Document:

Ex 10_1 - 210 Commitment Letter 1-10-17

		
			EXHIBIT 10.1
		

		
			210 CAPITAL, LLC
		

		
			8214 Westchester Drive, Suite 950 
Dallas, TX 75225
		

		
			PERSONAL AND CONFIDENTIAL January 10, 2018
		

		
			Real Industry, Inc.
		

		
			3700 Park East Drive, Suite 300 Beachwood, Ohio 44122
		

		
			Attention: Michael J. Hobey
		

		
			Commitment Letter
		

		
			Ladies and Gentlemen:
		

		
			210 Capital, LLC (or one of its affiliates) (“210 Capital”) and the Private Credit Group of Goldman Sachs Asset Management, L.P., on behalf of one or more of its managed funds, (“GSAM” and each of GSAM and 210 Capital, a “Commitment Party” and combined, the “Commitment Parties”), are pleased to confirm the arrangements under which the Commitment Parties commit to provide financing to Real Industry, Inc. (the “Borrower” or “you”) as described herein, on the terms and subject to the conditions set forth in this letter and the attached Exhibits A through G hereto (collectively, this “Commitment Letter”). To the extent not defined in the body of this Commitment Letter, each capitalized term used in this Commitment Letter shall have the meaning assigned to it in the Term Sheet attached as Exhibit A hereto (the “Term Sheet”). 
		

		
			The Commitment Parties have reviewed the Debtors’ Motion for Entry of an Order (I) Authorizing Real Industry, Inc. to obtain Senior Secured, Superpriority, Postpetition Financing, (II) Granting Liens and Providing Superpriority Administrative Expense Status, (III) Modifying the Automatic Stay in Connection Therewith, (IV) Authorizing Real Industry, Inc. to Obtain the Equity commitment, and (V) Granting Related Relief (the “DIP Motion”) filed in the Borrower’s Chapter 11 Case No. 17-12464-KJC, in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).  After Reviewing the DIP Motion and the financing proposal contained therein, the Commitment Parties present this Commitment Letter the Borrower for its consideration and approval.  The Commitment Parties request that the Borrowers revise and/or amend the DIP Motion to seek approval of the terms of this Commitment Letter and related Term Sheet.  
		

		
			You have informed us that the Borrower desires to, in accordance with this Commitment Letter:
		

			
	
			
				i.
			

			
	
			
			enter into a senior secured superiority debtor-in-possession note (the “210 DIP Facility”) which will be provided to the Borrower after the entry date of the DIP Order in an aggregate amount not to exceed $5,500,000; and

			
	
			
				ii.
			

			
	
			
			issue to the Commitment Parties on the Effective Date an amount of common stock in the Reorganized Borrower such that each Commitment Party shall own, or have the right to own, 45- 49% of such common stock as of such date (after taking into account a distribution of any common stock in the Reorganized Borrower to the Commitment Parties on account of the Upfront Fee) upon payment of a purchase price of $17,500,000 (the “Equity Commitment”)1  AND a credit facility of up to $500,000,000 made available or arranged by the Commitment Parties, under terms and conditions to be discussed, to pursue the acquisition of profitable businesses;

		

		
			1The purchase price of $17.5 million assumes that the Commitment Parties would acquire 49% of the outstanding stock and will be adjusted downward in the event that the Commitment Parties acquires less than 49% of the stock.
		

		
			

		 

 

		

		
			in each case, subject to the satisfaction of certain conditions to be specified in the 210 DIP Documents, including, without limitation, those conditions described in the Commitment Letter.  The proceeds of the 210 DIP Facility are expected to be used, in accordance with the Budget, Term Sheet and the 210 DIP Documents, as applicable, to fund general working capital and operational expenses and restructuring expenses of the Borrower.
		

			
	
			
				 1.
			Commitment; Titles and Roles.

		
			The Commitment Parties are pleased to commit to provide the Borrower 100% of the 210 DIP Facility and the Equity Commitment on the terms and subject to the conditions contained in this Commitment Letter and the Term Sheet. 
		

		
			The Borrower agrees that, except as contemplated in the paragraph above, no agents, co-agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than as contemplated by this Commitment Letter and the Term Sheet) will be paid in connection with the 210 DIP Facility unless you and we shall so agree.
		

			
	
			
				 2.
			Conditions Precedent.

		
			Each Commitment Party’s commitment and agreement hereunder, including without limitation the Equity Commitment, are subject to the entry of an order by the Bankruptcy Court approving the Borrower’s execution, delivery and performance of this Commitment Letter. In addition, each Commitment Party’s commitment and agreement hereunder are subject to there not having occurred, since the date hereof, any event that has resulted in or could reasonably be expected to result in a Material Adverse Change. For purposes hereof, “Material Adverse Change” means any condition, development or event that has resulted in, or would reasonably be expected to result in, a material adverse change in or materially adverse effect on the financial condition or results of operations of the Borrower (including, without limitation, a material impairment of any of Borrower’s assets), taken as a whole, other than the events typically resulting from the filing of the Chapter 11 cases of the Borrower and its subsidiaries, as applicable. Each Commitment Party’s commitment and agreement are also subject to (i) the conditions in the section entitled “Conditions Precedent to the 210 DIP Financing” in Exhibit B hereto, including, without limitation, the execution and delivery of appropriate definitive loan documents relating to the 210 DIP Facility that are substantially consistent with the terms set forth in this Commitment Letter and are otherwise acceptable to each Commitment Party and the Borrower; (ii) the Commitment Parties not becoming aware after the date hereof of any new or inconsistent information or other matter not previously disclosed to the Commitment Parties relating to the Borrower or the transactions contemplated by this Commitment Letter which each Commitment Party, in its reasonable judgment, deems material and adverse relative to the information or other matters disclosed to the Commitment Parties prior to the date hereof; (iii) the payment by SGGH, LLC of $0.00 to the Commitment Parties’ counsel for fees and expenses incurred by the Commitment Parties in connection with this Commitment Letter and the transactions contemplated herein by no later than January 20, 2018; (iv) the satisfactory completion of all financial, legal, accounting, and tax diligence with respect to the Borrower and the 210 DIP Facility by each Commitment Party no later than January 17, 2018; and (iv) the receipt by each Commitment Party of all internal approvals with respect to the 210 DIP Facility and the transactions contemplated herein no later than January 17, 2018.
		

		
			Furthermore, conditions precedent with respect to the 210 DIP Facility include, but are not limited to, those customary for facilities of this nature and for this transaction in particular the following, including: (i) the occurrence of the entry date of the DIP Order; (ii) the delivery of the Budget; (iii) no default or Event of Default (as defined in the Term Sheet) shall have occurred or be continuing; and (iv) the accuracy of the representations and warranties, including the specified representations and warranties attached in Exhibit E (including, without limitation, the representation and warranty as to the absence of a breach of any 

		 

 

affirmative covenant attached in Exhibit F or any negative covenant attached in Exhibit G), in all material respects.
		

			
	
			
				 3.
			Information.

		
			Borrower represents and covenants that (i) all written information, documentation and materials made available to the Commitment Parties in connection with the transactions and agreements contemplated hereby (collectively, the “Information”) (other than financial projections, forecasts and other forward looking statements (collectively, the “Projections”)) is and will be, when taken as a whole, complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading and (ii) the financial projections that have been or will be made available to the Commitment Parties by or on behalf of the Borrower have been and will be prepared in good faith based upon assumptions that are believed by the preparer thereof to be reasonable at the time such financial projections are furnished to the Commitment Parties, it being understood and agreed that financial projections are not a guarantee of financial performance and actual results may differ from financial projections and such differences may be material. You agree that if at any time prior to the DIP Closing Date, any of the representations in the preceding sentence would be incorrect in any material respect if the information and financial projections were being furnished, and such representations were being made, at such time, then you will promptly supplement, or cause to be supplemented, the information and financial projections so that such representations will be correct in all material respects under those circumstances. The Commitment Parties will have no obligation to conduct any independent evaluation or appraisal of the assets or liabilities of the Borrower or any other party or to advise or opine on any related solvency issues.
		

			
	
			
				 4.
			Indemnification and Related Matters.

		
			In connection with arrangements such as this, it is our policy to receive indemnification. The Borrower agrees to the provisions with respect to our indemnity and other matters set forth in Exhibit D, which is incorporated by reference into this Commitment Letter.
		

			
	
			
				 5.
			Assignments.

		
			This Commitment Letter may not be assigned by you without the prior written consent of the Commitment Parties (and any purported assignment without such consent will be null and void), is intended to be solely for the benefit of the Commitment Parties and the Borrower, and, except as set forth in Section 4 above (including Exhibit D), is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto. This Commitment Letter may not be amended nor any term or provision hereof or thereof waived or otherwise modified except by an instrument in writing signed by each of the parties hereto or thereto, as applicable, and any term or provision hereof or thereof may be amended or waived only by a written agreement executed and delivered by all parties hereto or thereto.
		

			
	
			
				 6.
			Confidentiality.

		
			Please note that this Commitment Letter and any written communications provided by, or oral discussions with, the Commitment Parties in connection with this arrangement are exclusively for the information of the Borrower and may not be disclosed by you to any third party or circulated or referred to publicly without our prior written consent except, after providing written notice to the Commitment Parties, pursuant to a subpoena or order issued by a court of competent jurisdiction or by a judicial, administrative or legislative body or committee; provided that the Commitment Parties hereby consent to your disclosure of (i) this Commitment Letter and such communications and discussions to the Borrower’s affiliates and the 

		 

 

Borrower’s and its affiliates’ respective officers, directors, agents and advisors who are directly involved in the consideration of the 210 DIP Facility and who have been informed by you of the confidential nature of such advice and this Commitment Letter and who have agreed to treat such information confidentially; (ii) this Commitment Letter or the information contained herein to the extent required in motions or any required SEC disclosures, each in form and substance reasonably satisfactory to the Commitment Parties, that may be filed with the Bankruptcy Court in connection with obtaining the entry of an order approving your execution, delivery and performance of this Commitment Letter and/or the definitive 210 DIP Documents; (iii) this Commitment Letter or the information contained herein may be disclosed to any official committee appointed in the Borrower’s cases on a confidential basis, and (iv) this Commitment Letter as required by applicable law or compulsory legal process (in which case you agree to inform us promptly thereof).
		

			
	
			
				 7.
			Miscellaneous.

		
			The commitment and agreement of the Commitment Parties hereunder will terminate upon the first to occur of (i) January 10, 2018 at 5:30 pm ET if the Borrower has not accepted the Commitment Letter and filed a notice of entry into the Commitment letter on the Borrower’s bankruptcy docket; (ii) January 22, 2018 at 11:59 p.m. New York City time, unless the DIP Closing Date shall have occurred on or before such date; (iii) the entry into an agreement by the Borrower, or the request of the Borrower seeking any approval of the Bankruptcy Court, in respect to debtor-in-possession financing or equity investment other than as contemplated by the Term Sheet; and (iv) a material breach by the Borrower under this Commitment Letter.
		

		
			By executing this Commitment Letter, you agree to (i) reimburse the Commitment Parties from time to time on demand for all reasonable out-of-pocket fees and expenses (including, but not limited to, the reasonable fees, disbursements and other charges of all legal counsel to the Commitment Parties (including, but not limited to, special and local counsel to the Commitment Parties) and examiners, search fees, due diligence expenses, transportation expenses, and appraisal, environmental, audit, and consultant costs and expenses) incurred in connection with the 210 DIP Facility, the preparation of the definitive documentation therefor and the other transactions contemplated hereby, regardless of whether any of the transactions contemplated hereby are consummated, as such expenses may be expressly limited by the Term Sheet, and (ii) pay all fees as contemplated by the Term Sheet, including, without limitation, the Upfront Fee upon entry of the DIP Order.
		

		
			As you know, GSAM and/or its affiliates are full-service securities firm engaged, either directly or through its affiliates in various activities, including securities trading, investment management, financing and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course of these activities, GSAM and/or its affiliates may actively trade the debt and equity securities (or related derivative securities) of the Borrower and other companies which may be the subject of the arrangements contemplated by this letter, including any of their respective affiliates, for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities. GSAM and/or its respective affiliates may also co-invest with, make direct investments in, and invest or co-invest client monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities or other debt obligations of the Borrower or other companies which may be the subject of the arrangements contemplated by this letter and any of their respective affiliates. Each Commitment Party and its affiliates bear their own responsibility for compliance with applicable laws, including federal securities laws, with respect to such activities.
		

		
			The provisions set forth under Sections 3, 4 (including Exhibit D), 6 and this Section 7 will remain in full force and effect regardless of whether definitive 210 DIP Documents are executed and delivered. Other 

		 

 

than to the extent otherwise provided herein, the provisions set forth under Sections 3, 4 (including Exhibit D), 6 and this Section 7 will remain in full force and effect notwithstanding the expiration or termination of this Commitment Letter or the Commitment Parties’ commitment and agreement hereunder.
		

		
			Notwithstanding any other provision of this Commitment Letter, the obligations under this Commitment Letter with respect to the 210 DIP Facility are joint and several obligations of the Borrower and the Guarantors.
		

		
			The Borrower for itself and its affiliates agrees that any suit or proceeding arising in respect of this Commitment Letter or the Commitment Parties’ commitment or agreement hereunder will be tried exclusively in the Bankruptcy Court or, if the Bankruptcy Court does not have subject matter jurisdiction, in any Federal court of the United States of America sitting in the Borough of Manhattan or, if that court does not have subject matter jurisdiction, in any state court located in the City and County of New York, and the Borrower hereby submits to the exclusive jurisdiction of, and to venue in, such court.  Any right to trial by jury with respect to any action or proceeding arising in connection with or as a result of either the Commitment Parties’ commitment or agreement or any matter referred to in this Commitment Letter is hereby waived by the parties hereto. The Borrower for itself and its affiliates agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Service of any process, summons, notice or document by registered mail or overnight courier addressed to any of the parties hereto at the addresses above shall be effective service of process against such party for any suit, action or proceeding brought in any such court. This Commitment Letter will be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws.
		

		
			The Commitment Parties hereby notify the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 10756 (signed into law October 26, 2001)) (the “Patriot Act”) the Commitment Parties may be required to obtain, verify and record information that identifies the Borrower and each of the Guarantors, which information includes the name and address of the Borrower and each of the Guarantors and other information that will allow the Commitment Parties to identify the Borrower and each of the Guarantors in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective for the Commitment Parties.
		

		
			This Commitment Letter may be executed in any number of counterparts, each of which when executed will be an original, and all of which, when taken together, will constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or electronic transmission (in pdf format) will be effective as delivery of a manually executed counterpart hereof. This Commitment Letter is the only agreement that has been entered into among the parties hereto with respect to the 210 DIP Facility and set forth the entire understanding of the parties with respect thereto and supersede any prior written or oral agreements among the parties hereto with respect to the 210 DIP Facility.
		

		
			 
		

		
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			Please confirm that the foregoing is in accordance with your understanding by signing and returning to the Commitment Parties the enclosed copy of this Commitment Letter on or before 4:30 p.m. New York City time on January 10, 2018, whereupon this Commitment Letter will become a binding agreement between us. If this Commitment Letter has not been signed and returned as described in the preceding sentence by such date, this offer will terminate on such date. We look forward to working with you on this transaction.
		

		
			 
		

		
			Sincerely
		

		
			 
		

		
			210 Capital, LLC
		

		
			 
		

		
			/s/ C. Clark Webb  
		

		
			By:  C. Clark Webb
		

		
			Title:  
		

		
			 
		

		
			 
		

		
			The Private Credit Group of Goldman Sachs Asset Management, L.P.
		

		
			 
		

		
			/s/ Brendan McGovern
		

		
			By: Brendan McGovern
		

		
			Title: Managing Director
		

		
			 
		

		
			 
		

		
			

		 

 

		

		
			ACCEPTED AND AGREED AS OF JANUARY 10, 2018: 
		

		
			REAL INDUSTRY, INC.
		

		
			 
		

		
			 
		

		
			 
		

		
			By: /s/ Michael J. Hobey
		

		
			Name: Michael J. Hobey
		

		
			Title: President, Interim Chief Executive Officer and CFO
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

 

		

			 

		

		

		
			 
		

		
			 
		

		
			Exhibit A
		

		
			Term Sheet
		

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			Exhibit A-1

		

 

		

		
			REAL INDUSTRY INC.
		

		
			SUMMARY OF PROPOSED DIP FINANCING BY 210 CAPITAL AND GSAM
		

		
			 
		

		
			The proposed DIP financing and Emergence Equity contribution will be used to facilitate the continuation of the Borrower/Debtor’s business strategy to acquire businesses and assets to increase free cash flow and create a sustainably profitable enterprise.
		

			
					
						 

					
					
						 

				
	
					
						BORROWER:

					
					
						Real Industry, Inc. (the “Borrower” and after the Effective Date (as defined below), the “Reorganized Borrower”), a debtor in possession in the Chapter 11 case (the “Case”) filed with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) (jointly administered under Case No. 17-12464) on November 17, 2017 (the “Petition Date”). 

				
	
					
						 

					
					
						 

				
	
					
						GUARANTORS:

					
					
						Each of the Borrower’s existing and newly acquired or created domestic U.S. direct or indirect subsidiaries, which exclude the debtors in the Case other than Borrower, listed on Annex 1 to this Term Sheet (collectively, the “Guarantors”) will unconditionally guarantee the obligations of the Borrower in respect of the 210 DIP Financing (as defined below) on a joint and several basis.

				
	
					
						 

					
					
						 

				
	
					
						LENDERS:

					
					
						210 Capital LLC (or one of its affiliates) and one or more funds managed by the Private Credit Group of Goldman Sachs Asset Management, L.P. (each a “Lender” and collectively the “Lenders”).  Lenders shall be severally and not jointly liable to Borrower with respect to any obligations in the 210 DIP Financing.

				
	
					
						 

					
					
						 

				
	
					
						DIP CLOSING DATE:

					
					
						The closing date with respect to the 210 DIP Financing (the “DIP Closing Date”) shall be no later than three (3) business days following the date of entry of the DIP Order, subject to (a) entry of the DIP Order, (b) satisfaction of all applicable conditions precedent and (c) the definitive documents, including a note purchase, security, collateral and guarantee agreements, having been executed and/or delivered in connection with the 210 DIP Financing (together with all documentation related to the 210 DIP Financing, collectively, the “210 DIP Documents”).

				
	
					
						 

					
					
						 

				
	
					
						MATURITY DATE:

					
					
						The 210 DIP Financing and all other obligations of the Borrower and the Guarantors thereunder and under the 210 DIP Documents (the “DIP Obligations”) shall be repaid in full in cash at the earliest of:

				
	
					
						 

					
					
						 

				

		 

		

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						(i)one (1) year following the Petition Date (the “Stated Maturity Date”);

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(ii)the effective date of a plan of reorganization for the Borrower which is confirmed by an order of the Bankruptcy Court; and

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(iii)the acceleration of the 210 DIP Financing and related termination of the commitments under the 210 DIP Documents, including, without limitation, as a result of the occurrence of an Event of Default under the 210 DIP Documents or default under the DIP Order (any such date in clauses (i) through (iii), the “Maturity Date”).

				
	
					
						 

					
					
						 

				
	
					
						USE OF PROCEEDS:

					
					
						Subject to a budget to be agreed upon and updated on a monthly basis (or more frequently, at the request of Lenders) (the “Budget”), the proceeds shall be used to fund general working capital, operational expenses and restructuring expenses of the Borrower, solely to the extent permitted by the DIP Orders, the Budget and the 210 DIP Documents, as applicable.  The proceeds of the 210 DIP Financing shall not be used by the Borrower to assert or prosecute any claim, demand, or cause of action against the Lenders, including, in each case, without limitation, any action, suit, or other proceeding for breach of contract or tort or pursuant to Sections 105, 510, 544, 547, 548, 549, 550, or 552 of the Bankruptcy Code, or under any other applicable law (state, federal, or foreign), or otherwise.  The initial Budget is attached hereto as Annex 2.

				
	
					
						 

					
					
						 

				
	
					
						OPTIONAL COMMITMENT REDUCTIONS AND REPAYMENTS:

					
					
						The commitments in respect of the 210 DIP Financing may be voluntarily reduced or terminated, and amounts borrowed under the 210 DIP Financing may be voluntarily repaid, in each case, upon two (2) business days’ notice to the Lenders by the Borrower, at a redemption price equal to the sum of (i) 100% of the principal amount of the 210 DIP Financing being redeemed plus accrued and unpaid interest thereon as of the date of such redemption; plus (ii) (x) in the event of a repayment for specified events, 2.0% of the amount of the repayment or (y) in all other cases, the Make-Whole Amount (as defined below). For the avoidance of doubt, no Make-Whole Amount will be due in connection with a repayment of the 210 DIP Financing on the Maturity Date.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						“Make-Whole Amount” means the greater of (x) 2.0% of the amount of the repayment and (y) an amount equal to the difference between (A) the aggregate amount of interest which would have otherwise been payable on the amount of the repayment from the date of repayment until the Maturity Date, minus (B) the aggregate amount of interest Lenders would earn if the prepaid amount were reinvested for the period from the date of repayment until the Maturity Date at the Treasury Rate (to be defined) plus 50 basis points.

				
	
					
						 

					
					
						 

				

		 

		

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						MANDATORY REPAYMENTS:

					
					
						The 210 DIP Financing will be subject to customary and appropriate mandatory prepayment events, acceptable to Lenders, including the net proceeds of (a) any issuance of debt or equity securities (other than as contemplated by this Term Sheet) and (b) any asset sale, catastrophic event or extraordinary receipts of the Borrower, subject to certain exceptions and specified events to be included in definitive documentation.  Any mandatory prepayment and any payments upon acceleration shall be at the purchase price applicable to an optional redemption occurring on such date, plus accrued and unpaid interest.

				
	
					
						 

					
					
						 

				
	
					
						SUPER PRIORITY ADMINISTRATIVE CLAIMS:

					
					
						Subject and subordinate to the Carve-Out in all respects, the DIP Obligations shall constitute allowed superpriority administrative expense claims under Sections 364(c)(1), 503(b), 507(a)(2) and 507(d) of the Bankruptcy Code and shall in each case have priority over all other allowed chapter 11 and chapter 7 administrative expense claims specified or ordered pursuant to any provision of the Bankruptcy Code, including, but not limited to, Bankruptcy Code sections 105, 326, 328, 330, 331, 503(a), 503(b), 506(c), 507(a), 507(b), 546(c), 546(d), 726, 1113 and 1114 and including, for the avoidance of doubt, the expenses of a chapter 11 or chapter 7 trustee.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						“Carve-Out” means (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee under section 1930(a) of title 28 of the United States Code; (ii) all accrued, allowed and unpaid fees and expenses of the Borrower’s professionals and the professionals for any official committee appointed in the Case through  and included the date of delivery of a Carve-Out Trigger Notice up to the amounts set forth in the Budget; and (iii) $150,000 for any fees and expenses of the Borrower’s professionals and the professionals for any official committee appointed in the Case following the delivery of a Carve-Out Trigger Notice; provided that, notwithstanding the foregoing, the fees and expenses described in clauses (i) through (iii) above shall include solely those fees and expenses directly relating to the chapter 11 case of the Borrower and Guarantors, if any, and any fees allocable to the Borrower pursuant to the Interim Compensation Procedures Order entered in the Borrower’s cases (and, for the avoidance of doubt, no fees or expenses directly related to the chapter 11 cases of any other affiliate of the Borrower).

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						No portion of the Carve-Out or proceeds of the 210 DIP Financing or any other amounts may be used for the payment of the fees and expenses of any person incurred in prosecuting any claims or causes of actions against the Lenders under the 210 DIP Financing, their respective advisors, agents and sub-agents, including formal discovery proceedings in anticipation thereof, and/or any lien of the Lenders under the 210 DIP Financing.

				
	
					
						 

					
					
						 

				

		 

		

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						210 DIP LIENS:

					
					
						Subject to the prior payment of the Carve-Out from the proceeds of Collateral, pursuant to Sections 364(c)(2), and 364(d) of the Bankruptcy Code, the DIP Obligations shall be secured by senior priming liens (the “210 DIP Liens”) on substantially all assets and property of the Borrower and the Guarantors,  wherever located, whether now owned or hereafter acquired, and all products and proceeds thereof, including, without limitation, intercompany claims and equity pledges (such assets and property, the “Collateral”) including, subject to the entry of the DIP Order, proceeds of the Borrower’s and the Guarantors’ claims and causes of action under sections 502(d), 544, 545, 547, 548, 549, 550 and 553 of the Bankruptcy Code and any other avoidance or similar action under the Bankruptcy Code or similar state or municipal law and the proceeds of each of the foregoing (collectively, the “Avoidance Actions”).

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Except as set forth above, all of the 210 DIP Liens shall be effective and perfected upon entry of the DIP Order and without the necessity of the execution, delivery, or filing of mortgages, security agreements, pledge agreements, financing statements, intellectual property filings, any other filing or notice with any governmental authority or other agreements or instruments.

				
	
					
						 

					
					
						 

				
	
					
						INTEREST RATE:

					
					
						The interest rate for any funded 210 DIP Financing shall be eleven percent (11%) per annum, accruing and payable monthly.

				
	
					
						 

					
					
						 

				
	
					
						DEFAULT INTEREST:

					
					
						The default interest rate shall be the interest rate then in effect plus two percent (2%) per annum.

				
	
					
						 

					
					
						 

				
	
					
						UPFRONT FEE:

					
					
						In consideration for the 210 DIP Financing and the Equity Commitment (as defined below), Lenders shall receive payment of an Upfront Fee upon the DIP Closing Date equal to $200,000 in cash plus shares of common stock equal to 4.9% of the outstanding stock of Borrower pursuant to a private placement, subject to customary registration rights.

				
	
					
						 

					
					
						 

				
	
					
						BREAK-UP FEE:

					
					
						$300,000 to be approved pursuant to the DIP Order and paid as provided below.

				
	
					
						 

					
					
						 

				
	
					
						ACQUISITION FINANCING DURING CHAPTER 11 CASE:

					
					
						Lenders will be granted a right of first refusal upon an offer by any third-party to provide financing of the Borrower’s acquisition activities during the period prior to the Maturity Date.  In connection with any such financing by Lenders,  Lenders shall be entitled to certain customary fees to be agreed in the 210 DIP Documents.

				
	
					
						 

					
					
						 

				
	
					
						CONDITIONS PRECEDENT TO 210 DIP FINANCING:

					
					
						The obligation of the Lenders to make the 210 DIP Financing will be subject to conditions precedent that are usual and customary for transactions of this kind, acceptable to Lenders, including, among others: (i) the execution of the 210 DIP Documents; (ii) entry by

				
	
					
						 

					
					
						 

				

		 

		

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						the Bankruptcy Court of the DIP Order; and (iii) the conditions specified in the Commitment Letter, including in Exhibit B thereto.

				
	
					
						 

					
					
						 

				
	
					
						REPRESENTATIONS AND WARRANTIES:

					
					
						To be applicable to the Borrower and Guarantors, including but not limited to the representation and warranties listed on Exhibit E to the Commitment Letter, as well as the following: corporate existence and good standing; authority to enter into and due execution, delivery and enforceability of, the 210 DIP Documents; validity and continued effectiveness of the DIP Order, as applicable, including the creation, validity, perfection and priority of the 210 DIP Liens and Lenders’ claims granted thereunder; governmental approvals; non-violation of organizational documents and material debt agreements (other than as a result of the commencement of the Case); accuracy of disclosure, including financial statements and information concerning the Borrower’s tax attributes (including the amount of net operating loss carryforwards of the Borrower and Guarantors, any limitations on the use thereof under section 382 of the Internal Revenue Code, and the degree to which past transactions could contribute to an “ownership change” of the Borrower within the meaning of section 382 of the Internal Revenue Code; no material litigation not stayed by reason of the Case; intellectual property; ownership of properties; compliance in all material respects with environmental, pension/ERISA and other laws (including, without limitation, FCPA, OFAC and the PATRIOT Act and similar laws applicable to sanctioned persons and any other anti-terrorism, anti-money laundering and anti-corruption and anti-bribery laws);  use of proceeds; payment of taxes; insurance; permits and licenses; absence of default or Event of Default; no material adverse change; the Borrower having not failed to disclose any material  assumptions or liabilities with respect to the Budget; and affirmation of the reasonableness of the assumptions and projections in the Budget by an appropriate financial officer of the Borrower.

				
	
					
						 

					
					
						 

				
	
					
						COVENANTS:

					
					
						The 210 DIP Documents will contain such affirmative and negative covenants as are customary in debtor-in-possession financings and acceptable to the Lenders, which shall be applicable to the Borrower and the Guarantors and shall include, without limitation, the affirmative covenants provided in Exhibit F to the Commitment Letter and the negative covenants provided in Exhibit G to the Commitment Letter, as well as the following: (i) the Borrower shall deliver to Lenders detailed budgets (in the form consistent with Annex 2), which shall be subject in all respects to Lenders’ approval, and variation from the Budget not to exceed 10%, tested on a rolling four-week basis beginning one week following approval of the DIP Order2 and the three weeks prior to such approval (each, a “Budget Period”) for each of the categories of

				
	
					
						 

					
					
						 

				

		
			 
		

		

		
			2The initial test shall include one week following approval of the DIP Order and the three weeks prior to such approval.
		

		
			
		

		

		 

		

			13

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						Payroll/Benefits, Occupancy, Discontinued Operations, Ordinary Course Professionals, and SG&A; provided that (x) amounts in all other categories and the portion of SG&A relating to amounts paid pursuant to D&O tail insurance shall be tested on a line-item basis, (y) the fees and expenses of Lenders and its professionals are not required to be included in the Budget and shall be excluded for determining any variance and (z) any cash receipts shall be excluded for all calculations of any variance; (ii) Borrower shall deliver in advance to Lenders all draft pleadings and public announcements relating to the Borrower’s and Guarantors assets and business plan and consider Lenders’ comments thereto in good faith; and (iii) Borrower and Guarantors shall not take any action to materially impair the assets of the Borrower or its subsidiaries including with respect to the availability of any tax attributes of the Borrower or its subsidiaries.

				
	
					
						 

					
					
						 

				
	
					
						MILESTONES:

					
					
						The 210 DIP Documents (to be executed no later than January 15, 2018) shall include the following milestones (the “DIP Milestones”):

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(i)no later than February 16, 2018, the Borrower shall have filed a chapter 11 plan (the “Plan”) and Disclosure Statement with respect to the Plan (the “Disclosure Statement”), in each case in form satisfactory to the Lenders;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(ii)entry by the Bankruptcy Court of an order approving the Disclosure Statement in form and substance acceptable to the Lenders by no later than March 29, 2018, subject to court availability;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(iii)execution of the definitive documents related to the Equity Commitment no later than five (5) days before the hearing to consider confirmation of the Plan;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(iv)entry by the Bankruptcy Court of an order confirming the Plan in form and substance acceptable to the Lenders (the “Confirmation Order”) by no later than May 1, 2018, subject to court availability; and

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(v)no later than 10 days after entry of the Confirmation Order, the Borrower shall have taken all steps reasonably necessary to satisfy all conditions for consummating the Plan.

				
	
					
						 

					
					
						 

				
	
					
						EVENTS OF DEFAULT:

					
					
						The 210 DIP Financing shall have usual and customary events of default for transactions of this kind (an “Event of Default”), acceptable to Lenders, including:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(i)default shall be made in the payment of any principal of or interest on the DIP Financing or in the payment of any fee 

				
	
					
						 

					
					
						 

				

		 

		

			14

		

 

	
					
						

					
						 

					
					
						or other amount due under the DIP Orders, 210 DIP Documents or the 210 DIP Financing, in each case, when and as the same shall become due and payable, whether at the due date thereof or by acceleration thereof or otherwise;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(ii)any representation or warranty made or deemed made in any 210 DIP Document, or any representation or warranty contained in any certificate, or other document furnished in connection with or pursuant to any 210 DIP Document or the 210 DIP Financing, including the Commitment Letter, shall prove to have been false or misleading in any material respect when so made, deemed made or furnished;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(iii)breach of any covenant that is not cured within 30 days;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(iv)a Change of Control (to be defined in the 210 DIP Documents) shall have occurred;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(v)the Borrower fails to meet any DIP Milestone;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(vi)any prohibited variance from the Budget;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(vii)the DIP Order shall not have been entered within 30 calendar days after the filing of the motion to approve the 210 DIP Financing;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(viii)the Borrower shall obtain, or the Bankruptcy Court shall enter an order approving, any additional financing from a party other than the Lenders, including from any of its subsidiaries;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(ix)the Borrower files a motion, or the Bankruptcy Court enters an order subordinating, disallowing, or otherwise challenging the claims and liens of the Lenders under the 210 DIP Financing;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(x)any other claim which is senior to or pari passu with the Lenders' administrative claim or any lien on any assets or property of the Borrower shall be granted without the Lenders’ consent, except as expressly permitted by the 210 DIP Documents;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xi)the Borrower shall (A) contest the validity or enforceability of any 210 DIP Document in writing or deny in writing that it has any further liability thereunder or (B) contest the validity or perfection of the liens and security interests securing the 210 DIP Financing;

				
	
					
						 

					
					
						 

				

		 

		

			15

		

 

	
					
						

					
						 

					
					
						(xii)any attempt by the Borrower to invalidate or otherwise impair the 210 DIP Financing or the liens granted to the Lenders with respect to the 210 DIP Financing;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xiii)the DIP Order shall be reversed, stayed or vacated, shall be amended, supplemented or otherwise modified without the prior written consent of the Lenders, or shall otherwise cease to be in full force and effect;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xiv)the filing of any plan in the Case by the Borrower, or the confirmation of any plan in the Case, that does not provide for the termination of the commitments under the 210 DIP Financing and the payment in full in cash of all DIP Obligations on or before the effective date of such plan;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xv)the Borrower fails to comply in any material respect with the DIP Order;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xvi)any sale or other disposition of all or a material portion of the Collateral pursuant to section 363 of the Bankruptcy Code other than as permitted by the DIP Orders or pursuant to a transaction that is permitted under the 210 DIP Documents;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xvii)conversion of the Case to a case under Chapter 7 of the Bankruptcy Code or the dismissal of the Case;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xviii)the determination of the Borrower, whether by vote of the Borrower’s board of directors or otherwise, to suspend the operation of the Borrower’s business in the ordinary course, liquidate all or substantially all of the Borrower’s assets or the filing of a motion or other application in the Case seeking authority to do any of the foregoing;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xix)the filing of a plan of reorganization or liquidation by the Borrower that is not acceptable to the Lenders or does not provide for the payment in full of the DIP Obligations;

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xx)appointment of a trustee, interim receiver or receiver, or manager or a responsible officer or person or an examiner with enlarged powers (having powers beyond the investigatory and reporting powers set forth in the Bankruptcy Code sections 1106(a)(3) and (4)) in the Case; and

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(xxi)the Borrower shall take any action, including the filing of an application, seeking or supporting of any of the foregoing or any person other than the Borrower shall do so and such application is not contested in good faith by the Borrower.

				
	
					
						 

					
					
						 

				

		 

		

			16

		

 

	
					
						

					
						REMEDIES:

					
					
						Among other remedies to be specified in the 210 DIP Documents, upon the occurrence and during the continuance of an Event of Default the Lenders may suspend the availability of the 210 DIP Financing and, after giving five business days’  notice to the Borrower and the Guarantors (the “Remedies Notice Period”), which notice may be given simultaneously to the Bankruptcy Court, the automatic stay provided in Section 362 of the Bankruptcy Code shall be deemed automatically vacated without further action or order of the Bankruptcy Court, and the Lenders, after the Remedies Notice Period, shall have relief from the automatic stay to exercise remedies under the 210 DIP Documents, including relief to foreclose on all or any portion of the security for the 210 DIP Financing, collect accounts receivable and apply the proceeds thereof to the DIP Obligations or otherwise exercise remedies against the Collateral permitted by applicable non-bankruptcy law. During the Remedies Notice Period, the Borrower shall be entitled to seek an emergency hearing before the Bankruptcy Court; provided that the only issue that may be raised at such hearing shall be whether an Event of Default has in fact occurred and is continuing. Subject to section 363(k) of the Bankruptcy Code, the Lenders shall also have the authority to credit bid all or a portion of the amounts owed under the 210 DIP Financing, whether pursuant to a sale under section 363 of the Bankruptcy Code, a plan pursuant to section 1129(b) of the Bankruptcy Code or otherwise, but only to the extent the DIP Obligations have been discharged concurrently with the consummation of the transactions in respect of such credit bid.

				
	
					
						 

					
					
						 

				
	
					
						EMERGENCE:

					
					
						In connection with the 210 DIP Financing, Lenders shall commit to purchase on the effective date of the Plan (the “Effective Date”) an amount of common stock in the Reorganized Borrower such that Lenders shall own, or have the right to own, 45-49%3 of such common stock as of such date (after taking into account a distribution of any common stock in the Reorganized Borrower to Lenders on account of the Upfront Fee) for a purchase price of $17.50 million4 (the “Equity Commitment”), AND Lenders shall commit to provide or arrange a credit facility of up to $500,000,000 for Reorganized Borrower to pursue acquisitions of profitable businesses, subject to the satisfaction of certain conditions to be specified in the 210 DIP Documents, including without limitation, (i) the Bankruptcy Court shall have entered an order, acceptable to Lenders, confirming the Plan and shall have approved all documents relating thereto, which documents shall be acceptable to Lenders; (ii) adoption of new governance documents and approval of related documents by the Reorganized Borrower acceptable to Lenders, including (a) articles of incorporation and by-laws that provide usual and customary rights for transactions of this kind, including among 

				

		
			 
		

		

		
			3Final amount to be determined based on applicable tax limitations.
		

		
			4Purchase price shall be used, among other things, to pay in full any amounts owned to Lender under the 210 DIP Financing. The purchase price amount of $17.5 million assumes that the Commitment Parties acquire 49% of the stock in Reorganized Borrower and will be adjusted downward in the event that the Commitment Parties acquire less than 49% of the stock.
		

		
			 
		

		
			
		

		

		 

		

			17

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						other things, (1) requirements for 55%5 shareholder approval for certain transactions (e.g., incurrence or guarantee of any material indebtedness for borrowed money, incurrence of any liens in respect of the same, issuance of common or preferred stock,  making of any prohibited restricted payments), (2) board structure and composition to be agreed, which generally reflects the relative share ownership of Lenders and as reasonably acceptable to Lenders, including the appointment of at least one independent board member, (3) requirement for such independent board member’s approval for certain types of transactions (e.g., material transactions, waiver of stock transfer restrictions described below),  and (4) requirement that any transfer of stock in the Reorganized Borrower by or to a 4.75% holder of such stock (defined as appropriate for purposes of avoiding an “ownership change” of the Reorganized Borrower within the meaning of section 382 of the Internal Revenue Code) shall be null and void ab initio unless specifically approved in writing by board of directors of the Reorganized Borrower (which board may not provide such approval without the prior written consent of Lenders), (b) a new Shareholder Agreement between and among the Lender, the Borrower and the shareholders of the Reorganized Borrower (the “Shareholders”) and a registration rights agreement between and among the Lender and the Reorganized Borrower, that provide usual and customary rights for transactions of this kind, including among other things drag and tag rights, and (c) a right of first refusal to Lenders with respect to any financing for the Borrower’s acquisition activities for the two-year period following the Effective Date (and certain fees to be agreed among the parties prior to the Effective Date); (iii) no material impairment of the assets of the Borrower including with respect to the availability of any tax attributes of the Borrower after the Petition Date; (iv) no Change of Control (to be defined in the 210 DIP Documents); (v) the receipt by Lender of customary opinions of counsel for a transaction of this kind, including an opinion from nationally recognized tax counsel or a “Big 4” accounting firm regarding the reorganization of the Borrower in connection with the Plan; (vi) the absence of any events that would be an Event of Default under the 210 DIP Financing; (vii) the payment in full in cash of all amounts due under the 210 DIP Financing; and (viii) all direct and indirect subsidiaries of Borrower shall either be retained by Borrower or disposed of or abandoned by Borrower in a manner acceptable to Lenders.  In the event that the Reorganized Borrower determines not to proceed with the equity purchase transaction contemplated by this paragraph, Lenders shall be entitled to the Break-Up Fee.

				

		
			 
		

		

		
			5The supermajority voting requirement of 55% for certain transactions assumes that the Commitment Parties acquire 49% of stock and will be adjusted downward if the Commitment Parties acquire less than 49% of the stock.
		

		
			 
		

		
			
		

		

		 

		

			18

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						WAIVERS AND AMENDMENTS:

					
					
						Customary for financing of this nature.

				
	
					
						 

					
					
						 

				
	
					
						CERTAIN MISCELLANEOUS PROVISIONS:

					
					
						Customary for financing of this nature, including assignments, yield protection (including changes in reserve, capital adequacy, liquidity and capital requirements, illegality, unavailability and other requirements of law), taxes (including the imposition of or changes in certain withholding or other taxes), indemnity and expenses (including “breakage costs”, if any) and funding protections to be set forth in the 210 DIP Documents.

				
	
					
						 

					
					
						 

				
	
					
						TAXES:

					
					
						The 210 DIP Documents will provide that all payments are to be made free and clear of any taxes (other than franchise taxes and taxes on overall net income), imposes, assessments, withholdings or other deductions whatsoever.  

				
	
					
						 

					
					
						 

				
	
					
						GOVERNING LAW:

					
					
						The 210 DIP Documents, and the interpretation, construction and enforcement of the terms thereof, shall be governed by the laws of the State of New York and (to the extent applicable) the Bankruptcy Code.

				
	
					
						 

					
					
						 

				
	
					
						OUT-OF-POCKET EXPENSES:

					
					
						All reasonable and documented (subject to redaction for privileged, confidential or otherwise sensitive information) fees, including legal, accounting and other professional (including financial advisors) fees for the Lenders, including no more than one counsel for each relevant material jurisdiction, in connection with the transactions described in this Term Sheet are to be paid by the Borrower without the need for the filing of any applications with the Bankruptcy Court but subject to customary notice requirements to Borrower, the United States Trustee and any official committee.

				
	
					
						 

					
					
						 

				
	
					
						INDEMNITY:

					
					
						Customary indemnity by the Borrower of the Lenders and their respective partners, directors, officers, employees, agents and advisors, in respect of the 210 DIP Financing.

				

		
			 
		

		
			
		

		
			

		 

		

			19

		

 

		

		
			Annex 1
		

		
			Guarantors
		

		
			 
		

		
			SGGH, LLC
		

		
			Cosmedicine LLC
		

		
			 
		

		
			 
		

		
			

		 

		

			20

		

 

		

		
			Exhibit B
		

		
			Conditions Precedent to the Closing Date
		

		
			The obligation of each Commitment Party to provide the DIP Financing and to fund the Equity Commitment will be subject to customary conditions precedent, including, without limitation, the following conditions precedent:
		

			
	
			
				 (i)
			

			
	
			
			All public statements and pleadings filed by Borrower and the Alloy Debtors after the date hereof relating to the 210 DIP Financing and the Borrower’s assets and business plan shall be in form and substance acceptable to the Commitment Parties.

			
	
			
				 (ii)
			

			
	
			
			Entry by the Bankruptcy Court of the DIP Order, which DIP Order approves the transactions and fees contemplated herein and grants superpriority administrative expense claim status and liens on the Collateral, as described in the Term Sheet, and such DIP Order shall be in form and substance acceptable to the Commitment Parties and shall not have been reversed, modified, amended, stayed, vacated or subject to any pending appeal.

			
	
			
				 (iii)
			

			
	
			
			No Material Adverse Change shall have occurred since the date hereof, other than the events typically resulting from the filing of Chapter 11 cases, as determined by the Commitment Parties in their reasonable business judgment.

			
	
			
				 (iv)
			

			
	
			
			The Commitment Parties shall have received the Budget, which shall be in the form and substance acceptable to the Commitment Parties, and, as of the Closing Date, any variation from the Budget shall not exceed 10% on a cumulative basis from the Budget attached to the DIP Term Sheet excluding any cash receipts from any variance calculations.

			
	
			
				 (v)
			

			
	
			
			The representations and warranties of the Borrower to the Commitment Parties, including without limitation those set forth in Exhibit E hereto, shall be true and correct in all material respects.

			
	
			
				 (vi)
			

			
	
			
			No default or Event of Default under the DIP Order shall have occurred or be continuing.

			
	
			
				 (vii)
			

			
	
			
			The Borrower and Guarantors shall be in compliance in all respects with the DIP Order.

			
	
			
				 (viii)
			

			
	
			
			Execution and delivery of the 210 DIP Documents (including without limitation control agreements with respect to all cash accounts of the Borrower and Guarantors) in form and substance satisfactory to the Commitment Parties, and the satisfaction of the conditions precedent contained therein.

			
	
			
				 (ix)
			

			
	
			
			All necessary governmental, shareholder and third party approvals, consents, licenses, franchises and permits in connection with the 210 DIP Facility and the operation by the Borrower and Guarantors of their businesses shall have been obtained and remain in full force and effect.

			
	
			
				 (x)
			

			
	
			
			The Borrower shall have paid to the Commitment Parties all fees and expenses then owing to the Commitment Parties in connection with this Commitment Letter and the 210 DIP Facility.

			
	
			
				 (xi)
			

			
	
			
			The Commitment Parties shall be satisfied that they have been granted, and still continue to hold,  perfected superpriority liens on all collateral of the Borrower and Guarantors, as described in the 210 DIP Documents, on and after the Closing Date, which collateral shall not be subject to any other liens, except existing liens acceptable to the Commitment Parties.

		
			
		

		
			

		 

		

			Exhibit B-1

		

 

		

			
	
			
				 (xii)
			

			
	
			
			The cash balance of the Borrower shall be no less than $950,000.

		
			 
		

		
			 
		

		
			

		 

		

			Exhibit B-2

		

 

		

		
			Exhibit C
		

		
			[Reserved]
		

		
			 
		

		
			 
		

		
			

		 

		

			Exhibit C-1

		

 

		

		
			Exhibit D
		

		
			In the event that 210 Capital, LLC or the Private Credit Group of Goldman Sachs Asset Management, L.P.,  and/or one or more of its managed funds, or any of the partners, directors or equivalents, agents, employees and controlling persons or entities (if any), as the case may be, of 210 Capital, LLC or the Private Credit Group of Goldman Sachs Asset Management, L.P.,  and/or one or more of its managed funds (each, an “Indemnified Person”) becomes involved in any capacity in any action, proceeding or investigation brought by or against any person or entity, including any of your affiliates, shareholders, partners, members or other equity holders of the Borrower or any of its affiliates, but excluding any Indemnified Person, in connection with or as a result of either this arrangement or any matter referred to in this Commitment Letter, the Borrower and/or Guarantors agrees to periodically reimburse such Indemnified Person for its legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith. The Borrower also agrees to indemnify and hold each Indemnified Person harmless against any and all losses, claims, damages or liabilities to any such person or entity in connection with or as a result of either this arrangement or any matter referred to in the Commitment Letter (whether or not such investigation, litigation, claim or proceeding is brought by you, your equity holders or creditors, but excluding any Indemnified Person, and whether or not any such indemnified person is otherwise a party thereto and without regard to the exclusive or contributory negligence of any such Indemnified Person), except to the extent that such loss, claim, damage or liability has been found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of an Indemnified Person in performing the services that are the subject of the Commitment Letter or from a Commitment Party’s breach of this Commitment Letter.  If for any reason the foregoing required indemnification is unavailable to any Indemnified Person or insufficient to hold it harmless, then the Borrower will contribute to the amount paid or payable by such Indemnified Person as a result of such loss, claim, damage, penalty, expense or liability in such proportion as is appropriate to reflect the relative economic interests of (i) the Borrower and the Guarantors and their respective affiliates, shareholders, partners, members or other equity holders on the one hand and (ii) such Indemnified Person on the other hand in the matters contemplated by the Commitment Letter as well as the relative fault of (x) the Borrower and the Guarantors and their respective affiliates, shareholders, partners, members or other equity holders on the one hand and (y) such Indemnified Person with respect to such loss, claim, damage, penalty, expense or liability and any other relevant equitable considerations.  The reimbursement, indemnity and contribution obligations of the Borrower under this paragraph will be in addition to any liability which the Borrower may otherwise have, will extend upon the same terms and conditions to any affiliate of any Indemnified Person and the partners, members, directors, agents, employees and controlling persons or entities (if any), as the case may be, of such Indemnified Person and any such affiliate, and will be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Borrower, any Indemnified Person, any such affiliate and any such person. The Borrower also agrees that neither any Indemnified Person nor any of such affiliates, partners, members, directors, agents, employees or controlling persons will have any liability based on its or their exclusive or contributory negligence or otherwise to the Borrower or any person or entity asserting claims on behalf of or in right of the Borrower or any other person or entity in connection with or as a result of either this arrangement or any matter referred to in the Commitment Letter, except in the case of the Borrower to the extent that any losses, claims, damages, penalties, liabilities or expenses incurred by the Borrower or its affiliates, shareholders, partners or other equity holders have been found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of an Indemnified Party in performing the services that are the subject of the Commitment Letter; provided,  however, that in no event will such Indemnified Person or such other parties have any liability for any indirect, consequential, special or punitive damages in connection with or as a result of such Indemnified Person’s or such other parties’ activities related to the Commitment Letter.  The provisions of this paragraph will survive any termination or completion of the arrangement provided by the Commitment Letter.
		

		
			 
		

		
			 
		

		
			

		 

		

			Exhibit D-1

		

 

		

		
			Exhibit E
		

		
			Specified Representations and Warranties
		

		
			The following representations and warranties will be applicable to the DIP Financing and will also be incorporated into the 210 DIP Documents and the Equity Commitment (subject to certain exceptions, qualifications and carveouts to be set forth therein):
		

		
			 
		

			
	
			
				 1.
			

			
	
			
			Financial Statements; No Change.  (a) The audited consolidated balance sheet of the Borrower and its subsidiaries (on a combined basis) (the “Financial Statement Entities”) dated December 31, 2016, and the related audited consolidated statements of income and of cash flows for the fiscal year of the Financial Statement Entities (on a combined basis) ended on that date (i) were prepared in accordance with GAAP applied consistently throughout the period reflected therein and with prior periods, except as disclosed therein, and (ii) fairly present in all material respects the consolidated financial condition of the Financial Statement Entities (on a combined basis) as of the date thereof and their consolidated results of operations and consolidated cash flows for the period covered thereby; (b) The unaudited consolidated balance sheets of the Financial Statement Entities(on a combined basis) dated September 30, 2017, and the related unaudited consolidated statements of income and of cash flows for the relevant quarterly period of the 2017 fiscal year of such Financial Statement Entities ended on that date (i) were prepared in accordance with GAAP (except that such financial statements may include abbreviated notes) applied consistently throughout the period reflected therein and with prior periods, except as disclosed therein, and (ii) fairly present in all material respects the consolidated financial condition of the Financial Statement Entities (on a combined basis) as of the date thereof and their consolidated results of operations and consolidated cash flows for the period covered thereby.  (c) Since November 17, 2017, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Change.

		
			 
		

			
	
			
				 2.
			

			
	
			
			Existence; Compliance with Law.  The Borrower and each of the Guarantors is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, except for absences of such good standing in respect of such Subsidiaries as could not, in the aggregate, reasonably be expected to have a Material Adverse Change, (b) has the organizational power and authority and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, except for absences of such power, authority or right as could not, in the aggregate, reasonably be expected to have a Material Adverse Change, and (c) is in compliance with all requirements of law, including any laws that require the maintenance and effect of any permits or licenses, except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Change.

		
			 
		

			
	
			
				 3.
			

			
	
			
			Power; Authorization; Enforceable Obligation.  The Borrower and each of the Guarantors has the organizational power and authority, and the legal right to make, deliver and perform the 210 DIP Documents. The Borrower and each of the Guarantors has taken all necessary action under its organizational documents and material debt agreements (other than as a result of the commencement of the Case) to authorize the execution, delivery and performance of the 210 DIP Documents. No consent or authorization of, filing with, notice to or other act by or in respect of, any governmental authority or any other person is required in connection with the 210 DIP Documents or with the execution, delivery, performance, validity or enforceability of the 210 DIP Documents. The 210 DIP Documents have been duly executed and delivered on behalf of the Borrower and each of the Guarantors. The 210 DIP Documents upon execution will constitute, a legal, valid and binding obligation of the Borrower and each of the Guarantors, 

		
			
		

		
			

		 

		

			Exhibit E-1

		

 

		

		
			enforceable against the Borrower and each of the Guarantors in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
		

		
			 
		

			
	
			
				 4.
			

			
	
			
			No Legal Bar.  The execution, delivery and performance of the 210 DIP Documents, the extension of credit thereunder and the use of proceeds thereof will not violate law or any material contractual obligation, including any post-petition agreement, of the Borrower and each of the Guarantors and will not result in, or require, the creation or imposition of any lien on any of their respective properties or revenues pursuant to any requirement of law or any such contractual obligation, other than 210 DIP Liens created under the 210 DIP Documents and the DIP Orders. No law or contractual obligation applicable to the Borrower and each of the Guarantors could reasonably be expected to have a Material Adverse Change.

		
			 
		

			
	
			
				 5.
			

			
	
			
			Litigation.  Other than the Case, no litigation, investigation or proceeding of or before any arbitrator or governmental authority (not stayed by reason of the Case) is pending or, to the knowledge of the Borrower and each of the Guarantors, threatened by or against the Borrower and each of the Guarantors or against any of their respective properties or revenues (a) with respect to any of the 210 DIP Documents or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Change.

		
			 
		

			
	
			
				 6.
			

			
	
			
			Claims.  The following have been disclosed, in writing, to the Commitment Party, and such disclosure is accurate in all material respects: (i) all claims (as such term is defined in 11 U.S.C. § 101(5)) of unaffiliated third parties against the Borrower or Guarantors and (ii) all indebtedness, liabilities or guarantees of any obligations of the Guarantors to any other person or entity, including each of the Alloy Debtors.  Excluding ordinary course expenses related to intercompany services, none of the Borrower’s affiliates that have filed Chapter 11 cases (collectively, the “Alloy Debtors”) have any claims (whether asserted or not asserted) against the Borrower or any of the Guarantors.  Neither the Borrower nor any Guarantor is aware of any claim of a creditor of the Alloy Debtors against the Borrower or a Guarantor.

		
			 
		

			
	
			
				 7.
			

			
	
			
			No Breach of Covenant.  No breach of any affirmative covenant attached in Exhibit F or any negative covenant attached in Exhibit G has occurred since the entry of the DIP Order or is continuing.

		
			 
		

			
	
			
				 8.
			

			
	
			
			No Default.  Other than as a result of the commencement of the Case, none of the Borrower or any of the Guarantors is in default under or with respect to any of its contractual obligations in any respect that could reasonably be expected to have a Material Adverse Change. No default or event of default under the 210 DIP Facility has occurred and is continuing.

		
			 
		

			
	
			
				 9.
			

			
	
			
			Ownership of Property.  The Borrower and each of the Guarantors has title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property, and none of such property is subject to any lien except as permitted by the 210 DIP Documents.

		
			 
		

			
	
			
				 10.
			

			
	
			
			Intellectual Property.  The Borrower and each of the Guarantors owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business in all material respects as currently conducted. No material claim has been asserted and is pending by any person

		
			
		

		
			

		 

		

			Exhibit E-2

		

 

		

		
			challenging or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does the Borrower nor any Guarantor know of any valid basis for any such claim. The use of Intellectual Property by the Borrower and each of the Guarantors does not infringe on the rights of any person in any material respect.
		

		
			 
		

			
	
			
				 11.
			

			
	
			
			Taxes.  The Borrower and each of the Guarantors has timely filed or caused to be timely filed all foreign, national, state and local income and other material tax returns that are required to be filed (taking into account all proper extensions) and has timely paid all income Taxes and other material taxes required to be paid and paid any assessments made against it or any of its property and all other income taxes and other material taxes, fees or other charges imposed on it or any of its property by any governmental authority (other than any taxes, fees or other charges the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Borrower and each of the Guarantors, as the case may be); no tax lien has been filed, and, to the knowledge of the Borrower or any Guarantor, no claim is being asserted, with respect to any tax, fee or other charge. Under the laws of its relevant jurisdiction it is not necessary that any stamp, registration, notarial or similar taxes or fees be paid on or in relation to the 210 DIP Documents or the transactions contemplated by the 210 DIP Documents.

		
			 
		

			
	
			
				 12.
			

			
	
			
			Environmental Matters.  Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Change:  (a) the facilities and properties owned, leased or operated by the Borrower and each of the Guarantors (the “Properties”) do not contain, and have not previously contained, any materials of environmental concern in amounts or concentrations or under circumstances that constitute or constituted a violation of, or could give rise to liability under, any environmental law; (b) has received or is aware of any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with environmental laws with regard to any of the Properties, nor do the Borrower or any of the Guarantors have knowledge or reason to believe that any such notice will be received or is being threatened; and (c) none of the Borrower or any of the Guarantors has assumed any liability of any other person under the environmental laws.

		
			 
		

			
	
			
				 13.
			

			
	
			
			Accuracy of Information. No statement or information, including information concerning the Borrower’s tax attributes (including the amount of net operating loss carryforwards of the Borrower and Guarantors, any limitations on the use thereof under section 382 of the Internal Revenue Code, and the degree to which past transactions could contribute to an “ownership change” of the Borrower within the meaning of section 382 of the Internal Revenue Code), contained in any 210 DIP Document, or any other document, certificate or statement furnished by or on behalf of the Borrower or any of the Guarantors to the Commitment Parties, or any of them, for use in connection with the transactions contemplated by the 210 DIP Documents, contained as of the date such statement, information, document or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary to make the statements contained herein or therein not misleading.

		
			 
		

			
	
			
				 14.
			

			
	
			
			Disclosure and Affirmation of Budget.  The Borrower has not failed to disclose any material assumptions or liabilities or any other material information with respect to the Budget or the accuracy of such Budget.  The Borrower has provided a written affirmation made by an appropriate financial officer of the Borrower to the Commitment Parties affirming the reasonableness of each of the assumptions and projections in the Budget.

		
			
		

		
			

		 

		

			Exhibit E-3

		

 

		

			
	
			
				 15.
			

			
	
			
			AML Laws; Anti-corruption Laws and Sanctions.  The Borrower and each of the Guarantors and has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower and each of other Guarantors and their respective directors, officers, employees and agents with anti- corruption laws and applicable sanctions. The Borrower and each of the Guarantors, any of their respective subsidiaries or, to the knowledge of either the Borrower or any Guarantor, any of their respective directors or officers, or any of their respective employees or affiliates, or (b) to the knowledge of either the Borrower or any Guarantor, any agent of the Borrower or Guarantors or other of its affiliates that will act in any capacity in connection with or benefit from the 210 DIP Facility, (i) is not a sanctioned person, (ii) is in compliance in all material respects with anti-corruption laws and sanctions, (iii) to the extent applicable, is in compliance in all material respects with anti-money laundering laws. No extension of credit under the 210 DIP Facility, use of proceeds thereof by the Borrower or any of other Guarantors or their respective subsidiaries or other transaction contemplated by the 210 DIP Documents will cause a violation of AML Laws, Anti-Corruption Laws or applicable Sanctions. The Borrower and each of the Guarantors represents that neither it nor any of its subsidiaries, or, to its knowledge, its parent company or any other of its affiliates has engaged in or intends to engage in any unlawful dealings or transactions with, or for the benefit of, any sanctioned person or with or in any sanctioned country.

			
	
			
				 16.
			

			
	
			
			Security Interest.  (a) Upon entry of the DIP Order, such DIP Order shall be effective to create in favor of the Commitment Parties, for the benefit of the Commitment Parties, a legal, valid, enforceable and perfected security interest in the Collateral of the Borrower and proceeds thereof, as contemplated thereby, as described in the 210 DIP Documents. (b) The provisions of the 210 DIP Documents shall be effective to create in favor of the Commitment Parties, for the benefit of the Commitment Parties, a legal, valid, enforceable and perfected security interest and hypothecate in the Collateral6 of the Borrower and the Guarantors and proceeds thereof, contemplated thereby, as described in the 210 DIP Documents.

			
	
			
				 17.
			

			
	
			
			DIP Financing Orders.  (a) At all times after its entry by the Bankruptcy Courts, the DIP Order, is in full force and effect, and has not been vacated, reversed, terminated, stayed modified or amended in any manner without the reasonable written consent of the Commitment Parties (b) Upon the occurrence of the maturity date (whether by acceleration or otherwise) of any of the obligations under the 210 DIP Facility, the Commitment Parties shall, subject to the provisions of the “Events of Default” section in the Term Sheet and the applicable provisions of the DIP Order, be entitled to immediate payment of such obligations, and to enforce the remedies provided for under the 210 DIP Documents in accordance with the terms thereof and such DIP Order, as applicable, without further application to or order by the Bankruptcy Court. (c) If the DIP Order is the subject of a pending appeal in any respect, none of such DIP Order, the extension of credit or the performance by the Borrower of any of its obligations under any of the 210 DIP Documents shall be the subject of a presently effective stay pending appeal. The Borrower and the Commitment Parties shall be entitled to rely in good faith upon the DIP Order, notwithstanding objection thereto or appeal therefrom by any interested party.    The Borrower and the Guarantors shall be permitted and required to perform their respective obligations in compliance with the 210 DIP Documents notwithstanding any such objection or appeal unless the DIP Order has been stayed by a court of competent jurisdiction.

			
	
			
				 18.
			

			
	
			
			Superpriority Claims; Liens.  Upon entry of the DIP Order, such DIP Order and the 210 DIP Loan Documents are sufficient to provide the DIP superpriority claims of the Commitment Parties and security interests and liens on the Collateral of the Borrower described in, and with the priority provided in the 210 DIP Documents.

		
			 
		

		

		
			6NTD: The definition of Collateral in the definitive documentation shall not include any real property or mortgages (excluding securities) in which the Guarantors have bare legal title.
		

		
			
		

		
			

		 

		

			Exhibit E-4

		

 

		

			
	
			
				 19.
			

			
	
			
			Assets of Guarantors.  All material assets of the Guarantors have been disclosed, in writing, to the Commitment Parties, and such disclosure is accurate in all material respects.

		
			 
		

		
			 
		

		
			

		 

		

			Exhibit E-5

		

 

		

		
			Exhibit F
		

		
			 
		

		
			Affirmative Covenants
		

		
			 
		

		
			The following affirmative covenants of the Borrower and the Guarantors will be applicable to the DIP Financing and will also be incorporated into the 210 DIP Documents (subject to certain exceptions, qualifications and carveouts to be set forth in the applicable 210 DIP Documents):
		

		
			 
		

			
	
			
				 1.
			

			
	
			
			Preservation and maintenance of existence, business and properties.

		
			 
		

			
	
			
				 2.
			

			
	
			
			Payment of income and other material taxes and other claims.

		
			 
		

			
	
			
				 3.
			

			
	
			
			Timely preparation of all financial statements, reports, and related documents and public filings.

		
			 
		

			
	
			
				 4.
			

			
	
			
			The proceeds of the 210 DIP Financing shall be used for purposes set forth in the “Use of Proceeds” section in the Term Sheet.

		
			 
		

			
	
			
				 5.
			

			
	
			
			Prompt delivery of litigation and other notices, including, but not limited to, with respect to (i) the occurrence of a default or Event of Default under the 210 DIP Documents of the Alloy Debtors debtor-in-possession financing agreements, (ii) after the Petition Date, any default under any contractual obligation of the Borrower or any of the Guarantors or litigation, investigation or proceeding that may exist at any time between the Borrower and any of the Guarantors and any governmental authority, that in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Change, (iii) after the Petition Date, the commencement of any litigation or proceeding affecting the Borrower or any of the Guarantors (1) in which the amount involved is $100,000 or more and not covered by insurance, (2) in which material injunctive or similar relief is sought or (3) which relates to any 210 DIP Document, (iv) any developments or event that has had or could reasonably be expected to have a Material Adverse Change and (v) such other information (financial or otherwise) with respect to the Borrower or any of the Guarantors as the Commitment Parties may reasonably request.

		
			 
		

			
	
			
				 6.
			

			
	
			
			Compliance with laws and regulations.

		
			 
		

			
	
			
				 7.
			

			
	
			
			Maintenance of records, access to properties and inspections.

		
			 
		

			
	
			
				 8.
			

			
	
			
			Compliance with environmental laws.

		
			 
		

			
	
			
				 9.
			

			
	
			
			Provision of additional collateral, guarantees and mortgages; further assurances.

		
			 
		

			
	
			
				 10.
			

			
	
			
			Compliance in all respects, after entry thereof, with all requirements and obligations set forth in the DIP Order, “first day” orders and “second day” orders, as each order is amended and in effect from time to time in accordance with this Commitment and the 210 DIP Documents, as applicable.

		
			 
		

			
	
			
				 11.
			

			
	
			
			Bi-weekly update calls for the Commitment Parties and their advisors.

		
			 
		

			
	
			
				 12.
			

			
	
			
			Borrower and Guarantors shall use its reasonable best efforts to enter into the 210 DIP Documents.

		
			
		

		
			

		 

		

			Exhibit F-1

		

 

		

			
	
			
				 13.
			

			
	
			
			Borrower shall deliver such other information (financial or otherwise, including detailed quarterly budgets, which shall be subject in all respects to the Commitment Parties’ approval), as the Commitment  Parties may reasonably request.

		
			 
		

			
	
			
				 14.
			

			
	
			
			Variation from the Budget shall not exceed 10%, provided that (i) all variance calculations shall exclude any cash receipts and (ii) any proceeds of the DIP Financing that are available under the Budget but not used in a previous week shall be available in subsequent weeks notwithstanding a variance exceeding the permitted amount.

		
			 
		

			
	
			
				 15.
			

			
	
			
			Borrower shall deliver in advance to the Commitment Parties all (i) draft pleadings and public announcements relating to the Borrower’s assets (including without limitation any tax attributes) and business plan and consider the Commitment Parties’ comments thereto in good faith, and (ii) pleadings, motions, applications, judicial information, financial information and other documents filed by or on behalf of the Borrower or any of the Guarantors with the Bankruptcy Court, or distributed by or on behalf of any of the Borrower or any of the Guarantors to any appointed in the Case.

		
			 
		

		
			 
		

		
			

		 

		

			Exhibit F-2

		

 

		

		
			Exhibit G
		

		
			 
		

		
			Negative Covenants
		

		
			 
		

		
			The following negative covenants of the Borrower and the Guarantors will be applicable to the DIP Financing and will also be incorporated into the 210 DIP Documents (subject to certain exceptions, qualifications and carveouts to be set forth in the applicable 210 DIP Documents):
		

		
			 
		

			
	
			
				 1.
			

			
	
			
			No incurrence of indebtedness for borrowed money shall be permitted.

		
			 
		

			
	
			
				 2.
			

			
	
			
			Limitations on liens, except that the following liens shall be permitted:

		
			 
		

			
	
			
				 a.
			

			
	
			
			liens for taxes not yet due;

		
			 
		

			
	
			
				 b.
			

			
	
			
			leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not secure any indebtedness; and

		
			 
		

			
	
			
				 c.
			

			
	
			
			liens securing the obligations under the 210 DIP Financing.

		
			 
		

			
	
			
				 3.
			

			
	
			
			No sale and leaseback transactions shall be permitted.

		
			 
		

			
	
			
				 4.
			

			
	
			
			No investments, loans and advances (collectively, the “Investments”) shall be permitted, except any Investments necessary in connection with the reorganization subject to the consent of the Commitment Parties (not to be unreasonably withheld or delayed.

		
			 
		

			
	
			
				 5.
			

			
	
			
			Limitations on mergers, consolidations, sales of assets, including any sale of the assets owned by the Guarantors, (“Dispositions”) and acquisitions, except that the following shall be permitted:

		
			 
		

			
	
			
				 a.
			

			
	
			
			the Plan subject to the consent of the Commitment Parties (not to be unreasonably withheld or delayed) and, to the extent permitted by the Bankruptcy Court, any other corporate reorganization;

		
			 
		

			
	
			
				 b.
			

			
	
			
			Specified transactions detailed in the definitive documentation that would not trigger a mandatory prepayment, subject to the consent of the Commitment Parties.

		
			 
		

			
	
			
				 c.
			

			
	
			
			any other Dispositions permitted by the applicable order of the Bankruptcy Court and not otherwise prohibited by the 210 DIP Financing; and

		
			 
		

			
	
			
				 d.
			

			
	
			
			Dispositions made to comply with any order of any governmental authority or any applicable laws.

		
			 
		

			
	
			
				 6.
			

			
	
			
			No dividends and distributions shall be permitted, except for any dividend or distribution by a Guarantor to the Borrower.

		
			 
		

			
	
			
				 7.
			

			
	
			
			No action to materially impair the assets of the Borrower or its subsidiaries, including with respect to the availability of any tax attributes of the Borrower or its subsidiaries, shall be permitted without the prior written consent of the Commitment Parties.

		
			 
		

			
	
			
				 8.
			

			
	
			
			Limitations on transactions with affiliates, except for:

		
			
		

		
			

		 

		

			Exhibit G-1

		

 

		

			
	
			
				 a.
			

			
	
			
			any transaction among Borrower and the Guarantors;

		
			 
		

			
	
			
				 b.
			

			
	
			
			ordinary course administration and transactions by the Borrower of the Alloy Debtors;

		
			 
		

			
	
			
				 c.
			

			
	
			
			any transactions in connection with the reorganization of the Borrower, subject to the consent of the Commitment Parties (not to be unreasonably withheld or delayed);

		
			 
		

			
	
			
				 d.
			

			
	
			
			transactions in existence on the DIP Closing Date and any similar transaction among Borrower and the Guarantors as consistent with past practice; and

		
			 
		

			
	
			
				 e.
			

			
	
			
			any transaction on terms that are no less favorable to the Borrower or any of the Guarantors than might be obtained at the time in a comparable arm’s length transaction from a person who is not an affiliate.

		
			 
		

			
	
			
				 9.
			

			
	
			
			No payment and modification of subordinated or other prepetition indebtedness of the Borrower or Guarantors, except in the case of prepetition debt, pursuant to “first day” or other orders entered by the Bankruptcy Court that are in form and substance satisfactory to the Commitment Parties.

		 

		

			Exhibit G-2lmrk-ex101_7.htm

Exhibit 10.1

 

Execution Version 

CONTRIBUTION AGREEMENT

by and among

LD ACQUISITION COMPANY 13 LLC, 

LANDMARK DIVIDEND GROWTH FUND – H LLC, LANDMARK DIVIDEND LLC

and

LANDMARK INFRASTRUCTURE PARTNERS LP 

 

Dated January 11, 2018

 

 

 

CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (the “Agreement”) is entered into and effective as of January 11, 2018 (the “Effective Date”), by and among LD Acquisition Company 13 LLC, a Delaware limited liability company (“LD 13”), Landmark Dividend Growth Fund – H LLC, a Delaware limited liability company (“Fund H” (LD 13 and Fund H each a “Seller” and collectively the “Sellers”)), Landmark Infrastructure Partners LP (the “Partnership”) and solely with respect to Article 9, Landmark Dividend LLC, a Delaware limited liability company (the “Sponsor”).  LD 13, Fund H, Sponsor and the Partnership may be singularly referred to as a “Party” and collectively referred to as the “Parties.”  

WITNESS:

WHEREAS, Sellers own or control the Assets (as defined herein); 

WHEREAS, Sellers desire to contribute and convey to the Partnership, and the Partnership wishes to accept the contribution of the Assets from LD 13; 

WHEREAS, the Partnership, upon the acceptance of the contribution of the Assets from LD 13, intends to contribute the Assets to its wholly owned subsidiary, Landmark Infrastructure Inc., a Delaware corporation (the “REIT Subsidiary”); 

WHEREAS, the REIT Subsidiary, upon acceptance of the Assets from the Partnership, intends to contribute the Assets to its wholly owned subsidiary, Landmark Infrastructure Operating Company, a Delaware limited liability company (“OpCo”); and

WHEREAS, following the contribution of the Assets by LD 13, the Partnership will issue up to 1,506,421 unregistered common units (the “Units”) valued at $18.35 per unit or $27,642,825.00 and the remainder in cash proceeds in the amount of $347,175.00 (the “Cash Consideration”) to Fund H, subject to adjustment per Section 13.6.1

NOW, THEREFORE, in consideration of the promises and mutual representations, warranties and covenants in this Agreement, the Parties agree as follows:

Article 1
DEFINITIONS

1.1The following terms have the meanings specified or referred to in this Article 1.

“Action” has the meaning set forth in Section 3.8.

“Accredited Investor” has the meaning set forth in Section 3.14(a).

“Affiliate” means, as to any specified entity, any other entity that, directly or indirectly through one or more intermediaries or otherwise, controls, is controlled by or is under common control with the specified entity.  For purposes of this definition, “control” of an entity means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such entity, whether by contract or otherwise.  Notwithstanding anything herein to the contrary, for the purposes of this Agreement, 

	
	 

	
1 
	
 Unit numbers and cash proceeds are estimates determined at on the Effective Date.  Final Unit numbers and cash proceeds amounts are subject to the final Confirmation by Fund H that will occur on or before the Closing of the transaction contemplated herein.

 

 

the Partnership and its subsidiaries (including OpCo) shall be deemed not to be “Affiliates” of Sellers or Sponsor and each of their respective other Affiliates and vice versa.

“Agreement” has the meaning set forth in the preamble, including the other transaction agreement, Exhibits, Schedules and documents referred to herein.

“Allocation” has the meaning set forth in Section 2.4.

“Assets” means with respect to each asset listed on Exhibit A, (each a “Scheduled Asset”), including, but not limited to, all of Sellers’ right, title and interest in and to all real and personal property to the extent constituting or otherwise relating to such Scheduled Asset, including the following (in each case to the extent applicable):

(a)(i)any real property owned in fee by LD 13 with respect to any such Scheduled Asset (the “Owned Real Property”) and (ii) any real property and other interests in land acquired and owned by LD 13 (other than Owned Real Property) with respect to any such Scheduled Asset, including any easement, right of way, leasehold interest or similar right to use and/or occupy any real property and/or land (each, a “Real Property Interest” and, together with the Owned Real Property, the “Real Property”);

(b)the rights of the lessor or landlord under any leases, including the Data Center Lease (as defined herein) subleases, licenses, or other occupancy agreements (as amended) or arrangements acquired and held by LD 13 and pursuant to which third-party telecommunications, billboard, solar power generation, wind turbine or other entities occupy or use any real property or personal property relating to such Scheduled Asset; 

(c)all buildings, structures, parking areas and other improvements located on the Data Center; and

(d)any consents, non-disturbance agreements, purchase agreements, permits, licenses and/or other ancillary agreements or rights acquired, obtained or otherwise held by Sellers with respect to any Scheduled Assets.  

For purposes of clarity, to the extent any contract or agreement relates to both a Scheduled Asset and a separate asset owned, acquired or to be acquired by LD 13 or any of its Affiliates, such contract or agreement shall constitute a portion of the Assets only to the extent relating to such Scheduled Asset and “Assets” shall not include any right, title and interest in and to such contract or agreement to the extent relating to such other asset owned, acquired or to be acquired by LD 13 or such Affiliate.

“Assignment Agreements” means (i) that certain Assignment and Assumption Agreement dated the date hereof between LD 13 and the Partnership evidencing the assignment of the Assets to Partnership, (ii) that certain Assignment and Assumption Agreement dated the date hereof between Partnership and REIT Subsidiary evidencing the assignment of the Assets to REIT Subsidiary, (iii) that certain Assignment and Assumption Agreement dated the date hereof between REIT Subsidiary and OpCo evidencing assignments of Assets to OpCo, and (iv) that certain Assignment and Assumption Agreement dated the date hereof of the Data Center  Lease.

“Bill of Sale” means the bill of sale duly executed by LD 13, in a form reasonably acceptable to the Partnership, transferring all of LD 13’s right, title and interest in and to any and all fixtures, chattels and articles of personal property that are attached to or located in or upon the Owned Real Property, to OpCo.

“Cash Consideration” has the meaning set forth in recitals.

2

 

 

“Closing” means the consummation of the transactions contemplated by this Agreement on the Closing Date.

“Closing Date” has the meaning set forth in Section 13.1.

“Code” means the Internal Revenue Code of 1986, as amended.

“Conflicts Committee” means the Conflicts Committee of the Board of Directors of Landmark Infrastructure Partners GP LLC, the general partner of the Partnership.

“Data Center” means the real property commonly known as 341-261 Haynes Drive, Wood Dale, Illinois, together with the building located thereon, and all other improvements that are part of such real property including the parking lot and loading areas, and all fixtures, machinery, and equipment owned by Landlord and used in connection with such building and other improvements.

“Data Center Asset Agreement” means that certain Agreement for Purchase and Sale of Real Estate, by and between VK Acquisitions IV, LLC, as seller, and LD 13, as purchaser, dated as of December 15, 2017.

“Data Center Lease” means that certain lease agreement for the Data Center, dated November 7, 2005, as amended. 

“Data Center Tenant” means that certain tenant leasing the Data Center. 

“Deeds” means special warranty deeds, or jurisdictional equivalents, as the case may be, in recordable form for the appropriate jurisdiction, reasonably acceptable to the Partnership, transferring title to the Real Property (subject only to Permitted Liens).

“Effective Date” has the meaning set forth in the preamble.

“Environmental Law” means any applicable United States federal, state, provincial or local law, statute, ordinance, regulation, permit or valid and legally-binding order of any Governmental Authority relating to (a) the protection, preservation or restoration of the environment (including air, surface water, ground water, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or (b) the exposure to, or the release or disposal of Hazardous Substances. For purposes of this definition, “Environmental Law” shall include the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.), or any other law of similar effect.

“Environmental Liabilities” means those liabilities and obligations, first arising prior to the Closing Date, related to the Assets referred to in Schedule 3.12.

“Environmental Permits” means any permits, certificates, licenses, franchises, writs, variances, exemptions, orders and other authorizations of all Governmental Authorities issued under any Environmental Law.

“Fund H” has the meaning set forth in the preamble. 

“Fund H Facility” means that certain Credit Agreement dated as of March 17, 2014 among Landmark Dividend Growth Fund – H LLC, as the Borrower Representative, The Other Borrowers Party Hereto, Legacy Texas Bank, N.A, successor-in-interest to View Point Bank, N.A., as Administrative Agent, Sole Lead Arranger and Sole Bookrunner. 

3

 

 

  “Governmental Authority” means any federal, state, local, foreign, multi-national, supra-national, national, regional or other governmental agency, authority, administrative agency, regulatory body, commission, board, bureau, agency, officer, official, instrumentality, court or arbitral tribunal having governmental or quasi-governmental powers or any other instrumentality or political subdivision thereof.

“Hazardous Substance” means any substance or material listed, defined, classified or regulated as a pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, or special waste under any applicable Environmental Law, including petroleum, petroleum products, volatile organic compounds, semi-volatile organic compounds, pesticides, polychlorinated biphenyls and friable asbestos and asbestos-containing materials.

“Indemnified Party” has the meaning set forth in Section 9.4.

“Indemnifying Party” has the meaning set forth in Section 9.4.

“LD 13” has the meaning set forth in the recitals.

“LD 13 Indemnitees” has the meaning set forth in Section 9.2. 

“Lien” means any mortgage, pledge, lien, charge, security interest, claim or other encumbrance.

“Loss” has the meaning set forth in Section 9.1.

“OpCo” has the meaning set forth in the recitals.

“Ordinary Course of Business” means, when used in reference to any Person, the ordinary course of business consistent with past customs and practices of such Person.

“Outside Date” has the meaning set forth in Section 12.1(d).

“Owned Real Property” has the meaning assigned to such term in the definition of Assets.

“Partnership” has the meaning set forth in the preamble.

“Partnership Indemnitees” has the meaning set forth in Section 9.1.

“Party” has the meaning set forth in the preamble.

“Permitted Liens” means:

(a)Liens for current period Taxes which are not yet due and payable, or are otherwise being contested in good faith;

(b)inchoate Liens arising by operation of law, including materialman’s, mechanic’s, repairman’s, laborer’s, warehousemen’s, carrier’s, employee’s, contractor’s and operator’s Liens arising in the Ordinary Course of Business but only to the extent such Liens secure obligations that, as of the Closing, are not due and payable;

(c)minor defects, irregularities in title, easements, encroachments, rights of way, servitudes and similar rights (whether affecting fee interests, a landlord’s interest in leased properties or a tenant’s interest in leased properties) that individually or in the aggregate (i) have not had, and are not reasonably likely to have an adverse effect on the ability of the Partnership or OpCo to use or enjoy the 

4

 

 

benefits of the Assets in the manner previously owned or used by Sellers and (ii) do not materially impair the value of the Assets;

(d)Liens securing the Fund H Facility which shall be released as of the Closing Date;

(e)Liens securing any financing of the Partnership or OpCo;

(f)Liens affecting a fee owner’s interest in any real property or land that is subject to an easement, right of way, leasehold interest or similar right to use and/or occupy such real property and/or land held by LD 13 so long as such Liens do not breach and are not reasonably likely to breach a customary covenant of quiet enjoyment (due to the existence of a non-disturbance agreement or other arrangement or legal or equitable right in which the holder of such easement, right of way, leasehold interest or similar right is recognized and protected); and

(g)the Liens set forth on Schedule 1.1(a).

“Person” means any natural person, firm, limited partnership, general partnership, association, corporation, limited liability company, company, trust, other organization (whether or not a legal entity), public body or government, including any Governmental Authority.

“Property Tax” means all real property Taxes, personal property Taxes and similar ad valorem Taxes.

“Real Property” has the meaning assigned to such term in the definition of Assets.

“Real Property Interest” has the meaning assigned to such term in the definition of “Assets.”

“REIT Subsidiary” has the meaning set forth in the recitals.

“Rents and A/R” has the meaning set forth in Section 13.4(a)(i).

“Retained Liabilities” means those liabilities and obligations as set forth on Schedule 1.1(b).

“Scheduled Asset” has the meaning assigned to such term in the definition of “Assets.” 

“Securities Act” has the meaning set forth in Section 3.14(a).

“Sponsor” has the meaning set forth in the preamble.

 “Tax” means any federal, state, local or foreign income, gross receipts, branch profits, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, escheat, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, ad valorem, value added, alternative or add-on minimum or estimated tax or other tax of any kind whatsoever, including any interest, penalty or addition thereto, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the Tax liability of any other Person by law, by contract or otherwise.

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

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“Tax Consideration” means the Cash Consideration together with any other amounts treated as a transfer of consideration pursuant to Treasury Regulations Section 1.707-3(a)(1), which for the avoidance of doubt, includes any amount of liabilities other than “qualified liabilities” (within the meaning of Treasury Regulations Section 1.707-5(a)(6)) assumed or deemed to be assumed by the Partnership in connection with the transactions contemplated hereby.

“Units” has the meaning set forth in the recitals.

1.2Interpretation.  Whenever the context requires, the gender of all words used in this Agreement includes the masculine, feminine and neuter and terms defined in the singular have the corresponding meanings in the plural, and vice versa.  Except as this Agreement otherwise specifies, all references herein to any law, are references to that law (and any rules and regulations promulgated thereunder), as the same may have been amended.  The word “includes” or “including” means “including, but not limited to,” unless the context otherwise requires.  The words “shall” and “will” are used interchangeably and have the same meaning.  The words “this Agreement,” “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this Agreement refer to the relevant agreement as a whole and not any particular Section or Article in which such words appear.  If a word or phrase is defined, its other grammatical forms have a corresponding meaning.  Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless business days are specified.  Time periods within or following which any payment is to be made or an act is to be done shall be calculated by excluding the day on which the time period commences and including the day on which the time period ends.  Unless specifically provided for in this Agreement, the term “or” shall not be deemed to be exclusive.  References to a Person are also to its successors and/or permitted assigns, if any.  All exhibits and annexes attached to this Agreement constitute a part of this Agreement and are incorporated herein for all purposes.  All references to currency in this Agreement shall be to, and all payments required under this Agreement shall be paid in, lawful currency of the United States.

Article 2
contribution

2.1Contribution of Assets and Equity.  Subject to the terms and conditions set forth herein, LD 13 agrees to contribute, assign, transfer, convey and deliver to the Partnership, and the Partnership agrees to accept the contribution of the Assets, free and clear of any Lien other than the Permitted Liens.  

2.2Consideration.  The consideration in the amount of $27,990,000.00 for the contribution of the Assets, subject to adjustment as set forth in Section 13.6, shall be equal to the following:

(a)the Units issued to Fund H on behalf of LD 13; and

(b)the Cash Consideration, subject to adjustment as set forth in Section 13.4. 

2.3Tax Treatment.  Fund H and the Partnership intend that the contribution made pursuant to this Article 2 shall, except as otherwise required by Section 707(a)(2)(B) of the Code and its implementing Treasury regulations, be treated as a contribution in exchange for a partnership interest in a transaction consistent with the requirements of Section 721(a) of the Code.  Fund H and the Partnership further intend that the Tax Consideration shall be treated to the maximum extent possible as a reimbursement of capital expenditures described in Section 1.707-4(d) of the Treasury regulations.  If the Tax Consideration exceeds the amount that can be treated as a reimbursement of capital expenditures under Treasury regulations Section 1.707-4(d), Fund H and the Partnership acknowledge and agree that for U.S. federal income tax purposes, the transactions contemplated hereby will qualify in part for nonrecognition of gain or loss 

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pursuant to Section 721(a) of the Code and will be characterized in part as a disguised sale transaction described in Section 707(a)(2)(B) of the Code and its implementing Treasury regulations.

2.4Allocation.  To the extent the Tax Consideration exceeds the amount that can be treated as a reimbursement of capital expenditures under Treasury Regulations Section 1.707-4(d), such amount shall be allocated among the Assets in accordance with Section 1060 of the Code and the Treasury regulations promulgated thereunder (and any similar provision of state, local or foreign law, as appropriate) (the “Allocation”).  The Allocation shall be delivered by Fund H to the Partnership within sixty (60) days after the Closing Date for the Partnership’s approval, which approval shall not be unreasonably withheld.  Fund H and the Partnership shall work in good faith to resolve any disputes relating to the Allocation.  If the consideration is adjusted pursuant to any provision of this Agreement, the Allocation will reflect such adjustment as mutually agreed by Fund H and the Partnership.  Fund H and the Partnership shall file all Tax Returns (including, but not limited to, IRS Form 8594) consistent with the Allocation.  Neither Fund H nor the Partnership shall take any Tax position inconsistent with such Allocation and neither Fund H nor the Partnership shall agree to any proposed adjustment to the Allocation by any Taxing authority without first giving the other Party prior written notice; provided, however, that nothing contained herein shall prevent Fund H or the Partnership from settling any proposed deficiency or adjustment by any Taxing authority based upon or arising out of the Allocation, and neither Fund H nor the Partnership shall be required to litigate before any court any proposed deficiency or adjustment by any Taxing authority challenging such Allocation.

2.5Non-Assignable Assets.  Notwithstanding anything to the contrary in this Agreement, to the extent that the sale, assignment, transfer, conveyance or delivery, or attempted sale, assignment, transfer, conveyance or delivery, to OpCo of any Asset (i) would result in a violation of applicable law, (ii) cannot be effected due to any defect in the chain of title of such Asset (including the failure of Sellers to have marketable title to any Asset), or (iii) would require the consent, authorization, approval or waiver of a Person who is not a party to this Agreement, and such consent, authorization, approval or waiver shall not have been obtained prior to the Closing, this Agreement shall not constitute a sale, assignment, transfer, conveyance or delivery, or an attempted sale, assignment, transfer, conveyance or delivery, thereof; provided, however, that, subject to the satisfaction or waiver of the conditions contained in Article 10 and Article 11, the Closing shall occur notwithstanding the foregoing without any adjustment to the Purchase Price on account thereof. Following the Closing, LD 13 and OpCo shall use commercially reasonable efforts, and shall cooperate with each other, to obtain any such required consent, authorization, approval or waiver. Subject to Section 13.4, to the extent that any Asset or Assumed Liability cannot be transferred to OpCo at the Closing or any transfer is later voided or diminished due to a cause of the type described in clauses (i), (ii) or (iii) of the first sentence of this Section 2.5, LD 13 and OpCo shall use commercially reasonable efforts to enter into such arrangements to provide to the parties the economic and operational equivalent of the transfer of such Asset or Assumed Liability to OpCo as of the Closing and the performance by OpCo and LD 13 of their respective obligations with respect thereto. 

Article 3
REPRESENTATIONS AND WARRANTIES OF Sellers

Each Seller represents and warrants on behalf of itself and its Affiliates as of the date hereof and as of the Closing Date as follows:

3.1Organization of Each Seller.  Each Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to conduct business in each jurisdiction where the nature of its business or the ownership of its properties require it to be qualified, except where the failure to be so qualified would not have a material adverse effect. LD 13 is a wholly owned subsidiary of Fund H.

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3.2Authority and Action.  Each Seller has the limited liability company power and authority to enter into this Agreement and to perform all of its obligations and consummate the transactions contemplated hereby.  Each Seller has taken or will take all necessary and appropriate limited liability company actions to authorize, execute and deliver this Agreement and to consummate the transactions contemplated hereby.  This Agreement is, and each agreement and instrument to be executed and delivered by each Seller pursuant hereto will be, when so executed and delivered, a valid and binding obligation of each Seller enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity.

3.3No Violation; Consents.  The execution and delivery of this Agreement (or any related instrument or agreement) by each Seller does not, and the consummation of the transactions contemplated hereby and the performance by each Seller of the obligations that it is obligated to perform hereunder do not and at the Closing will not: (a) violate any provision of the organizational documents of LD 13; (b) violate, or result in the violation of or acceleration of, or entitle any party to accelerate any obligation or indebtedness under, or result in the imposition of any Lien upon any Asset, pursuant to, any mortgage, lien, lease, franchise, license, permit, agreement or other instrument to which each Seller is a party, or by which each Seller is bound, and that could have a material adverse effect upon this transaction or the Parties; or (c) contravene or violate any municipal, state or federal ordinance, law, rule, regulation, judgment, order, writ, injunction, or decree in any material respect.  Except as set forth on Schedule 3.3, no consent, approval, waiver or authorization is required to be obtained by either Seller from any Person in connection with the execution, delivery and performance by either Seller of this Agreement and the consummation of the transactions contemplated hereby.

3.4Title to Assets.  LD 13 owns and has good and marketable title to all of the Assets, free and clear of Liens other than the Permitted Liens.  LD 13 owns no assets other than the Assets. Fund H owns no Assets.  

3.5Contracts/Agreements.  

(a)LD 13 has not breached or defaulted on any of its obligations under any material contracts or agreements relating to any of the Assets, including that certain Amended and Restated Limited Liability Agreement of LD 13 dated December 31, 2013, in effect as of the date hereof.  

(b)Since December 30, 2013, LD 13 has not breached or defaulted on any of its obligations under any material contracts or agreements relating to any of the Assets.

(c)At no time since December 30, 2013 has LD 13 or any of its Affiliates delivered or received notice of a breach or default by either LD 13 or any counterparty under any material contract or agreement relating to any of the Assets or notice of any fact, condition or circumstance that would constitute a breach or default by either LD 13 or other counterparty under any material contract or agreement relating to any of the Assets.

(d)LD 13 has received no notice of any intent or desire to terminate, amend or modify any material contract or agreement relating to any of the Assets or abandon or surrender any interest held by the counterparty under any material contract or agreement relating to any of the Assets.

(e)Each contract that is an Asset constitutes the valid and binding obligation of LD 13 and, to LD 13’s knowledge, as applicable, the other party or parties thereto, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws, and is in full force and effect in all material respects. 

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(f)LD 13, each of its Affiliates and each Real Property (i) are in compliance with all declarations of covenants, conditions or restrictions, restrictive covenants and reciprocal easement agreements, in each case affecting any Real Property, and (ii) have not received any notice of any breach, violation or default under any such declarations, agreements or easements

3.6Compliance.  LD 13’s ownership and operation of the Assets is and has been, and will continue to be, in compliance in all material respects with all applicable federal, state and local laws, rules, regulations and orders; and neither Seller nor any of their Affiliates has received notice from any Governmental Authority asserting any act of non-compliance.

3.7Information.

(a)Sellers have not intentionally withheld disclosure from the Conflicts Committee and/or its advisers of any fact that would have a material adverse effect upon the Partnership, OpCo or their Affiliates, or the Assets (or the value thereof).

(b)The projections and budgets provided to the Conflicts Committee (including those provided to Duff & Phelps LLC, the financial adviser to the Conflicts Committee) as part of the Conflicts Committee’s review in connection with this Agreement have a reasonable basis and are consistent with the current expectations of LD 13 and its member and management.

(c)All historical financial information related to the Assets provided to the Conflicts Committee (including provided to Duff & Phelps LLC, the financial adviser to the Conflicts Committee) as part of the Conflicts Committee’s review in connection with this Agreement is consistent with and derived from the books and records of LD 13.

(d)To Sellers’ knowledge, except for the tenant under the Data Center Lease, there are no persons in possession or occupancy of the Data Center or improvements or any part thereof, nor are there any persons who have possessory rights in respect to the Data Center or improvements or any part thereof.

(e)To Sellers’ knowledge, there are no condemnation or eminent domain proceedings pending, or, to Sellers’ knowledge, threatened, with regard to the Data Center or improvements or any portion thereof. 

(f)Sellers’ have not received written notice and have no actual knowledge that (i) there are any conditions, covenants, restrictions, easements, servitudes or other liens or encumbrances, upon the  Data Center that will in any way limit, restrict or prohibit the current use of the  Data Center; and (ii) the use being made of the  Data Center at present is not in conformity with the certificates of occupancy issued for the  Data Center; any required certificates and permits of such type have not been issued, are not in full force and effect and are not transferable with the  Data Center or to OpCo without payment; and the  Data Center does not comply with all building, fire, zoning and other ordinances and regulations applicable thereto. In addition, Seller has not received any written notice from any insurance company or underwriter of any defects in the improvements that would materially adversely affect the ability to insure any of the improvements or cause an increase in insurance premiums.

(g)Sellers have not intentionally or willfully withheld any information or documentation material to the ownership or operation of the Data Center in Sellers’ possession.  

3.8Litigation.  Except as otherwise set forth on Schedule 3.8, there is no suit, action, claim, arbitration, administrative or legal or other proceeding (including eminent domain, zoning or other land use 

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regulation) or governmental investigation (“Action”) pending or, to either Sellers’ knowledge, threatened against Sellers, their Affiliates, or the Assets that affect the ownership or operation of the Assets or that would prevent the consummation of the transactions contemplated by this Agreement.

3.9Brokers.  Neither Seller nor any of their Affiliates has incurred any liability, contingent or otherwise, for any brokerage fee, commission or financial advisory fee in connection with the transactions contemplated by this Agreement for which the Partnership or any of its respective Affiliates will be liable.

3.10No Adverse Changes.  From December 15, 2017, except for changes in the Ordinary Course of Business or due to matters that generally affect the economy or the industry in which LD 13 is engaged, there have been no changes in the Assets that would, individually or in the aggregate, have, or reasonably be expected to have, a material adverse effect on the Assets.

3.11Taxes. 

(a)All Tax Returns that are required to be filed by or with respect to LD 13 or the Assets prior to the Closing Date (taking into account any valid extension of time within which to file) have been or will be timely filed prior to the Closing Date and all such Tax Returns are or will be true, correct and complete in all material respects.  All Taxes due and payable by or with respect to LD 13 or the Assets (whether or not shown on any Tax Return) have been fully paid and all deficiencies asserted or assessments made with respect to such Tax Returns have been paid in full or properly accrued for by LD 13.  No examination, audit, claim, assessment, levy or administrative or judicial proceeding regarding any of the Tax Returns described in this Section 3.11 or any Taxes of or with respect to the Assets are currently pending or have been proposed in writing or have been threatened.  No waivers or extensions of statutes of limitations have been given or requested in writing with respect to any amount of Taxes of or with respect to the Assets or any Tax Returns of or with respect to the Assets.  LD 13 is properly classified as an entity disregarded as separate from its owner for U.S. federal income tax purposes. There are no Liens with respect to Taxes upon any Assets other than Permitted Liens.

(b)At least 90% of the gross income generated by the Partnership on or after Closing, excluding those Assets assigned to Landmark Infrastructure Asset OpCo LLC, will constitute “qualifying income” (as defined in Section 7704(d) of the Code).

(c)The gross income derived by the REIT Subsidiary and its subsidiaries in 2017 and 2018 (including gross income attributable to the Assets) is expected to meet the gross income test under Section 856(c) of the Code and that the REIT Subsidiary is intended to qualify as a real estate investment trust as defined in Section 856 of the Code.

(d)To Sellers’ knowledge, there are not any special assessments, special tax districts, special service areas, sanitary sewer separation fees or outstanding obligations (contingent or otherwise) to governmental entities, including, without limitation, any portion payable with the current tax bill with respect to the Assets or any part thereof.

3.12Environmental. 

(a)Except as set forth on Schedule 3.12, Sellers are and have been in compliance with all applicable Environmental Laws.  

(b)Except as set forth on Schedule 3.12, Sellers have obtained, have complied with, and are in compliance with all material Environmental Permits that are required pursuant to Environmental 

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Laws for the occupation of its Assets and the operation of the business, and all such Environmental Permits are in full force and effect, free from material breach.

(c)Except as set forth on Schedule 3.12, there are no suits, claims or proceedings pending or, to Sellers’ knowledge, threatened against Sellers’ or the Assets alleging any violation of, or liability under, any Environmental Law, Environmental Permit or any indemnity obligations for which the Partnership or any of its Affiliates will be responsible or liable after Closing.

(d)Except as set forth on Schedule 3.12, Sellers are not, and none of the Assets are, subject to any decree, order or judgment requiring the investigation or cleanup of any Hazardous Substance under any Environmental Law or Environmental Permit at any real property or facility currently or formerly owned by Sellers (or in which Sellers owns or owned an interest), or included in the Assets.

(e)Except as set forth on Schedule 3.12, to Sellers’ knowledge, there is not now, and there has not been, any Hazardous Substance (i) used, generated, treated, stored, transported, disposed of, released, or handled on any owned, leased or easement property owned (now or at any time) by Sellers or included in the Assets except in full compliance with Environmental Law and Environmental Permits or (ii) otherwise existing on, under, about or emanating from or to any property included in the Assets except in full compliance with Environmental Law and Environmental Permits.

(f)The transactions contemplated hereby will not result in any material liabilities for site investigation or cleanup, or require the consent of any Person, pursuant to Illinois law. 

(g)Except as set forth on Schedule 3.12, neither Seller has, either expressly or by operation of law, assumed or undertaken any material liability, including any obligation for corrective or remedial action, of any other Person relating to Environmental Laws.

3.13Matters Regarding LD 13. 

(a)LD 13 is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to conduct business in each jurisdiction where the nature of its business or the ownership of its properties require it to be qualified, except where the failure to be so qualified would not have a material adverse effect on LD 13 or its assets.

(b)LD 13 has no obligations or liabilities that would have been required to be reflected in, reserved against or otherwise described on the financial statements of LD 13 other than those incurred in the Ordinary Course of Business in connection with the ownership and operation of the Assets.

(c)LD 13 has, and is in compliance with, all applicable permits, certificates, licenses, franchises, writs, variances, exemptions, orders and other authorizations of all Governmental Authorities required for its ownership and operation of the Assets.

3.14Restricted Securities.

(a)Each Seller (i) is an “accredited investor” (“Accredited Investor”) as defined in Rule 501 under the Securities Act of 1933, as amended (the “Securities Act”), and (ii) by reason of its business and financial experience it has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Units, is able to bear the economic risk of such investment and, at the present time, would be able to afford a complete loss of such investment.  Fund H is not an entity formed for the specific purpose of acquiring the Units.

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(b)Each Seller understands that the Units are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Partnership in a transaction not involving a public offering and that under such laws and applicable regulations the Units may be resold without registration under the Securities Act only in certain limited circumstances. Fund H acknowledges and agrees that the Units will, when issued and if evidenced by a certificate, include a restrictive legend. 

3.15Real Property.  

(a)LD 13 has delivered to the Partnership, complete and correct copies of (i) all title policies and commitments (where no policy was issued) naming LD 13 as the insured party, documents evidencing the exceptions to title shown thereon and surveys for the Owned Real Property that in each case are in the possession or control of LD 13 and (ii) the leases.

(b)The Real Property, including all buildings, fixtures and other improvements constituting a part thereof, is in good operating condition without structural defects and is suitable, sufficient and appropriate for its current and contemplated uses.  All mechanical and other systems located at the Real Property are in good operating condition, and no condition exists requiring repairs (other than routine maintenance) or alterations thereof.  None of such improvements to any Real Property constitute a legal non-conforming use or otherwise require any special dispensation, variance or permit under any municipal, state or federal ordinance, law, rule, regulation, judgment, order, writ, injunction, or decree.  

(c)LD 13 has good, marketable and exclusive fee simple title to, and the valid and enforceable power and unqualified right to use and sell, transfer, convey or assign the Owned Real Property, free and clear of all Liens other than Permitted Liens.  Upon consummation of the transactions contemplated by this Agreement, OpCo will have good, marketable and exclusive title to all Owned Real Property, free and clear of all Liens other than Permitted Liens.

(d)LD 13 has all certificates of occupancy, permits, licenses, certificates of authority, authorizations, approvals, registrations, and other similar consents issued by or obtained from any Governmental Authority necessary or useful for the current use and operation of the Real Property.  The Real Property is in compliance with all applicable municipal, state, federal or foreign ordinance, law, rule, regulation, judgment, order, writ, injunction, or decree and fire, health, building, use, occupancy, subdivision and zoning laws.

(e)There do not exist any actual or, to LD 13’s knowledge, threatened condemnation or eminent domain proceedings that affect any Real Property or any part thereof, and LD 13 has not received any notice, oral or written, of the intention of any Governmental Authority or other person to take or use any Real Property or any part thereof or interest therein.

(f)LD 13 has not received any notice from any insurance company that has issued a policy with respect to any Real Property requiring performance of any structural or other repairs or alterations to such Real Property that have not been completed.

(g)LD 13 has not received any notice of any increase in the current assessed valuation of any Real Property or any notice of any contemplated special assessment. 

(h)All buildings, structures and other improvements constituting a part of the Real Property are supplied with utilities and other services necessary for the operation of such buildings, structures or other improvements in the Ordinary Course of Business.

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(i)There is no water diffusion or other intrusion into any buildings, structures or other improvements constituting a part of any Real Property which would impair the value thereof or prevent the use thereof in connection with the conduct of business of OpCo.

(j)LD 13 does not own or hold, or is obligated under or is a party to, any option, right of first refusal or other contractual (or other) right or obligation to purchase, acquire, sell, assign or dispose of any real estate or any portion of or interest in the Real Property.  

(k)No work has been done at the Real Property, and no materials have been supplied to the Real Property, that have not been paid for, and there are no materialman’s liens or mechanic’s liens affecting the Real Property.

Article 4
REPRESENTATIONS AND WARRANTIES OF the Partnership

The Partnership represents and warrants as of the date hereof and as of the Closing Date as follows:

4.1Organization of the Partnership.  The Partnership is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in each jurisdiction where the nature of its business or the ownership of its properties requires it to be qualified, except where a failure to be so qualified would not have a material adverse effect.

4.2Authority and Action.  The Partnership has the limited partnership power and authority to enter into this Agreement and to perform all of its obligations and consummate the transactions contemplated hereby.  The Partnership has taken or will take all necessary and appropriate limited partnership action to authorize, execute and deliver this Agreement and to consummate the transactions contemplated hereby.  This Agreement is, and each agreement and instrument to be delivered by the Partnership pursuant hereto will be, when so executed and delivered, a valid and binding obligation of the Partnership, enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity.

4.3No Violation; Consents.  The execution and delivery of this Agreement (or any related instrument) by the Partnership does not, and the consummation of the transaction contemplated hereby and the performance by the Partnership of the obligations that it is obligated to perform hereunder do not and at the Closing will not: (a) violate any provision of the limited partnership agreement of the Partnership; (b) violate, or result in the violation of or acceleration of, or entitle any party to accelerate any obligation or indebtedness under, or result in the imposition of any Lien upon any Asset, if any, pursuant to, any mortgage, lien, lease, franchise, license, permit, agreement or other instrument to which the Partnership is a party, or by which the Partnership is bound, and that could have a material adverse effect upon this transaction or the Parties; or (c) contravene or violate any municipal, state or federal ordinance, law, rule, regulation, judgment, order, writ, injunction, or decree in any material respect.  No consent, approval, waiver or authorization is required to be obtained by the Partnership from any Person in connection with the execution, delivery and performance by the Partnership of this Agreement and the consummation of the transactions contemplated hereby.

4.4Litigation.  There is no Action pending or, to the Partnership’s knowledge, threatened against the Partnership that would prevent the consummation of the transactions contemplated by this Agreement or the ownership of the Assets by the Partnership following the Closing.

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4.5Brokers.  Except for Duff & Phelps LLC, the fees and expenses of which will be paid by the Partnership or its Affiliates, neither the Partnership nor any of its Affiliates has incurred any liability, contingent or otherwise, for any brokerage fee, commission or financial advisory fee in connection with the transactions contemplated by this Agreement for which LD 13 or any of its Affiliates or Fund H or any of its Affiliates will be liable.

4.6Units.  The Units have been duly authorized by all necessary limited partner action of the Partnership and, when issued to Fund H in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, except as such nonassessability may be affected by Section 17-607 of the Delaware Revised Uniform Limited Partnership Act.  When issued to Fund H, the Units will be free and clear of all Liens, except as set forth in the Third Amended and Restated Limited Partnership Agreement of the Partnership.

4.7Intentionally Omitted.

Article 5
DISCLAIMER OF WARRANTIES

5.1Disclaimer of Warranties by Sellers.  Except as expressly set forth in Article 3, neither Seller makes no representations or warranties whatsoever and disclaims all liability and responsibility for any other representation, warranty, statement or information made or communicated (orally or in writing), including any opinion, information or advice that may have been provided by any officer, member, director, employee, agent or consultant of either Seller or their Affiliates.  EXCEPT AS SPECIFICALLY REPRESENTED AND WARRANTED IN Article 3, THE SALE OF THE ASSETS TO THE PARTNERSHIP IS ON AN “AS IS” BASIS, WITHOUT ANY OTHER REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE.

5.2Disclaimer of Warranties by the Partnership.  Except as expressly set forth in Article 4, the Partnership makes no representations or warranties whatsoever and disclaims all liability and responsibility for any other representation, warranty, statement or information made or communicated (orally or in writing), including any opinion, information or advice that may have been provided by any officer, shareholder, director, employee, agent or consultant of the Partnership or its Affiliates.

Article 6
PRE-CLOSING COVENANTS

6.1Approvals and Consents.  From the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement, each Party will use all commercially reasonable efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement, including giving any notices to, making any filings with, and obtaining any required authorizations, consents and approvals of Governmental Authorities or other third parties.

6.2Owned Real Property Title Policy.  At or prior to Closing, LD 13 shall deliver to Fidelity National Title Insurance Company (or another nationally recognized insurance company), such customary affidavits, indemnities and other agreements, evidence of authority, Lien releases and such other documents and instruments reasonably required by such title company in order to issue a title policy with respect to each parcel of Owned Real Property to OpCo.

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Article 7
POST-CLOSING COVENANTS

7.1General.  In case at any time after the Closing, any further action is necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as the other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor). 

7.2Title Policy.  LD 13 shall exercise commercially reasonable efforts to deliver to the Partnership a 2006 ALTA standard owner’s policy of title insurance (or the equivalent if such form is not available with respect to any particular jurisdiction) from Fidelity National Title Insurance Company (or another nationally recognized insurance company) for each Real Property Interest in an Asset and as required to be paid by LD 13, that insures LD 13’s interest in and thereto, subject, in each case, to the pre-printed exceptions to such policy and the Permitted Liens.

7.3Unit Consideration.  If Fund H is unable to confirm that one or more of its members is an Accredited Investor (either by a failure of such member to return a fully-completed and executed investor questionnaire, failure by such member to meet the requirements of an Accredited Investor set forth in Rule 501 of the Securities Act or otherwise), then Fund H agrees that it (i) shall only distribute to such member its pro rata portion of the Cash Consideration and (ii) shall not distribute, transfer or assign any of the Units, if issued, to any such member.

7.4Closing.  Following the Closing, Fund H and LD 13 shall exercise commercially reasonable efforts to deliver to the Partnership any agreements or instruments relating to the Assets. 

7.5Illinois Income Tax Act.  Pursuant to Section 902(d) of the Illinois Income Tax Act (35 ILCS 5/), if applicable, the Partnership shall file with the Bulk Sales Section of the Illinois Department of Revenue a completed Notice of Sale or Purchase of Business Assets on Illinois Department of Revenue Form CBS -1 no later than five (5) days after Closing. Each Seller agrees to indemnify, defend and hold the Partnership and its Affiliates harmless from any tax, penalty and interest that is due and owing by either Seller or its predecessor under the Illinois Income Tax Act (35 ILCS 5/). Each Seller agrees to indemnify, defend and hold the Partnership and its Affiliates harmless from any tax, penalty and interest that is due and owing by either Seller or its predecessor under the Retailer’s Occupational Tax Act, 35 ILCS 120/5 for which the Partnership is liable, or is alleged by the State of Illinois to be liable, by virtue thereof. This Section shall survive the Closing, but shall terminate immediately upon the Partnership’s receipt of a bulk sales release in connection with the filing of the Notice of Sale with the Illinois Department of Revenue. The Partnership shall promptly forward LD 13 copies of any stop orders issued by the Illinois Department of Revenue, as well as the bulk sales release when received by the Partnership.

Article 8
TAX MATTERS

8.1Taxes and Tax Returns.  Sellers and the Partnership agree to furnish or cause to be furnished to the other, upon request, as promptly as practicable, such information and assistance relating to the Assets (as available or within Sellers’ or the Partnership’s control, as applicable), including access to books and records, as is reasonably necessary for the filing of all Tax Returns by Fund H, LD 13 or the Partnership, as applicable, the making of any election relating to Taxes, the preparation for any audit by any taxing authority and the prosecution or defense of any claim, suit or proceeding relating to any Tax.  Each Seller and the Partnership shall retain, or cause to be retained, all books and records with respect to Taxes pertaining to either Seller or the Assets for a period of at least seven years following the Closing 

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Date.  Sellers and the Partnership shall cooperate fully with each other in the conduct of any audit, litigation or other proceeding relating to Taxes involving the Assets or the Allocation.

8.2Audits.  Fund H and LD 13 shall promptly notify the Partnership in writing upon receipt by Fund H or LD 13 of notice of any pending or threatened Tax audits or assessments relating to the income, properties or operations of LD 13 that reasonably may be expected to relate to or give rise to a Lien on the Assets.  Each of the Partnership, LD 13 and Fund H shall promptly notify the other in writing upon receipt of notice of any pending or threatened Tax audit or assessment challenging the Allocation.

8.3Tax Treatment of Indemnification Payments.  Any payments made to any Party pursuant to Article 9 shall constitute an adjustment of the consideration received pursuant to Section 2.2 for Tax purposes and shall be treated as such by Fund H and the Partnership on their Tax Returns to the extent permitted by law.

Article 9
INDEMNIFICATION

9.1Indemnification by Sellers and the Sponsor.  Subject to Section 9.3, from and after the Closing Date, Sellers and the Sponsor, jointly and severally, will indemnify, defend and hold harmless the Partnership, the Partnership’s Affiliates and each of their respective partners, directors, members, officers, employees, and representatives (the “Partnership Indemnitees”), from and against any losses, liabilities, Liens, costs, damages, deficiencies, diminution in value, judgments, demands, suits, assessments, charges, fines, penalties, or expenses (including reasonable attorneys’ fees and other costs of litigation) (“Loss”) actually suffered or incurred by any of them resulting from, related to, or arising out of:

(a)the breach of any representation, warranty or covenant of LD 13 contained in this Agreement, including any Exhibit to this Agreement, or in any document, instrument, agreement or certificate delivered under this Agreement, in each case, without giving effect to any limitation or qualification as to “materiality,” “material,” “material adverse effect” or similar qualifiers set forth in such representation, warranty or covenant for purposes of determining whether there is a breach and the Loss resulting from, related to, or arising out of such breach; 

(b)any claim for Property Taxes relating to LD 13 or any Asset for any period prior to the Closing Date (except to the extent the Partnership has otherwise received a proration credit or adjustment hereunder);

(c)the Retained Liabilities and Environmental Liabilities;

(d)any liabilities or obligations of Sellers or with respect to the Assets arising from the failure to obtain the required items set forth on Schedule 3.3; and

(e)any other liabilities or obligations of Sellers or with respect to the Assets first arising prior to the Closing Date.

If either Seller liquidates or ceases to exist, such Seller covenants that it will, before such liquidation or cessation of existence, reserve an amount in cash reasonably sufficient to satisfy any remaining indemnification obligations under this Section 9.1 or transfer any such remaining indemnification obligations to an Affiliate with adequate resources to satisfy all such remaining indemnification obligations.  

9.2Indemnification by the Partnership.  Subject to Section 9.3, from and after the Closing, the Partnership will indemnify, defend and hold harmless LD 13, LD 13’s Affiliates, including the Sponsor, 

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and their respective directors, members, officers, employees and representatives (the “LD 13 Indemnitees”), from and against any Losses actually suffered or incurred by any of them resulting from, related to, or arising out of:

(a)the breach of any representation, warranty or covenant of the Partnership contained in this Agreement, including any Exhibit to this Agreement, or in any document, instrument, agreement or certificate delivered under this Agreement, in each case, without giving effect to any limitation or qualification as to “materiality,” “material,” “material adverse effect” or similar qualifiers set forth in such representation, warranty or covenant for purposes of determining whether there is a breach and the Loss resulting from, related to, or arising out of such breach;

(b)any claim for Property Taxes relating to any Asset for any period from and after the Closing Date or for which the Partnership has otherwise received a proration credit or adjustment hereunder for any period prior to the Closing Date and which credit or adjustment exceeds LD 13’s allocable share of such Property Taxes; or

(c)any liabilities or obligations of LD 13 or with respect to the Assets arising after the Closing Date, except for those contemplated by Section 9.1(d).

9.3Limitations on Indemnities.

(a)Subject to the limitations and other provisions of this Agreement, the representations and warranties of the Parties hereto contained in this Agreement, other than those contained in Section 3.11, and the covenants and agreements of the Parties hereto contained herein required to be fully performed on or before the Closing, other than those contained in Article 8, shall survive the Closing and shall remain in full force and effect for a period of one (1) year from the Closing Date.  Each covenant and agreement of the Parties in this Agreement which by its terms requires performance after the Closing Date, other than those contained in Article 8, shall survive the Closing and shall remain in full force and effect until such covenant or agreement is fully performed. The representations and warranties contained in Section 3.11, and the covenants and agreements contained in Article 8 shall survive until the expiration of sixty (60) days after the end of the applicable statute of limitations period. The representation and warranty related to Liens in Section 3.4 shall survive for the duration of the lease/easements related to the applicable Asset.

(b)To the extent the Partnership Indemnitees are entitled to indemnification for Losses pursuant to Section 9.1, (i) Sellers and the Sponsor shall not be liable for any Losses until the aggregate amount of all Losses exceeds $139,950.00 in which event Sellers and the Sponsor shall only be required to pay or be liable for Losses in excess of such amount, and (ii) Sellers and the Sponsor’s aggregate liability to the Partnership Indemnitees shall not exceed $1,3995,000.00; provided, however, that such limitations shall not apply to (i) breaches of the representations and warranties contained in Sections 3.1, 3.2, 3.9, 3.11, 3.13(a) and 3.15,(ii) breaches of the covenants and agreements contained in Sections 6.2, 7.2, 7.5, 13.4 and 13.5 and Article 8 or (iii) the indemnification obligations set forth in Sections 9.1(c), 9.1(d) or 9.1(e). 

(c)NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, NO PARTY HERETO SHALL BE ENTITLED TO RECOVER FROM ANY OTHER PARTY HERETO ANY AMOUNT IN RESPECT OF EXEMPLARY, PUNITIVE, REMOTE OR SPECULATIVE DAMAGES, EXCEPT, IN EACH CASE, TO THE EXTENT SUCH DAMAGES ARE PAID TO AN UNAFFILIATED THIRD PARTY.  ALL RELEASES, DISCLAIMERS, LIMITATIONS ON LIABILITY AND INDEMNITIES IN THIS AGREEMENT, INCLUDING THOSE IN THIS Article 9, SHALL APPLY EVEN IN THE EVENT OF THE SOLE, JOINT, OR 

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CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF THE PARTY WHOSE LIABILITY IS RELEASED, DISCLAIMED, LIMITED OR INDEMNIFIED (EXCLUDING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT).

9.4Indemnification Procedures.  An LD 13 Indemnitee or Partnership Indemnitee, as the case may be (for purposes of this Section 9.4, an “Indemnified Party”), shall give the indemnifying party under Section 9.1 or Section 9.2, as applicable (for purposes of this Section 9.4, an “Indemnifying Party”), prompt written notice of any matter which it has determined has given or could give rise to a right of indemnification under this Agreement, stating the amount of the Loss, if known, and method of computation thereof, containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from its obligations under this Article 9 except to the extent the Indemnifying Party is prejudiced by such failure.  In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a Person who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense. If the Indemnifying Party does not assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including, but not limited to, settling such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to any damages resulting therefrom. The Indemnifying Party shall not settle any Action without the Indemnified Party’s prior written consent (which consent shall not be unreasonably withheld or delayed).

Article 10
CONDITIONS PRECEDENT TO Sellers OBLIGATIONS

Each and every obligation of Sellers under this Agreement shall be subject to the satisfaction, at or prior to the Closing, of the following conditions precedent.

10.1Representations and Warranties; No Default.  The representations and warranties of the Partnership set forth in Article 4 of this Agreement shall be true and correct in all material respects (it being understood that, for purposes of determining the accuracy of such representations and warranties, all qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded) as of the Closing with the same force and effect and as though made as of the Closing (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

10.2Covenants.  The Partnership shall have performed in all material respects all its covenants and fulfilled in all material respects all the terms of this Agreement that are required to be performed or fulfilled prior to or as of the Closing.

10.3Proceedings.  No investigations, inquiry, proceeding or claim has been initiated or received by or asserted or threatened against LD 13 by any private party or by any government or governmental agency, relating to the validity, invalidity or legality of this Agreement and its consummation under any state or federal statute, or rules, regulations, order or guidelines promulgated pursuant thereto.

10.4Waiver.  LD 13 may waive any condition specified in this Article 10 if it executes a writing so stating at or before the Closing.

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Article 11
CONDITIONS PRECEDENT TO THE PARTNERSHIP’s OBLIGATIONS

Each and every obligation of the Partnership under this Agreement shall be subject to the satisfaction, at or prior to the Closing, of the following conditions precedent.

11.1Representations and Warranties.  The representations and warranties of Sellers set forth in Article 3 of this Agreement shall be true and correct in all material respects (it being understood that, for purposes of determining the accuracy of such representations and warranties, all qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded) as of the Closing with the same force and effect and as though made as of the Closing (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

11.2Covenants.  Sellers shall have performed in all material respects all its covenants and fulfilled in all material respects all the terms of this Agreement that are required to be performed or fulfilled prior to or as of the Closing.

11.3Proceedings.  No investigations, inquiry, proceeding or claim has been initiated or received by or asserted or threatened against the Partnership by any private party or by any government or governmental agency, relating to the validity, invalidity or legality of this Agreement and its consummation under any state or federal statute, or rules, regulations, order or guidelines promulgated pursuant thereto.

11.4 Release of Mortgages.  All Liens securing the Fund H Facility shall be released and executed payoff letter and authorization for filing the UCC-3 termination statements shall be delivered to the Partnership.  

11.5Tenant Estoppel Certificate.  LD 13 shall deliver or cause to be delivered to the Partnership a tenant estoppel certificate from the Data Center Tenant, certified to LD 13 and the Partnership, in a form reasonably satisfactory to the Partnership.

11.6Units.  The trading price of the Units shall not have materially increased since the signing of the Agreement.

11.7Assignment Documents.  LD 13 shall deliver all documents in Sections 9.4 and 9.6 of the Data Center Asset Agreement with LD 13 named as Seller.

11.8Waiver.  The Partnership may waive any condition specified in this Article 11 if it executes a writing so stating at or before the Closing; provided, any such waiver must be approved by the Conflicts Committee.

Article 12
TERMINATION

12.1Termination of Agreement.  This Agreement may be terminated at any time prior to the Closing Date as follows:

(a)By mutual written consent of the Partnership and LD 13.

(b)By the Partnership or LD 13 if any Governmental Authority of competent jurisdiction shall have (i) enacted, issued or promulgated any law that is in effect and has the effect of 

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making the consummation of the transactions contemplated by this Agreement illegal or of prohibiting or otherwise preventing the consummation of the transactions contemplated by this Agreement or (ii) issued or entered any order (whether temporary, preliminary or permanent) that is in effect and has the effect of making the consummation of the transactions contemplated by this Agreement illegal or of prohibiting or otherwise preventing the consummation of the transactions contemplated by this Agreement; provided, however, the right to terminate this Agreement under Section 12.1(b)(ii) shall not be available to a Party if such order was primarily due to the failure of such Party or its Affiliate to perform any of its obligations under this Agreement.

(c)By the Partnership if there has been an event, change, occurrence or circumstance that, individually or in the aggregate with any other events, changes, occurrences or circumstances, has had or could reasonably be expected to have a material adverse effect on the Assets or materially increase the trading price of the Units.

(d)By the Partnership if the Closing shall not have occurred by June 18, 2018 (the “Outside Date”); provided that such right to terminate this Agreement under this Section 12.1(d) shall not be available to the Partnership if the Partnership has materially breached its obligations under this Agreement in a manner that shall have proximately contributed to the failure of the Closing to occur by such date.

(e)By LD 13 if the Closing shall not have occurred by the Outside Date; provided that such right to terminate this Agreement under this Section 12.1(e) shall not be available to LD 13, if either Seller has materially breached its obligations under this Agreement in a manner that shall have proximately contributed to the failure of the Closing to occur by such date.

(f)By the Partnership if at any time the representations and warranties of either Seller contained in this Agreement shall fail to be true and correct or either Seller shall at any time have failed to perform and comply with all agreements and covenants of either Seller contained in this Agreement requiring performance or compliance prior to such time, and in either case, such failure (i) shall be such that, if not cured, the conditions set forth in Section 11.1 or Section 11.2 would not be fulfilled and (ii) if capable of cure, shall not have been cured within ten (10) days of LD 13’s receipt of written notice thereof from the Partnership or, if earlier, the Outside Date.

(g)By LD 13 if at any time the representations and warranties of the Partnership contained in this Agreement shall fail to be true and correct or the Partnership shall at any time have failed to perform and comply with all agreements and covenants of the Partnership contained in this Agreement requiring performance or compliance prior to such time, and in either case, such failure (i) shall be such that, if not cured, the conditions set forth in Section 10.1 or Section 10.2 would not be fulfilled and (ii) if capable of cure, shall not have been cured within 10 days of the receipt of written notice thereof by the Partnership from LD 13 or, if earlier, the Outside Date.

12.2Notice of Termination.  The Partnership may exercise its right to terminate this Agreement by giving written notice of termination from time to time to LD 13 specifying the basis for the Partnership’s termination.  LD 13 may exercise its right to terminate this Agreement by giving written notice thereof from time to time to the Partnership specifying the basis for LD 13 s termination.

12.3Effect of Termination.  If this Agreement is terminated pursuant to the provisions of this Article 12, this Agreement shall become void and have no effect, and there shall be no further liability on the part of the Partnership or either Seller to any Person in respect of this Agreement; provided, however, the covenants and agreements contained in Article 14 and in this Section 12.3 shall survive the termination of this Agreement; provided further, except as otherwise provided in this Agreement, no such termination 

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shall relieve any Party of any liability resulting from any breach of this Agreement prior to the time of such termination.

Article 13
CLOSING

The Closing shall be conducted as follows, with the performance of the Parties to be mutually dependent, and all transfers deemed to have taken place simultaneously.

13.1Subject to satisfaction or waiver of the conditions set forth in Article 10 and Article 11, the Closing of the transactions contemplated by this Agreement shall occur on January 18, 2018 or, if all of the conditions set forth in Article 10 and Article 11 are not satisfied or waived by such date, such other date as the Parties may agree (the “Closing Date”).

13.2At the Closing, LD 13 shall deliver to the Partnership:

(a)such customary instruments of transfer and conveyance, including the Assignment and Assumption Agreements, as necessary to vest all right, title and interest of LD 13 in and to the Assets to OpCo;

(b)all necessary forms and certificates complying with applicable Law, duly executed and acknowledged, certifying that the transactions contemplated hereby are exempt from withholding under Section 1445 of the Code and any state or local equivalent thereof; 

(c)copies of documents, including all leases, grants of easements and non-disturbance agreements relating to the Assets, including any amendments, guarantees or other documents relating thereto;

(d)a settlement statement mutually approved by the Parties;

(e)Bill of Sale in connection with Scheduled Asset DC100001;

(f)the Deed in connection with Scheduled Asset DC100001; and

(g)each other document or instrument specified in or as may be reasonably required by this Agreement.

13.3At Closing, the Partnership shall deliver to Fund H and/or LD 13, as applicable:

(a)the Units in book-entry form;

(b)the Cash Consideration, in immediately available funds to an account or accounts designated by Fund H;

(c)the executed counterpart to the Contribution Agreement and other ancillary agreements thereto; 

(d)a settlement statement mutually approved by the Parties; and

(e)each other document or instrument specified in or as may be reasonably required by this Agreement.

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13.4Credits and Prorations.  

(a)General Matters.  All income and expenses relating to the Assets shall be apportioned as of 12:01 a.m., Los Angeles time, on the day of Closing, LD 13 being charged and credited for the same prior to such date and time, and the Partnership being charged and credited for the same on and after such date and time.  Such prorated items include the following:

(i)all rents and other accounts receivables payable with respect to the Assets (“Rents and A/R”) received by the Closing, if any;

(ii)all Property Taxes for which LD 13 or VK Acquisitions IV, LLC is liable, including for calendar year 2017 even if not due and payable until calendar year 2018 or through the Closing Date and due and payable in calendar year 2019; and

(iii)utility charges or service contracts to be assumed by the Partnership and listed as a Scheduled Asset for which LD 13 or VK Acquisitions IV, LLC is liable, if any, such charges to be apportioned at Closing on the basis of the most recent meter reading occurring prior to Closing or, if unmetered, on the basis of a current bill for each such utility.

(b)Specific Matters.  Notwithstanding anything contained in this Section 13.4:

(i)Any Property Taxes paid at or prior to Closing shall be prorated based upon the amounts actually paid.  If any Property Taxes due and payable during the year of Closing have not been paid before Closing, LD 13 shall be charged at Closing an amount equal to that portion of such Property Taxes which relates to the period before Closing, and LD 13 shall pay, or cause to be paid, such Property Taxes prior to their becoming delinquent.  Any such apportionment made with respect to a Property Tax year for which the Property Tax rate or assessed valuation, or both, have not yet been fixed shall be based upon the Property Tax rate or assessed valuation fixed for the prior Property Tax year.  To the extent that the actual Property Taxes for the current year differ from the amount apportioned at Closing, the Parties shall make all necessary adjustments by appropriate payments between themselves within thirty (30) days after such amounts are determined following Closing, subject to the provisions of Section 13.4(c) below. The Partnership shall pay all supplemental Property Tax resulting from the change in ownership and reassessment, if any, occurring as the result of the Closing pursuant to this Agreement;

(ii)Charges referred to in clause (i) above that are payable by any third party (as opposed to the Partnership or LD 13) shall not be apportioned hereunder, and the Partnership and LD 13 shall look solely to the third party responsible therefor for the payment of such charges.  If LD 13 shall have paid any of such charges on behalf of any third party to which it is entitled to reimbursement, and shall not have been reimbursed therefor by the time of Closing, the Partnership shall credit to LD 13 an amount equal to all such charges so paid by LD 13;

(iii)Unpaid and delinquent Rents and A/R collected by LD 13 or the Partnership, as the case may be, after the date of Closing shall be delivered as follows: (1) if LD 13 collects any unpaid or delinquent Rents and A/R for the Assets, LD 13 shall, within 15 days after the receipt thereof, deliver to the Partnership any such Rents and A/R which the Partnership is entitled to hereunder relating to the date of Closing and any period thereafter, and (2) if the Partnership collects any unpaid or delinquent Rents and A/R, the Partnership shall, within 15 days after the receipt thereof, deliver to LD 13 any such Rents and A/R which LD 13 is entitled to hereunder relating to the period prior to the date of Closing.  The Parties agree that (i) all Rents and A/R received by either Party within the first thirty (30) day period after the date of Closing shall be 

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applied first to delinquent Rents and A/R, if any, in the order of their maturity, and then to current Rents and A/R, and (ii) all Rents and A/R received by either Party  after the first thirty (30) day period after the date of Closing shall be applied first to current Rents and A/R and then to delinquent Rents and A/R, if any, in the inverse order of maturity.  The Partnership will use commercially reasonable efforts after Closing to collect all Rents and A/R in the Ordinary Course of Business, but neither the Partnership nor LD 13 will be obligated to institute any lawsuit or other collection procedures to collect delinquent Rents and A/R.  If there shall be any Rents and A/R which, although relating to a period prior to Closing, do not become due and payable until after Closing or are paid prior to Closing but are subject to adjustment after, then any Rents and A/R of such type received by either Party shall, to the extent applicable to a period extending through the Closing, be prorated between LD 13 and the Partnership as of Closing and LD 13’s portion thereof shall be remitted promptly to LD 13 by the Partnership together with a reasonably detailed accounting from the Partnership.

(c)Final Adjustments.  Except as otherwise provided herein, any revenue or expense amount which cannot be ascertained with certainty as of Closing shall be prorated on the basis of the Parties’ reasonable estimates of such amount and current receipts, and shall be the subject of a final proration sixty (60) days’ after Closing, or as soon thereafter as the precise amounts can be ascertained.  The Partnership shall promptly notify LD 13 when it becomes aware that any such estimated amount has been ascertained.  Once all revenue and expense amounts have been ascertained, the Parties shall jointly and in good faith prepare a final proration statement, which final proration statement when agreed upon by the Parties, shall be conclusively deemed to be accurate and final.

(d)Survival.  The provisions of this Section 13.4 shall survive Closing.

13.5Closing Costs.  The following costs of Closing shall be allocated between LD 13 and the Partnership as follows:

(a)All fees associated with reissuance of title policies delivered to the Partnership pursuant to Section 7.2 shall be paid by the Partnership;

(b)All other title fees and premiums, all recordation fees, and all transfer, stamp, excise or similar taxes imposed by the state, county or city in connection with the transaction shall be divided equally and paid by LD 13 and the Partnership at Closing; 

(c)All sales or similar Taxes shall be paid by the Partnership; and

(d)Each party shall bear its own counsel’s fees and expenses in connection with the transactions described in this Agreement.

The provisions of this Section 13.5 shall survive the Closing.

13.6Fund H Accredited Investor Adjustment.  At Closing, the Parties agree the Sellers shall have the option to request an additional cash payment of up to $622,101.70 from the Partnership in lieu and reduction of Unit consideration (up to 33,902 Units, valued at $18.35 per Unit).  

Article 14
MISCELLANEOUS

14.1Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the respective Parties and their permitted successors and assigns.  The Partnership’s rights under this 

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Agreement may not be assigned other than to a wholly-owned subsidiary of the Partnership, without the prior written consent of LD 13, which consent may be withheld for any reason, and LD 13’s rights under this Agreement may not be assigned, without the prior written consent of the Partnership, which consent may be withheld for any reason.  Any purported assignment in violation of the foregoing shall be void ab initio.

14.2Entire Understanding, Headings and Amendment.  This entire Agreement and the attached Exhibits and all documents to be executed and delivered pursuant hereto constitute the entire understanding between the Parties, and supersede all previous agreements of any sort.  Article headings are included only for purposes of convenience and shall not be construed as a part of this Agreement or in any way affecting the meaning of the provisions of this Agreement or its interpretation.  This Agreement may not be amended or modified orally and no amendment or modification shall be valid unless in writing and signed by the Parties; provided, any such amendment or modification must be approved by the Conflicts Committee.

14.3Rights of Third Parties.  This Agreement shall not be construed to create any Lien on the Assets or to create any express or implied rights in any persons other than the Parties, except as provided for the indemnification of the Partnership Indemnitees and the LD 13 Indemnitees in Article 9.

14.4Notices.  All notices shall be in writing and shall be delivered or sent by first-class mail, postage prepaid, overnight courier or by means of electronic transmission.  Any notice sent shall be addressed as follows:

(a)If to LD 13, Fund H or the Sponsor:

Landmark Dividend LLC
2141 Rosecrans Avenue, Suite 2100
El Segundo, CA 90245
Attn:  General Counsel 

(b)If to the Partnership:

Landmark Infrastructure Partners GP LLC
2141 Rosecrans Avenue, Suite 2100
El Segundo, CA 90245
Attn:  Chief Financial Officer

Any notice required hereunder shall be effective when sent if given in the manner set forth above.

14.5Choice of Law; Mediation; Submission to Jurisdiction.

(a)This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.  EACH OF THE PARTIES AGREES THAT THIS AGREEMENT INVOLVES AT LEAST U.S. $100,000.00 AND THAT THIS AGREEMENT HAS BEEN ENTERED INTO IN EXPRESS RELIANCE UPON 6 Del. C. § 2708.  EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY AGREES (i) TO BE SUBJECT TO THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF THE FEDERAL COURTS SITTING IN THE STATE OF DELAWARE, AND (ii) TO THE EXTENT SUCH PARTY IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE, TO APPOINT AND MAINTAIN AN AGENT IN THE STATE OF DELAWARE AS SUCH PARTY’S 

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AGENT FOR ACCEPTANCE OF LEGAL PROCESS AND TO NOTIFY THE OTHER PARTY OF THE NAME AND ADDRESS OF SUCH AGENT.

(b)Each Party agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement, whether in tort or contract or at law or in equity, exclusively in any federal or state courts located in Delaware and (i) waives any objection to laying venue in any such action or proceeding in such courts, (ii) waives any objection that such courts are an inconvenient forum or do not have jurisdiction over it and (iii) agrees that, to the fullest extent permitted by law, service of process upon it may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address specified in Section 14.4.  The foregoing consents to jurisdiction and service of process shall not constitute general consents to service of process in the State of Delaware for any purpose except as provided herein and shall not be deemed to confer rights on any Person other than the Parties.

14.6Time of the Essence.  Time is of the essence in the performance of this Agreement in all respects.  If the date specified herein for giving any notice or taking any action is not a business day (or if the period during which any notice is required to be given or any action taken expires on a date which is not a business day), then the date for giving such notice or taking such action (and the expiration date of such period during which notice is required to be given or action taken) shall be the next day which is a business day.

14.7Waiver and Severability.

(a)No waiver, either express or implied, by any Party hereto of any term or condition of this Agreement or right to enforcement thereof shall be effective, unless such waiver is in writing and signed by both Parties.  Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way adversely affect the rights of the Party granting such waiver in any other respect or at any other time.  The failure of any Party to exercise any rights or privileges under this Agreement shall not be construed as a waiver of any such rights or privileges under this Agreement.  The rights and remedies provided in this Agreement are cumulative and, except as otherwise expressly provided in this Agreement, none is exclusive of any other or of any rights or remedies that any Party may hereunder or otherwise have at law or in equity.

(b)Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

14.8Costs and Expenses.  Except as otherwise specifically provided in this Agreement, each Party will bear its own costs and expenses in connection with this Agreement and the transactions contemplated hereby.

14.9Counterpart Execution.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one agreement.

[SIGNATURES ON THE FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, each of the Parties has executed this Agreement as of the Effective Date.

 

	
LD Acquisition Company 13 LLC

	
 
	
 

	
By:
	
 
	
/s/ George P. Doyle

	
Name:
	
 
	
George P. Doyle

	
Title:
	
 
	
Chief Financial Officer

 

	
Landmark Dividend Growth Fund - H LLC

	
 

	
 

	
By: Landmark Dividend Management 2 LLC, its managing member

	
 
	
 

	
By:
	
 
	
/s/ George P. Doyle

	
Name:
	
 
	
George P. Doyle

	
Title:
	
 
	
Authorized Signatory

 

	
Landmark Infrastructure Partners LP

	
 

	
 

	
By: Landmark Infrastructure Partners GP LLC, its general partner

	
 
	
 

	
By:
	
 
	
/s/ George P. Doyle

	
Name:
	
 
	
George P. Doyle

	
Title:
	
 
	
Chief Financial Officer

 

	
Solely with respect to Article 9: 
Landmark Dividend LLC

	
 
	
 

	
 
	
 

	
By:
	
 
	
/s/ George P. Doyle

	
Name:
	
 
	
George P. Doyle

	
Title:
	
 
	
Chief Financial Officer

 

Signature Page to DD #18 Contribution Agreement

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