exhibit 10.1

Execution Version

 

 

 

 

 

 

Broadstone Net Lease, LLC

Broadstone Net Lease, Inc.

 

 

 

 

$325,000,000

 

 

 

 

5.09% Series B Guaranteed Senior Notes due July 2, 2028

5.19% Series C Guaranteed Senior Notes due July 2, 2030

 

 

 

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Note and Guaranty Agreement

 

 

 

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Dated as of July 2, 2018

 

 

 

 

 

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Table of Contents

 

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Schedule A—Defined Terms

Schedule 4.4(b)—Form of Opinion of Special Counsel for the Purchasers

Schedule 5.3—Disclosure Materials

Schedule 5.5—Financial Statements

Schedule 5.10—Real Estate Assets

Schedule 5.15—Existing Indebtedness of the Parent Guarantor and its Subsidiaries

Purchaser Schedule —Information Relating to Purchasers

 

 

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Broadstone Net Lease, LLC

Broadstone Net Lease, Inc.
800 Clinton Square
Rochester, New York 14604

5.09% Series B Guaranteed Senior Notes due July 2, 2028

5.19% Series C Guaranteed Senior Notes due July 2, 2030

 

Dated as of July 2, 2018

To each of the Purchasers listed in
the Purchaser Schedule hereto:

Ladies and Gentlemen:

Broadstone Net Lease, LLC, a New York limited liability company (the “Issuer”), and Broadstone Net Lease, Inc., a Maryland corporation (the “Parent Guarantor,” and together with the Issuer, the “Constituent Companies” and individually, a “Constituent Company”), jointly and severally, agree with each of the Purchasers as follows:

The Issuer will authorize the issue and sale of $325,000,000 aggregate principal amount of its guaranteed senior notes, of which (a) $225,000,000 aggregate principal amount shall be its 5.09% Series B Guaranteed Senior Notes due July 2, 2028 (the “Series B Notes”), and (b) $100,000,000 aggregate principal amount shall be its 5.19% Series C Guaranteed Senior Notes due July 2, 2030 (the “Series C Notes”).  The Series B Notes and the Series C Notes are hereinafter referred to collectively as the “Notes.”  The Series B Notes and the Series C Notes shall be substantially in the forms set out in Schedules 1(a) and 1(b), respectively.  Certain capitalized and other terms used in this Agreement are defined in Schedule A and, for purposes of this Agreement, the rules of construction set forth in Section 23.4 shall govern.

Sale and Purchase of Notes

.  Subject to the terms and conditions of this Agreement, the Issuer will issue and sell to each Purchaser and each Purchaser will purchase from the Issuer, at the Closings provided for in Section 3, Notes in the principal amount and series specified opposite such Purchaser’s name in the Purchaser Schedule at the purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.

Guaranty

.  The obligations of the Issuer hereunder and under the Notes are unconditionally and irrevocably guaranteed by the Parent Guarantor pursuant to the Parent Guaranty.

 

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The execution and delivery of this Agreement shall occur on July 2, 2018 (the “Execution Date”).  The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Schiff Hardin LLP, 666 Fifth Avenue, New York, New York 10103.  The sale and purchase of $100,000,000 aggregate principal amount of the Series B Notes and $50,000,000 aggregate principal amount of the Series C Notes (the “First Closing”) shall occur at 11:00 a.m. New York, New York time on July 2, 2018 (the “First Closing Date”).  The sale and purchase of $125,000,000 aggregate principal amount of the Series B Notes and $50,000,000 aggregate principal amount of the Series C Notes (the “Second Closing” and, together with the First Closing, each, a “Closing”) shall occur at 11:00 a.m. New York, New York time on September 13, 2018 (the “Second Closing Date” and, together with the First Closing Date, each, a “Closing Date”).  The date or time of a Closing may be changed to such other Business Day as may be agreed upon by the Issuer and the Purchasers purchasing Notes at such Closing.  At each Closing, the Issuer will deliver to each Purchaser the Notes to be purchased by such Purchaser at such Closing in the form of a single Note for each series to be purchased by such Purchaser at such Closing (or such greater number of Notes of such series in denominations of at least $100,000 as such Purchaser may request) dated the date of such Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Issuer or its order of immediately available funds in the amount of the purchase price therefor by wire transfer to the account of the Issuer set forth in the funding instructions delivered by the Issuer pursuant to Section 4.10.  If at a Closing the Issuer shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure by the Issuer to tender such Notes or any of the conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at a Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at such Closing, of the following conditions:

Representations and Warranties

.  The representations and warranties of each Constituent Company in this Agreement shall be correct when made and at such Closing.

Performance; No Default

.  Each Constituent Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at such Closing.  Before and after giving effect to the issue and sale of the Notes to be sold at such Closing (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred and be continuing.  Neither Constituent Company nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Section 10 had such Section applied since such date.

Section 4.3Compliance Certificates.

 

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(a)Officer’s Certificate of each Constituent Company.  Each Constituent Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of such Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

(b)Secretary’s Certificate of each Constituent Company.  Each Constituent Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of such Closing, certifying as to (1) the resolutions attached thereto and other corporate or limited liability company proceedings relating to the authorization, execution and delivery of the Notes (in the case of the Issuer) and this Agreement (in the case of each Constituent Company) and (2) such Constituent Company’s organizational documents as then in effect.

Opinions of Counsel

.  Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the date of such Closing (a) from Alston & Bird LLP and Vaisey, Nicholson & Nearpass PLLC, each counsel for the Constituent Companies, covering the matters set forth in Schedule 4.4(a) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Constituent Companies hereby instruct such counsel to deliver such opinions to the Purchasers), and (b) from Schiff Hardin LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Schedule 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.

Purchase Permitted By Applicable Law, Etc

.  On the date of such Closing, such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the Execution Date.  If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate from the Issuer certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

Sale of Other Notes

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(a)Contemporaneously with such Closing, the Issuer shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at such Closing as specified in the Purchaser Schedule.

(b)Prior to the Second Closing, the applicable Purchasers shall have purchased the Notes to be purchased by them at the First Closing as specified in the Purchaser Schedule.

Payment of Special Counsel Fees

.  Without limiting Section 16.1, the Issuer shall have paid on or before the Execution Date and the date of such Closing the

 

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reasonable and documented fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4(b) to the extent reflected in a statement of such counsel rendered to the Issuer at least one Business Day prior to such date.

Private Placement Numbers

.  A Private Placement Number issued by CUSIP Global Services, managed on behalf of the American Bankers Association by S&P Global Market Intelligence (in cooperation with the SVO), shall have been obtained for each series of the Notes.

Changes in Corporate Structure; Change in Control

.  Neither Constituent Company shall have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.  Since June 13, 2018, no Change in Control or Control Event shall have occurred.

Funding Instructions

.  At least three Business Days prior to the date of such Closing, each Purchaser shall have received written instructions signed by a Responsible Officer or Senior Financial Officer of the Issuer on letterhead of the Issuer directing the manner of the payment of the purchase price for the Notes to be purchased at such Closing and setting forth (a) the name and address of the transferee bank, (b) such transferee bank’s ABA number and (c) the account name and number into which the purchase price for the Notes to be purchased at such Closing is to be deposited.

Material Credit Facilities

.  Such Purchaser shall have received a copy of each Material Credit Facility as in effect on the date of such Closing, which copy shall be certified as true, correct and complete and which certificate shall identify each Additional Covenant then in effect therein.

Rating of the Notes

.  Such Purchaser shall have received a copy of a letter from Moody’s evidencing that the Notes shall have been rated “Baa3” or higher by such rating agency (which evidence shall include the information required by Section 9.10).

Proceedings and Documents

.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.

Each Constituent Company represents and warrants to each Purchaser on and as of the Execution Date and the date of each Closing (provided that representations and warranties regarding Canadian Economic Sanctions Laws are only made as of the relevant date if any Purchaser is then organized under the laws of or domiciled in Canada) that:

Organization; Power and Authority

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(a)The Issuer is a limited liability company duly formed, validly existing and in good standing under the laws of its jurisdiction of formation, and is duly qualified as a foreign limited liability company and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Issuer has the limited liability company power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.

(b)The Parent Guarantor is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Parent Guarantor has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and to perform the provisions hereof.

Authorization, Etc

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(a)This Agreement and the Notes have been duly authorized by all necessary limited liability company action on the part of the Issuer, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms, except as such enforceability may be limited by (1) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (2) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(b)This Agreement has been duly authorized by all necessary corporate action on the part of the Parent Guarantor, and this Agreement constitutes a legal, valid and binding obligation of the Parent Guarantor enforceable against the Parent Guarantor in accordance with its terms, except as such enforceability may be limited by (1) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (2) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

Disclosure

.  The Constituent Companies, through their agents, JPMorgan Securities, LLC, Wells Fargo Securities, LLC and SunTrust Robinson Humphrey, have delivered to each Purchaser a copy of a Private Placement Memorandum, dated May 2018 (the “Memorandum”), relating to the transactions contemplated hereby.  The Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Parent Guarantor and its Subsidiaries.  This Agreement, the Memorandum, the financial

 

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statements listed in Schedule 5.5 and the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Constituent Companies prior to June 13, 2018 in connection with the transactions contemplated hereby and identified in Schedule 5.3 (this Agreement, the Memorandum and such documents, certificates or other writings and such financial statements delivered to each Purchaser being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made; provided that, with respect to any financial projections or other forward looking statements, such financial projections and other forward looking statements were prepared in good faith based on assumptions that the Constituent Companies believed to be reasonable in light of the circumstances in which they were made (it being acknowledged that projections and forward-looking statements are not viewed as facts and the actual results may vary materially and adversely from projected results and that no assurance can be given that the projected results will be realized).  Except as disclosed in the Disclosure Documents, since December 31, 2017, there has been no change in the financial condition, operations, business or properties of the Parent Guarantor or any Subsidiary except changes that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  There is no fact existing as of the Execution Date or the date of the applicable Closing known to either Constituent Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

Organization and Ownership of Shares of Subsidiaries; Affiliates

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(a)Schedule 5.4 contains (except as noted therein) complete and correct lists of (1) the Parent Guarantor’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization, the percentage of shares of each class of its capital stock or similar Equity Interests outstanding owned by the Parent Guarantor and each other Subsidiary and whether such Subsidiary is an Excluded Subsidiary, (2) the Parent Guarantor’s Affiliates, other than Subsidiaries and identifying each Unconsolidated Affiliate, and (3) each Constituent Company’s directors and senior officers.

(b)All of the outstanding shares of capital stock or similar Equity Interests of each Subsidiary shown in Schedule 5.4 as being owned by the Parent Guarantor and its Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by the Parent Guarantor or another Subsidiary free and clear of any Lien that is prohibited by this Agreement and the Parent Guarantor or such Subsidiary has the unencumbered right to vote such shares of capital stock or similar Equity Interests.

(c)Each Subsidiary is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each Subsidiary has the corporate or other power and

 

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authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

(d)No Subsidiary (other than an Excluded Subsidiary) is subject to any legal, regulatory, contractual or other restriction (other than the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Parent Guarantor or any of its Subsidiaries that owns outstanding shares of capital stock or similar Equity Interests of such Subsidiary.

Financial Statements; Material Liabilities

.  The Constituent Companies have delivered to each Purchaser copies of the financial statements of the Parent Guarantor and its Subsidiaries listed on Schedule 5.5.  All of such financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Parent Guarantor and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments).  The Parent Guarantor and its Subsidiaries do not have any Material liabilities that are not disclosed in the Disclosure Documents; it being acknowledged by each Purchaser that the Disclosure Documents may not contain a narrative description of each Material liability but that such Material liability shall have been otherwise accounted for, or appropriately reserved against, in the financial statements of the Parent Guarantor delivered to the Purchasers.

Compliance with Laws, Other Instruments, Etc

.  The execution, delivery and performance by (a) the Issuer of this Agreement and the Notes and (b) the Parent Guarantor of this Agreement will not (1) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Parent Guarantor or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter, regulations or by-laws, shareholders agreement or any other agreement or instrument to which the Parent Guarantor or any Subsidiary is bound or by which the Parent Guarantor or any Subsidiary or any of their respective properties may be bound or affected, (2) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to the Parent Guarantor or any Subsidiary or (3) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Parent Guarantor or any Subsidiary.

Governmental Authorizations, Etc

.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by (a) the Issuer of this Agreement or the Notes or (b) the Parent Guarantor of this Agreement.

Litigation; Observance of Agreements, Statutes and Orders

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(a)There are no actions, suits, investigations or proceedings pending or, to the best knowledge of either Constituent Company, threatened in writing against or affecting the Parent Guarantor or any Subsidiary or any property of the Parent Guarantor or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)Neither the Parent Guarantor nor any Subsidiary is (1) in default under any agreement or instrument to which it is a party or by which it is bound, (2) in violation of any order, judgment, decree or ruling of any court, any arbitrator of any kind or any Governmental Authority or (3) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations that are referred to in Section 5.16), in each case, which default or violation could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Taxes; REIT Status

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(a)The Parent Guarantor and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (1) the amount of which, individually or in the aggregate, is not Material or (2) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Parent Guarantor or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  Neither Constituent Company knows of any basis for any other tax or assessment that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the books of the Parent Guarantor and its Subsidiaries in respect of U.S. federal, state or other taxes for all fiscal periods are adequate.  The U.S. federal income tax liabilities of the Parent Guarantor and its Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years up to and including the fiscal year ended December 31, 2012.

(b)The Parent Guarantor has operated, and intends to continue to operate in a manner so as to permit it to qualify, as a REIT.  The Parent Guarantor has elected treatment as a REIT.  Each Subsidiary of the Parent Guarantor is either (1) a “qualified REIT subsidiary” within the meaning of Section 856(i) of the Code, (2) a REIT, (3) a Taxable REIT Subsidiary within the meaning of Section 856(l) of the Code, (4) a partnership under Treasury Regulation Section 301.7701-3 or (5) an entity disregarded as a separate entity from its owner under Treasury Regulation Section 301.7701-3.

Title to Property; Leases

.  Part I of Schedule 5.10 contains, as of the Execution Date, a complete and correct listing of all Properties of the Parent Guarantor and its Subsidiaries, setting forth, for each such Property, the current occupancy status of such Property

 

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and whether such Property is (a) a Development Property and, if such Property is a Development Property, the status of completion of such Property and (b) an Eligible Property.  The Parent Guarantor and its Subsidiaries that own Eligible Properties have good, marketable and legal title to, or a valid leasehold interest in, their respective assets.  As of the Execution Date, there are no Liens against any assets of the Issuer or any Subsidiary other than Permitted Liens and Liens set forth on Part II of Schedule 5.10.

Licenses, Permits, Etc

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(a)The Parent Guarantor and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto (collectively, “Intellectual Property”), that individually or in the aggregate are Material, without known material conflict with the rights of others.

(b)To the best knowledge of each Constituent Company, no product or service of the Parent Guarantor or any of its Subsidiaries infringes in any material respect any Intellectual Property or other right owned by any other Person.

(c)To the best knowledge of each Constituent Company, there is no Material violation by any Person of any right of the Parent Guarantor or any of its Subsidiaries with respect to any Intellectual Property or other right owned or used by the Parent Guarantor or any of its Subsidiaries.

Compliance with Employee Benefit Plans

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(a)The Parent Guarantor and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.  Neither the Parent Guarantor nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by the Parent Guarantor or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Parent Guarantor or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.

(b)Neither the Parent Guarantor nor any ERISA Affiliate has at any time, during the current calendar year or any of the preceding six calendar years, established, maintained or contributed to any Plan subject to Title IV of ERISA or Sections 412 or 430 of the Code.

 

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(c)The Parent Guarantor and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans, which liabilities individually or in the aggregate are Material.

(d)The expected postretirement benefit obligation (determined as of the last day of the Parent Guarantor’s most recently ended fiscal year in accordance with FASB ASC Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Parent Guarantor and its Subsidiaries is not Material.

(e)The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The representation by each Constituent Company to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by such Purchaser.

(f)The Parent Guarantor and its Subsidiaries do not have any Non-U.S. Plans.

Private Offering by the Issuer

.  Neither Constituent Company or anyone acting on their behalf has offered the Notes, the Parent Guaranty or any similar Securities for sale to, or solicited any offer to buy the Notes, the Parent Guaranty or any similar Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than not more than 65 “accredited investors” (as defined in Rule 501(a) of Regulation D under the Securities Act) (including the Purchasers), each of which has been offered the Notes at a private sale for investment.  Neither Constituent Company or anyone acting on their behalf has taken, or will take, any action that would subject the issuance or sale of the Notes or the execution and delivery by the Parent Guarantor of this Agreement for purposes of providing the Parent Guaranty to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction.

Use of Proceeds; Margin Regulations

.  The Issuer will apply the proceeds of the sale of the Notes hereunder as set forth in the Memorandum.  No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Issuer in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 5% of the value of the consolidated assets of the Issuer and its Subsidiaries and the Issuer does not have any present intention that margin stock will constitute more than 5% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

 

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Existing Indebtedness; Future Liens

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(a)Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Parent Guarantor and its Subsidiaries as of May 31, 2018 (including descriptions of the obligors and obligees, principal amounts outstanding, any collateral therefor and any Guaranty thereof), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Parent Guarantor or its Subsidiaries.  Neither the Parent Guarantor nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Parent Guarantor or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Parent Guarantor or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

(b)Except as disclosed in Schedule 5.15, neither the Parent Guarantor nor any Subsidiary has agreed or consented to cause or permit any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by this Agreement.

(c)Neither the Parent Guarantor nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Parent Guarantor or such Subsidiary, any agreement relating thereto or any other agreement (including its charter or any other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of either Constituent Company, except as disclosed in Schedule 5.15.

Foreign Assets Control Regulations, Etc

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(a)Neither the Parent Guarantor nor any Controlled Entity (1) is a Blocked Person, (2) has been notified that its name appears or may in the future appear on a State Sanctions List or (3) is a target of sanctions that have been imposed by the United Nations or the European Union.

(b)Neither the Parent Guarantor nor any Controlled Entity (1) has violated, been found in violation of, or been charged or convicted under, any applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws, Anti-Corruption Laws or, to either Constituent Company’s knowledge, Canadian Economic Sanctions Laws, (2) to either Constituent Company’s knowledge, is under investigation by any Governmental Authority for possible violation of any Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.

(c)No part of the proceeds from the sale of the Notes hereunder:

(1)constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Parent Guarantor or any Controlled Entity, directly or indirectly, (i) in connection with any investment in, or any transactions or dealings with, any Blocked Person, (ii) for any purpose that

 

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would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws or, to each Constituent Company’s knowledge, any Canadian Economic Sanctions Laws, or (iii) otherwise in violation of any U.S. Economic Sanctions Laws or, to each Constituent Company’s knowledge, any Canadian Economic Sanctions Laws;

(2)will be used, directly or indirectly, in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Money Laundering Laws; or

(3)will be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case which would be in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Corruption Laws.

(d)The Parent Guarantor has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Parent Guarantor and each Controlled Entity are and will continue to be in compliance, in all material respects, with all applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws (and, in the case of Canadian Economic Sanctions Laws, to ensure that the Parent Guarantor and each Controlled Entity will not knowingly or willfully violate such laws).

Status under Certain Statutes

.  Neither the Parent Guarantor nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, the Public Utility Holding Company Act of 2005, the ICC Termination Act of 1995, or the Federal Power Act.

Environmental Matters

.  

(a)Neither the Parent Guarantor nor any Subsidiary has knowledge of any claim or has received any notice of any claim and no proceeding has been instituted asserting any claim against the Parent Guarantor or any of its Subsidiaries or any of their respective real properties or other assets now or formerly owned, leased or operated by any of them, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect.

(b)Neither the Parent Guarantor nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(c)Neither the Parent Guarantor nor any Subsidiary has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them in

 

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a manner which is contrary to any Environmental Law that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(d)Neither the Parent Guarantor nor any Subsidiary has disposed of any Hazardous Materials in a manner which is contrary to any Environmental Law that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(e)All buildings on all real properties now owned, leased or operated by the Parent Guarantor or any Subsidiary are in compliance with applicable Environmental Laws, except where failure to comply could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

Section 5.19Obligations Rank Pari Passu.

(a)The obligations of the Issuer under this Agreement and the Notes rank at least pari passu in right of payment with all other unsecured and unsubordinated senior Indebtedness (actual or contingent) of the Issuer, including all unsecured and unsubordinated senior Indebtedness of the Issuer described in Schedule 5.15.

(b)The obligations of the Parent Guarantor under this Agreement rank at least pari passu in right of payment with all other unsecured and unsubordinated senior Indebtedness (actual or contingent) of the Parent Guarantor, including all unsecured and unsubordinated senior Indebtedness of the Parent Guarantor described in Schedule 5.15.

Solvency

.  The Parent Guarantor and its Subsidiaries, on a consolidated basis, are, and each of the Parent Guarantor and the Issuer individually is, Solvent.

Purchase for Investment

.  Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control.  Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Issuer is not required to register the Notes.

Accredited Investor

.  Each Purchaser severally represents that it is an “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others are also “accredited investors”).  Each Purchaser further severally represents that such Purchaser has received the Disclosure Documents and has had the opportunity to ask questions of the Issuer and received answers concerning the terms and conditions of the sale of the Notes.

 

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Source of Funds

. Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

(a)the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

(b)the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

(c)the Source is either (1) an insurance company pooled separate account, within the meaning of PTE 90-1 or (2) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Issuer in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(d)the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a Person controlling or controlled by the QPAM maintains an ownership interest in the Issuer that would cause the QPAM and the Issuer to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (1) the identity of such QPAM and (2) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same

 

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employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Issuer in writing pursuant to this clause (d); or

(e)the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a Person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Issuer and (1) the identity of such INHAM and (2) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Issuer in writing pursuant to this clause (e); or

(f)the Source is a governmental plan; or

(g)the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Issuer in writing pursuant to this clause (g); or

(h)the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

Financial and Business Information

.  The Constituent Companies shall deliver to each Purchaser and each holder of a Note that is an Institutional Investor:

(a)Quarterly Statements — within 60 days (or such shorter period as is the earlier of (x) 15 days greater than the period applicable to the filing of the Parent Guarantor’s Quarterly Report on Form 10‑Q (the “Form 10‑Q”) with the SEC regardless of whether the Parent Guarantor is subject to the filing requirements thereof and (y) the date by which such financial statements are required to be delivered under any Material Credit Facility or the date on which such corresponding financial statements are delivered under any Material Credit Facility if such delivery occurs earlier than such required delivery date) after the end of each quarterly fiscal period in each fiscal year of the Parent Guarantor (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,

(1)the unaudited consolidated balance sheet of the Parent Guarantor and its Subsidiaries as at the end of such quarter, and

(2)the related unaudited consolidated statements of operations, changes in shareholders’ equity and cash flows of the Parent Guarantor and its

 

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Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer of the Parent Guarantor as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments;

(b)Annual Statements — within 120 days (or such shorter period as is the earlier of (x) 15 days greater than the period applicable to the filing of the Parent Guarantor’s Annual Report on Form 10‑K (the “Form 10‑K”) with the SEC regardless of whether the Parent Guarantor is subject to the filing requirements thereof and (y) the date by which such financial statements are required to be delivered under any Material Credit Facility or the date on which such corresponding financial statements are delivered under any Material Credit Facility if such delivery occurs earlier than such required delivery date) after the end of each fiscal year of the Parent Guarantor, duplicate copies of,

(1)the audited consolidated balance sheet of the Parent Guarantor and its Subsidiaries as at the end of such year, and

(2)the related audited consolidated statements of operations, changes in shareholders’ equity and cash flows of the Parent Guarantor and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances;

(c)SEC and Other Reports — promptly upon their becoming available, one copy of (1) each financial statement, report, notice, proxy statement or similar document sent by the Parent Guarantor or any Subsidiary (i) to its creditors under any Material Credit Facility (excluding information sent to such creditors in the ordinary course of administration of a credit facility, such as information relating to pricing and borrowing availability) or (ii) to its public Securities holders generally, except, in the case of clauses (i) and (ii), to the extent such financial statement, report, notice or proxy statement has been otherwise delivered to each Purchaser and each holder of a Note pursuant to this

 

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Agreement, and (2) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such Purchaser or holder), and each prospectus and all amendments thereto filed by the Parent Guarantor or any Subsidiary with the SEC and of all press releases and other statements made available generally by the Parent Guarantor or any Subsidiary to the public concerning developments that are Material;

(d)Notice of Default or Event of Default — promptly, and in any event within five Business Days after a Responsible Officer of either Constituent Company becoming aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Constituent Companies are taking or propose to take with respect thereto;

(e)Employee Benefits Matters — promptly, and in any event within five Business Days after a Responsible Officer of either Constituent Company becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Parent Guarantor or an ERISA Affiliate proposes to take with respect thereto:

(1)with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the Execution Date;

(2)the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Parent Guarantor or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan;

(3)any event, transaction or condition that could reasonably be expected to result in the incurrence of any liability by the Parent Guarantor or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Parent Guarantor or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, could reasonably be expected to have a Material Adverse Effect; or

(4)receipt of notice of the imposition of a Material financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans;

 

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(f)Notices from Governmental Authority — promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Parent Guarantor or any Subsidiary from any Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect;

(g)Resignation or Replacement of Independent Auditors — within 15 Business Days following the date on which the Parent Guarantor’s independent auditors resign or the Parent Guarantor elects to change independent auditors, as the case may be, notification thereof, together with such further information as the Required Holders may reasonably request;

(h)Operating Summaries for Unencumbered Properties — within 45 days after the end of each fiscal quarter of the Parent Guarantor, but only to the extent then required to be delivered pursuant to a Material Credit Facility, an operating summary with respect to each Eligible Property including a quarterly and year-to-date statement of Net Operating Income and a leasing/occupancy status report, together with a current rent roll for such Property (except if such Property is subject to a Triple Net Lease, in which case, the Issuer shall furnish to such Purchaser and holder of a Note a rent roll showing rent paid for the last fiscal quarter for such Eligible Property);

(i)Change in Senior Financial Officer — prompt notice of any change in any Senior Financial Officer of the Parent Guarantor or the Issuer;

(j)Calculation of Ownership Share — promptly upon the request of such Purchaser or holder, evidence of the Parent Guarantor’s calculation of the Ownership Share with respect to a Subsidiary or an Unconsolidated Affiliate, such evidence to be in form and detail reasonably satisfactory to such Purchaser or holder; and

(k)Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Parent Guarantor or any of its Subsidiaries (including actual copies of the Parent Guarantor’s Form 10‑Q and Form 10‑K) or relating to the ability of either Constituent Company or any Subsidiary Guarantor to perform its obligations hereunder, under the Notes or under the applicable Subsidiary Guaranty Agreement as from time to time may be reasonably requested by any such Purchaser or holder of a Note.

Officer’s Certificate

.  Each set of financial statements delivered to a Purchaser or a holder of a Note pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer of the Parent Guarantor:

(a)Covenant Compliance — setting forth the information from such financial statements that is required in order to establish whether the Parent Guarantor was in compliance with the requirements of Section 10.8 and each Additional Covenant during the quarterly or annual period covered by the financial statements then being furnished (including with respect to each such provision that involves mathematical calculations, the information from such financial statements that is required to perform such

 

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calculations) and detailed calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Section or Additional Covenant, and the calculation of the amount, ratio or percentage then in existence.  In the event that the Parent Guarantor or any Subsidiary has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to Section 23.2) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to such election;

(b)Event of Default — certifying that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Parent Guarantor and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including any such event or condition resulting from the failure of the Parent Guarantor or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Constituent Companies shall have taken or propose to take with respect thereto;

(c)Subsidiary Guarantors — certifying that each Subsidiary that is required to be a Subsidiary Guarantor pursuant to Section 9.8 is a Subsidiary Guarantor as of the date of such certificate of such Senior Financial Officer and, if any Subsidiary is then so required to be a Subsidiary Guarantor, setting forth a list of all Subsidiaries that are Subsidiary Guarantors as of such date;

(d)Eligible Properties — setting forth a reasonably detailed list of all Eligible Properties which the Parent Guarantor has included in the calculation of Total Unencumbered Eligible Property Value for the fiscal period covered by such certificate of such Senior Financial Officer.

Visitation

.  Each Constituent Company shall permit the representatives of each Purchaser and each holder of a Note that is an Institutional Investor:

(a)No Default — if no Default or Event of Default then exists, at the expense of such Purchaser or holder and upon reasonable prior notice to such Constituent Company, to visit the principal executive office of such Constituent Company, to discuss the affairs, finances and accounts of such Constituent Company and its Subsidiaries with such Constituent Company’s officers, and (with the consent of such Constituent Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of such Constituent Company, which consent will not be unreasonably withheld) to visit the other offices and, subject to the rights of tenants under Tenant Leases (so long as such rights do not consist of restrictions on such Purchaser’s or holder’s right to visit a property imposed to avoid compliance with this Section), properties of such Constituent Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and

 

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(b)Default — if a Default or Event of Default then exists, at the expense of the Constituent Companies to visit and inspect any of the offices or, subject to the rights of tenants under Tenant Leases (so long as such rights do not consist of restrictions on such Purchaser’s or holder’s right to visit a property imposed to avoid compliance with this Section), properties of such Constituent Company or any of its Subsidiaries, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision each Constituent Company authorizes said accountants to discuss the affairs, finances and accounts of such Constituent Company and its Subsidiaries), all at such times and as often as may be requested.

Electronic Delivery

.  Financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates that are required to be delivered by a Constituent Company pursuant to Sections 7.1(a), (b), (c), (e), (g), (h), (i) or (j) and Section 7.2 shall be deemed to have been delivered if such Constituent Company satisfies any of the following requirements with respect thereto:

(a)such financial statements satisfying the requirements of Section 7.1(a) or (b) and related Officer’s Certificate satisfying the requirements of Section 7.2 and any other information required under Section 7.1(c) are delivered to each Purchaser and each holder of a Note by e-mail at the e-mail address set forth in such Purchaser’s or holder’s Purchaser Schedule or as communicated from time to time in a separate writing delivered to the Constituent Companies;

(b)the Parent Guarantor shall have timely filed such Form 10–Q or Form 10–K, satisfying the requirements of Section 7.1(a) or Section 7.1(b), as the case may be, with the SEC on EDGAR and shall have made such form and the related Officer’s Certificate satisfying the requirements of Section 7.2 available on its home page on the internet, which is located at www.broadstone.com as of the Execution Date;

(c)such financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates satisfying the requirements of the applicable Section are timely posted in printable form by or on behalf of such Constituent Company on IntraLinks or on any other similar website to which each Purchaser and each holder of Notes has free access; or

(d)such Constituent Company shall have timely filed such financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates satisfying the requirements of the applicable Section with the SEC on EDGAR and shall have made such items available in printable form on its home page on the internet or on IntraLinks or on any other similar website to which each Purchaser and each holder of Notes has free access;

provided however, that in no case shall access to such financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates be conditioned upon any waiver or other agreement or consent (other than confidentiality provisions

 

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consistent with Section 21 of this Agreement); provided further, that in the case of any of clauses (b), (c) or (d), such Constituent Company shall have given each Purchaser and each holder of a Note prior written notice, which may be by e-mail or in accordance with Section 19, of such posting or filing in connection with each delivery, provided further, that upon request of any Purchaser or any holder to receive paper copies of such forms, financial statements, other information and Officer’s Certificates or to receive them by e-mail, such Constituent Company will promptly e-mail them or deliver such paper copies, as the case may be, to such Purchaser or holder.

Limitation on Disclosure Obligation

.  The Constituent Companies shall not be required to disclose the following information pursuant to Section 7.1(c)(1)(i), 7.1(g) (other than notice of the resignation or change of the Parent Guarantor’s independent auditors), 7.1(k) or 7.3:

(a)information that the Constituent Companies determine after consultation with counsel qualified to advise on such matters that, notwithstanding the confidentiality requirements of Section 21, they would be prohibited from disclosing by applicable law or regulations without making public disclosure thereof;

(b)information, if the reason for such non-disclosure is solely to preserve an attorney-client privilege available to the Constituent Companies and the Constituent Companies have determined after consultation with independent counsel qualified to advise on such matters that such information would reasonably be expected, if disclosed, to no longer be entitled to the benefits of such attorney-client privilege notwithstanding the confidentiality requirements of Section 21, provided that (1) such information was not made subject to such attorney-client privilege in contemplation of this clause (b) and (2) such non-disclosure is necessary to preserve such attorney-client privilege; or

(c)information that, notwithstanding the confidentiality requirements of Section 21, the Constituent Companies are prohibited from disclosing by the terms of an obligation of confidentiality contained in any agreement with any non-Affiliate binding upon a Constituent Company and not entered into in contemplation of this clause (c), provided that the Constituent Companies shall use commercially reasonable efforts to obtain consent from the party in whose favor the obligation of confidentiality was made to permit the disclosure of the relevant information and provided further that the Constituent Companies have received a written opinion of counsel confirming that disclosure of such information without consent from such other contractual party would reasonably be expected to constitute a breach of such agreement.

Promptly after determining that the Constituent Companies are not permitted to disclose any information as a result of the limitations described in this Section 7.5, the Constituent Companies will provide each of the Purchasers and holder of a Note with an Officer’s Certificate describing generally the requested information that the Constituent Companies are prohibited from disclosing pursuant to this Section 7.5 and the circumstances under which the Constituent Companies are not permitted to disclose such information.  Promptly after a request therefor from any Purchaser or holder of a Note that is an Institutional Investor, the Constituent Companies will provide such Purchaser or holder with a written opinion of counsel (which may

 

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be addressed to the Constituent Companies) relied upon as to any requested information that the Constituent Companies have asserted that they are prohibited from disclosing to such Purchaser or holder under circumstances described in this Section 7.5.

Maturity

.  As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.

Optional Prepayments with Make-Whole Amount

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(a)During any period when no Default or Event of Default exists or would be caused by an optional prepayment, the Issuer may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes of any series, in an amount not less than 5% of the aggregate principal amount of the Notes of such series then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal amount.  

(b)If a Default or Event of Default then exists or would be caused by an optional prepayment, the Issuer may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes of each series, in an amount not less than 5% of the aggregate principal amount of the Notes of such series then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal amount.  In no event shall the rights of the Issuer under this Section 8.2(b) extend the date payment is due in respect of any Notes that have become due and payable pursuant to Section 12.1.  Acceptance of a prepayment of Notes pursuant to this Section 8.2(b) shall not constitute a waiver of any Default or Event of Default.

(c)The Issuer will give each holder of Notes of the series to be prepaid (with a copy to each other holder of Notes) written notice of each optional prepayment under this Section 8.2 not less than 10 days and not more than 60 days prior to the date fixed for such prepayment unless the Issuer and the holders of more than 50% of the aggregate principal amount of the Notes of each series to be prepaid agree to another time period pursuant to Section 18.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes of such series to be prepaid on such date, the principal amount of each Note of such series held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer of the Issuer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Issuer shall deliver to each holder of Notes of the series to be prepaid a certificate of a Senior Financial Officer of the Issuer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

 

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Allocation of Partial Prepayments and Purchases

.  In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.  In the case of any purchase or prepayment of the Notes pursuant to Section 8.5 or Section 8.7, the principal amount of the Notes to be purchased or prepaid shall be allocated among all of the Notes that have accepted such offer of purchase or prepayment.

Maturity; Surrender, Etc

.  In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Issuer shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Issuer and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

Purchase of Notes

.  The Issuer will not, and will not permit any Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Issuer or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions and, for the avoidance of doubt, such offer may be at less than par and may or may not include the payment of the Make-Whole Amount.  Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 10 Business Days.  If the holders of more than 50% of the principal amount of the Notes then outstanding accept such offer, the Issuer shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 10 Business Days from its receipt of such notice to accept such offer.  A failure by a holder of Notes to respond prior to the last day on which such holder may respond (including any extension of such period pursuant to the terms of the preceding sentence) to an offer to purchase made pursuant to this Section 8.5 shall be deemed to constitute a rejection of such offer by such holder.  The Issuer will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such Notes.  Acceptances of offers to repurchase Notes pursuant to this Section 8.5 need not be a on a pro rata basis among the Notes.

Section 8.6Make-Whole Amount.

The term “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

 

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“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum of (a) 0.50% plus (b) the yield to maturity implied by the “Ask Yield(s)” reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (1) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (2) interpolating linearly between the “Ask Yields” Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities (i) closest to and greater than such Remaining Average Life and (ii) closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum of (x) 0.50% plus (y) the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (A) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (B) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (a) such Called Principal into (b) the sum of the products obtained by multiplying (1) the principal component of each Remaining

 

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Scheduled Payment with respect to such Called Principal by (2) the number of years, computed on the basis of a 360-day year comprised of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1.

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

Section 8.7Offer to Prepay Notes in the Event of a Change in Control.

(a)Notice of Change in Control or Control Event.  The Constituent Companies will, within 10 Business Days after any Responsible Officer of either thereof has knowledge of the occurrence of any Change in Control or any Control Event, give written notice of such Change in Control or Control Event to each holder of Notes unless notice in respect of such Change in Control (or the Change in Control contemplated by such Control Event) shall have been given pursuant to Section 8.7(b).  If a Change in Control has occurred, such notice shall contain and constitute an offer by the Issuer to prepay Notes as described in Section 8.7(c) and shall be accompanied by the certificate described in Section 8.7(g).

(b)Condition to Company Action.  The Parent Guarantor will not take any action that consummates or finalizes a Change in Control unless (1) at least 30 days prior to such action the Issuer shall have given to each holder of Notes written notice containing and constituting an offer to prepay Notes as described in Section 8.7(c), accompanied by the certificate described in Section 8.7(g), and (2) contemporaneously with such action, the Issuer prepays all Notes required to be prepaid in accordance with this Section 8.7.  

(c)Offer to Prepay Notes.  The offer to prepay Notes contemplated by Sections 8.7(a) and (b) shall be an offer to prepay, in accordance with and subject to this Section 8.7, all, but not less than all, Notes held by each holder on a date specified in such offer (the “Change in Control Proposed Prepayment Date”).  If such Change in Control Proposed Prepayment Date is in connection with an offer contemplated by Section 8.7(a), such date shall be a Business Day not less than 30 days and not more than 60 days after the date of such offer (or if the Change in Control Proposed Prepayment

 

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Date shall not be specified in such offer, the Change in Control Proposed Prepayment Date shall be the Business Day nearest to the 30th day after the date of such offer).

(d)Acceptance; Rejection.  A holder of Notes may accept or reject the offer to prepay made pursuant to this Section 8.7 by causing a notice of such acceptance or rejection to be delivered to the Issuer at least five Business Days prior to the Change in Control Proposed Prepayment Date.  A failure by a holder of Notes to so respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute a rejection of such offer by such holder.

(e)Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.7 shall be at 100% of the principal amount of such Notes, together with accrued and unpaid interest on such Notes accrued to the date of prepayment but without any Make-Whole Amount.  The prepayment shall be made on the Change in Control Proposed Prepayment Date, except as provided by Section 8.7(f).

(f)Deferral Pending Change in Control.  The obligation of the Issuer to prepay Notes pursuant to the offers required by Section 8.7(c) and accepted in accordance with Section 8.7(d) is subject to the occurrence of the Change in Control in respect of which such offers and acceptances shall have been made.  In the event that such Change in Control does not occur on the Change in Control Proposed Prepayment Date in respect thereof, the prepayment shall be deferred until, and shall be made on the date on which, such Change in Control occurs.  The Constituent Companies shall keep each holder of Notes reasonably and timely informed of (1) any such deferral of the date of prepayment, (2) the date on which such Change in Control and the prepayment are expected to occur and (3) any determination by the Parent Guarantor that efforts to effect such Change in Control have ceased or been abandoned (in which case the offers and acceptances made pursuant to this Section 8.7 in respect of such Change in Control automatically shall be deemed rescinded without penalty or other liability).

(g)Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Issuer and dated the date of such offer, specifying (1) the Change in Control Proposed Prepayment Date, (2) that such offer is made pursuant to this Section 8.7 and that failure by a holder to respond to such offer by the deadline established in Section 8.7(d) shall result in such offer to such holder being deemed rejected, (3) the principal amount of each Note offered to be prepaid, (4) the interest that would be due on each Note offered to be prepaid, accrued to the Change in Control Proposed Prepayment Date, (5) that the conditions of this Section 8.7 have been fulfilled and (6) in reasonable detail, the nature and date of the Change in Control.

(h)Change in Control Defined.  “Change in Control” means:

(1)Any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)), is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be deemed to have

 

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“beneficial ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 30% of the total voting power of the then outstanding voting stock of the Parent Guarantor; or

(2)During any period of 12 consecutive months ending after the Execution Date, individuals who at the beginning of any such 12-month period constituted the Board of Directors of the Parent Guarantor (together with any new directors whose election by such Board or whose nomination for election by the shareholders of the Parent Guarantor was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Parent Guarantor then in office.

(i)Control Event Defined.  “Control Event” means the execution of any definitive written agreement which, when fully performed by the parties thereto, would result in a Change in Control.

Payments Due on Non-Business Days

.  Anything in this Agreement or the Notes to the contrary notwithstanding, (a) except as set forth in clause (b), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; and (b) any payment of principal of or Make-Whole Amount on any Note (including principal due on the Maturity Date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

From the Execution Date until the First Closing and thereafter, so long as any of the Notes are outstanding, the Constituent Companies covenant that:

Compliance with Laws

.  Without limiting Section 10.4, each Constituent Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject (including ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16) and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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Insurance

.  Each Constituent Company will, and will cause each of its Subsidiaries to, or will cause each tenant under a Tenant Lease to, maintain, with financially sound and reputable insurers, insurance (on a replacement cost basis) with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.

Maintenance of Properties

.  Each Constituent Company will, and will cause each of its Subsidiaries to, or will cause each tenant under a Tenant Lease to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear or as the result of a casualty for which insurance is maintained pursuant to Section 9.2 or condemnation), so that the business carried on in connection therewith may be properly conducted at all times subject to the rights of tenants under Tenant Leases, provided that this Section 9.3 shall not prevent the Parent Guarantor or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Parent Guarantor has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Payment of Taxes and Claims

.  Each Constituent Company will, and will cause each of its Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Parent Guarantor or any Subsidiary, provided that neither the Parent Guarantor nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (a) the amount, applicability or validity thereof is contested by the Parent Guarantor or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Parent Guarantor or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Parent Guarantor or such Subsidiary or (b) the nonpayment of all such taxes, assessments, charges, levies and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Corporate Existence, Etc

.  Each Constituent Company will at all times preserve and keep its limited liability company or corporate existence in full force and effect.  Subject to Section 10.2, each Constituent Company will at all times preserve and keep in full force and effect the corporate or other legal existence of each of its Subsidiaries and all rights and franchises of each Constituent Company and its Subsidiaries unless, in the good faith judgment of the Parent Guarantor, the termination of or failure to preserve and keep in full force and effect such corporate or other existence, right or franchise could not, individually or in the aggregate, have a Material Adverse Effect.

Books and Records

.  Each Constituent Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory

 

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jurisdiction over such Constituent Company or such Subsidiary, as the case may be.  Each Constituent Company will, and will cause each of its Subsidiaries to, keep books, records and accounts which, in reasonable detail, accurately reflect all transactions and dispositions of assets.  Each Constituent Company and its Subsidiaries have devised a system of internal accounting controls sufficient to provide reasonable assurances that their respective books, records, and accounts accurately reflect all transactions and dispositions of assets and each Constituent Company will, and will cause each of its Subsidiaries to, continue to maintain such system.

REIT Status

.  The Parent Guarantor shall maintain its status as, and election to be treated as, a REIT under the Code.

Section 9.8Subsidiary Guarantors.

(a)The Parent Guarantor will cause each of its Subsidiaries that guarantees or otherwise becomes liable at any time, whether as a borrower or an additional or co-borrower or otherwise, for or in respect of any Indebtedness under any Material Credit Facility to, concurrently therewith:

(1)enter into an agreement in form and substance satisfactory to the Required Holders providing for the guaranty by such Subsidiary, on a joint and several basis with all other such Subsidiaries, of (x) the prompt payment in full when due of all amounts payable by the Issuer pursuant to the Notes (whether for principal, interest, Make-Whole Amount or otherwise) and by the Constituent Companies pursuant to this Agreement, including all indemnities, fees and expenses payable by the Constituent Companies thereunder and (y) the prompt, full and faithful performance, observance and discharge by the Constituent Companies of each and every covenant, agreement, undertaking and provision required pursuant to the Notes (in the case of the Issuer) or this Agreement to be performed, observed or discharged by it (a “Subsidiary Guaranty Agreement”); and

(2)deliver the following to each holder of a Note:

(i) an executed counterpart of such Subsidiary Guaranty Agreement;

(ii)a certificate signed by an authorized Responsible Officer of such Subsidiary containing representations and warranties on behalf of such Subsidiary to the same effect, mutatis mutandis, as those contained in Sections 5.1(b), 5.2(b), 5.6(b), 5.7(b) and 5.19(b) of this Agreement (but with respect to such Subsidiary and such Subsidiary Guaranty Agreement rather than the Parent Guarantor and this Agreement);

(iii)all documents as may be reasonably requested by the Required Holders to evidence the due organization, continuing existence and, where applicable, good standing of such Subsidiary and the due authorization by all requisite action on the part of such Subsidiary of the

 

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execution and delivery of such Subsidiary Guaranty Agreement and the performance by such Subsidiary of its obligations thereunder; and

(iv)an opinion of counsel reasonably satisfactory to the Required Holders covering such matters relating to such Subsidiary and such Subsidiary Guaranty Agreement as the Required Holders may reasonably request.

(b)At the request of the Parent Guarantor and by written notice to each holder of Notes, any Subsidiary Guarantor that has provided a Subsidiary Guaranty Agreement under subparagraph (a) of this Section 9.8 shall be discharged from all of its obligations and liabilities under its Subsidiary Guaranty Agreement and shall be automatically released from its obligations thereunder without the need for the execution or delivery of any other document by the holders, provided that (1) if such Subsidiary Guarantor is a guarantor or is otherwise liable for or in respect of any Material Credit Facility, then such Subsidiary Guarantor has been released and discharged (or will be released and discharged concurrently with the release of such Subsidiary Guarantor under its Subsidiary Guaranty Agreement) under such Material Credit Facility, (2) at the time of, and after giving effect to, such release and discharge, no Default or Event of Default shall have occurred and be continuing, (3) no amount is then due and payable under its Subsidiary Guaranty Agreement, (4) if, in connection with such Subsidiary Guarantor being released and discharged under any Material Credit Facility, any fees or other remuneration (other than (i) commitment fees and similar fees given in consideration of a new extension of credit in connection with an extension or replacement of the applicable Material Credit Facility, (ii) amounts paid in satisfaction of principal or interest under such Material Credit Facility and (iii) structuring, arrangement or similar fees solely for the account of the agent under such Material Credit Facility in connection with such release of such Subsidiary Guarantor from such Material Credit Facility) were paid or agreed to be paid to or for the benefit of any agent or any lender, in such capacity, under such Material Credit Facility principally for the purpose of releasing such Subsidiary Guarantor from its guaranty obligations under such Material Credit Facility, then the Issuer shall pay or agree to pay to the holders of the Notes the same fees or other remuneration on a pro rata basis in proportion to the relative outstanding principal amounts of the Notes and the principal amount of the Indebtedness outstanding under such applicable Material Credit Facility (or applicable Material Credit Facilities) and (5) each holder shall have received a certificate of a Responsible Officer of the Parent Guarantor certifying as to the matters set forth in clauses (1) through (4).

Most Favored Lender Provision

.  If at any time a Material Credit Facility or any Guaranty in respect thereof shall include any Financial Covenant and such provision is not contained in this Agreement (any such provision, together with any related definitions (including, any term defined therein with reference to the application of GAAP, as identified in such Material Credit Facility), an “Additional Covenant”), then the Constituent Companies shall promptly, and in any event within 15 Business Days thereof, provide a Most Favored Lender Notice with respect to each such Additional Covenant; provided that a Most Favored Lender Notice is not required to be given in the case of the Additional Covenants incorporated herein on the Execution Date.  Thereupon, unless waived in writing by the Required

 

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Holders within 10 days of the Purchasers’ and holders’ receipt of such notice, such Additional Covenant shall be deemed incorporated by reference into this Agreement, mutatis mutandis, as if set forth fully herein, effective (a) in the case of any Additional Covenant effective on the Execution Date, as of the Execution Date, and (b) in the case of any Additional Covenant effective after the Execution Date, as of the date when such Additional Covenant became effective under such Material Credit Facility.  Any Additional Covenant incorporated into this Agreement pursuant to this provision (1) shall remain unchanged herein notwithstanding any temporary waiver of such Additional Covenant under the relevant Material Credit Facility, (2) shall be deemed automatically amended herein to reflect any subsequent amendments agreed and implemented in relation to such Additional Covenant under the relevant Material Credit Facility and (3) shall be deemed deleted from this Agreement at such time as such Additional Covenant is deleted or otherwise removed from or is no longer in effect under or pursuant to the relevant Material Credit Facility or if the relevant Material Credit Facility has been terminated; provided that (i) if any fees or other remuneration (other than (A) commitment fees and similar fees given in consideration of a new extension of credit in connection with an extension or replacement of the applicable Material Credit Facility, (B) amounts paid in satisfaction of principal or interest under such Material Credit Facility and (C) structuring, arrangement or similar fees solely for the account of the agent under such Material Credit Facility in connection with such deletion, amendment or modification) were paid or agreed to be paid to or for the benefit of any agent or any lender, in such capacity, under such Material Credit Facility principally to cause such Additional Covenant to cease to be in effect or be deleted or to be so amended or modified in such Material Credit Facility, then the Issuer shall pay or agree to pay to the holders of the Notes the same fees or other remuneration on a pro rata basis in proportion to the relative outstanding principal amounts of the Notes and the principal amount of the Indebtedness outstanding under such applicable Material Credit Facility (or applicable Material Credit Facilities); and (ii) no Additional Covenant shall be so deemed automatically amended or deleted during any time that a Default or Event of Default has occurred and is continuing.  In determining whether a breach of any Financial Covenant incorporated by reference into this Agreement pursuant to this Section 9.9 shall constitute an Event of Default, the period of grace, if any, applicable to such Additional Covenant in the relevant Material Credit Facility shall apply.

Rating on the Notes

.  The Issuer shall at all times maintain a Debt Rating for the Notes from an NRSRO.  Evidence of such Debt Rating (or any change thereto) shall (a) be delivered by the Issuer to the holders of the Notes (1) at least annually (on or before each anniversary of the First Closing) and (2) promptly upon any change in such Debt Rating, (b) set forth the Debt Rating for such Notes, (c) refer to each Private Placement Number issued by CUSIP Global Services, managed on behalf of the American Bankers Association by S&P Global Market Intelligence, in respect of such Notes, (d) state that the Debt Rating addresses the likelihood of payment of both the principal and interest of such Notes, (e) not include any prohibition against sharing such evidence with the SVO or any other regulatory authority having jurisdiction over the holders of the Notes, and (f) include such other information relating to the Debt Rating for the Notes as may be required from time to time by the SVO or any other regulatory authority having jurisdiction over the holders of the Notes.

Although it will not be a Default or an Event of Default if the Constituent Companies fail to comply with any provision of Section 9 on or after the Execution Date and prior to the First

 

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Closing, if such a failure occurs, then any of the Purchasers may elect not to purchase the Notes on the date of the First Closing that is specified in Section 3.

From the Execution Date until the First Closing and thereafter, so long as any of the Notes are outstanding, the Constituent Companies covenant that:

Transactions with Affiliates

.  The Constituent Companies will not, and will not permit any Subsidiary to, enter into directly or indirectly any transaction or group of related transactions (including the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate, except (a) in the ordinary course and pursuant to the reasonable requirements of such Constituent Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to such Constituent Company or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate, (b) transactions between or among the Parent Guarantor, the Issuer and any Subsidiary Guarantor and (c) transactions between or among direct or indirect Wholly-Owned Subsidiaries that are not Subsidiary Guarantors.

Merger, Consolidation, Sales of Assets and Other Arrangements

.

The Constituent Companies will not, and will not permit any Subsidiary to, (a) enter into any transaction of merger or consolidation (other than (1) any transaction of merger or consolidation between or among the Constituent Companies and the Subsidiary Guarantors; provided that if the Parent Guarantor or the Issuer enters into such a transaction of merger, it is the survivor thereof, (2) any transaction of merger or consolidation of a Subsidiary (other than the Issuer) that is not a Subsidiary Guarantor into a Constituent Company or a Subsidiary Guarantor so long as such Constituent Company or such Subsidiary Guarantor is the survivor thereof and (3) any transaction of merger or consolidation between two or more Subsidiaries (other than the Issuer) that are not Subsidiary Guarantors), (b) liquidate, windup or dissolve itself (or suffer any liquidation or dissolution) or (c) convey, sell, lease, sublease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business or assets, or the capital stock of or other Equity Interests in any of its Subsidiaries, whether now owned or hereafter acquired; provided, however, that any of the actions described in the immediately preceding clauses (a) through (c) may be taken with respect to either Constituent Company, any Subsidiary Guarantor or any other Subsidiary so long as (i) immediately prior to the taking of such action, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence, and (ii) if any such action involves the Parent Guarantor or the Issuer, the Parent Guarantor or the Issuer, respectively, must be the survivor, except that the Parent Guarantor may take any such action pursuant to which the Parent Guarantor is not the survivor so long as (A) if such transaction results in a Change of Control, the Issuer has offered to purchase the Notes then outstanding in accordance with Section 8.7, (B) the surviving Person shall be a solvent corporation or limited liability company organized and existing under the laws of the United States or any State thereof (including the District of Columbia), and such surviving Person (I) shall have executed and delivered to each holder of a Note its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and (II) shall have caused to be delivered to each holder of any

 

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Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof, and (C) each Subsidiary Guarantor shall have reaffirmed in writing its obligations under its Subsidiary Guaranty Agreement.

Further, neither Constituent Company nor any Subsidiary, will enter into any sale-leaseback transactions or other transaction by which such Constituent Company or such Subsidiary shall remain liable as lessee (or the economic equivalent thereof) of any real or personal property that it has sold or leased to another Person other than in a transaction involving only property that is not an Eligible Property and only to the extent occurring in the ordinary course of business for such Constituent Company or Subsidiary.

Line of Business

.  The Constituent Companies will not, and will not permit any Subsidiary to, engage in any business if, as a result, the general nature of the business in which the Parent Guarantor and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Parent Guarantor and its Subsidiaries, taken as a whole, are engaged on the Execution Date as described in the Memorandum.

Economic Sanctions, Etc

.  The Constituent Companies will not, and will not permit any Controlled Entity to (a) become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or (b) directly or indirectly have any investment in or engage in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (1) would cause any Purchaser or holder or any affiliate of such Purchaser or holder to be in violation of, or subject to sanctions under, any law or regulation applicable to such Purchaser or holder, or (2) is prohibited by or subject to sanctions under any Economic Sanctions Laws.

Section 10.5Negative Pledge.

(a)Except for Permitted Negative Pledges, the Constituent Companies will not, and will not permit any Subsidiary to, permit any Eligible Property or any direct or indirect ownership interest of the Issuer in any Person owning any Eligible Property to be subject to a Negative Pledge if such Negative Pledge prohibits or purports to prohibit the creation of a Lien on such Eligible Property or ownership interest as security for the obligations of the Constituent Companies hereunder or under the Notes.

(b)The Constituent Companies will not, and will not permit any Subsidiary to, create, assume, or incur any Lien (other than Permitted Liens) upon any of its properties, assets, income or profits of any character whether now owned or hereafter acquired if immediately prior to the creation, assumption or incurring of such Lien, or immediately thereafter, a Default or Event of Default is or would be in existence, including a Default or Event of Default resulting from a violation of any of the covenants contained in Section 10.8 or any Additional Covenant.

 

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Restrictions on Intercompany Transfers

.  The Constituent Companies will not, and will not permit any Subsidiary (other than an Excluded Subsidiary) to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary (other than an Excluded Subsidiary) to: (a) pay dividends or make any other distribution on any of such Subsidiary’s capital stock or other Equity Interests owned by the Parent Guarantor or any Subsidiary; (b) pay any Indebtedness owed to the Parent Guarantor or any other Subsidiary; (c) make loans or advances to the Parent Guarantor or any other Subsidiary or (d) transfer any of its property or assets to the Parent Guarantor or any other Subsidiary; other than:

(1)with respect to clauses (a) through (d) above, those encumbrances or restrictions contained in (i) this Agreement or any Subsidiary Guaranty Agreement, (ii) the Material Credit Facilities as in effect on the Execution Date, or (iii) any other agreement (A) evidencing Indebtedness that is not Secured Indebtedness which either Constituent Company or any Subsidiary may create, incur, assume or permit or suffer to exist under this Agreement and (B) containing encumbrances and restrictions imposed in connection with such Indebtedness that are either substantially similar to, or less restrictive than, the encumbrances and restrictions set forth in this Agreement;

(2)with respect to clause (d), (x) customary provisions restricting assignment of any agreement entered into by either Constituent Company or any Subsidiary in the ordinary course of business, and (y) restrictions contained in any agreement relating to the sale of a Subsidiary (other than the Issuer) or the assets of a Subsidiary pending such sale to the extent that such sale is permitted under this Agreement and the restrictions apply only to the Subsidiary or the assets that are the subject of such sale; and

(3)with respect to clause (d), those encumbrances or restrictions contained in an agreement (i) evidencing Indebtedness which a Subsidiary may create, incur, assume, or permit or suffer to exist under this Agreement and (ii) which Indebtedness is secured by a Lien on the assets of such Subsidiary permitted to exist under this Agreement, so long as such encumbrances and restrictions apply only to such Subsidiary and such Subsidiary has no material assets other than those encumbered by such Lien.

Parent Guarantor Ownership and Management of the Issuer

.  The Constituent Companies will not permit the Parent Guarantor to (a) cease to own and control, directly or indirectly, at least 65% of the outstanding Equity Interests of the Issuer, (b) cease to be the managing member of the Issuer or (c) cease to have the sole and exclusive power to exercise all management and control over the Issuer.

Financial Covenants

.

(a)Leverage Ratio.  The Parent Guarantor will not at any time permit the ratio of (1) Total Outstanding Indebtedness to (2) Total Market Value to exceed 0.60 to 1.00; provided that if such ratio is greater than 0.60 to 1.00 but is not greater than 0.65 to 1.00,

 

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then the Parent Guarantor shall be deemed to be in compliance with this Section 10.8(a) so long as (i) the Issuer or any Subsidiary of the Issuer completed a Material Acquisition which resulted in such ratio (after giving effect to such Material Acquisition) exceeding 0.60 to 1.00 at any time during the fiscal quarter in which such Material Acquisition took place and for the three immediately subsequent consecutive fiscal quarters, (ii) the Parent Guarantor has not maintained compliance with this Section 10.8(a) in reliance on this proviso for more than one time during the term of this Agreement and (iii) such ratio (after giving effect to such Material Acquisition) is not greater than 0.65 to 1.00 at any time.

(b)Secured Indebtedness Ratio.  The Parent Guarantor will not at any time permit the ratio of (1) Secured Indebtedness of the Parent Guarantor and its Subsidiaries to (2) Total Market Value to exceed 0.40 to 1.00.

Notwithstanding the foregoing, the Constituent Companies will not, and will not permit any Subsidiary to, secure any Indebtedness outstanding under or pursuant to any Material Credit Facility unless and until the Notes (and the Parent Guaranty, each Subsidiary Guaranty Agreement and each other Guaranty delivered in connection therewith) shall concurrently be secured equally and ratably with such Indebtedness pursuant to documentation reasonably acceptable to the Required Holders in substance and in form, including an intercreditor agreement and opinions of counsel to the Constituent Companies and/or any such Subsidiary, as the case may be, from counsel and in a form that is reasonably acceptable to the Required Holders.

(c)Ratio of Adjusted EBITDA to Fixed Charges.  The Parent Guarantor will not at any time permit the ratio of (1) Adjusted EBITDA for the fiscal quarter most recently ended for which financial statements are available to (2) Fixed Charges of the Parent Guarantor and its Subsidiaries for such fiscal quarter to be less than 1.50 to 1.00.

(d)Ratio of Total Unsecured Indebtedness to Total Unencumbered Eligible Property Value.  The Parent Guarantor will not at any time permit the ratio of (1) Total Unsecured Indebtedness to (2) Total Unencumbered Eligible Property Value to exceed 0.60 to 1.00; provided that if such ratio is greater than 0.60 to 1.00 but is not greater than 0.65 to 1.00, then the Parent Guarantor shall be deemed to be in compliance with this Section 10.8(d) so long as (i) the Issuer or any Subsidiary of the Issuer completed a Material Acquisition which resulted in such ratio (after giving effect to such Material Acquisition) exceeding 0.60 to 1.00 at any time during the fiscal quarter in which such Material Acquisition took place and for the three immediately subsequent consecutive fiscal quarters, (ii) the Parent Guarantor has not maintained compliance with this Section 10.8(d) in reliance on this proviso for more than one time during the term of this Agreement and (iii) such ratio (after giving effect to such Material Acquisition) is not greater than 0.65 to 1.00 at any time.

(e)Dividends and Other Restricted Payments.  Subject to the following sentence, if an Event of Default exists, the Constituent Companies will not, and will not permit any Subsidiary to, declare or make any Restricted Payments except that the Parent Guarantor may declare and make cash distributions to its shareholders in an aggregate

 

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amount not to exceed the minimum amount necessary for the Parent Guarantor to remain in compliance with Section 9.7 (and the Issuer and its Subsidiaries may declare and make cash distributions to the Parent Guarantor for such purpose), and Subsidiaries of the Issuer may pay Restricted Payments to the Issuer or any other Subsidiary of the Issuer that is a Subsidiary Guarantor.  If an Event of Default specified in Section 11(a), Section 11(b), Section 11(g), Section 11(h) or Section 11(i) shall exist, or if as a result of the occurrence of any other Event of Default the Notes have been accelerated pursuant to Section 12, the Constituent Companies will not, and will not permit any Subsidiary to, make any Restricted Payments to any Person except that Subsidiaries may pay Restricted Payments to the Issuer or any other Subsidiary of the Issuer that is a Subsidiary Guarantor.

Although it will not be a Default or an Event of Default if the Constituent Companies fail to comply with any provision of Section 10 before or after giving effect to the issuance of Notes at the First Closing on a pro forma basis, if such a failure occurs, then any of the Purchasers may elect not to purchase the Notes on the date of the First Closing that is specified in Section 3.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

(a)the Issuer defaults in the payment of any principal or Make-Whole Amount on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b)the Issuer defaults in the payment of any interest on any Note for more than three Business Days after the same becomes due and payable; or

(c)either Constituent Company defaults in the performance of or compliance with any term contained in Section 7.1(d), Section 9.7, or Section 10 or any Additional Covenant; or

(d)either Constituent Company or any Subsidiary Guarantor defaults in the performance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)) or in a Subsidiary Guaranty Agreement and such default is not remedied within 30 days after the earlier of (1) a Responsible Officer of either Constituent Company obtaining actual knowledge of such default and (2) either Constituent Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or

(e)(1) any representation or warranty made in writing by or on behalf of either Constituent Company or by any officer of either Constituent Company in this Agreement or any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made, or (2) any representation or warranty made in writing by or on behalf of any Subsidiary Guarantor or by any officer of such Subsidiary Guarantor in any Subsidiary

 

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Guaranty Agreement or any writing furnished in connection with any Subsidiary Guaranty Agreement proves to have been false or incorrect in any material respect on the date as of which made; or

(f)(1) either Constituent Company or any Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of (x) $25,000,000 or more in the case of Indebtedness that is not Nonrecourse Indebtedness or (y) $75,000,000 or more in the case of Nonrecourse Indebtedness (or such lesser amount of Indebtedness that is not Nonrecourse Indebtedness or that is Nonrecourse Indebtedness, as applicable, as is the lowest threshold amount for triggering a similar default under any Material Credit Facility) (or its equivalent in the relevant currency of payment) beyond any period of grace provided with respect thereto, or (2) either Constituent Company or any Significant Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of (x) $25,000,000 or more in the case of Indebtedness that is not Nonrecourse Indebtedness or (y) $75,000,000 or more in the case of Nonrecourse Indebtedness (or such lesser amount of Indebtedness that is not Nonrecourse Indebtedness or that is Nonrecourse Indebtedness, as applicable, as is the lowest threshold amount for triggering a similar default under any Material Credit Facility) (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other agreement relating thereto or any other condition exists (other than solely as a result of any condition that constitutes a Change of Control where the Constituent Companies have complied with the provisions of Section 8.7), and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (3) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests or solely as a result of any condition that constitutes a Change of Control where the Constituent Companies have complied with the provisions of Section 8.7), (i) either Constituent Company or any Significant Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of (x) $25,000,000 or more in the case of Indebtedness that is not Nonrecourse Indebtedness or (y) $75,000,000 or more in the case of Nonrecourse Indebtedness (or such lesser amount of Indebtedness that is not Nonrecourse Indebtedness or that is Nonrecourse Indebtedness, as applicable, as is the lowest threshold amount for triggering a default similar to that described in clause (1) hereof under any Material Credit Facility) (or its equivalent in the relevant currency of payment), or (ii) one or more Persons have the right to require either Constituent Company or any Significant Subsidiary so to purchase or repay such Indebtedness; or

(g)either Constituent Company or any Significant Subsidiary (1) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (2) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to

 

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take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (3) makes an assignment for the benefit of its creditors, (4) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (5) is adjudicated as insolvent or to be liquidated, or (6) takes corporate or other organizational action for the purpose of any of the foregoing; or

(h)a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by either Constituent Company or any Significant Subsidiary, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of either Constituent Company or any Significant Subsidiary, or any such petition shall be filed against either Constituent Company or any Significant Subsidiary and such petition shall not be dismissed within 60 days; or

(i)any event occurs with respect either Constituent Company or any Significant Subsidiary which under the laws of any jurisdiction is analogous to any of the events described in Section 11(g) or Section 11(h), provided that the applicable grace period, if any, which shall apply shall be the one applicable to the relevant proceeding which most closely corresponds to the proceeding described in Section 11(g) or Section 11(h); or

(j)one or more final judgments or orders for the payment of money aggregating in excess of $25,000,000 (or such lesser amount as is the lowest threshold amount for triggering a similar default under any Material Credit Facility) (or its equivalent in the relevant currency of payment), including any such final order enforcing a binding arbitration decision and for which insurance has not been acknowledged in writing by the applicable insurance carrier (or the insurer has denied liability), are rendered against one or more of the Constituent Companies and/or their Significant Subsidiaries and which judgments are not, within 30 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 30 days after the expiration of such stay; or

(k)if (1) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards is sought or granted under section 412 of the Code, (2) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Parent Guarantor or any ERISA Affiliate that a Plan is expected to become a subject of any such proceedings, (3) there is any “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under one or more Plans, determined in accordance with Title IV of ERISA, (4) the aggregate present value of accrued benefit liabilities under all funded Non-U.S. Plans exceeds the aggregate current value of the assets of such Non-U.S. Plans

 

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allocable to such liabilities, (5) the Parent Guarantor or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (6) the Parent Guarantor or any ERISA Affiliate withdraws from any Multiemployer Plan, (7) the Parent Guarantor or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Parent Guarantor or any Subsidiary thereunder, (8) the Parent Guarantor or any Subsidiary fails to administer or maintain a Non-U.S. Plan in compliance with the requirements of any and all applicable laws, statutes, rules, regulations or court orders or any Non-U.S. Plan is involuntarily terminated or wound up, or (9) the Parent Guarantor or any Subsidiary becomes subject to the imposition of a financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans; and any such event or events described in clauses (1) through (9) above, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect.  As used in this Section 11(k), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA; or

(l)any Subsidiary Guaranty Agreement shall cease to be in full force and effect with respect to any Subsidiary Guarantor, any Subsidiary Guarantor or any Person acting on behalf of such Subsidiary Guarantor shall contest in any manner the validity, binding nature or enforceability of any Subsidiary Guaranty Agreement with respect to such Subsidiary Guarantor, or the obligations of any Subsidiary Guarantor under its Subsidiary Guaranty Agreement are not or cease to be legal, valid, binding and enforceable in accordance with the terms of such Subsidiary Guaranty Agreement.

Acceleration

.  

(a)If an Event of Default with respect to either Constituent Company described in Section 11(g), (h) or (i) (other than an Event of Default described in clause (1) of Section 11(g) or described in clause (6) of Section 11(g) by virtue of the fact that such clause encompasses clause (1) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

(b)If any other Event of Default has occurred and is continuing, the Required Holders may at any time at their option, by notice or notices to the Issuer, declare all the Notes then outstanding to be immediately due and payable.

(c)If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Issuer, declare all the Notes held by it or them to be immediately due and payable.

 

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Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (1) all accrued and unpaid interest thereon (including interest accrued thereon at the Default Rate) and (2) the Make-Whole Amount determined in respect of such principal amount, shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Issuer acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Issuer (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Issuer in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

Other Remedies

.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note or any Subsidiary Guaranty Agreement, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

Rescission

.  At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders, by written notice to the Issuer, may rescind and annul any such declaration and its consequences if (a) the Issuer has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Issuer nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 18, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

No Waivers or Election of Remedies, Expenses, Etc

.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement, any Subsidiary Guaranty Agreement or any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Constituent Companies under Section 16, the Issuer will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including reasonable attorneys’ fees, expenses and disbursements.

 

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The Guarantee

.  The Parent Guarantor hereby absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, to each holder of a Note (a) the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the principal of, Make-Whole Amount, if any, and interest (including any interest accruing after the commencement of any proceeding in bankruptcy and any additional interest that would accrue but for the commencement of such proceeding) on the Notes and all other obligations of the Issuer under this Agreement and (b) the full and prompt performance and observance by the Issuer of each and all of the obligations, covenants and agreements required to be performed or observed by the Issuer under the terms of this Agreement and the Notes (all the foregoing being hereinafter collectively called the “Obligations”).  The Parent Guarantor further agrees (to the extent permitted by applicable law) that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it shall remain bound under this Section 13 notwithstanding any extension or renewal of any Obligation.

Waiver of Defenses

.  The Parent Guarantor waives presentation to, demand of payment from and protest to the Issuer of any of the Obligations and also waives notice of protest for nonpayment.  The Parent Guarantor waives notice of any default under this Agreement, the Notes or the other Obligations.  The obligation of the Parent Guarantor hereunder shall not be affected by (a) the failure of any holder of a Note to assert any claim or demand or to enforce any right or remedy against the Issuer or any other Person (including any Subsidiary Guarantor) under this Agreement, the Notes, any Subsidiary Guaranty Agreement or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Agreement, the Notes, any Subsidiary Guaranty Agreement or any other agreement; (d) the acceptance of any security or Guarantee (including any Subsidiary Guaranty Agreement) by any holder of a Note for the Obligations or any of them; (e) the release of any security or Guarantee (including any Subsidiary Guaranty Agreement) held by any holder of a Note for the Obligations or any of them; (f) the release of the Issuer, any Subsidiary Guarantor or any other Person from its liability with respect to the Obligations; (g) any act or failure to act with regard to the Obligations; (h) the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization or arrangement under bankruptcy or similar laws, composition with creditors or readjustment of, or other similar procedure affecting the Issuer, any Subsidiary Guarantor or any other Person or any of the assets of any of them, or any allegation or contest of the validity of this Agreement, the Notes, any Subsidiary Guaranty Agreement or any other agreement or the disaffirmance of this Agreement, the Notes, any Subsidiary Guaranty Agreement or any other agreement in any such proceeding; (i) the invalidity or unenforceability of this Agreement, the Notes, any Subsidiary Guaranty Agreement or any other agreement; (j) the impossibility or illegality of performance on the part of the Issuer, any Subsidiary Guarantor or any other Person of its obligations under the Notes, this Agreement, any Subsidiary Guaranty Agreement or any other instrument or agreement; (k) in respect of the Issuer, any Subsidiary Guarantor or any other Person, any change of circumstances, whether or not foreseen or foreseeable, whether or not imputable to the Issuer, any Subsidiary Guarantor or any other Person, or other impossibility of performance through fire, explosion, accident, labor disturbance, floods, droughts, embargoes, wars (whether or not declared), acts of terrorists, civil

 

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commotions, acts of God or the public enemy, delays or failures of suppliers or carriers, inability to obtain materials, action of any Governmental Authority, change of law or any other causes affecting performance, or other force majeure, whether or not beyond the control of the Issuer, any Subsidiary Guarantor or any other Person and whether or not of the kind above specified; or (l) any change in the ownership of the Issuer.  

It being understood that the specific enumeration of the above-mentioned acts, failures or omissions shall not be deemed to exclude any other acts, failures or omissions, though not specifically mentioned above, it being the purpose and intent of this Section 13.2 that the obligations of the Parent Guarantor shall be absolute, unconditional and irrevocable to the extent herein specified and shall not be discharged, impaired or varied except by the payment of the Obligations and then only to the extent of such payment.

Guaranty of Payment

.  The Parent Guarantor further agrees that the Guarantee herein constitutes a guaranty of payment when due (and not a guaranty of collection) and waives any right to require that any resort be had by any holder of a Note to any other Person or to any security held for payment of the Obligations.

Guaranty Unconditional

.  The obligations of the Parent Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of the Parent Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any holder of a Note to assert any claim or demand or to enforce any remedy under this Agreement, the Notes, any Subsidiary Guaranty Agreement or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of the Parent Guarantor or would otherwise operate as a discharge of the Parent Guarantor as a matter of law or equity.

Reinstatement

.  The Parent Guarantor further agrees that the Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored by any holder of a Note upon the bankruptcy or reorganization of the Issuer or otherwise.

Payment on Demand

.  In furtherance of the foregoing and not in limitation of any other right which any holder of a Note has at law or in equity against the Parent Guarantor by virtue hereof, upon the failure of the Issuer to pay any of the Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, the Parent Guarantor hereby promises to and shall, upon receipt of written demand by any holder of a Note, forthwith pay, or cause to be paid, in cash, to the holders an amount equal to the sum of (a) the unpaid amount of such Obligations then due and owing and (b) accrued and unpaid interest on such Obligations then due and owing (but only to the extent not prohibited by applicable law).

 

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The Parent Guarantor acknowledges and agrees that repeated and successive demands may be made and recoveries may be had hereunder as and when, from time to time, the Issuer shall default under the terms of a Note or this Agreement and that notwithstanding recovery hereunder for or in respect of any given Default or Event of Default, the Guarantee contained in this Section 13 shall remain in full force and effect and shall apply to each and every subsequent Default or Event of Default.  

Stay of Acceleration

.  The Parent Guarantor further agrees that, as between itself, on the one hand, and the holders of the Notes, on the other hand, (a) the maturity of the Obligations guaranteed hereby may be accelerated as provided in this Agreement for the purposes of the Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby and (b) in the event of any such declaration of acceleration of such Obligations, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Parent Guarantor for the purposes of this Guarantee.

No Subrogation

.  Notwithstanding any payment or payments made by the Parent Guarantor hereunder, the Parent Guarantor shall not be entitled to be subrogated to any of the rights of any holder of a Note against the Issuer or any collateral security or Guarantee or right of offset held by any holder for the payment of the Obligations, nor shall the Parent Guarantor seek or be entitled to seek any contribution or reimbursement from the Issuer or any Subsidiary Guarantor in respect of payments made by the Parent Guarantor hereunder, until all amounts owing to the holders of the Notes by the Issuer on account of the Obligations are paid in full.  If any amount shall be paid to the Parent Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by the Parent Guarantor in trust for the holders of the Notes, segregated from other funds of the Parent Guarantor, and shall, forthwith upon receipt by the Parent Guarantor, be turned over to the holders of the Notes in the exact form received by the Parent Guarantor (duly indorsed by the Parent Guarantor to the holders of the Notes, if required), to be applied against the Obligations.

Marshalling

.  No holder of a Note shall be under any obligation: (a) to marshal any assets in favor of the Parent Guarantor or in payment of any or all of the liabilities of the Issuer under or in respect of the Notes and this Agreement or the obligations of the Parent Guarantor hereunder or (b) to pursue any other remedy that the Parent Guarantor may or may not be able to pursue itself and that may lighten the Parent Guarantor’s burden, any right to which the Parent Guarantor hereby expressly waives.

Transfer of Notes

.  All rights of any holder of a Note under this Section 13 shall be considered to be transferred or assigned at any time or from time to time upon the transfer of any Note held by such holder whether with or without the consent of or notice to the Parent Guarantor under this Section 13 or to the Issuer.

Consideration

.  The Parent Guarantor has received, or shall receive, direct or indirect benefits from the making of this Guarantee.

 

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Registration of Notes

.  The Issuer shall keep at its principal executive office a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement.  Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Issuer shall not be affected by any notice or knowledge to the contrary.  The Issuer shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

Transfer and Exchange of Notes

.  Upon surrender of any Note to the Issuer at the address and to the attention of the designated officer (all as specified in Section 19(3)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within 10 Business Days thereafter, the Issuer shall execute and deliver, at the Issuer’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) of the same series in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Schedule 1(a) or 1(b), as applicable.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Issuer may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred (a) to any Competitor, provided that the limitation contained in this clause (a) shall not apply during any period when an Event of Default has occurred and is continuing, or (b) in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes of a series, one Note of such series may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.3.

Replacement of Notes

.  Upon receipt by the Issuer at the address and to the attention of the designated officer (all as specified in Section 19(3)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

(a)in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an

 

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original Purchaser or another holder of a Note with a minimum net worth of at least $100,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b)in the case of mutilation, upon surrender and cancellation thereof,

within 10 Business Days thereafter, the Issuer at its own expense shall execute and deliver, in lieu thereof, a new Note of the same series, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

Place of Payment

.  Subject to Section 15.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of JPMorgan Chase Bank, N.A. in such jurisdiction.  The Issuer may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Issuer in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

Payment by Wire Transfer

.  So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 15.1 or in such Note to the contrary, the Issuer will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in the Purchaser Schedule, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Issuer in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Issuer made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Issuer at its principal executive office or at the place of payment most recently designated by the Issuer pursuant to Section 15.1.  Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Issuer in exchange for a new Note or Notes of the same series pursuant to Section 14.2.  The Issuer will afford the benefits of this Section 15.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 15.2.

FATCA Information

.  By acceptance of any Note, the holder of such Note agrees that such holder will with reasonable promptness duly complete and deliver to the Issuer, or to such other Person as may be reasonably requested by the Issuer, from time to time (a) in the case of any such holder that is a United States Person, such holder’s United States tax identification number or other forms reasonably requested by the Issuer necessary to establish such holder’s status as a United States Person under FATCA and as may otherwise be necessary for the Issuer to comply with its obligations under FATCA and (b) in the case of any such holder

 

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that is not a United States Person, such documentation prescribed by applicable law (including as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be necessary for the Issuer to comply with its obligations under FATCA and to determine that such holder has complied with such holder’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from any such payment made to such holder.  Nothing in this Section 15.3 shall require any holder to provide information that is confidential or proprietary to such holder unless the Issuer is required to obtain such information under FATCA and, in such event, the Issuer shall treat any such information it receives as confidential.

Transaction Expenses

.  Whether or not the transactions contemplated hereby are consummated, the Constituent Companies will pay all documented costs and expenses (including reasonable attorneys’ fees of one special counsel and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, any Subsidiary Guaranty Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective), including: (a) the documented costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, any Subsidiary Guaranty Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, any Subsidiary Guaranty Agreement or the Notes, or by reason of being a holder of any Note, (b) the documented costs and the expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of either Constituent Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes and each Subsidiary Guaranty Agreement and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO, provided that such costs and expenses under this clause (c) shall not exceed $5,000.  If required by the NAIC, the Issuer shall obtain and maintain at its own cost and expense a Legal Entity Identifier (LEI).

The Constituent Companies will pay, and will save each Purchaser and each other holder of a Note harmless from, (1) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes), (2) any and all wire transfer fees that any bank or other financial institution deducts from any payment under such Note to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note and (3) any judgment, liability, claim, order, decree, fine, penalty, cost, fee, expense (including reasonable attorneys’ fees and expenses) or obligation resulting from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Issuer.

Certain Taxes

.  The Constituent Companies agree to pay all stamp, documentary or similar taxes or fees which may be payable in respect of the execution and delivery or the enforcement of this Agreement or any Subsidiary Guaranty Agreement or the execution and delivery (but not the transfer) or the enforcement of any of the Notes in the United States or any other jurisdiction where either Constituent Company or any Subsidiary Guarantor

 

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has assets or of any amendment of, or waiver or consent under or with respect to, this Agreement, any Subsidiary Guaranty Agreement or of any of the Notes, and to pay any value added tax due and payable in respect of reimbursement of costs and expenses by the Constituent Companies pursuant to this Section 16, and will save each holder of a Note to the extent permitted by applicable law harmless against any loss or liability resulting from nonpayment or delay in payment of any such tax or fee required to be paid by the Constituent Companies hereunder.

Survival

.  The obligations of the Constituent Companies under this Section 16 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, any Subsidiary Guaranty Agreement or the Notes, and the termination of this Agreement.

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of either Constituent Company pursuant to this Agreement shall be deemed representations and warranties of such Constituent Company under this Agreement.  Subject to the preceding sentence, this Agreement, the Notes and the Subsidiary Guaranty Agreements embody the entire agreement and understanding between each Purchaser and the Constituent Companies and supersede all prior agreements and understandings relating to the subject matter hereof.

Requirements

.  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), only with the written consent of the Constituent Companies and the Required Holders, except that:

(a)no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 22 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing; and

(b)no amendment or waiver may, without the written consent of each Purchaser and the holder of each Note at the time outstanding, (1) subject to Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (i) interest on the Notes or (ii) the Make-Whole Amount, (2) change the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver or the principal amount of the Notes that the Purchasers are to purchase pursuant to Section 2 upon the satisfaction of the conditions to

 

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a Closing that appear in Section 4 or (3) amend any of Section 8 (except as set forth in the second sentence of Section 8.2), 11(a), 11(b), 12, 13, 18 or 21.

Section 18.2Solicitation of Holders of Notes.

(a)Solicitation. The Constituent Companies will provide each Purchaser and each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required, to enable such Purchaser or holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes or any Subsidiary Guaranty Agreement.  The Constituent Companies will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to this Section 18 or any Subsidiary Guaranty Agreement to each Purchaser and each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite Purchasers and/or holders of Notes.

(b)Payment. The Constituent Companies will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any Purchaser or any holder of a Note as consideration for or as an inducement to the entering into by such Purchaser or holder of any waiver or amendment of any of the terms and provisions hereof or of any Subsidiary Guaranty Agreement or any Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of a Note even if such Purchaser or holder did not consent to such waiver or amendment.

(c)Consent in Contemplation of Transfer.  Any consent given pursuant to this Section 18 or any Subsidiary Guaranty Agreement by a holder of a Note that has transferred or has agreed to transfer its Note to (1) a Constituent Company, (2) any Subsidiary or any other Affiliate or (3) any other Person in connection with, or in anticipation of, such other Person acquiring, making a tender offer for or merging with either Constituent Company and/or any of its Affiliates, in each case in connection with such consent, shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

Binding Effect, Etc

.  Any amendment or waiver consented to as provided in this Section 18 or any Subsidiary Guaranty Agreement applies equally to all Purchasers and holders of Notes and is binding upon them and upon each future holder of any Note and upon the Constituent Companies without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between either Constituent Company and any Purchaser or any holder of a Note and no delay in exercising any rights hereunder or under

 

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any Note or any Subsidiary Guaranty Agreement shall operate as a waiver of any rights of any Purchaser or any holder of such Note.

Notes Held by the Constituent Companies, Etc

. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any Subsidiary Guaranty Agreement or the Notes, or have directed the taking of any action provided herein or in any Subsidiary Guaranty Agreement or the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by a Constituent Company or any of its Affiliates shall be deemed not to be outstanding.

Except to the extent otherwise provided in Section 7.4, all notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges prepaid), (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by an internationally recognized overnight delivery service (charges prepaid).  Any such notice must be sent:

(1)if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in the Purchaser Schedule, or at such other address as such Purchaser or nominee shall have specified to the Constituent Companies in writing,

(2)if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Constituent Companies in writing, or

(3)if to either Constituent Company, to such Constituent Company at its address set forth at the beginning hereof to the attention of Chief Financial Officer (with a copy to the attention of the General Counsel at the same such address), or at such other address as such Constituent Company shall have specified to the Purchaser and holders of the Notes in writing.

Notices under this Section 19 will be deemed given only when actually received.

This Agreement and all documents relating hereto, including (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser on the Execution Date or at a Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced.  Each Constituent Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or

 

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administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 20 shall not prohibit either Constituent Company or any other Purchaser or holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

For the purposes of this Section 21, “Confidential Information” means information delivered to any Purchaser by or on behalf of a Constituent Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by a Constituent Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (1) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes) who agree or are deemed to have agreed to hold confidential the Confidential Information substantially in accordance with this Section 21, (2) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with this Section 21, (3) any other holder of any Note, (4) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 21), (5) any Person from which it offers to purchase any Security of a Constituent Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 21), (6) any federal or state regulatory authority having jurisdiction over such Purchaser, (7) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (8) any other Person to which such delivery or disclosure may be necessary or appropriate (i) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (ii) in response to any subpoena or other legal process; provided that, except pursuant to the exercise of its rights pursuant to clause (iv) below, if not prohibited by applicable law, court order or regulation, such Purchaser shall use commercially reasonable efforts to give reasonably prompt notice to the Constituent Companies thereof prior to such disclosure so that the Constituent Companies may, in their discretion, attempt to obtain a protective order restraining such disclosure, (iii) in connection with any litigation to which such Purchaser is a party; provided that, except pursuant to the exercise of its rights pursuant to clause (iv) below, if not prohibited by applicable law, court order or regulation, such Purchaser shall use commercially reasonable efforts to give reasonably prompt notice to the Constituent Companies thereof prior to such disclosure so that the

 

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Constituent Companies may, in their discretion, attempt to obtain a protective order restraining such disclosure, or (iv) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this Agreement or any Subsidiary Guaranty Agreement.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 21 as though it were a party to this Agreement.  On reasonable request by a Constituent Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Constituent Companies embodying this Section 21.

In the event that as a condition to receiving access to information relating to a Constituent Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 21, this Section 21 shall not be amended thereby and, as between such Purchaser or such holder and such Constituent Company, this Section 21 shall supersede any such other confidentiality undertaking.

Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute Purchaser”) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Constituent Companies, which notice shall be signed by both such Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 22), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser.  In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Constituent Companies of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 22), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.

Successors and Assigns

.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including any subsequent holder of a Note) whether so expressed or not, except that, subject to Section 10.2, neither Constituent Company may assign or otherwise transfer any of its rights or obligations hereunder or under the Notes without the prior written consent of each holder.  Nothing in this Agreement, expressed or implied, shall be

 

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construed to confer upon any Person (other than the parties hereto and their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement.

Accounting Terms

.  

(a)All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  

(b)If the Constituent Companies notify the holders of Notes that, in their reasonable opinion, or if the Required Holders notify the Constituent Companies that, in their reasonable opinion, as a result of any change in GAAP from time to time (a “Subsequent Change”), any of the financial covenants contained in this Agreement or any of the defined terms used therein no longer apply as intended such that such covenants are materially more or less restrictive to the Constituent Companies than are such covenants immediately prior to giving effect to such Subsequent Change, the Constituent Companies and the holders of Notes shall negotiate in good faith to reset or amend such covenants or defined terms so as to negate such Subsequent Change, or to establish alternative covenants or defined terms.  Until the Constituent Companies and the Required Holders so agree to reset, amend or establish alternative covenants or defined terms, the financial covenants contained in this Agreement together with the relevant defined terms, shall continue to apply and compliance therewith shall be determined assuming that the Subsequent Change shall not have occurred (“Static GAAP”).  During any period that compliance with any covenants shall be determined pursuant to Static GAAP, the Constituent Companies shall include relevant reconciliations in reasonable detail between GAAP and Static GAAP with respect to the applicable covenant compliance calculations contained in each certificate of a Senior Financial Officer delivered pursuant to Section 7.2(a) during such period.

(c)Except as otherwise specifically provided herein, (a) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (b) all financial statements shall be prepared in accordance with GAAP.  For purposes of determining compliance with this Agreement (including Section 9, Section 10 and the definition of “Indebtedness”), any election by the Parent Guarantor to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option, International Accounting Standard 39 – Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

Severability

.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

 

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Construction, Etc

.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

Defined terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein) and, for purposes of the Notes, shall also include any such notes issued in substitution therefor pursuant to Section 14, (b) subject to Section 23.1, any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Schedules shall be construed to refer to Sections of, and Schedules to, this Agreement, and (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.

Counterparts

.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.  Delivery of a counterpart in “pdf” shall be treated as a delivery of an original counterpart hereof.

Governing Law

.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice‑of‑law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Jurisdiction and Process; Waiver of Jury Trial

.

(a)Each party hereto irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent permitted by applicable law, each party hereto irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or

 

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proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(b)Each party hereto agrees, to the fullest extent permitted by applicable law, that a final judgment in any suit, action or proceeding of the nature referred to in Section 23.7(a) brought in any such court shall be conclusive and binding upon it subject to rights of appeal, as the case may be, and may be enforced in the courts of the United States or the State of New York (or any other courts to the jurisdiction of which it or any of its assets is or may be subject) by a suit upon such judgment.

(c)Each party hereto consents to process being served by or on behalf of any other party hereto in any suit, action or proceeding of the nature referred to in Section 23.7(a) by mailing a copy thereof by registered, certified, priority or express mail (or any substantially similar form of mail), postage prepaid, return receipt or delivery confirmation requested, to it at its address specified in Section 19 or at such other address of which such party shall then have been notified pursuant to said Section.  Each party hereto agrees that such service upon receipt (1) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (2) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

(d)Nothing in this Section 23.7 shall affect the right of any party hereto to serve process in any manner permitted by law, or limit any right that any party hereto may have to bring proceedings against another party hereto in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

(e)The parties hereto hereby waive trial by jury in any action brought on or with respect to this Agreement, the Notes or any other document executed in connection herewith or therewith.

*    *    *    *    *

 

 

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If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Constituent Companies, whereupon this Agreement shall become a binding agreement between you and the Constituent Companies.

Very truly yours,

Broadstone Net Lease, Inc.

[Signature Page to Note and Guaranty Agreement]

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This Agreement is hereby
accepted and agreed to as
of the date hereof.

Teachers Insurance and Annuity Association of America

 

By: Nuveen Alternatives Advisors LLC, its investment manager

Title:   Director

[Signature Page to Note and Guaranty Agreement]

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The United States Life Insurance Company in the City of New York

American General Life Insurance Company

The Variable Annuity Life Insurance Company

 

By:AIG Asset Management (U.S.), LLC, as Investment Adviser

 

 

Title:Vice President

[Signature Page to Note and Guaranty Agreement]

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Minnesota Life Insurance Company

The Cincinnati Life Insurance Company

Farm Bureau Life Insurance Company of Michigan

Securian Life Insurance Company

Farm Bureau Mutual Insurance Company of Michigan

Farm Bureau General Insurance Company of Michigan

UnitedHealthcare Insurance Company

Royal Neighbors of America

Catholic Financial Life

Blue Cross and Blue Shield of Florida, Inc.

Catholic United Financial

Trustmark Insurance Company

Unity Financial Life Insurance Company

By: Securian Asset Management, Inc.

 

 

Title:Vice President

[Signature Page to Note and Guaranty Agreement]

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Sun Life Assurance Company of Canada

 

 

Title:Senior Director

 

 

 

Professional Insurance Company

 

 

Name: Arthur Baril

Title:Authorized Signer

 

 

Name: Ann C. King

Title:Authorized Signer

[Signature Page to Note and Guaranty Agreement]

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Massachusetts Mutual Life Insurance Company

MassMutual Asia Limited

Banner Life Insurance Company

By:  Barings LLC, as Investment Adviser

 

 

Title:Managing Director

[Signature Page to Note and Guaranty Agreement]

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United of Omaha Life Insurance Company

 

 

Title:Vice President

 

[Signature Page to Note and Guaranty Agreement]

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Genworth Life Insurance Company

Genworth Life and Annuity Insurance Company

 

 

 

[Signature Page to Note and Guaranty Agreement]

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The Guardian Life Insurance Company of America

Berkshire Life Insurance Company of America

The Guardian Insurance & Annuity Company, Inc.

 

 

Title:Managing Director

 

[Signature Page to Note and Guaranty Agreement]

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Ameritas Life Insurance Corp.

Ameritas Life Insurance Corp. of New York

 

By: Ameritas Investment Partners Inc., as Agent

 

 

Name: Tina Udell

Title:    Vice President & Managing Director

 

[Signature Page to Note and Guaranty Agreement]

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AB US Diversified Credit BM Fund

By: AllianceBernstein L.P., its Investment
     Advisor

 

Title:Vice President

[Signature Page to Note and Guaranty Agreement]

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Modern Woodmen of America

 

 

Title:Portfolio Manager, Private Placements

 

Title:Manager, Fixed Income

 

 

[Signature Page to Note and Guaranty Agreement]

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Defined Terms

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

“Additional Covenant” is defined in Section 9.9.

“Adjusted EBITDA” means, for any given period, (a) EBITDA of the Parent Guarantor and its Subsidiaries determined on a consolidated basis for such period, minus (b) Reserves for Replacements in respect of Properties that are subject to a Tenant Lease that is not a Triple Net Lease.

“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person.  Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Parent Guarantor.

“Agreement” means this Note and Guaranty Agreement, including all Schedules attached to this Agreement.

“Anti-Corruption Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.

“Anti-Money Laundering Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes, including the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.

“Bank Credit Agreement” means that certain Revolving Credit and Term Loan Agreement dated as of June 23, 2017 by and among the Issuer, the Parent Guarantor, the lenders party thereto, Manufacturers and Traders Trust Company, as administrative agent, and the other parties thereto.

“Blocked Person” means (a) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC, (b) a Person, entity, organization, country or regime that is blocked or a target of sanctions that have been imposed under Economic Sanctions Laws, (c) a Canada Blocked Person or (d) a Person that is an agent, department or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, any Person, entity, organization, country or regime described in clause (a), (b) or (c).

“Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any

Schedule A
(to Note and Guaranty Agreement)

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day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Rochester, New York are required or authorized to be closed.

“Canada Blocked Person” means (a) a “terrorist group” as defined for the purposes of Part II.1 of the Criminal Code (Canada) or (b) a Person identified in or pursuant to (1) Part II.1 of the Criminal Code (Canada), (2) the Proceeds of Crime (Money Laundering) and Terrorist Finance Act, (3) the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law), or (4) regulations or orders promulgated pursuant to the Special Economic Measures Act (Canada), the United Nations Act (Canada), or the Freezing Assets of Corrupt Foreign Officials Act (Canada), in any case pursuant to this clause (b) as a Person in respect of whose property or benefit a holder of Notes would be prohibited from entering into or facilitating a related financial transaction.

“Canadian Economic Sanctions Laws” means those laws, including enabling legislation, orders-in-council or other regulations administered and enforced by Canada or a political subdivision of Canada pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including Part II.1 of the Criminal Code (Canada), the Special Economic Measures Act (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Finance Act, the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law), the United Nations Act (Canada), the Export and Import Permits Act (Canada), and the Freezing Assets of Corrupt Foreign Officials Act (Canada), and including all regulations promulgated under any of the foregoing, or any other similar sanctions program or action.

“Capitalization Rate” means 7.75%; provided that, if any Material Credit Facility provides for a “capitalization rate” that is higher or lower than 7.75%, then the capitalization rate herein shall be the highest capitalization rate then applicable under all Material Credit Facilities; provided, however, that in no event may the capitalization rate herein be less than 6.75%.

“Capitalized Lease Obligation” means obligations under a lease (to pay rent or other amounts under any lease or other arrangement conveying the right to use property) that are required to be capitalized for financial reporting purposes in accordance with GAAP.  The amount of a Capitalized Lease Obligation is the capitalized amount of such obligation as would be required to be reflected on a balance sheet of the applicable Person prepared in accordance with GAAP as of the applicable date.

“Cash Equivalents” means (a) securities issued, guaranteed or insured by the United States or any of its agencies with maturities of not more than one year from the date acquired; (b) certificates of deposit with maturities of not more than one year from the date acquired issued by a United States federal or state chartered commercial bank of recognized standing, or a commercial bank organized under the laws of any other country which is a member of the Organisation for Economic Co-operation and Development, or a political subdivision of any such country, acting through a branch or agency, which bank has capital and unimpaired surplus in excess of $500,000,000 and which bank or its holding company has a short term commercial paper rating of at least “A-2” or the equivalent by S&P or at least “P-2” or the equivalent by Moody’s; (c) reverse repurchase agreements with terms of not more than seven days from the date acquired, for securities of the type described in clause (a) above and entered into only with

 

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commercial banks having the qualifications described in clause (b) above; (d) commercial paper issued by any Person incorporated under the laws of the United States of America or any State thereof and rated at least “A-2” or the equivalent thereof by S&P or at least “P-2” or the equivalent thereof by Moody’s, in each case with maturities of not more than one year from the date acquired; and (e) investments in money market funds registered under the Investment Company Act of 1940 which have net assets of at least $500,000,000 and at least 85% of whose assets consist of securities and other obligations of the type described in clauses (a) through (d) above.

“Change in Control” is defined in Section 8.7(h).

“Change in Control Proposed Prepayment Date” is defined in Section 8.7(c).

“Closing” is defined in Section 3.

“Code” means the Internal Revenue Code of 1986 and the rules and regulations promulgated thereunder from time to time.

“Competitor” means any Person that is a real estate investment trust, real property fund or a listed property trust; provided, however, that the term “Competitor” shall exclude any Person that is an Institutional Investor and that, but for this proviso, would fall within the definition of “Competitor” solely through the holding of passive investments in a Competitor (it being agreed that the normal administration of the investment and enforcement thereof shall be deemed not to cause such Institutional Investor to be a “Competitor”).

“Confidential Information” is defined in Section 21.

“Constituent Companies” and “Constituent Company” are defined in the first paragraph of this Agreement.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “Controlled” and “Controlling” shall have meanings correlative to the foregoing.

“Control Event” is defined in Section 8.7(i).

“Controlled Entity” means (a) any of the Subsidiaries of the Parent Guarantor and any of their or the Parent Guarantor’s respective Controlled Affiliates and (b) if the Parent Guarantor has a parent company, such parent company and its Controlled Affiliates.

“Debt Rating” means the debt rating of the Notes as determined from time to time by any NRSRO.

“Debtor Relief Laws” means the United States Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar laws relating to the relief of debtors in the United States or other applicable jurisdictions from time to time in effect.

 

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“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

“Default Rate” means, with respect to any Note, that rate of interest per annum that is the greater of (a) 2.00% above the rate of interest stated in clause (a) of the first paragraph of such Note or (b) 2.00% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. in New York, New York as its “base” or “prime” rate.

“Derivatives Contract” means (a) any transaction (including any master agreement, confirmation or other agreement with respect to any such transaction) now existing or hereafter entered into by a Constituent Company or any of its Subsidiaries (1) which is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, weather index transaction or forward purchase or sale of a security, commodity or other financial instrument or interest (including any option with respect to any of these transactions) or (2) which is a type of transaction that is similar to any transaction referred to in clause (1) above that is currently, or in the future becomes, recurrently entered into in the financial markets (including terms and conditions incorporated by reference in such agreement) and which is a forward, swap, future, option or other derivative on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, or other benchmarks against which payments or deliveries are to be made, and (b) any combination of these transactions.

“Derivatives Termination Value” means, in respect of any one or more Derivatives Contracts, after taking into account the effect of any legally enforceable netting agreement or provision relating thereto, (a) for any date on or after the date such Derivatives Contracts have been terminated or closed out, the termination amount or value determined in accordance therewith, and (b) for any date prior to the date such Derivatives Contracts have been terminated or closed out, the then-current mark-to-market value for such Derivatives Contracts, determined based upon one or more mid-market quotations or estimates provided by any recognized dealer in Derivatives Contracts.

“Development Property” means a Property currently under development that has not achieved an Occupancy Rate of 80% or more or, subject to the last sentence of this definition, on which the improvements (other than tenant improvements on unoccupied space) related to the development have not been completed.  The term “Development Property” shall include real property of the type described in the immediately preceding sentence that satisfies both of the following conditions:  (a) it is to be (but has not yet been) acquired by the Issuer, any Subsidiary of the Issuer or any Unconsolidated Affiliate of the Parent Guarantor upon completion of construction pursuant to a contract in which the seller of such real property is required to develop or renovate prior to, and as a condition precedent to, such acquisition and (b) a third party is developing such property using the proceeds of a loan that is Guaranteed by, or is otherwise

 

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recourse to, the Issuer, any Subsidiary of the Issuer or any Unconsolidated Affiliate of the Parent Guarantor.  A Development Property on which all improvements (other than tenant improvements on unoccupied space) related to the development of such Property have been completed for at least 12 months shall cease to constitute a Development Property notwithstanding the fact that such Property has not achieved an Occupancy Rate of at least 80%.

“Disclosure Documents” is defined in Section 5.3.

“Double Net Lease” means a lease (other than a Triple Net Lease) by a tenant of a Property under which the tenant is financially responsible for real estate taxes and insurance premiums relating to such Property.

“EBITDA” means, with respect to a Person for any period and without duplication, the sum of (a) net income (loss) of such Person for such period determined on a consolidated basis excluding the following (but only to the extent included in determining net income (loss) for such period):  (1) depreciation and amortization; (2) Interest Expense; (3) income tax expense and franchise tax expense; (4) extraordinary or nonrecurring items, including gains and losses from the sale of operating Properties (but not from the sale of Properties developed for the purpose of sale); (5) equity in net income (loss) of its Unconsolidated Affiliates; and (6) non-cash expenses related to mark to market exposure under Derivatives Contracts; plus (b) such Person’s Ownership Share of EBITDA of its Unconsolidated Affiliates.  EBITDA shall be adjusted to remove any impact from straight line rent leveling adjustments required under GAAP and amortization of intangibles pursuant to FASB ASC 805.  For purposes of this definition, nonrecurring items shall be deemed to include (x) gains and losses on early extinguishment of Indebtedness, (y) non-cash severance and other non-cash restructuring charges and (z) transaction costs of acquisitions not permitted to be capitalized pursuant to GAAP.

“Economic Sanctions Laws” means U.S. Economic Sanctions Laws and Canadian Economic Sanctions Laws.

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System or any successor SEC electronic filing system for such purposes.

“Eligible Property” means, at any time, a Property which satisfies all of the following requirements:  (a) such Property is 100% owned in fee simple, or 100% leased under a Ground Lease, by the Issuer or a Wholly-Owned Subsidiary of the Issuer; (b) such Property is located in a State of the contiguous United States, in the District of Columbia or in the States of Hawaii or Alaska; (c) regardless of whether such Property is owned by the Issuer or a Wholly-Owned Subsidiary of the Issuer, the Issuer has the right directly, or indirectly through a Subsidiary of the Issuer, to take the following actions without the need to obtain the consent of any Person:  (1) to create Liens on such Property as security for Indebtedness of the Issuer or such Subsidiary, as applicable, and (2) to sell, transfer or otherwise dispose of such Property; (d) no tenant of such Property is (1) subject to any proceeding under Debtor Relief Laws or (2) more than 60 days past due on any rental obligation to the Issuer or any of its Subsidiaries in respect of such Property; (e) all Tenant Leases in respect of such Property are (1) Triple Net Leases or (2) Double Net Leases with respect to Properties developed as medical offices or other office spaces for which Double Net Leases are customary; (f) such Property is not a Development Property and has been

 

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developed for (1) retail, industrial, healthcare or office use, (2) other use permitted under the Parent Guarantor’s internally approved property selection investment criteria; provided that Properties qualifying as an Eligible Property pursuant to this clause (f)(2) shall not exceed 10% of Total Unencumbered Eligible Property Value or (3) another commercial use then permitted (including pursuant to consent by the lenders thereunder) by each Material Credit Facility; (g) neither such Property, nor if such Property is owned by a Wholly-Owned Subsidiary of the Issuer, any of the Issuer’s direct or indirect ownership interest in such Wholly-Owned Subsidiary, is subject to (1) any Lien other than Permitted Liens (other than Permitted Liens described under clauses (f) through (k) of the definition thereof) or (2) any Negative Pledge other than a Permitted Negative Pledge; and (h) such Property is free of all structural defects, title defects, environmental conditions or other adverse matters except for defects, conditions or matters which are not individually or collectively material to the profitable operation of such Property.  For purposes of calculating “Total Unencumbered Eligible Property Value” hereunder, a Property shall cease to be an Eligible Property if at any time such Property shall for any reason be excluded as an “eligible property” for the purpose of calculating “total unencumbered eligible property value” under any Material Credit Facility.

“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to Hazardous Materials.

“Equity Interest” means, with respect to any Person, any share of capital stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership or profit interests in) such Person, whether or not certificated, any security convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.

“Equity Issuance” means any issuance or sale by a Person of any Equity Interest in such Person and shall in any event include the issuance of any Equity Interest upon the conversion or exchange of any security constituting Indebtedness that is convertible or exchangeable, or is being converted or exchanged, for Equity Interests.

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

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Parent Guarantor under section 414 of the Code.

“Event of Default” is defined in Section 11.

 

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“Exchange Act” is defined in Section 8.7(h)(1).

“Excluded Subsidiary” means any Subsidiary (a) holding title to assets that are or are to become collateral for any Secured Indebtedness that is Nonrecourse Indebtedness of such Subsidiary and (b) that is prohibited from Guaranteeing the Indebtedness of any other Person pursuant to (1) any document, instrument, or agreement evidencing such Secured Indebtedness or (2) a provision of such Subsidiary’s organizational documents which provision was included in such Subsidiary’s organizational documents as a condition to the extension of such Secured Indebtedness.

“Execution Date” is defined in Section 3.

“Fair Market Value” means (a) with respect to a security listed on a national securities exchange or the NASDAQ National Market, the price of such security as reported on such exchange or market by any widely recognized reporting method customarily relied upon by financial institutions, and (b) with respect to any other property, the price which could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction.

“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.

“FATCA” means (a) sections 1471 through 1474 of the Code, as of the Execution Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), together with any current or future regulations or official interpretations thereof, (b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the United States and any other jurisdiction, which (in either case) facilitates the implementation of the foregoing clause (a), and (c) any agreements entered into pursuant to section 1471(b)(1) of the Code.

“Financial Covenant” means any covenant (whether set forth as a covenant, undertaking, event of default, restriction, prepayment event or other such provision) that requires the Parent Guarantor and/or any Subsidiary to:

(a)maintain a specified level of net worth, shareholders’ equity, total assets, unencumbered assets, unencumbered properties, cash flow, net income, occupancy rate or lease term;

(b)maintain any relationship of any component of its capital structure to any other component thereof (including the relationship of indebtedness, subsidiary indebtedness, senior indebtedness, secured indebtedness, unsecured indebtedness, subordinated indebtedness or recourse indebtedness to total capitalization, total assets, unencumbered assets or to net worth);

(c)maintain any measure of its ability to service its indebtedness (including exceeding any specified ratio of revenues, cash flow, operating income or net income to indebtedness, interest expense, rental expense, capital expenditures and/or scheduled payments of indebtedness);

 

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(d)restrict the amount of distributions; or

(e)restrict the amount or type of its investments;

but in all cases excluding any such covenant that amounts to a negative pledge or a sale of assets limitation.

“First Closing” is defined in Section 3.

“First Closing Date” is defined in Section 3.

“Fitch” means Fitch Ratings, Inc.

“Fixed Charges” means, with respect to a Person and for a given period, the sum, without duplication, of (a) the Interest Expense of such Person for such period, plus (b) the aggregate of all scheduled principal payments on Indebtedness made by such Person (including the Ownership Shares of such payments made by any Unconsolidated Affiliate of such Person) during such period (excluding balloon, bullet or similar payments of principal due upon the stated maturity of Indebtedness), plus (c) the aggregate of all Preferred Dividends paid or accrued by such Person (including the Ownership Share of such dividends paid or accrued by any Unconsolidated Affiliate of such Person) on any Preferred Equity during such period.

“Form 10‑K” is defined in Section 7.1(b).

“Form 10‑Q” is defined in Section 7.1(a).

“GAAP” means (a) generally accepted accounting principles as in effect from time to time in the United States and (b) for purposes of Section 9.6, with respect to any Subsidiary, generally accepted accounting principles (including International Financial Reporting Standards, as applicable) as in effect from time to time in the jurisdiction of organization of such Subsidiary.

“Governmental Authority” means

(a)the government of

(1)the United States or any state or other political subdivision thereof, or

(2)any other jurisdiction in which the Parent Guarantor or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Parent Guarantor or any Subsidiary, or

(b)entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

“Governmental Official” means any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political

 

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party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.

“Ground Lease” means a ground lease containing the following terms and conditions:  (a) a remaining term (inclusive of any unexercised and unexpired extension options (unless the lessee has permanently relinquished its right to exercise such options), which options may be exercised at the sole option of the lessee without approval by the lessor) of 40 years or more from June 23, 2017; (b) the right of the lessee to mortgage and encumber its interest in the leased property without the consent of the lessor; (c) the obligation of the lessor to give the holder of any mortgage Lien on such leased property written notice of any defaults on the part of the lessee and agreement of such lessor that such lease will not be terminated until such holder has had a reasonable opportunity to cure or complete foreclosures, and fails to do so; (d) reasonable transferability of the lessee’s interest under such lease, including ability to sublease; and (e) such other rights customarily required by mortgagees making a loan secured by the interest of the holder of the leasehold estate demised pursuant to a ground lease.

“Guaranty,” “Guaranteed” or to “Guarantee” as applied to any obligation means and includes:  (a) a guaranty (other than by endorsement of negotiable instruments for collection in the ordinary course of business), directly or indirectly, in any manner, of any part or all of such obligation, or (b) an agreement, direct or indirect, contingent or otherwise, and whether or not constituting a guaranty, the practical effect of which is to assure the payment or performance (or payment of damages in the event of nonperformance) of any part or all of such obligation whether by:  (1) the purchase of securities or obligations, (2) the purchase, sale or lease (as lessee or lessor) of property or the purchase or sale of services primarily for the purpose of enabling the obligor with respect to such obligation to make any payment or performance (or payment of damages in the event of nonperformance) of or on account of any part or all of such obligation, or to assure the owner of such obligation against loss, (3) the supplying of funds to or in any other manner investing in the obligor with respect to such obligation, (4) repayment of amounts drawn down by beneficiaries of letters of credit, or (5) the supplying of funds to or investing in a Person on account of all or any part of such Person’s obligation under a Guaranty of any obligation or indemnifying or holding harmless, in any way, such Person against any part or all of such obligation.  

“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law, including asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.

“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Issuer pursuant to Section 14.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 8.7, 12, 18.2 and 19 and any related definitions in this Schedule A, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.

 

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“Indebtedness” means, with respect to a Person, at the time of computation thereof, all of the following (without duplication):  (a) all obligations of such Person in respect of money borrowed or for the deferred purchase price of property or services (excluding trade debt incurred in the ordinary course of business); (b) all obligations of such Person, whether or not for money borrowed (1) represented by notes payable, or drafts accepted, in each case representing extensions of credit, (2) evidenced by bonds, debentures, notes or similar instruments, or (3) constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property or for services rendered; (c) Capitalized Lease Obligations of such Person; (d) all reimbursement obligations (contingent or otherwise) of such Person under or in respect of any letters of credit or acceptances (whether or not the same have been presented for payment); (e) all Off-Balance Sheet Obligations of such Person; (f) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Mandatorily Redeemable Stock issued by such Person or any other Person, valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (g) all obligations of such Person in respect of any purchase obligation, repurchase obligation, takeout commitment or forward equity commitment, in each case evidenced by a binding agreement (excluding any such obligation to the extent the obligation can be satisfied by the issuance of Equity Interests (other than Mandatorily Redeemable Stock)); (h) net obligations under any Derivative Contract not entered into as a hedge against interest rate risk in respect of existing Indebtedness (which shall be deemed to have an amount equal to the Derivatives Termination Value thereof at such time but in no event shall be less than zero); and (i) all Indebtedness of other Persons which such Person has Guaranteed or is otherwise recourse to such Person (except for guaranties of customary exceptions for fraud, misapplication of funds, environmental indemnities, voluntary bankruptcy, collusive involuntary bankruptcy and other similar exceptions to non-recourse liability until such Guaranty is called upon); (j) all Indebtedness of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness or other payment obligation; and (k) such Person’s Ownership Share of the Indebtedness of any Unconsolidated Affiliate of such Person.  Indebtedness of any Person shall include Indebtedness of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s Ownership Share of such partnership or joint venture (except if such Indebtedness, or portion thereof, is recourse to such Person, in which case the greater of such Person’s Ownership Share of such Indebtedness or the amount of the recourse portion of the Indebtedness, shall be included as Indebtedness of such Person).

“INHAM Exemption” is defined in Section 6.3(e).

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than $2,000,000 of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.

 

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“Intellectual Property” is defined in Section 5.11(a).

“Interest Expense” means, with respect to a Person and for any period, (a) all paid, accrued or capitalized interest expense (other than capitalized interest funded from a construction loan interest reserve account held by another lender and not included in the calculation of cash for balance sheet reporting purposes) and interest expense attributable to Capitalized Lease Obligations of such Person, and in any event shall include all letter of credit fees and all interest expense with respect to any Indebtedness in respect of which such Person is wholly or partially liable whether pursuant to any repayment, interest carry, performance guarantee or otherwise, plus (b) to the extent not already included in the foregoing clause (a), such Person’s Ownership Share of all paid, accrued or capitalized interest expense for such period of Unconsolidated Affiliates of such Person.

“Investment” means, with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following: (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, Guaranty of Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person.  Any commitment to make an Investment in any other Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment.  Except as expressly provided otherwise, for purposes of determining compliance with any covenant in this Agreement, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Issuer” is defined in the first paragraph of this Agreement.

“Lien” as applied to the property of any Person means: (a) any security interest, encumbrance, mortgage, deed to secure debt, deed of trust, assignment of leases and rents, pledge, lien, hypothecation, assignment, charge or lease constituting a Capitalized Lease Obligation, conditional sale or other title retention agreement, or other security title or encumbrance of any kind in respect of any property of such Person, or upon the income, rents or profits therefrom; (b) any arrangement, express or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to the payment of the general, unsecured creditors of such Person; and (c) the filing of any financing statement under the Uniform Commercial Code or its equivalent as in effect in any applicable jurisdiction, other than any unauthorized filing or precautionary filing not otherwise constituting or giving rise to a Lien, including a financing statement filed (1) in respect of a lease not constituting a Capitalized Lease Obligation pursuant to Section 9-505 (or a successor provision) of the Uniform Commercial Code or its equivalent as in effect in any applicable jurisdiction or (2) in connection with a sale or other disposition of accounts or other assets not prohibited by this Agreement in a transaction not otherwise constituting or giving rise to a Lien.

“Make-Whole Amount” is defined in Section 8.6.

 

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“Mandatorily Redeemable Stock” means, with respect to any Person, any Equity Interest of such Person which by the terms of such Equity Interest (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), upon the happening of any event or otherwise, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than an Equity Interest to the extent redeemable in exchange for common stock or other equivalent common Equity Interests at the option of the issuer of such Equity Interest), (b) is convertible into or exchangeable or exercisable for Indebtedness or Mandatorily Redeemable Stock, or (c) is redeemable at the option of the holder thereof, in whole or part (other than an Equity Interest which is redeemable solely in exchange for common stock or other equivalent common Equity Interests), in the case of each of clauses (a) through (c) on or prior to the latest Maturity Date of any Note.

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Parent Guarantor and its Subsidiaries taken as a whole.

“Material Acquisition” means any acquisition (whether by direct purchase, merger or other transaction and whether in one or more related transactions) by the Issuer or any Subsidiary in which the purchase price of the assets acquired exceeds 10% of the Total Market Value of the Parent Guarantor, the Issuer and its other Subsidiaries determined under GAAP as of the last day of the most recently ended fiscal quarter of the Issuer for which financial statements are publicly available.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Parent Guarantor and its Subsidiaries taken as a whole, (b) the ability of either Constituent Company to perform its obligations under this Agreement and/or the Notes, (c) the ability of the Subsidiary Guarantors, taken as a whole, to collectively perform their obligations under the Subsidiary Guaranty Agreements or (d) the validity or enforceability of this Agreement, the Notes or any Subsidiary Guaranty Agreement.

“Material Credit Facility” means, as to the Constituent Companies and their Subsidiaries,

(a)the Bank Credit Agreement;

(b)the Term Loan Agreement;

(c)the Note and Guaranty Agreement dated as of March 16, 2017 among the Constituent Companies and the purchasers named therein; and

(d)any other agreement(s) creating or evidencing indebtedness for borrowed money (excluding any Nonrecourse Indebtedness) entered into on or after the Execution Date by either Constituent Company or any Subsidiary, or in respect of which either Constituent Company or any Subsidiary is an obligor or otherwise provides a guarantee or other credit support (other than a guaranty of customary recourse exceptions) (“Credit Facility”), in a principal amount outstanding or available for borrowing equal to or greater than $50,000,000 (or the equivalent of such amount in the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange

 

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rate of such other currency); and if no Credit Facility or Credit Facilities equal or exceed such amounts, then the largest Credit Facility shall be deemed to be a Material Credit Facility.

“Maturity Date” with respect to any Note is defined in the first paragraph of such Note.

“Memorandum” is defined in Section 5.3.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage Receivable” means a promissory note secured by a mortgage, deed of trust or similar instrument of which a Constituent Company or a Subsidiary is the holder and retains the rights of collection of all payments thereunder.

“Most Favored Lender Notice” means, in respect of any Additional Covenant, a written notice from the Constituent Companies giving notice of such Additional Covenant, including therein a verbatim statement of such Additional Covenant, together with any definitions incorporated therein.

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

“NAIC” means the National Association of Insurance Commissioners.

“Negative Pledge” means, with respect to a given asset, any provision of a document, instrument or agreement (other than this Agreement) which prohibits or purports to prohibit the creation or assumption of any Lien on such asset as security for Indebtedness of the Person owning such asset or any other Person; provided that an agreement that conditions a Person’s ability to encumber its assets upon the maintenance of one or more specified ratios that limit such Person’s ability to encumber its assets but that do not generally prohibit the encumbrance of its assets, or the encumbrance of specific assets, shall not constitute a Negative Pledge.

“Net Operating Income” means, for any Property and for a given period, the result of the following (without duplication and determined on a consistent basis with prior periods):  (a) rents and other revenues received in the ordinary course from such Property (including proceeds from rent loss or business interruption insurance but excluding pre-paid rents and revenues and security deposits except to the extent applied in satisfaction of tenants’ obligations for rent) minus (b) all expenses paid (excluding interest but including an appropriate accrual for property taxes and insurance) related to the ownership, operation or maintenance of such Property, including property taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses minus (c) the greater of (1) the actual property management fee paid during such period with respect to such Property and (2) an imputed management fee in an amount equal to the greater of the actual base management fee or 3% of the gross revenues for such Property for such period.

“Nonrecourse Indebtedness” means, with respect to a Person, (a) Indebtedness in respect of which recourse for payment (except for customary exceptions for fraud,

 

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misapplication of funds, environmental indemnities, voluntary bankruptcy, collusive involuntary bankruptcy and other similar customary exceptions to nonrecourse liability) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness, and (b) if such Person is a Single Asset Entity, any Indebtedness of such Person.  For the avoidance of doubt, the parties confirm that Indebtedness of a Subsidiary that constitutes Nonrecourse Indebtedness shall not be considered to be Nonrecourse Indebtedness to the extent such Indebtedness is Guaranteed by the Parent Guarantor or another Subsidiary of the Parent Guarantor that is not an Excluded Subsidiary (except for any Guarantee of customary exceptions for fraud, misapplication of funds, environmental indemnities, voluntary bankruptcy, collusive involuntary bankruptcy and other similar customary exceptions to nonrecourse liability).

“Non-U.S. Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States by the Parent Guarantor or any Subsidiary primarily for the benefit of employees of the Parent Guarantor or one or more Subsidiaries residing outside the United States, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.

“Notes” is defined in Section 1.

“NRSRO” means (a) Fitch, Moody’s or S&P, or (b) or any other credit rating agency that is recognized as a nationally recognized statistical rating organization by the SEC and approved by the Required Holders, so long as, in each case, any such credit rating agency described in clause (a) or (b) above continues to be a nationally recognized statistical rating organization recognized by the SEC and is approved as a “Credit Rating Provider” (or other similar designation) by the NAIC.

“Obligations” is defined in Section 13.1.

“Occupancy Rate” means, with respect to a Property at any time, the ratio, expressed as a percentage, of (a) net rentable square footage of such Property actually occupied by non-Affiliate tenants paying rent at rates not materially less than rates generally prevailing at the time the applicable lease was entered into, pursuant to binding leases as to which no monetary default has occurred and has continued unremedied for 30 or more days, to (b) the aggregate net rentable square footage of such Property.  For purposes of this definition, a tenant shall be deemed to actually occupy a Property notwithstanding a temporary cessation of operations for renovations, repairs or other temporary reason.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

“Off-Balance Sheet Obligation” means: (i) so long as the Parent Guarantor is not a reporting company with the SEC, the monetary obligation of the Parent Guarantor, the Issuer or any Subsidiary under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an

 

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agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment); or (ii) so long as the Parent Guarantor is a reporting company with the SEC, liabilities and obligations of the Parent Guarantor, the Issuer or any Subsidiary in respect of “off-balance sheet arrangements” (as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act) which the Parent Guarantor would be required to disclose in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the Parent Guarantor’s report on Form 10-Q or Form 10-K (or their equivalents) which the Parent Guarantor is required to file with the SEC.

“Officer’s Certificate” means, with respect to any Person, a certificate of a Senior Financial Officer or of any other officer of such Person whose responsibilities extend to the subject matter of such certificate.

“Ownership Share” means, with respect to any Subsidiary of a Person (other than a Wholly-Owned Subsidiary) or any Unconsolidated Affiliate of a Person, the greater of (a) such Person’s relative nominal direct and indirect ownership interest (expressed as a percentage) in such Subsidiary or Unconsolidated Affiliate or (b) such Person’s relative direct and indirect economic interest (calculated as a percentage) in such Subsidiary or Unconsolidated Affiliate determined in accordance with the applicable provisions of the declaration of trust, articles or certificate of incorporation, articles of organization, partnership agreement, joint venture agreement or other applicable organizational document of such Subsidiary or Unconsolidated Affiliate.  When determining compliance by the Constituent Companies with any financial covenant set forth in this Agreement, (1) only the Ownership Share of the Parent Guarantor or the Issuer, as applicable, of the financial attributes of a Subsidiary that is not a Wholly-Owned Subsidiary shall be included and (2) the Parent Guarantor’s Ownership Share of the Issuer shall be deemed to be 100%.

“Parent Guarantor” is defined in the first paragraph of the Agreement.

“Parent Guaranty” means the Guaranty of the Parent Guarantor set forth in Section 13.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

“Permitted Liens” means, with respect to any asset or property of a Person: (a)(1) Liens securing taxes, assessments and other charges or levies imposed by any Governmental Authority (excluding any Lien imposed pursuant to any of the provisions of ERISA or pursuant to any Environmental Laws) or (2) the claims of materialmen, mechanics, carriers, warehousemen or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, which, in the case of clauses (a)(1) and (a)(2), are not at the time required to be paid or discharged under Section 9.4; (b) Liens consisting of deposits or pledges made, in the ordinary course of business, in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance or similar laws; (c) easements, zoning restrictions, rights of way and similar encumbrances (and, with respect to leasehold interests (other than leasehold interests in Eligible Properties), mortgages, obligations, liens and other encumbrances

 

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incurred, created, assumed or permitted to exist and arising by, through or under or asserted by a landlord or owner of leased property, with or without the consent of the lessee) on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or impair the intended use thereof in any material respects and such title defects which may constitute Liens and are expressly permitted to exist with respect to an Eligible Property in accordance with clause (h) of the definition thereof; (d) leases, subleases or non-exclusive licenses granted to others not interfering with the ordinary conduct of business of such Person and otherwise permitted by the terms hereof; (e) Liens in favor of the holders of the Notes; (f) Liens securing judgments not constituting an Event of Default under Section 11(j); (g) Liens on assets to secure the performance of bids, trade contracts, leases, contracts (other than for the repayment of borrowed money), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (h) Liens arising solely by virtue of any statutory or common law provisions relating to banker’s liens, liens in favor of securities intermediaries, rights of setoff or similar rights and remedies as to deposit accounts or securities accounts or other funds maintained with depository institutions or securities intermediaries; (i) licenses and sublicenses of Intellectual Property granted in the ordinary course of business and not interfering in any material respect with the business of such Person; (j) Liens on insurance policies and proceeds thereof incurred in the ordinary course of business to secure premiums thereunder; and (k) other Liens on assets of either Constituent Company or any Subsidiary Guarantor to the extent not otherwise included in paragraphs (a) through (j) of this definition securing Indebtedness or other obligations in an aggregate amount not to exceed $2,500,000 at any time outstanding.

“Permitted Negative Pledge” means a Negative Pledge contained in any agreement that evidences unsecured Indebtedness which contains restrictions on encumbering assets that are substantially similar to, or no more restrictive than, those restrictions contained in this Agreement.

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or governmental authority.

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Parent Guarantor or any ERISA Affiliate or with respect to which the Parent Guarantor or any ERISA Affiliate may have any liability.

“Preferred Dividends” means, for any period and without duplication, all Restricted Payments paid during such period on Preferred Equity issued by the Issuer or a Subsidiary of the Issuer.  Preferred Dividends shall not include dividends or distributions (a) paid or payable solely in Equity Interests (other than Mandatorily Redeemable Stock) payable to holders of such class of Equity Interests, (b) paid or payable to the Issuer or a Subsidiary of the Issuer, or (c) constituting or resulting in the redemption of Preferred Equity, other than scheduled redemptions not constituting balloon, bullet or similar redemptions in full.

 

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“Preferred Equity” means, with respect to any Person, Equity Interests in such Person which are entitled to preference or priority over any other Equity Interest in such Person in respect of the payment of dividends or distribution of assets upon liquidation or both.

“Property” means a parcel (or group of related parcels) of real property owned or leased or operated by the Issuer, any Subsidiary of the Issuer or any Unconsolidated Affiliate of the Parent Guarantor.

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

“PTE” is defined in Section 6.3(a).

“Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Constituent Companies and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 14.2), provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 14.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.

“Purchaser Schedule” means the Purchaser Schedule to this Agreement listing the Purchasers of the Notes and including their notice and payment information.

“QPAM Exemption” is defined in Section 6.3(d).

“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

“REIT” means a Person qualifying for treatment as a “real estate investment trust” under the Code.

“Related Fund” means, with respect to any holder of any Note, any fund or entity that (a) invests in Securities or bank loans, and (b) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.

“Required Holders” means at any time (a) prior to the First Closing, the Purchasers, (b) after the First Closing and prior to the Second Closing, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by either Constituent Company or any of its Affiliates) and each Purchaser of the Series B Notes and the Series C Notes to be purchased at the Second Closing, and (c) on or after the Second Closing, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by either Constituent Company or any of its Affiliates).

“Reserve for Replacements” means, for any period and with respect to any Property, an amount equal to (a) the aggregate square footage of all completed space of such Property times (b) $0.10 times (c) the number of days in such period divided by (d) 365.  If the term Reserve for Replacements is used without reference to any specific Property, then it shall be determined on

 

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an aggregate basis with respect to all Properties and the applicable Ownership Shares of all real property of all Unconsolidated Affiliates of the Parent Guarantor.

“Responsible Officer” means, with respect to any Person, (i) the chief executive officer of such Person, (ii) the chief financial officer of such Person, (iii) the chief operating officer of such Person and (iv) any executive vice president of such Person with responsibility for the administration of the relevant portion of this Agreement.

“Restricted Payment” means: (a) any dividend or other distribution, direct or indirect, on account of any Equity Interest of either Constituent Company or any Subsidiary now or hereafter outstanding, except a dividend or other distribution payable solely in Equity Interests of that class of Equity Interests to the holders of that class; (b) any redemption, conversion, exchange, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interests of either Constituent Company or any Subsidiary now or hereafter outstanding; and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Equity Interests of either Constituent Company or any Subsidiary now or hereafter outstanding.

“S&P” means S&P Global Ratings.

“SEC” means the Securities and Exchange Commission of the United States.

“Second Closing” is defined in Section 3.

“Second Closing Date” is defined in Section 3.

“Secured Indebtedness” means, with respect to a Person as of a given date, the aggregate principal amount of all Indebtedness of such Person outstanding on such date that is secured in any manner by any Lien on any property and, in the case of the Parent Guarantor shall include (without duplication) the Parent Guarantor’s Ownership Share of the Secured Indebtedness of any of its Unconsolidated Affiliates.

“Securities Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder from time to time in effect.

“Securities” or “Security” shall have the meaning specified in section 2(1) of the Securities Act.

“Senior Financial Officer” means, with respect to any Person, the chief financial officer, chief accounting officer, executive vice president of finance or treasurer of such Person.

“Series B Notes” is defined in Section 1.

“Series C Notes” is defined in Section 1.

“Significant Subsidiary” means at any time with respect to any Event of Default described in paragraph (f), (g), (h), (i) or (j) of Section 11, (a) if any Material Credit Facility then in existence does not include the concept of a “Significant Subsidiary” (or equivalent term) for

 

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purposes of the corresponding event of default contained in such Material Credit Facility, any Subsidiary and (b) if each Material Credit Facility then in existence includes such concept with respect to the corresponding event of default contained in such Material Credit Facility, each Subsidiary (or group of Subsidiaries) having, individually or in the aggregate, 5% (or, if any Material Credit Facility provides for a higher or lower percentage than 5% within its corresponding definition of “Significant Subsidiary” (or equivalent term), the lowest such percentage then applicable under all Material Credit Facilities) or more of the Total Market Value at such time.

“Single Asset Entity” means a Subsidiary of the Issuer that: (a) only owns a single Property or a group of related Properties; (b) is engaged only in the business of owning, developing and/or leasing such Property or Properties; and (c) receives substantially all of its gross revenues from such Property or Properties.

“Solvent” means, when used with respect to any Person (or group of Persons), that (a) the fair value and the fair salable value of its (or their) assets (excluding any Indebtedness due from any Affiliate of such Person) are each in excess of the fair valuation of its (or their) total liabilities (including all contingent liabilities computed at the amount which, in light of all facts and circumstances existing at such time, represents the amount that could reasonably be expected to become an actual and matured liability); (b) such Person is (or group of Persons are) able to pay its (or their) debts or other obligations in the ordinary course as they mature; and (c) such Person (or group of Persons) has capital not unreasonably small to carry on its (or their) business and all business in which it proposes (or they propose) to be engaged.

“Source” is defined in Section 6.3.

“State Sanctions List” means a list that is adopted by any state Governmental Authority within the United States pertaining to Persons that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.

“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Parent Guarantor.

“Subsidiary Guarantor” means each Subsidiary that has executed and delivered a Subsidiary Guaranty Agreement and has not been released from such Subsidiary Guaranty Agreement pursuant to Section 9.8(b).

“Subsidiary Guaranty Agreement” is defined in Section 9.8(a)(1).

 

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“Substitute Purchaser” is defined in Section 22.

“SVO” means the Securities Valuation Office of the NAIC.

“Tenant Lease” means any lease entered into by the Issuer or any Subsidiary of the Issuer with respect to any portion of a Property.

“Term Loan Agreement” means that certain Amended and Restated Term Loan Agreement dated as of June 23, 2017 by and among the Issuer, the Parent Guarantor, the lenders party thereto, SunTrust Bank, as administrative agent, and the other parties thereto.

“Total Budgeted Cost” means, with respect to a Development Property, and at any time, the aggregate amount of all costs budgeted to be paid, incurred or otherwise expended or accrued by the Issuer, a Subsidiary of the Issuer or an Unconsolidated Affiliate of the Parent Guarantor with respect to such Property to achieve an Occupancy Rate of 100%, including all amounts budgeted with respect to all of the following:  (a) acquisition of land and any related improvements; (b) a reasonable and appropriate reserve for construction interest; (c) a reasonable and appropriate operating deficit reserve; (d) tenant improvements; (e) leasing commissions and (f) other hard and soft costs associated with the development or redevelopment of such Property.  With respect to any Property to be developed in more than one phase, the Total Budgeted Cost shall exclude budgeted costs (other than costs relating to acquisition of land and related improvements) to the extent relating to any phase for which (1) construction has not yet commenced and (2) a binding construction contract has not been entered into by the Issuer, any Subsidiary of the Issuer or any Unconsolidated Affiliate of the Parent Guarantor, as the case may be.

“Total Market Value” means, at a given time, the sum (without duplication) of all of the following of the Parent Guarantor and its Subsidiaries determined on a consolidated basis:  (a) in the case of Properties owned or leased by a Constituent Company or a Subsidiary for the entire period of four consecutive fiscal quarters most recently ended, the Net Operating Income for such Property for the fiscal quarter most recently ending multiplied by 4, divided by the Capitalization Rate; (b) in the case of Properties acquired during the period of four consecutive fiscal quarters most recently ended, the purchase price paid by a Constituent Company or a Subsidiary for such Property exclusive of (1) closing and other transaction costs and (2) any amounts paid by such Constituent Company or such Subsidiary as a purchase price adjustment, to be held in escrow, to be retained as a contingency reserve, or other similar amounts; (c) the GAAP book value of all Mortgage Receivables, Development Property and unimproved real estate; (d) unrestricted cash, unrestricted Cash Equivalents and Unrestricted 1031 Cash which would be included on the Parent Guarantor’s consolidated balance sheet as of such date and (e) the GAAP book value of all other tangible assets of the Parent Guarantor and its Subsidiaries; provided that, to the extent the amount of Total Market Value attributable to this clause (e) would exceed 5% of Total Market Value, such excess shall be excluded.  The Parent Guarantor’s Ownership Share of assets held by its Unconsolidated Affiliates will be included in Total Market Value calculations consistent with the above described treatment for assets owned by the Parent Guarantor and its Subsidiaries.  For purposes of determining Total Market Value, Net Operating Income from Properties disposed of by either Constituent Company or any Subsidiary during the immediately preceding period of four consecutive fiscal quarters of the Parent Guarantor shall be

 

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excluded to the extent included in clause (a) above. For purposes of determining Total Market Value, to the extent (x) the amount of Total Market Value attributable to common stock, Preferred Equity and other Equity Interests in Persons (other than Wholly Owned Subsidiaries) would exceed 10% of Total Market Value, such excess shall be excluded, (y) the amount of Total Market Value attributable to Mortgage Receivables would exceed 10% of Total Market Value, such excess shall be excluded and (z) the aggregate value of Total Budgeted Costs for Development Properties plus the amount of Total Market Value attributable to Mortgage Receivables, common stock, Preferred Equity and other Equity Interests in Persons (other than Wholly Owned Subsidiaries) and unimproved real estate (which shall not include any Development Property) would exceed 15% of Total Market Value, such excess shall be excluded.

“Total Outstanding Indebtedness” means, as of a given date, the aggregate principal amount of all Indebtedness of the Parent Guarantor and its Subsidiaries determined on a consolidated basis.

“Total Unencumbered Eligible Property Value” means, with respect to Eligible Properties as of any measurement date, the sum (without duplication) of the following:  (a) with respect to Eligible Properties which have been owned as of the measurement date for not less than four full consecutive calendar quarters, an amount equal to (1)(i) Net Operating Income for all such Eligible Properties for the immediately preceding four consecutive calendar quarters as of the measurement date minus (ii) Reserves for Replacements for such Eligible Properties to the extent any Tenant Lease thereof is not a Triple Net Lease divided by (2) the Capitalization Rate; plus (b) with respect to Eligible Properties which have been owned for less than four full consecutive calendar quarters as of the measurement date, an amount equal to the purchase price paid by the Parent Guarantor or any of its Subsidiaries for such Property exclusive of (1) closing and other transaction costs and (2) any amounts paid by the Parent Guarantor or such Subsidiary as a purchase price adjustment, to be held in escrow, to be retained as a contingency reserve, or other similar amounts.  

“Total Unsecured Indebtedness” means, as of a given date, the aggregate principal amount of all Indebtedness of the Parent Guarantor and its Subsidiaries that is not Secured Indebtedness, determined on a consolidated basis; provided that any Indebtedness that is secured only by a pledge of Equity Interests shall be deemed to be Indebtedness that is not Secured Indebtedness for purposes of calculating Total Unsecured Indebtedness.

“Triple Net Lease” means a lease by a tenant of a Property under which the tenant is financially responsible for real estate taxes and assessments, repairs and maintenance (except for major roof and structural repairs and other customary exclusions for Triple Net Leases), insurance, premiums and other expenses relating to the operation of such Property.

“Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

 

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“United States” or “U.S.” means the United States of America.

“United States Person” has the meaning set forth in Section 7701(a)(30) of the Code.

“Unrestricted 1031 Cash” means the aggregate amount of cash of the Constituent Companies and each Subsidiary that is held in escrow in connection with the completion of “like-kind” exchanges being effected in accordance with Section 1031 of the Internal Revenue Code.

“USA PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the rules and regulations promulgated thereunder from time to time in effect.

“U.S. Economic Sanctions Laws” means those laws, executive orders, enabling legislation or regulations administered and enforced by the United States pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and any other OFAC Sanctions Program.

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary all of the Equity Interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Parent Guarantor and the Parent Guarantor’s other Wholly-Owned Subsidiaries at such time.

 

 

---

 

Form of Series B Note

Broadstone Net Lease, LLC

5.09% Series B Guaranteed Senior Notes due July 2, 2028

 

No. RB- _____                   , 20   
$_______PPN: 11134# AB8

For Value Received, the undersigned, Broadstone Net Lease, LLC (herein called the “Issuer”), a limited liability company organized and existing under the laws of the State of New York, hereby promises to pay to ____________, or registered assigns, the principal sum of _____________________ Dollars (or so much thereof as shall not have been prepaid) on July 2, 2028 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30‑day months) (a) on the unpaid balance hereof at the rate of 5.09% per annum from the date hereof, payable semiannually, on the 2nd day of January and July in each year, commencing with the January 2 or July 2 next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (1) on any overdue payment of interest and (2) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 7.09% or (ii) 2.00% over the rate of interest publicly announced by the principal office of JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States at JPMorgan Chase Bank, N.A. in New York, New York or at such other place as the Issuer shall have designated by written notice to the holder of this Note as provided in the Note and Guarantee Agreement referred to below.

This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to the Note and Guaranty Agreement dated as of July 2, 2018 (as from time to time amended, the “Note and Guaranty Agreement”) between the Issuer, Broadstone Net Lease, Inc., a corporation organized and existing under the laws of the State of Maryland, and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 21 of the Note and Guaranty Agreement and (ii) made the representation set forth in Section 6.3 of the Note and Guaranty Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note and Guaranty Agreement.

This Note is a registered Note and, as provided in the Note and Guaranty Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized

Schedule 1(a)
(to Note and Guaranty Agreement)

---

 

in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Issuer may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Issuer will not be affected by any notice to the contrary.

This Note may not be transferred to a Competitor except as otherwise set forth in the Note and Guaranty Agreement.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note and Guaranty Agreement, but not otherwise.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note and Guaranty Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Issuer and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Broadstone Net Lease, LLC

Its

 

 

 

 

---

 

Form of Series C Note

Broadstone Net Lease, LLC

5.19% Series C Guaranteed Senior Notes due July 2, 2030

 

No. RC- _____                   , 20   
$_______PPN: 11134# AC6

For Value Received, the undersigned, Broadstone Net Lease, LLC (herein called the “Issuer”), a limited liability company organized and existing under the laws of the State of New York, hereby promises to pay to ____________, or registered assigns, the principal sum of _____________________ Dollars (or so much thereof as shall not have been prepaid) on July 2, 2030 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30‑day months) (a) on the unpaid balance hereof at the rate of 5.19% per annum from the date hereof, payable semiannually, on the 2nd day of January and July in each year, commencing with the January 2 or July 2 next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (1) on any overdue payment of interest and (2) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 7.19% or (ii) 2.00% over the rate of interest publicly announced by the principal office of JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States at JPMorgan Chase Bank, N.A. in New York, New York or at such other place as the Issuer shall have designated by written notice to the holder of this Note as provided in the Note and Guarantee Agreement referred to below.

This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to the Note and Guaranty Agreement dated as of July 2, 2018 (as from time to time amended, the “Note and Guaranty Agreement”) between the Issuer, Broadstone Net Lease, Inc., a corporation organized and existing under the laws of the State of Maryland, and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 21 of the Note and Guaranty Agreement and (ii) made the representation set forth in Section 6.3 of the Note and Guaranty Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note and Guaranty Agreement.

This Note is a registered Note and, as provided in the Note and Guaranty Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of

Schedule 1(b)
(to Note and Guaranty Agreement)

---

 

transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Issuer may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Issuer will not be affected by any notice to the contrary.

This Note may not be transferred to a Competitor except as otherwise set forth in the Note and Guaranty Agreement.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note and Guaranty Agreement, but not otherwise.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note and Guaranty Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Issuer and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Broadstone Net Lease, LLC

Its

 

 

 

---

 

Form of Opinion of Special Counsel
for the Constituent Companies

(See Attached)

 

 

 

Schedule 4.4(a)
(to Note and Guaranty Agreement)

---

One Atlantic Center

1201 West Peachtree Street

Atlanta, GA  30309-3424

 

404-881-7000

Fax: 404-253-8269

www.alston.com

 

 [________ ___], 2018

 

To each of the Persons listed

on Annex I attached hereto

 

Re:Broadstone Net Lease, LLC/Broadstone Net Lease, Inc.

Ladies and Gentlemen:

We have acted as special counsel to Broadstone Net Lease, LLC, a New York limited liability company (the “Issuer”), and Broadstone Net Lease, Inc., a Maryland corporation (the “Parent Guarantor”; the Issuer and the Parent Guarantor referred to collectively as the “Constituent Companies”), in connection with the issuance of the (i) 5.09% Series B Guaranteed Senior Notes due July 2, 2028 and (ii) 5.19% Series C Guaranteed Senior Notes due July 2, 2030, in each case, under and pursuant to that certain Note and Guaranty Agreement dated as of July 2, 2018 (the “Note Agreement”), among the Constituent Companies, on the one hand, and the Purchasers (as defined below), on the other hand.  Capitalized terms used herein and not defined herein shall have the respective meanings given such terms in the Note Agreement.

This opinion is being delivered to the purchasers of the Notes listed on Annex I attached hereto (collectively, the “Purchasers”) pursuant to Section 4.4(a) of the Note Agreement.

In connection with this opinion, we have examined originals or copies of the following documents:

 

 

 

 

---

[________ ___], 2018

Page 2

 

 

The documents referenced in clauses (a) through (c), inclusive, above are hereinafter referred to collectively as the “Transaction Documents”.  The Issuer and the Parent Guarantor are sometimes referred to herein as the “Obligors” and each as an “Obligor”.

 

As to certain factual matters relevant to this opinion letter, we have relied conclusively on certificates and statements of officers of the Obligors, certificates of public officials, and upon the representations and warranties contained in the Note Agreement.  Except to the extent expressly set forth herein, we have made no independent investigations with regard thereto, and, accordingly, we do not express any opinion or belief as to matters that might have been disclosed by independent verification.

In making the examinations described above and in rendering the opinions expressed below, we have assumed the following:

(a)the genuineness of all signatures;

(b)the legal capacity of natural persons;

(c)the authenticity of all documents submitted to us as originals;

(d)the conformity to original documents of all documents submitted to us as certified, conformed, telefacsimile, electronic or photostatic copies and the authenticity of the originals of such documents;

(e)the due authorization, execution and delivery of the Transaction Documents by all of the parties thereto (including the Obligors);

(f)the Transaction Documents are enforceable against all parties thereto (other than the Obligors);

(g)all parties to the Transaction Documents (including the Obligors) have the full power, authority and legal right to perform their respective obligations under the Transaction Documents;

(h)all representations and warranties made by the Obligors in the Transaction Documents are true and correct as to factual matters;

(i)there has not been any mutual mistake of fact or misunderstanding, fraud, duress or undue influence in connection with the documents examined by us;

(j)the terms of the Note Agreement have not been amended, modified, supplemented or qualified directly or indirectly by any other agreements or understandings (written or oral) of

 

---

[________ ___], 2018

Page 3

 

 

the parties thereto, or by any course of dealing or trade custom or usage, in any manner affecting the opinions expressed herein;

(k)the delivery of copies of signatures by facsimile, email or other electronic means shall be equally effective as delivery of an original executed signature;

(l)to the extent applicable law requires that the Purchasers act in accordance with duties of good faith and fair dealing, in a commercially reasonable manner, or otherwise in compliance with applicable legal requirements (including, without limitation, federal and state securities laws) in exercising their respective rights and remedies under the Transaction Documents, the Purchasers will fully comply with such legal requirements, notwithstanding any provisions of the Transaction Documents that purport to grant any of the Purchasers the right to act or fail to act in a manner contrary to such legal requirements, or based on its sole judgment or in its sole discretion or provisions of similar import; and

(m)each of the certifications set forth in that certain Offeree Letter, dated as of July 2, 2018, made by J.P. Morgan Securities LLC and Wells Fargo Securities, LLC to the Issuer, Alston & Bird LLP and Schiff Hardin LLP is true and correct.

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

 

---

[________ ___], 2018

Page 4

 

 

Our opinions are subject to the following further exceptions, qualifications and limitations:

 

 

 

---

[________ ___], 2018

Page 5

 

 

 

 

 

 

 

 

 

---

[________ ___], 2018

Page 6

 

 

 

 

(k)We express no opinion as to the applicability or effect of compliance or non‑compliance by any Purchaser with any state, federal or other laws applicable to such Purchaser or to the transactions contemplated by the Transaction Documents because of the nature of such Purchaser’s business, including its legal or regulatory status.

 

 

 

 

 

 

 

(r)In rendering the opinion set forth in paragraph 8 above, we have assumed that the Issuer will use the proceeds of the Notes as set forth in the Memorandum.

 

 

---

[________ ___], 2018

Page 7

 

 

(s)Our opinions are limited to those laws that in our experience normally would be applicable to the Obligors as a result of their engaging in the transactions contemplated by the Transaction Documents.

 

(t)The following matters, including their effects and the effects of noncompliance, are not covered by implication or otherwise in any opinion expressed herein: (a) any statutes, administrative decisions, ordinances, rules or regulations of any county, municipality or other political subdivision of any state, (b) antitrust and unfair competition law, (c) securities law (except as set forth in paragraphs 3, 6, 7 and 8 above), (d) fiduciary obligations, (e) pension and employee benefit law (e.g., ERISA), (f) fraudulent transfer law, (g) environmental law, (h) land use and subdivision law, (i) Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (j) Exon-Florio Amendment under the Omnibus Trade and Competitiveness Act of 1988, (k) bulk transfer law, (l) tax law, (m) patent, copyright, trademark and other intellectual property law, (n) racketeering law (e.g., RICO), (o) criminal statutes of general application (e.g., mail fraud and wire fraud), (p) occupational health and safety law (e.g., OSHA), (q) labor law, and (r) law concerning national or local emergency.  

 

In connection with certain of the assumptions set forth above, including those regarding the due authorization, execution and delivery by the Obligors of the Transaction Documents and the corporate or other organizational power of the Obligors regarding same, we understand the Purchasers will be relying upon an opinion of Vaisey, Nicholson & Nearpass PLLC dated the date hereof.  We have not independently reviewed or confirmed the accuracy or correctness of such opinion.

 

We are members, among other non‑applicable jurisdictions, of the Bar of the State of New York and, except as set forth below, we express no opinion as to the laws of any jurisdictions other than the federal laws of the United States and the laws of the State of New York.  We express no opinion as to the laws of any other state or jurisdiction other than as set forth above.

This opinion letter is limited to the matters stated herein and no opinion may be implied or inferred beyond those opinions expressly stated.  Opinions rendered herein are as of the date hereof, and we make no undertaking and expressly disclaim any duty to supplement such opinions if, after the date hereof, facts and circumstances come to our attention or changes in the law occur which could affect such opinions.

 

---

[________ ___], 2018

Page 8

 

 

We acknowledge that this opinion is being issued at the request of the Issuer pursuant to Section 4.4(a) of the Note Agreement and we agree that the Purchasers may rely and are relying hereon in connection with the consummation of the transactions contemplated by the Note Agreement.  Subsequent holders of the Notes may rely on this opinion as if it were specifically addressed to them (subject to the immediately preceding paragraph hereof).  Schiff Hardin LLP, special counsel to the Purchasers, may rely on this opinion for the sole purpose of rendering their opinion to be rendered pursuant to Section 4.4(b) of the Note Agreement.  

Very truly yours,

 

Alston & Bird llp

 

 

 

By:  

A Partner

 

 

 

---

One Atlantic Center

1201 West Peachtree Street

Atlanta, GA  30309-3424

 

404-881-7000

Fax: 404-253-8269

www.alston.com

 

ANNEX I

TO LEGAL OPINION OF ALSTON & BIRD LLP

 

List of Purchasers

 

Teachers Insurance and Annuity Association of America

The United States Life Insurance Company in the City of New York

American General Life Insurance Company

The Variable Annuity Life Insurance Company

Minnesota Life Insurance Company

The Cincinnati Life Insurance Company

Farm Bureau Life Insurance Company of Michigan

Securian Life Insurance Company

Farm Bureau Mutual Insurance Company of Michigan

Farm Bureau General Insurance Company of Michigan

UnitedHealthcare Insurance Company

Royal Neighbors of America

Catholic Financial Life

Blue Cross and Blue Shield of Florida, Inc.

Catholic United Financial

Trustmark Insurance Company

Unity Financial Life Insurance Company

Sun Life Assurance Company of Canada

Professional Insurance Company

Massachusetts Mutual Life Insurance Company

MassMutual Asia Limited

Banner Life Insurance Company

 

---

[________ ___], 2018

Page 109

 

 

United of Omaha Life Insurance Company

Genworth Life Insurance Company

Genworth Life and Annuity Insurance Company

The Guardian Life Insurance Company of America

Berkshire Life Insurance Company of America

The Guardian Insurance & Annuity Company, Inc.

Ameritas Life Insurance Corp.

Ameritas Life Insurance Corp. of New York

AB US Diversified Credit BM Fund

Modern Woodmen of America

 

 

---

[________ ___], 2018

Page 110

 

 

ANNEX II

TO LEGAL OPINION OF ALSTON & BIRD LLP

 

Material Debt Agreements

 

 

 

 

---

 

 

 

[________ ___], 2018

 

To each of the Persons listed

on Annex I attached hereto

 

Re:Broadstone Net Lease, LLC/Broadstone Net Lease, Inc.

 

Ladies and Gentlemen:

We serve as principal outside counsel to Broadstone Net Lease, LLC, a New York limited liability company (the “Issuer”), and Broadstone Net Lease, Inc., a Maryland corporation (the “Parent Guarantor”; the Issuer and the Parent Guarantor; referred to collectively as the “Constituent Companies”) in connection with the issuance of the (i) 5.09% Series B Guaranteed Senior Notes due July 2, 2028 and (ii) 5.19% Series C Guaranteed Senior Notes due July 2, 2030, in each case, under and pursuant to that certain Note and Guaranty Agreement dated as of July 2, 2018 (the “Note Agreement”), among the Constituent Companies, on one hand, and the Purchasers (as defined below), on the other hand.  Capitalized terms used herein and not defined herein shall have the respective meanings given such terms in the Note Agreement.

This opinion is being delivered to the purchasers of the Notes listed on Annex I attached hereto (collectively, the “Purchasers”) pursuant to Section 4.4(a) of the Note Agreement.

In connection with this opinion, we have examined originals or copies of the following documents:

 

(b)the 5.09% Series B Guaranteed Senior Notes due July 2, 2028, in the aggregate principal amount of $100,000,000.00 (the “Series B Notes”), each dated the date hereof, issued by the Issuer; and

 

(c)the 5.19% Series C Guaranteed Senior Notes due July 2, 2030, in the aggregate principal amount of $50,000,000.00 (the “Series C Notes”; together with the Series B Notes, the “Notes”), each dated the date hereof, issued by the Issuer.

 

The documents referenced in clauses (a) through (c), inclusive, above are hereinafter referred to collectively as the “Transaction Documents”.  The Issuer and the Parent Guarantor are sometimes referred to herein as the “Obligors” and each as an “Obligor”.

As to certain factual matters relevant to this opinion letter, we have relied conclusively on certificates and statements of officers of the Obligors, on certificates of public officials,

 

---

[________ ___], 2018

Page 112

 

statements in the organizational documents of the Obligors, and upon the representations and warranties contained in the Note Agreement.  Except to the extent expressly set forth herein, we have made no independent investigations with regard thereto, and, accordingly, we do not express any opinion or belief as to matters that might have been disclosed by independent verification.

In making the examinations described above and in rendering the opinions expressed below, we have assumed the following:

(a)the genuineness of all signatures (other than signatures of the Obligors);

 

(b)the legal capacity of natural persons;

 

(c)the authenticity of all documents submitted to us as originals;

 

(d)each document or certificate, including those from public officials, submitted to us for review or reliance is accurate, complete, and correct;

 

(e)the conformity to original documents of all documents submitted to us as certified, conformed, telefacsimile, electronic or photostatic copies and the authenticity of the originals of such documents;

 

(f)the due authorization, execution and delivery of the Transaction Documents by all of the parties thereto (other than the Obligors);

 

(g)the Transaction Documents are enforceable against all parties thereto (including the Obligors);

 

(h)all parties to the Transaction Documents (other than the Obligors) have the full power, authority and legal right to perform their respective obligations under the Transaction Documents;

 

(i)all representations and warranties made by the Obligors in the Transaction Documents are true and correct as to factual matters;

 

(j)there has not been any mutual mistake of fact or misunderstanding, fraud, duress or undue influence in connection with the documents examined by us;

 

(k)the terms of the Note Agreement have not been amended, modified, supplemented or qualified directly or indirectly by any other agreements or understandings (written or oral) of the parties thereto, or by any course of dealing or trade custom or usage, in any manner affecting the opinions expressed herein;

 

(l)the delivery of copies of signatures by facsimile, email or other electronic means shall be equally effective as delivery of an original executed signature; and

 

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[________ ___], 2018

Page 113

 

(m)to the extent applicable law requires that the Purchasers act in accordance with duties of good faith and fair dealing, in a commercially reasonable manner, or otherwise in compliance with applicable legal requirements (including, without limitation, federal and state securities laws) in exercising their respective rights and remedies under the Transaction Documents, the Purchasers will fully comply with such legal requirements, notwithstanding any provisions of the Transaction Documents that purport to grant any of the Purchasers the right to act or fail to act in a manner contrary to such legal requirements, or based on its sole judgment or in its sole discretion or provisions of similar import.

 

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

 

 

 

 

 

 

---

[________ ___], 2018

Page 114

 

 

Our opinions are subject to the following further exceptions, qualifications and limitations:

(a)We express no opinion with respect to any consent, approval, authorization, or other action by or filing with any Governmental Authority that might be required, or any violation of constitutional provision, statute, regulation, rule or order applicable to any Obligor, because of the specific type of business in which any Purchaser engages.

 

(b)Our opinions are limited to those laws that in our experience normally would be applicable to the Obligors as a result of its engaging in the transactions contemplated by the Transaction Documents.

 

(c)The following matters, including their effects and the effects of non-compliance, are not covered by implication or otherwise in any opinion expressed herein: (i) any statutes, administrative decisions, ordinances, rules or regulations of any county, municipality or other political subdivision of any state, (ii) antitrust and unfair competition law, (iii) securities law, (iv) fiduciary obligations, (v) pension and employee benefit law (e.g., ERISA), (vi) fraudulent transfer law, (vii) environmental law, (viii) land use and subdivision law, (ix) Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (x) Exon-Florio Amendment under the Omnibus Trade and Competitiveness Act of 1988, (xi) bulk transfer law, (xii) tax law, (xiii) patent, copyright, trademark and other intellectual property law, (xiv) racketeering law (e.g., RICO), (xv) criminal statutes of general application (e.g., mail fraud and wire fraud), (xvi) occupational health and safety law (e.g., OSHA), (xvii) labor law, (xviii) law concerning national or local emergency, and (xix) law relating to permissible rates, computations, or disclosure of interest (e.g., usury).

 

In connection with certain of the assumptions set forth above, including the enforceability of the Note Agreement and the Notes, we understand the Purchasers will be relying upon an opinion of Alston & Bird LLP (the “A&B Opinion”) dated the date hereof.  We have not independently reviewed or confirmed the accuracy or correctness of such opinion.  We express no opinion on any matter that is addressed by the A&B Opinion.  To the extent any such matter is necessary to our conclusion, we assume it.

We are members, among other non‑applicable jurisdictions, of the Bar of the State of New York and, except as set forth below, we express no opinion as to the laws of any jurisdictions other than: (i) the federal laws of the United States, (ii) the laws of the State of New York and (iii) the Corporations and Associations Article of the Maryland Code as currently in effect in the State of Maryland.  We express no opinion as to the laws of any other state or jurisdiction other than as set forth above.

 

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[________ ___], 2018

Page 115

 

This opinion letter is limited to the matters stated herein and no opinion may be implied or inferred beyond those opinions expressly stated.  Opinions rendered herein are as of the date hereof, and we make no undertaking and expressly disclaim any duty to supplement such opinions if, after the date hereof, facts and circumstances come to our attention or changes in the law occur which could affect such opinions.

We acknowledge that this opinion is being issued at the request of the Issuer pursuant to Section 4.4(a) of the Note Agreement and we agree that the Purchasers may rely and are relying hereon in connection with the consummation of the transactions contemplated by the Note Agreement.  Subsequent holders of the Notes may rely on this opinion as if it were specifically addressed to them (subject to the immediately preceding paragraph).  Schiff Hardin LLP, special counsel to the Purchasers, may rely on this opinion for the sole purpose of rendering their opinion to be rendered pursuant to Section 4.4(b) of the Note Agreement.  This opinion letter may not be relied upon by any other person or for any other purpose.

Very truly yours,

 

VAISEY NICHOLSON & NEARPASS PLLC

 

 

By:  

A Partner

 

 

 

---

 

ANNEX I

TO LEGAL OPINION OF VAISEY NICHOLSON & NEARPASS PLLC

 

 

List of Purchasers:

 

Teachers Insurance and Annuity Association of America

The United States Life Insurance Company in the City of New York

American General Life Insurance Company

The Variable Annuity Life Insurance Company

Minnesota Life Insurance Company

The Cincinnati Life Insurance Company

Farm Bureau Life Insurance Company of Michigan

Securian Life Insurance Company

Farm Bureau Mutual Insurance Company of Michigan

Farm Bureau General Insurance Company of Michigan

UnitedHealthcare Insurance Company

Royal Neighbors of America

Catholic Financial Life

Blue Cross and Blue Shield of Florida, Inc.

Catholic United Financial

Trustmark Insurance Company

Unity Financial Life Insurance Company

Sun Life Assurance Company of Canada

Professional Insurance Company

Massachusetts Mutual Life Insurance Company

MassMutual Asia Limited

Banner Life Insurance Company

United of Omaha Life Insurance Company

Genworth Life Insurance Company

Genworth Life and Annuity Insurance Company

The Guardian Life Insurance Company of America

Berkshire Life Insurance Company of America

The Guardian Insurance & Annuity Company, Inc.

 

---

[________ ___], 2018

Page 117

 

Ameritas Life Insurance Corp.

Ameritas Life Insurance Corp. of New York

AB US Diversified Credit BM Fund

Modern Woodmen of America

 

 

 

 

 

 

---

 

Form of Opinion of Special Counsel
for the Purchasers

The closing opinion of Schiff Hardin LLP, special counsel to the Purchasers, called for by Section 4.4(b) of the Agreement, shall be dated the date of the applicable Closing and addressed to the Purchasers, shall be satisfactory in form and substance to the Purchasers and shall be to the effect that:

1.The Issuer is a limited liability company in good standing under the laws of the State of New York.

2.The Parent Guarantor is a corporation in good standing under the laws of the State of Maryland.

3.The Agreement and the Notes being delivered on the date hereof constitute the legal, valid and binding contracts of the Issuer enforceable against the Issuer in accordance with their respective terms.

4.The Agreement constitutes the legal, valid and binding contract of the Parent Guarantor enforceable against the Parent Guarantor in accordance with its terms.

5.The issuance, sale and delivery of the Notes being delivered on the date hereof under the circumstances contemplated by the Agreement do not, under existing law, require the registration of such Notes under the Securities Act or the qualification of an indenture under the Trust Indenture Act of 1939.

The opinion of Schiff Hardin LLP shall also state that the opinions of Alston & Bird LLP and Vaisey, Nicholson & Nearpass PLLC are satisfactory in scope and form to Schiff Hardin LLP and that, in its opinion, the Purchasers are justified in relying thereon.

The opinion of Schiff Hardin LLP is limited to the laws of the State of New York and the federal laws of the United States.

With respect to matters of fact upon which such opinion is based, Schiff Hardin LLP may rely on appropriate certificates of public officials and officers of the Issuer and the Parent Guarantor and upon representations of the Issuer, the Parent Guarantor and the Purchasers delivered in connection with the issuance and sale of the Notes.

 

 

 

 

 

Schedule 4.4(b)
(to Note and Guaranty Agreement)

---

 

Disclosure Materials

 

 

 

Schedule 5.3
(to Note and Guaranty Agreement)

---

 

Subsidiaries and Affiliates of the Parent Guarantor and
Ownership of Subsidiary Stock; Directors and Senior Officers

(See Attached)

 

 

Schedule 5.4
(to Note and Guaranty Agreement)

---

 

S - 5.4 - 1

---

 

S-5.4-2

---

 

S-5.4-3

---

 

S-5.4-4

---

 

S-5.4-5

---

 

S-5.4-6

---

 

S-5.4-7

---

 

S-5.4-8

---

 

S-5.4-9

---

 

S-5.4-10

---

 

 

 

 

 

S-5.4-11

---

 

Financial Statements

 

 

Schedule 5.5
(to Note and Guaranty Agreement)

---

 

Real Estate Assets

 

 

 

Schedule 5.10
(to Note and Guaranty Agreement)

---

 

S-5.10-1

---

S-5.10-2

---

S-5.10-3

---

S-5.10-4

---

S-5.10-5

---

S-5.10-6

---

S-5.10-7

---

S-5.10-8

---

S-5.10-9

---

S-5.10-10

---

S-5.10-11

---

S-5.10-12

---

S-5.10-13

---

S-5.10-14

---

S-5.10-15

---

S-5.10-16

---

S-5.10-17

---

S-5.10-18

---

S-5.10-19

---

S-5.10-20

---

S-5.10-21

---

S-5.10-22

---

S-5.10-23

---

S-5.10-24

---

S-5.10-25

---

S-5.10-26

---

S-5.10-27

---

S-5.10-28

---

 

 

 

 

 

 

S-5.10-29

---

Part II

 

 

 

S-5.10-30

---

 

Existing Indebtedness of the Parent Guarantor and its Subsidiaries

 

Schedule 5.15
(to Note and Guaranty Agreement)

---

 

 

S-5.15 - 2

---

 

Information Relating to Purchaser

Purchaser Schedule
(to Note and Guaranty Agreement)

---

 

Purchaser Schedule-2

---

Purchaser Schedule-3

---

 

 

Purchaser Schedule-4

---

Purchaser Schedule-5

---

 

Purchaser Schedule-6

---

Purchaser Schedule-7

---

 

Purchaser Schedule-8

---

 

 

Purchaser Schedule-9

---

 

Purchaser Schedule-10

---

 

Purchaser Schedule-11

---

 

Purchaser Schedule-12

---

 

Purchaser Schedule-13

---

 

Purchaser Schedule-14

---

 

Purchaser Schedule-15

---

 

Purchaser Schedule-16

---

 

Purchaser Schedule-17

---

 

Purchaser Schedule-18

---

 

Purchaser Schedule-19

---

 

Purchaser Schedule-20

---

 

Purchaser Schedule-21

---

 

Purchaser Schedule-22

---

Purchaser Schedule-23

---

 

Purchaser Schedule-24

---

 

Purchaser Schedule-25

---

Purchaser Schedule-26

---

 

Purchaser Schedule-27

---

 

Purchaser Schedule-28

---

Purchaser Schedule-29

---

 

Purchaser Schedule-30

---

Purchaser Schedule-31

---

 

 

Purchaser Schedule-32

---

Purchaser Schedule-33

---

 

 

Purchaser Schedule-34

---

Purchaser Schedule-35

---

 

Purchaser Schedule-36

---

 

 

 

Purchaser Schedule-37

---

 

 

 

Purchaser Schedule-38

---

 

 

 

Purchaser Schedule-39

---

 

Purchaser Schedule-40

---

 

Purchaser Schedule-41

---

 

Purchaser Schedule-42

---

 

 

 

Purchaser Schedule-43

---

 

Purchaser Schedule-44

---

 

Purchaser Schedule-45

---

Purchaser Schedule-46

---

 

 

 

Purchaser Schedule-47

---

 

 

 

CH2\20796062.9

Purchaser Schedules - 48