Document:

ex_103500.htm

Exhibit 10.6

 

 

WARRANT NO. 18-1004

 

Dated: January 19, 2018  

 

  

WARRANT

 

THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THEIR EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, A "NO-ACTION" LETTER FROM THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION” OR THE “SEC”) WITH RESPECT TO SUCH TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE COMMISSION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

 

Zero Gravity Solutions, Inc.

 

 

Zero Gravity Solutions, Inc., a corporation organized under the laws of the State of Nevada (the “Company”), hereby certifies that, for value received from from _________________, an individual (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company up to a total of ten thousand (10,000) shares of the common stock, $0.001 par value per share (the “Common Stock”), of the Company (the “Warrant Shares”), at an exercise price equal to three dollars ($3.00) per share (the “Exercise Price”). This Warrant may be exercised at any time after issuance through and including the Fifth (5th) anniversary of its original issuance as noted above (the “Expiration Date”), subject to the following terms and conditions:

 

1.     Registration of Warrant. The Company shall, from time to time and whenever requested by the Holder, register this Warrant in conformity with records to be maintained by the Company for such purpose (the “Warrant Register”) in the name of the Holder. The Company shall treat the registered Holder of this Warrant as the absolute owner hereof for any and all purposes, including the exercise hereof or any distribution to the Holder, and the Company shall not be affected by notice to the contrary.

 

2.     Registration of Transfers and Exchanges. 

 

(a)     The Company or the transfer agent shall enter or record the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant to the Company at the office specified herein or pursuant to Section 11 hereof. Upon any such registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant hereinafter referred to as a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance of such transferee of all of the rights and obligations of a holder of a Warrant.

 

1

 

 

(b)     This Warrant is exchangeable, upon the surrender hereof by the Holder to the office of the Company specified herein or pursuant to Section 3(b) hereof for one or more New Warrants, evidencing in the aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder. Any such New Warrant shall be dated as of the date of such exchange.

 

3.     Duration and Exercise of Warrants. 

 

(a)     This Warrant shall be exercisable by the registered Holder on any business day before 5:00 P.M., New York time, at any time and from time to time on or after the date hereof to and including the Expiration Date. At 5:00 P.M., New York time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. Prior to the Expiration Date, the Company may not call or otherwise redeem this Warrant without the prior written consent of the Holder, which consent shall be given or withheld at the sole and absolute discretion of the Holder.

 

(b)     Subject to Section 2(b), Section 6 and Section 10 hereof, upon: (x) surrender of this Warrant, together with the Form of Election to Purchase attached hereto duly completed and signed, to the Company at its address for notice set forth in Section 11 hereof; and (y) payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, in the manner provided hereunder, all as specified by the Holder in the Form of Election to Purchase, the Company shall promptly (but in no event later than ten (10) business days after the Date of Exercise (as defined below)) issue or cause to be issued and cause to be delivered to the Holder in such name(s) as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise and free of restrictive legends unless a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act then the Warrant Shares will bear a Securities Act restrictive legend. Any person so designated by the Holder to receive Warrant Shares shall be deemed to have become holder of record of such Warrant Shares as of the Date of Exercise of this Warrant. A “Date of Exercise” means the date on which the Company shall have received (I) this Warrant (or any New Warrant, as applicable), together with the Form of Election to Purchase attached hereto (or attached to such New Warrant) appropriately completed and duly signed; and (II) payment of the Exercise Price for the number of Warrant Shares so indicated by the holder hereof to be purchased.

 

(c)     This Warrant shall be exercisable in its entirety or, from time to time, for a portion of the number of Warrant Shares. If less than all of the Warrant Shares which may be purchased under this Warrant are exercised at any time, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares for which no exercise has been evidenced by this Warrant.

 

2

 

 

4.     Piggyback Registration Rights. The Holder shall be granted certain Piggyback Registration Rights as more fully described in that certain Piggyback Registration Rights Agreement entered into in connection with the Offering.

 

5.     Payment of Taxes. Upon the exercise of this Warrant, the Company will pay all documentary stamp taxes attributable to the issuance of Warrant Shares; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

 

6.     Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and indemnity, if requested, satisfactory to it. Applicants for a New Warrant under such circumstances shall comply with such other reasonable regulations and procedures and pay such other reasonable charges as the Company may prescribe.

 

7.     Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 8 hereof). The Company covenants that all Warrant Shares that shall be so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. If the Company does not have a sufficient amount of Common Stock authorized to reserve for the Warrant Shares, it shall, as soon as reasonably practicable, use its best efforts to increase the number of its authorized shares such that the Company will have a sufficient amount of Common Stock authorized to reserve for the Warrant Shares.

 

8.     Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 8. Upon each such adjustment of the Exercise Price pursuant to this Section 8, the Holder shall thereafter but prior to the Expiration Date be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of Warrant Shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. 

 

3

 

 

(a)     An adjustment shall be made, if the Company, at any time while this Warrant is outstanding (i) pays a stock dividend (except scheduled dividends paid on outstanding preferred stock as of the date hereof which contain a stated dividend rate) or otherwise make distribution(s) on shares of its Common Stock or on any other class of capital stock and not the Common Stock payable in shares of Common Stock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; or (iii) combines outstanding shares of Common Stock into a smaller number of shares. If either (i), (ii) or (iii) above occurs, the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination, and shall apply to successive subdivisions and combinations.

 

(b)     In case of any reclassification of the Common Stock, any consolidation or merger of the Company with or into another entity, the sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property, then the Holder shall have the right thereafter to exercise this Warrant only into the shares of stock and other securities and property receivable upon or deemed to be held by holders of Common Stock following such reclassification, consolidation, merger, sale, transfer or share exchange, and the Holder shall be entitled upon such event to receive such amount of securities or property equal to the amount of Warrant Shares such Holder would have been entitled to had such Holder exercised this Warrant immediately prior to such reclassification, consolidation, merger, sale, transfer or share exchange. The terms of any such consolidation, merger, sale, transfer or share exchange shall include such terms so as to continue to give to the Holder the right to receive the securities or property set forth in this Section 8(b) upon any exercise following any such reclassification, consolidation, merger, sale, transfer or share exchange. 

 

(c)     For the purposes of this Section 8, the following clauses shall also be applicable:

 

(i) Record Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock or in securities convertible or exchangeable into shares of Common Stock, or (B) to subscribe for or purchase Common Stock or securities convertible or exchangeable into shares of Common Stock, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

 

4

 

 

(ii) Treasury Shares. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

(d)     All calculations under this Section 8 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.

 

9.     Payment of Exercise Price. 

 

(a)     Cash Exercise. The Holder shall deliver to the Company at its principal offices, with the Election to Purchase form attached hereto, duly executed by the Holder and accompanied by payment in cash, wire transfer or by check, payable to the order of the Company, of the aggregate Exercise Price for the total aggregate number of Warrant Shares for which this Warrant is exercised.

 

(b)     Legend. Unless the Warrant Shares have been registered under the Securities Act, upon exercise of any of the Warrants and the issuance of any of the Warrant Shares, all certificates representing the Warrant Shares shall bear on the face thereof substantially the following legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR UNLESS AN OPINION OF COUNSEL TO THE CORPORATION IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.

 

 

10.     Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this Warrant. The number of full Warrant Shares which shall be issuable upon the exercise of this Warrant shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of this Warrant so presented. If any fraction of a Warrant Share would, except for the provisions of this Section 10, be issuable on the exercise of this Warrant, the Company shall pay an amount in cash equal to the Exercise Price multiplied by such fraction.

 

5

 

 

11.     Notices. Any and all notices or other communications or deliveries hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:00 p.m. New York time on a business day, (ii) the business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:00 p.m. New York time on any date and earlier than 11:59 p.m. New York time on such date, (iii) the business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: 

 

If to the Company:      

 

Zero Gravity Solutions, Inc. 

190 NW Spanish River Boulevard

Boca Raton, Florida 33431

Attention: Kenneth Barnett, Corporate Counsel

Telephone: (561) 416-0400

 

If to the Holder:

 

 ___________________________

 ___________________________

 ___________________________

 ___________________________

 

or if none listed above, to such Holder’s address as set forth in the register maintained by the Company.

 

12.     Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further action. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder's last address as shown on the Warrant Register.

 

13.     Miscellaneous.

 

(a)     This Warrant shall be binding on and inure to the benefit of the parties hereto. This Warrant may be amended only in writing signed by the Company and the Holder.

 

(b)     Nothing in this Warrant shall be construed to give to any person or corporation other than the Company and the Holder any legal or equitable right, remedy or cause under this Warrant. This Warrant shall inure to the sole and exclusive benefit of the Company and the Holder.

 

6

 

 

(c)     The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

 

(d)     In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

(e)     The Company hereby represent and warrants to the Holder that: (i) it is voluntarily issuing this Warrant of its own freewill, (ii) it is not issuing this Warrant under economic duress, (iii) the terms of this Warrant are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review this Warrant, advise the Company with respect to this Warrant, and represent the Company in connection with its issuance of this Warrant. 

 

(f)     Any capitalized term used but not defined in this Warrant shall have the meaning ascribed to it in the Subscription Agreement.

 

(g)     This Warrant may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Warrant. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

 

(h)     This Warrant and the obligations of the Company hereunder shall not be assignable by the Company.

 

14. Disputes Under This Agreement.

 

This Agreement shall be construed and interpreted in accordance with the laws of the State of Nevada, without reference to such State’s conflicts of laws principles. Any legal suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be instituted exclusively in a court of competent jurisdiction located in the County of Palm Beach, Florida. The parties hereto hereby: (i) waives any objection which they may now have or hereafter have to the venue of any such suit, action or proceeding, and (ii) irrevocably consents to the courts of competent jurisdiction in the County of Palm Beach, Florida in any such suit, action or proceeding. The parties further agree to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in a court of competent jurisdiction in the County of Palm Beach, Florida and agree that service of process upon a party mailed by certified mail to such party’s address shall be deemed in every respect effective service of process upon such party in any such suit, action or proceeding. 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

[Signature on Following Page]

 

7

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

 

 

	 	Zero Gravity Solutions, Inc. 
	 	 
	 	By:                                                            
	 	Harvey Kaye
	 	Its: Chairman

 

8

 

 

EXHIBIT A

 

FORM OF ELECTION TO PURCHASE

 

Zero Gravity Solutions, Inc.

 

Re: Intention to Exercise Right to Purchase Shares of Common Stock Under the Warrant

 

Gentlemen:

 

In accordance with the Warrant enclosed with this Form of Election to Purchase, the undersigned hereby irrevocably elects to purchase                                shares of Common Stock, $0.001 par value per share, of Zero Gravity Solutions, Inc. encloses herewith $                            in cash, certified or official bank check(s), which sum represents the aggregate Exercise Price for the number of shares of Common Stock to which this Form of Election to Purchase relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant. Any capitalized terms used but not defined in this Form of Election to Purchase shall have the meaning ascribed to them in the accompanying Warrant.

 

The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of:

 

(Please insert SS# or FEIN #)

 

(Please print name and address)

 

If the number of shares of Common Stock issuable upon this exercise shall not be all of the shares of Common Stock which the undersigned is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a New Warrant evidencing the right to purchase the shares of Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to:

 

(Please print name and address)

 

 

 

	Dated: _____________, _____  	Name of Holder:
	 	 
	 	Signed:                                                                   
	 	Print Name:                                                            
	 	Title:                                                                       

             

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

 

 

9Exhibit 10.1 

 

AMENDMENT NO. 2 TO

 

LIMITED LIABILITY COMPANY AGREEMENT OF

JERNIGAN CAPITAL OPERATING COMPANY, LLC

 

AMENDMENT TO DESIGNATION OF SERIES A
PREFERRED UNITS

AND

DESIGNATION OF 7.00% SERIES B CUMULATIVE
REDEEMABLE PERPETUAL PREFERRED UNITS

 

January 25, 2018

 

WHEREAS, pursuant to
Article XIV of the Limited Liability Company Agreement (the “Operating Agreement”) of Jernigan Capital Operating
Company, LLC (the “Company”), the Managing Member hereby amends the Operating Agreement as follows in connection
with (i) Amendment No. 1 to the Articles Supplementary of the Managing Member (the “Series A Articles Supplementary”)
designating the terms of the Series A Preferred Stock and (ii) the issuance and sale of 7.00% cumulative redeemable perpetual preferred
stock, $0.01 par value per share (the “Series B Preferred Stock”), of the Managing Member and the issuance to
the Managing Member of units designated as “7.00% Series B Cumulative Redeemable Preferred Units” (the “Series
B Preferred Units”) in exchange for the contribution by the Managing Member of the net proceeds from the issuance and
sale of the Series B Preferred Stock.

  

		1.	Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings
given to such terms in the Operating Agreement.

 

		2.	Amendment to Terms of Series A Preferred Units. Section 5(a) of Amendment No. 1 to the Operating
Agreement is hereby amended by adding the following language immediately after Clause (ii) of Section 5(a):

 

“Notwithstanding anything in this
Clause 5(a)(ii) above to the contrary, for the fiscal quarters beginning with the fiscal quarter ending March 31, 2018 through
and including the fiscal quarter ending June 30, 2021, the following provision shall apply with respect to the computation and
payment of the Aggregate Unit Distribution:

 

For the first three (3) fiscal quarters
of the fiscal years 2018, 2019 and 2020 and for the first fiscal quarter of 2021, the Company shall declare and pay an Aggregate
Unit Distribution equal to $2,125,000 (the “Target Unit Distribution”). For the last fiscal quarter of each
of 2018, 2019 and 2020 and for the second fiscal quarter of 2021, the Company shall compute the cumulative Aggregate Unit Distribution
for all periods after December 31, 2017 through the end of such fiscal quarter in accordance with the first clause of this Paragraph
(c)(2) (the “Computed Unit Distribution”) and shall declare and pay for such quarter an Aggregate Unit Distribution
equal to the greater of the Target Unit Distribution or the Computed Unit Distribution minus the sum of all Aggregate Unit Distributions
declared and paid for all fiscal quarters after December 31, 2017 and before the fiscal quarter for which such payment is computed,
in each case subject to the Cumulative Cap.”

 

		3.	Designation of Terms of the Series B Preferred Units. The Operating Agreement is hereby
amended to incorporate Exhibit A hereto as Exhibit H thereto.

  

		4.	Except as modified herein, all terms and conditions of the Operating Agreement shall remain in
full force and effect, which terms and conditions the Managing Member hereby ratifies and confirms.

 

[Signature Page Follows]

 

     

     

    

 

IN WITNESS WHEREOF,
the undersigned has executed and agrees to be bound by this Amendment as of the date first written above.

 

	 	MANAGING MEMBER:
	 	 
	 	JERNIGAN CAPITAL, INC., a Maryland corporation
	 	 	 
	 	By:	/s/ John A. Good
	 	Name: 	John A. Good
	 	Title: 	President and Chief Operating Officer 

 

    
[Signature Page to Amendment No. 2 to the Limited Liability Company Agreement of Jernigan Capital Operating Company, LLC]

     

    

 

EXHIBIT A

 

DESIGNATION OF TERMS AND CONDITIONS OF

7.00% SERIES B PREFERRED UNITS

(1)       Designation
and Number. A series of Preferred Units, designated as the “7.00% Series B Preferred Units,” hereby
is established. The number of Series B Preferred Units shall be 1,725,000.

 

(2)       Defined
Terms. Capitalized terms used in this Exhibit and not otherwise defined shall have the meanings given to such terms in the
Operating Agreement.

 

(3)       Ranking.
The Series B Preferred Units shall, with respect to distribution rights and rights upon liquidation, winding up and dissolution
of the Company, rank (i) senior to the Common Units and LTIP Units of the Company and to all classes and series of common units
of the Company now existing or hereafter authorized, issued or outstanding and any class or series of limited liability company
interests of the Company expressly designated as ranking junior to the Series B Preferred Units as to distribution rights and rights
upon liquidation, winding up and dissolution of the Company (collectively, the “Junior Preferred Units”) unless
otherwise agreed by vote or written consent of the holders of a majority of the units of Series A Preferred Units then outstanding,
voting as a separate class; (ii) on parity with the Series A Preferred Units and any class or series of limited liability company
interests of the Company expressly designated as ranking on parity with the Series B Preferred Units as to distribution rights
and rights upon liquidation, dissolution and winding up of the Company (“Parity Units”); (iii) junior to any
class or series of limited liability company interests of the Company expressly designated as ranking senior to the Series A Preferred
Units as to distribution rights and rights upon liquidation, winding up and dissolution of the Company; and (iv) junior in right
of payment to the Company’s existing and future indebtedness. All Series B Preferred Units shall rank on parity with each
other.

 

(4)       Maturity.
The Series B Preferred Units have no stated maturity and will not be subject to any sinking fund or mandatory redemption.

 

(5)       Distributions.

 

(a)       
Distributions on each outstanding Series B Preferred Units shall be cumulative from and including January 26, 2018 (the “Original
Issue Date”) and shall be payable (i) for the period from the Original Issue Date to, but excluding, the Business
Day (as defined herein) immediately preceding April 15, 2018, in the amount of $0.37431 per share to holders of record as of the
Business Day immediately succeeding April 1, 2018, and (ii) for each quarterly distribution period thereafter, quarterly in
equal amounts in arrears on the fifteenth (15th) day of each January, April, July and October, commencing on July 15, 2018 (each
such day being hereinafter called a “Series B Distribution Payment Date”), at the then applicable annual rate;
provided, however, that if any Series B Distribution Payment Date falls on any day other than a Business Day (as defined herein),
the distribution that would otherwise have been payable on such Series B Distribution Payment Date shall be paid on the immediately
preceding Business Day with the same force and effect as if paid on such Series B Distribution Payment Date; provided
further, that no holder of any Series B Preferred Units shall be entitled to receive any distributions paid or payable on
the Series B Preferred Units with a Series B Distribution Payment Date before
the date such Series B Preferred Units are issued. Each distribution is payable to holders of record as they appear
on the records of the Company at 5:00 p.m., New York City time, on the record date, which shall be the first (1st) day
of January, April, July and October immediately preceding the applicable Series B Distribution Payment Date; provided that, if
such record date is not a Business Day, the record date shall be the immediately succeeding Business Day (each such date, a “Record
Date”). Distributions shall accrue and be cumulative from the most recent Series B Distribution Payment Date to which
distributions have been paid (a “Prior Distribution Payment Date”) (or if no Prior Distribution Payment Date,
from the Original Issue Date) to, but excluding, the next Series B Distribution Payment Date, to holders of record as of 5:00 p.m.,
New York City time, on the related Record Date, whether or not the terms and provisions set
forth in Section 5(c) hereof at any time prohibit the current payment of distributions, whether or not in any such
distribution period or periods there shall be funds legally available for the payment of such distribution, whether or not the
Corporation has earnings or whether or not such distributions are authorized. No interest, or sum of money in lieu of interest,
shall be payable in respect of any distribution payment or payments on the Series B Preferred Units that may be in arrears. Holders
of Series B Preferred Units shall not be entitled to any distributions, whether payable in cash, property or shares, in excess
of full cumulative distributions, as herein provided, on the Series B Preferred Units. Distributions payable on the Series B Preferred
Units for any period greater or less than a full distribution period will be computed on the basis of a three hundred sixty (360) day
year consisting of twelve (12) thirty (30) day months. Distributions payable on the Series B Preferred Units for each
full distributions period will be computed by dividing the applicable annual distribution rate by four. After full cumulative distributions
on the Series B Preferred Units have been paid or declared and funds therefor set aside for payment with respect to a distribution
period, the holders of Series B Preferred Units will not be entitled to any further distributions with respect to that distribution
period.

 

     

     

    

 

(b)       
On and after the Original Issue Date, holders of the then outstanding Series B Preferred Units shall be entitled to receive, when,
as and if authorized by the Managing Member and declared by the Company, out of funds legally available for payment of distributions,
cumulative cash distributions at the rate of 7.00% per annum on the $25.00 liquidation preference of each Series B Preferred
Unit (equivalent to $1.75 per annum per share).

 

(c)        The
Managing Member shall not authorize, and the Company shall not declare or pay or set apart for payment, any distributions on the
Series B Preferred Units at such time as the terms and provisions of any agreement of the Company, including any agreement relating
to the Company’s indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration,
payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such declaration or payment
shall be restricted or prohibited by law.

 

(d)       So
long as any Series B Preferred Units are outstanding, the Board shall not authorize, and the Company shall not declare or pay or
set apart for payment, except as described in the immediately following sentence, any distributions on any series or class or classes
of Parity Units, including the Series A Preferred Units, for any period unless full cumulative distributions have been declared
and paid or are contemporaneously declared and paid or declared and a sum sufficient for the payment thereof set apart for such
payment on the Series B Preferred Units for all prior distribution periods. When distributions are not paid in full or a sum sufficient
for such payment is not set apart on the Series B Preferred Units and any shares of Parity Equity Securities, all distributions
authorized and declared upon the Series B Preferred Units and all distributions authorized and declared upon any other series or
class or classes of Parity Units, including the Series A Preferred Units, shall be authorized and declared ratably in proportion
to the respective amounts of distributions accrued and unpaid on the Series B Preferred Units and such Parity Units, including
the Series A Preferred Units.

 

(e)       So
long as any Series B Preferred Units are outstanding, the Managing Member shall not authorize and declare, and the Company shall
not pay or set apart for payment, any distributions or other distribution upon Junior Units, nor shall any Junior Units or Parity
Units be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of Common Units made
for purposes of and in compliance with requirements of an employee incentive or benefit plan of the Managing Member or any subsidiary,
or a conversion into or exchange for Junior Units or redemptions for the purpose of preserving the Managing Member’s qualification
as a real estate investment trust (a “REIT”)), for any consideration (or any monies to be paid to or made available
for a sinking fund for the redemption of any such shares) by the Company, directly or indirectly (except by conversion into or
exchange for Junior Units), unless in each case all cumulative distributions on all outstanding Series B Preferred Units shall
have been paid or set apart for payment for all past distribution periods.

 

(f)       Any
distribution payment made on the Series B Preferred Units shall first be credited against the earliest accrued but unpaid distribution
due with respect to such shares which remains payable.

 

(g)       As
used herein, the term “Business Day” shall mean any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which banking institutions in New York, New York are authorized or required by law, regulation
or executive order to close.

 

(h)       As
used herein, the term “distribution” does not include distributions payable solely in Junior Units on Junior
Equity Securities, or in options, warrants or rights to holders of Junior Units to subscribe for or purchase any Junior Units.

 

(6)       Liquidation
Preference.

 

(a)       In
the event of any Liquidation Event, before any payment or distribution of the assets of the Company shall be made to or set apart
for the holders of Junior Units, the holders of the Series B Preferred Units shall be entitled to receive (i) a liquidating
distribution in the amount of $25.00 per unit, plus (ii) an amount per Series B Preferred Unit equal to all distributions
(whether or not authorized or declared) accrued and unpaid thereon to, but excluding, the date of final distribution to such holders
(the “Liquidation Preference”). Such holders of the Series B Preferred Units shall not be entitled to any further
payment.

 

    A-2

     

    

 

(b)       If,
upon any Liquidation Event, the assets of the Company, or proceeds thereof, distributable among the holders of the Series B Preferred
Units shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any other Parity Units,
including the Series A Preferred Units, then such assets, or the proceeds thereof, shall be distributed among the holders of such
Series B Preferred Units and any such other Parity Units, including the Series A Preferred Units, ratably in accordance with the
respective amounts that would be payable on such Series B Preferred Units and any such other Parity Units, including the Series
A Preferred Units, if all amounts payable thereon were paid in full. For the purposes of this paragraph (6), none of (i) a
consolidation or merger of the Company with one or more other entities, (ii) a statutory share exchange or (iii) a voluntary
sale, transfer or conveyance of all or substantially all of the Company’s assets, properties or business shall be deemed
to be a Liquidation Event of the Company.

 

(c)        Subject
to the rights of the holders of Parity Units, including the Series A Preferred Units, upon any liquidation, dissolution or winding
up of the Company, after payment shall have been made in full to the holders of the Series B Preferred Units, as provided in this
paragraph (6), any series or class or classes of Junior Equity Securities shall, subject to any respective terms and provisions
applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series
B Preferred Units shall not be entitled to share therein.

 

(d)       Written
notice of any such liquidation, dissolution or winding up of the Company, stating the payment date or dates when, and the place
or places where the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage pre-paid,
not less than thirty (30) nor more than sixty (60) days prior to the payment date stated therein, to each record holder
of the Series B Preferred Units at the respective addresses of such holders as the same shall appear on the share transfer records
of the Corporation.

 

(e)       In
determining whether a distribution (other than upon voluntary or involuntary liquidation), by dividend, redemption or other acquisition
of units of the Company or otherwise, is permitted under the Act, amounts that would be needed, if the Company were to be dissolved
at the time of the distribution, to satisfy the preferential rights upon dissolution of holders of Series B Preferred Units shall
not be added to the Company’s total liabilities.

 

(7)       Redemption.
In connection with the redemption by the Managing Member of shares of Series B Preferred Stock in accordance with the provisions
of the Articles Supplementary dated as of January 25, 2018 to the Articles of Amendment and Restatement of the Managing Member
designating the Series B Preferred Stock (the “Series B Articles Supplementary”).

 

(a)       The
Series B Preferred Units are not redeemable except as provided in this paragraph (7).

 

(b)       Regular
Redemption. If the Managing Member exercises its Regular Redemption Right (as defined in the Series B Articles Supplementary)
with respect to any share of Series B Preferred Stock after January 26, 2023, the Company
shall redeem a Series B Preferred Unit by making a payment to the Managing Member for such purpose in an amount equal to the Liquidation
Preference (as defined in the Series B Articles Supplementary).

 

(c)       Special
Redemption Right upon a Change of Control. Upon the occurrence of a Change of Control
(as defined in the Series B Articles Supplementary), if and when the Managing Member exercises its Special Redemption Right (as
defined in the Series B Articles Supplementary) to redeem any share of Series B Preferred Stock, the Company shall redeem a Series
B Preferred Unit by making a payment to the Managing Member for such purpose in an amount equal to the Special Redemption Price
(as defined in the Series B Articles Supplementary).

  

(8)       Voting
Rights. Holders of the Series B Preferred Units will not have any voting rights.

 

(9)       Conversion.

 

(a)       The
Series B Preferred Units are not convertible or exchangeable for any other property or securities except as otherwise provided
in this Section 9.

 

(b)       In
the event a holder of shares of Series B Preferred Stock exercises its Change of Control Conversion Right (as defined in the Series
B Articles Supplementary), to convert shares of Series B Preferred Stock into Shares in accordance with the terms of the Series
B Articles Supplementary (subject to the Special Redemption Right or the Regular Redemption Right of the Corporation), then, concurrently
therewith, an equivalent number of Series B Preferred Units held by the Managing Member shall
be automatically converted into a number of Class A Units equal to the number of Shares issued upon conversion of such shares of
Series B Preferred Stock. Any such conversion will be effective at the same time as the conversion of the shares of Series B Preferred
Stock into Shares.

 

(c)       No
fractional units will be issued in connection with the conversion of Series B Preferred Units into Class A Units, and the number
of Class A Units to be issued upon conversion shall be rounded down to the nearest whole unit. In lieu of fractional Class A Units,
the Managing Member shall be entitled to receive an amount in cash equal to the fair market value of such fractional Class A Unit
that was rounded down on the date of conversion, computed on the basis of the applicable per share VWAP for the Common Stock of
Managing Member.

 

    A-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00278-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00278-of-00352.parquet"}]]