct or fraud of SS&C Associates in the performance of SS&C’s duties or obligations under this Agreement.

15.13            Third Party Beneficiaries.  This Agreement is entered into for the sole and exclusive benefit of the Parties and will not be interpreted in such a manner as to give rise to or create any rights or benefits of or for any other person except as set forth with respect to SS&C Associates.

15.14            Waiver.  No failure or delay by a Party to exercise any right or remedy provided under this Agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy.  No exercise (or partial exercise) of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy.

*            *            *

Page 9 of 20

This Agreement has been entered into by the Parties as of the Effective Date.

	
SS&C Technologies, Inc.

 

	
Ceres Managed Futures LLC, on behalf of each of the Funds listed on Schedule C

 

	
By:

	
/s/ Patrick Pedonti                        

 

	
By:

	
/s/ Patrick T. Egan                           

 

	
Name:

	
Patrick Pedonti                           

 

	
Name:

	
Patrick T. Egan                                

 

	
Title:

	
Senior Vice President and CFO 

 

	
Title:

	
President and Director                     

 

	 	 	 	 

 

 

  

Page 10 of 20

Schedule A

Services

General

	1.	As used in this Schedule A, the following additional terms have the following meanings:

		(i)	“AML” means anti-money laundering and countering the financing of terrorism.

		(ii)	“investor” means an equity owner in the Fund, whether a shareholder in a company, a partner in a partnership, a unitholder in a trust or otherwise.  A “prospective investor” means an applicant to become an investor.

		(iii)	“NAV” means net asset value.

		(iv)	“OFAC” means the Office of Foreign Assets Control, an agency of the United States Department of the Treasury.

	2.	Any references to law are to be construed to the law as amended to the date of effectiveness of the relevant provision.

	3.	Client acknowledges that SS&C’s ability to perform the Services is subject to SS&C’s timely receipt of all Client Data and the then most current version of all Fund governing documents and the receipt of such information in an accurate and complete form, and in electronic file format, acceptable to SS&C.

	4.	The following Services will be performed by SS&C and, as applicable, are contingent on the performance of Client of the duties and obligations listed.

A.            Accounting – Daily Processing

	5.	Receive and import a daily trade file from Client.

	6.	On a daily basis (i) reconcile portfolio transactions, positions and cash balances to prime brokers and custodian banks, (ii) process involuntary corporate actions and income items, (iii) record income and expense accruals and applicable cash payments and (iv) process voluntary corporate action notices upon receipt of instructions from Ceres.

	7.	Provide daily profit and loss, estimated NAV and position and reconciliation reports:

		(i)	Daily reports do not include investor allocations unless specifically agreed.

		(ii)	If all required items are provided in a timely manner to SS&C, reports are to be delivered the following Business Day (T+1) as soon as reasonably practicable, but in no event later than 12:00 Noon, New York prevailing time.  Typically, the estimated NAV (price per share), daily and month-to-date rates of returns, position and trading profit & loss reports are delivered before 11:00 A.M., New York prevailing time.

		(iii)	Disseminate daily NAVs to third parties (i.e., Reuters).

	8.	Assist in establishing and operating Fund bank accounts as reasonably instructed by Ceres.

B.            Accounting -- Monthly NAV Calculation

	9.	Reconcile portfolio transactions, positions and cash balances to prime brokers/custodian banks and statements from underlying investments on a daily basis.  Maintain Fund books and records including general ledger accounts.

	10.	Calculate and accrue income, expenses, gains and loss.

	11.	Prepare financial, performance and other reporting to be distributed to Ceres and third parties (i.e., Chennai and Broadridge) as mutually agreed in writing.

	12.	Communicate with Ceres with respect to the Fund’s accounting books and records and related matters.

	13.	Calculate the NAV following each month-end and each other date as may be agreed in writing.

 

 

Page 11 of 20

 

C.            Financial Statements and Financial and Audit Support

	14.	Coordinate the annual audit between Ceres and the Fund auditor including establishing timelines for SS&C deliverables, and answering questions as appropriate.

	15.	Prepare the Fund’s draft annual financial statements and accompanying materials:

		(i)	Provide the Fund auditor with information customarily provided by SS&C to facilitate their audit.

		(ii)	Prepare the first draft of the financial statement schedules, footnotes, schedules of investments and applicable calculations and presentations of footnote disclosures.  Incorporate comments from Fund auditors as well as Fund legal counsel and coordinate with financial printers.

	16.	Client shall (i) provide information to SS&C to complete the financial statement schedules and notes to the financial statements if SS&C is preparing such notes, (for matters such as risk management disclosures, details of related party transactions, netting and collateral arrangements), (ii) assist and guide SS&C with determining industry, geographic and other descriptions and classification of assets, (iii) provide all required disclosure of regulatory status, (iv) provide such other information and assistance as SS&C may reasonably request related to the preparation and audit of the financial statements or related schedules, as appropriate, and (v) approve all information prepared on behalf of Client and provided to the Fund auditor.

	17.	With respect to the Forms 10K and 10Q that a Fund is required to file with the U.S. Securities and Exchange Commission manage the updating and production process, including: (i) provide the financial schedules and other financial data necessary to complete the Forms to Ceres in template form as agreed in writing by the Parties, (ii) respond to questions related thereto, (iii) provide back-up schedules as agreed in writing by the Parties and (iv) incorporate comments to the Forms from Client, Fund auditors and Fund legal counsel.

	18.	Notwithstanding anything in this Agreement to the contrary, Client has ultimate authority over and responsibility for its financial statements and filings (including preparing in EDGAR format) with the U.S. Securities and Exchange Commission.

D.            Form CPO-PQR (applicable to Ceres only with respect solely to the Funds as applicable)

	19.	Assist Ceres with its quarterly filings of Form CPO-PQR; the estimated first filing date shall be for the period ending September 30, 2015.

	20.	Provide Ceres password protected access to the Form CPO-PQR reporting section of SS&C’s web portal during business hours.

	21.	Enrich data stored in SS&C systems with required information for Form CPO-PQR.

	22.	Provide other implementation services as may be reasonably required to enable Client to access and use the Form CPO-PQR Services as described herein.

	23.	Assist Ceres with collecting information required to be sourced initially from the Client and develop processes to collect this information directly where practical going forward.

	24.	Maintain a history of previously filed Form CPO-PQR reports including all supporting documentation.

	25.	Provide software updates to reflect routine regulatory changes by the U.S. Commodities Futures Trading Commission or National Futures Association, as applicable.

	26.	In order for SS&C to provide Form CPO-PQR Services, Ceres shall prepare and provide in a timely manner and supply SS&C answers to questions related to aspects of the form.  With respect to collective investment vehicles for which SS&C does not maintain such entities investment records, Ceres will provide the data to SS&C in a predefined template or in an easily convertible data format as agreed in writing by the parties.  SS&C shall have no responsibility for or with respect to any such data supplied by Ceres.

	27.	Ceres has ultimate authority over and responsibility for its Form CPO-PQR filings.

E.            Tax Matters (U.S. Federal Income Tax Related)

	28.	Provide the applicable level of tax services to each Fund as listed on Schedule C.

 

 

Page 12 of 20

	29.	Level I Services:

		(i)	Work with Ceres and the Fund’s audit firm, if requested by Ceres, to calculate Fund level U.S. federal taxable income.  Client shall inform SS&C of all tax elections made or to be made on a timely basis and provide SS&C with all related correspondence with the United States Internal Revenue Service.

		(ii)	For Funds that are treated as partnerships under the U.S. Internal Revenue Code of 1986 (the “Code”), maintain tax capital accounts and tax capital roll-forwards by investment.

		(iii)	Prepare for the Fund a qualified dividend (as defined in §1 of the Code) analyses and report.

		(iv)	Prepare a wash sales (§1091 of the Code) analyses and report.  Client shall be responsible for identifying substantially identical stock or securities as requested by SS&C.  Prepare an analyses of other book to tax differences.

		(v)	Prepare mixed straddle account analyses and support (based on Temp Treas. Reg . §1.1092(b)-4T), including monthly evaluation of trades to support a timely election process.

		(vi)	Prepare computation and analyses for Funds that have made §988(c)(1)(E) of the Code Qualified Fund Elections, §988(a)(1)(b) of the Code Major Currency Forward Elections and §475(f)(1) of the Code Mark to Market Elections.

		(vii)	Prepare analyses and reports for Fund trades under §1256 of the Code.

	30.	Level II Services:

		(i)	Provide Level I Services.

		(ii)	Allocate Fund level U.S. federal taxable income to the appropriate investors.

	31.	Level III Services:

		(i)	Provide Level I and Level II Services.

		(ii)	Prepare a draft U.S. Federal income tax return for Funds that are treated as partnerships under the Code on Form 1065, together with Schedules K-1 and other relevant schedules and supporting work papers; prepare related U.S. state tax returns due to resident limited partners.

		(iii)	Provide digital Schedule K-1 packages.

		(iv)	Engage a third party public accounting firm reasonably acceptable to both SS&C and Ceres to provide tax partner review and signature on the Fund’s U.S. Federal partnership income tax return, including Schedule K-1s, and related U.S. state tax returns or filings due to resident limited partners (currently Georgia, Indiana, Missouri, New Jersey, New York, Oregon, Pennsylvania, and West Virginia).

		(v)	Calculate foreign withholding payments under the §§1441-1446 of the Code and prepare U.S. Federal income tax Form 1042/8804 as required.  File all necessary related extensions electronically or by paper as may be required.

		(vi)	With respect to those draft tax returns it prepares, prepare extension filings and procedural responses to U.S. Federal and state tax notices.

		(vii)	Prepare final tax returns and file them with the proper tax authority, electronically where available, or by paper when electronic filing is not practical.

		(viii)	Prepare and file Fund Form 1099-Misc information returns, if applicable, electronically.

		(ix)	Prepare investor letters containing taxable income estimates for those Funds that do not provide Form K1s in March of each year, if applicable, in a form agreed by the Parties in writing.

	32.	SS&C will not prepare any U.S. state, withholding or non-U.S. returns, filings schedules and other schedules unless specifically agreed in writing with Client.

 

 

Page 13 of 20

F.            Miscellaneous

	33.	Notwithstanding anything to the contrary in this Agreement, SS&C:

		(i)	Does not maintain custody of any cash or securities.

		(ii)	Does not have the ability to authorize transactions.

		(iii)	Does not have the authority to enter into contracts on behalf of the Fund.

		(iv)	Is not responsible for determining the valuation of the Fund’s assets and liabilities.

		(v)	Does not perform any management functions or make any management decisions with regard to the operation of the Fund.

		(vi)	Is not responsible for effecting any U.S. federal or state regulatory filings which may be required or advisable as a result of the offering of interests in the Fund.

		(vii)	Is not the Fund’s tax advisor and does not provide any tax advice.

		(viii)	Is not obligated to perform any additional or materially different services due to changes in law or audit guidance.

	34.	It is the responsibility of Client to safeguard all passwords and any other login credentials; for all purposes of this Agreement SS&C shall be entitled to assume that any user of such credentials is an authorized representative of the Client.

	35.	Notwithstanding anything in this Agreement to the contrary, Fund has ultimate authority over and responsibility for its tax matters and financial statement tax disclosures.  All memoranda, schedules, tax forms and other work product produced by SS&C are the responsibility of the Fund and are subject to review and approval by Client and the Fund’s auditors, or tax preparers, as applicable.

	36.	Provide reasonable assistance to responding to due diligence and analogous requests for information from investors and prospective investors (or others representing them); provided, that SS&C may elect to provide these services only upon Client agreement in writing to separate fees in the event responding to such requests becomes, in SS&C’s absolute discretion, excessive.

	37.	Maintain books and records with respect to the Services.  As it pertains to books and records of the commodity pools, certify using SS&C’s standard client certification form that certain books and records required to be maintained by commodity pool operators by the U.S. Commodities Futures Trading Commission are being maintained by SS&C.

 

 

Page 14 of 20

 

Schedule B

Fees and Expenses

	1.	Fees

SS&C will provide the Services at the rates and fees agreed from time to time in writing between the Parties.

	2.	Fees for Additional Services; Expenses

Fees for conversion, customized reports and other services not listed above will be agreed between the Parties prior to any such additional services being provided.  Fees for reviews of Client records maintained by SS&C by Government Authorities in connection with those authorities oversight or regulation of Client or otherwise not caused by SS&C will be billed at SS&C’s standard rates (currently $325 per hour), if applicable; SS&C shall promptly notify Ceres of any such review or proposed review and the then current standard rate.  For Services that require information for the year 2015, such as tax and regulatory filings, Client shall provide data to SS&C in formats reasonably acceptable to SS&C in order to supply such Services.  Additional fees at SS&C’s standard rates will apply if such data is not provided.

Reasonable out-of-pocket expenses and any and all charges for Market Data will be billed to the Client separately on a monthly basis.  Out-of-pocket expenses, including expenses incurred by SS&C for shipping, duplicating, cost of data, and other direct expenses, are billed to Client, and are in addition to any fees.  Out of pocket expenses will be subject to procedures as the Parties may reasonably agree in writing; provided that SS&C shall use best efforts to comply with Ceres “Expense Reimbursement Policy for Consultants” as provided by Ceres in writing from time to time.  Any such expenses will be charged on a pass-through basis at SS&C’s cost or on an allocated basis and SS&C will provide Client with documentation evidencing all approved expenses.

 

 

 

 

Page 15 of 20

	3.	Payment and Fee Changes

Payment shall be made to SS&C or its Affiliates by wire transfer or at the address on the fee statement or invoice or at such other address as SS&C may specify.  Unless otherwise stated, fees are billed monthly in advance and are due and payable upon receipt of the invoice.  Bills for expenses and are due and payable upon receipt of SS&C’s invoice.

Each invoice, to the extent not reasonably disputed, is due and payable within 45 days after Client’s receipt of such invoice.  Client is responsible for payment for all billed and unbilled fees for the provision of Services through the date of termination of this Agreement.

Client shall reimburse SS&C for any applicable sales, use, property or other taxes and customs duties paid or payable by SS&C in connection with the Services or property (such as Market Data) delivered in connection with this Agreement.  Client shall have no liability for any taxes based upon the net income of SS&C.  All taxes owed by Client hereunder shall become due and payable when billed by SS&C to Client, or when assessed, levied or billed by the appropriate tax authority, even if such billing occurs subsequent to termination of this Agreement.  When SS&C’s contracting entity is a U.S. corporation, Client shall recognize SS&C as such for purposes of any government and double taxation convention.

All amounts payable to SS&C specified in this Agreement are in United States dollars.

SS&C reserves the right to review and increase its fees upon the prior approval by Client.  If SS&C proposes a fee amendment, the amendment will become effective as agreed in writing between the Parties.  If no agreement is reached within thirty (30) days of SS&C’s proposal, SS&C may terminate this Agreement upon ninety (90) days written notice to Client.  Such termination is effective at the end of the next calendar quarter ending not less than ninety (90) days following the date of the termination notice.

 

 

 

 

  

Page 16 of 20

 

Schedule C

Funds

	
 

Fund

	
 

Organization

	
Type of Fund

	
Tax Svc Level

	
 

Effective Date

	
CMF Campbell Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Willowbridge Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Graham Capital Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Aspect Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Altis Partners Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Winton Master L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Blackwater Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
PGR Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
JEM Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
MB Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Cambridge Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Rabar Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
SECOR Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Altis I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Aspect I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Augustus I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney BHM I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Boronia I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney TT II, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
PGM Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Charter Campbell L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Graham L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Charter WNT L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Charter Aspect L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Spectrum Currency and Commodity L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Spectrum Select L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Spectrum Strategic L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Spectrum Technical L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Managed Futures Premier BHM L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Managed Futures Strategic Alternatives, L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Polaris Futures Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
LV Futures Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Meritage Futures Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Managed Futures Custom Solutions Fund LP

	
DE LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Abingdon L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Tactical Diversified Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Emerging CTA Portfolio L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Energy Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Diversified 2000 Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Global Diversified Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Orion Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Energy Fund L.P.II

	
NY LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Aventis II L.P.

	
NY LP

	 	 	
1 Feb 2015

 

 

  

Page 17 of 20

	
 

Fund

	
 

Organization

	
Type of Fund

	
Tax Svc Level

	
 

Effective Date

	
Potomac Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Westport Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Institutional Futures Portfolio L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Commodity Advisors Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Global Futures Fund Ltd.

	
Cayman Ltd

	 	 	
1 Feb 2015

Notes:

	M:	Means a Master Fund

	F:	Means a Feeder Fund

	D:	Means a Direct Fund

	H:	Means a Hybrid Fund

	DE:	Means the State of Delaware

	LP:	Means a limited partnership

	LLC:	Means a limited liability company

	Cayman Ltd:	Means a Cayman Islands exempted company

 

 

Page 18 of 20

Schedule D

Compliance with Data Protection Laws

	A.	SS&C represents, warrants and covenants that:

		1.	it will process, use, maintain and disclose Personal Information only as necessary for the specific purpose for which this information was disclosed to it and only in accordance with the instructions of Morgan Stanley and the Agreement;

		2.	it will not disclose any Personal Information to any third party (including to the subject of such information) or any representative who does not have a need to know such Personal Information;

		3.	it will immediately notify Client in writing if it becomes aware of: (a) any disclosure or use of any Personal Information by it or any of its representatives in breach of this Schedule D; (b) any disclosure of any Persona Information to it or its representatives where the purpose of such disclosure is not known; (c) any request for disclosure or inquiry regarding Personal Information from a third party; and (d) any change in applicable law that is likely to have a substantial adverse effect on SS&C’s ability to comply with this Schedule D;

		4.	it will cooperate with Client and its relevant supervisory authority in the event of  litigation or a regulatory inquiry concerning Personal Information and shall abide by the advice of Client (including, at Client’s request, the advice of its relevant supervisory authority) with regard to the processing of such Personal Information;

		5.	it will enter into further commercially reasonable agreements as requested by Morgan Stanley to comply with law from time to time; provided that such agreements do not materially change the Services or the duties and obligations of SS&C hereunder;

		6.	it has no reason to believe that any applicable law will prevent it from fulfilling its obligations under this Schedule D;

		7.	it will comply with Section 11.3; and

		8.	it will cause its Representatives to act in accordance with this Schedule D.

	B.	For compliance with US privacy and data protection, SS&C represents, warrants and covenants that:

		1.	it will implement and maintain an appropriate written information security program, the terms of which are reasonably designed to ensure its adherence to the requirements for financial institutions under 17 CFR 248.30, and which shall include appropriate technical and organizational measures to: (a) ensure the security and confidentiality of all Confidential Information provided to it by Client; (b) protect against any threats or hazards to the security or integrity of information, including unlawful destruction or accidental loss, alteration and any other form of unlawful processing; and (c) prevent such unauthorized access to, use or disclosure of the information;

	C.	For compliance with EU Data Protection Directive:

		1.	Each of Client and SS&C warrants that it will implement and maintain appropriate written policies, the terms of which are reasonably designed to ensure its compliance with the EEA Data Protection Laws.

		2.	In respect to any Personal Information processed pursuant to this Agreement by SS&C, SS&C warrants and undertakes that it shall, and any of its subcontractors shall:

a.            put in place appropriate technical and organizational measures against accidental or unlawful destruction or accidental loss, alteration, unauthorized disclosure or access to such Personal Information as well as reasonable security programs and procedures for the purpose of ensuring that only authorized personnel have access to such Personal Information, processing equipment to be used to process such Personal Information and that any persons whom it authorizes to have access to such Personal Information will respect and maintain all due confidentiality;

b.            only carry out those actions in respect of the Personal Information processed on behalf of Client as are authorized by Client; and

c.            not cause or permit the Personal Information to be transferred or otherwise processed outside the European Economic Area without the prior written consent of Client.

 

 

 

 

 

 

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		3.	In the event that the services involve the processing of Personal Information outside the European Economic Area, the parties agree to execute the Standard Contractual Clauses for Data Processors established in Third Countries pursuant to the Commission Decision (2010/87/EU) of 5 February 2010 under the EU Directive 95/46/EC. In addition, to the extent that the Services involve processing of Personal Information transferred from Germany, the Parties agree to use commercially reasonable efforts to execute additional terms as agreed between the Parties.

		4.	Where SS&C has registered with the US Safe Harbor Scheme as a means of providing adequacy of data protection for any Personal Information processed in the United States of America, prior to processing any such information under the Agreement and upon request any time during the term of this Agreement, SS&C shall provide evidence that: (i) the registration with the US Safe Harbor Scheme has in fact been made; (ii) the registration has not been rejected by the US authorities; and (iii) the registration is current. In addition, SS&C warrants and undertakes that during the term of processing any Personal Information in the United States of America it shall:

a.            fully comply with all its obligations under the US Safe Harbor Scheme;

b.            promptly and duly execute the Standard Contractual Clauses as per paragraph 3 above if for any reason SS&C is unable to fully comply with its obligations under US Safe Harbor Scheme or is no longer subject to the adequacy protection provided by the US Safe Harbor Scheme.

		5.	Client and its nominated representatives shall have the right to audit SS&C's data processing activities under this Schedule D.

	D.	For compliance with privacy and data protection laws in the various jurisdictions in Asia:

		1.	Each of Client and SS&C warrants that it will implement and maintain appropriate written policies, the terms of which are reasonably designed to ensure its compliance with applicable privacy and data protection laws in any jurisdiction in Asia including the Australia Privacy Act 1988 (“Asia Data Protection Laws”) applicable to it.

		2.	In respect to any Personal Information processed pursuant to this Agreement by SS&C, SS&C warrants and undertakes that it shall, and any of its subcontractors shall:

a.            put in place appropriate security programs to: protect against accidental or unlawful destruction or accidental loss, alteration, unauthorized disclosure or access to such Personal Information; ensure that only authorized personnel have access to such information, processing equipment to be used to process such information; and to ensure that any persons whom it authorizes to have access to such information will respect and maintain all due confidentiality; and

b.            only carry out those actions in respect of the Personal Information processed on behalf of Client as are authorized by Client.

		3.	In the event that the services involve the processing of Personal Information which is subject to the Japan Personal Information Protection Law or other applicable Japanese data protection laws regulations and guidance then the Parties agree to use commercially reasonable efforts to execute additional terms as agreed between the Parties.

In this Schedule D, the term Personal Information means “personal data” as that term is used in, and “process” and “processed” shall have the same meaning as ascribed to them under, the applicable data protection laws.

 

 

 

 

 

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