Document:

exhibit_4-19.htm

Exhibit 4.19

Deed of Trust

 

Signed on August 2, 2015

 

    Between:

	 	
Optibase Ltd.

10 Hasadnaut St., Herzliya

Tel.: 073-7073700

Fax: 073-7946331

(hereinafter: the “Company”)

 

Of the first part;

            and between

	 	
Hermetic Trusts (1975) Ltd.

113 Hayarkon Street, Tel Aviv

Tel.: 03-5544553

Fax: 03-5271039

(hereinafter: the “Trustee")

 

Of the second part;

	
Whereas

	
On August 2, 2015, the Company’s board of directors approved the publication of a supplement prospectus of the Company, whereby the public will be offered Bonds (Series A) of the Company, that are not convertible into shares of the Company (hereinafter jointly: the “Bonds (Series A)” or the “Bonds”) in accordance with this Deed of Trust; and

 

	
Whereas

	
On May 6, 2015, Midroog Ltd. announced that it was providing a rating of Baa1 with a stable outlook to the issue of the Bonds (Series A) of the Company; and

 

	
Whereas

	
The Company requested of the trustee that, subject to the issue of the Bonds (Series A), it will serve as a trustee for the Bondholders (Series A), and the trustee has agreed to the same, all subject to and in accordance with the terms of this Deed of Trust; and

 

  

  

  

	
Whereas

	
The trustee is a company limited by shares, duly incorporated in Israel, whose purpose is to engage in trusts; and

 

	
Whereas

	
The trustee declares that there is no impediment under the Law (as defined below) or any other law, to its engagement with the Company under this Deed of Trust, and that it meets the requirements and terms of fitness as prescribed in the Law (as defined below) to serve as a trustee under this Deed of Trust; and

 

	
Whereas

	
The trustee has no material interest in the Company, and the Company has no personal interest in the trustee; and

 

	
Whereas

	
The Company declares that there is no impediment under any law to the engagement with the trustee under this Deed of Trust; and

 

	
Whereas

	
The Trustee agrees to sign this Deed of Trust and act as a trustee for the Bondholders.

 

Therefore, it is stipulated and agreed between the parties as follows:

 

	
1.

	
Preamble, Interpretation and Definitions

 

	
  

	
1.1.

	
The preamble to this Deed of Trust and the appendices attached hereto constitute integral parts thereof.

 

	
  

	
1.2.

	
The Trustee's signature on this Deed does not constitute an opinion on its part regarding the nature of the offered securities or desirability of investment therein.

 

	
  

	
1.3.

	
Division of this Deed of Trust into sections as well as the provision of titles for the sections was done solely for purposes of convenience and they shall not be used for the purpose of interpretation.

 

	
  

	
1.4.

	
All of the contents of this Deed in the plural refer to the singular as well, and vice versa, and all of the contents of this Deed in the masculine form relate to the feminine as well, and vice versa, and all references to an individual refer to a corporation as well, all unless there is an explicit and/or implicit provision in this Deed otherwise and/or unless the content or context requires otherwise.

 

  

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1.5.

	
In any event of a conflict between the provisions of the law that can be conditioned upon (dispositive) and the provisions of this Deed, the provisions of this Deed will prevail. In any event of a conflict between the provisions of the law that cannot be conditioned upon (cogent) and the provisions of this Deed, the provisions of the Law will prevail.

 

	
  

	
1.6.

	
In any event of a conflict between the provisions described in the Prospectus in connection with this Deed and the explicit provisions of this Deed, the provisions of this Deed will govern.

 

	
  

	
1.7.

	
In this Deed of Trust, the following terms will have the meanings beside them, unless another intention is implied from the content or their context:

	 	
"This Deed" or the "Deed of Trust"

	 	
This Deed of Trust, including the addendum and appendices attached hereto, constituting integral parts hereof;

 

	 	
“Trustee"

	 	
The Trustee mentioned at the beginning of this Deed and/or a person who serves from time to time as a trustee of the Bondholders under this Deed;

 

	 	
The “Prospectus”

	 	
The supplementary prospectus of the Company, which will be published in August 2015 for the issue of the Bonds and/or any later prospectus based on which additional bonds will be issued (Series A);

 

	 	
The “Tender”

	 	
The tender on the fixed annual interest rate that the Bonds (Series A) issued by the Company in accordance with the Prospectus will bear;

 

	 	
The “Law” or the “Securities Law”

	 	
The Securities Law, 5728-1968 and the regulations enacted thereunder, as they may be from time to time;

 

 

  

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“The Bondholder Registry”

	 	
The registry of bondholders as set forth in Section 35h2 of the Law, and as stated in Section ‎26 of this Deed;

 

	 	
“Stock Exchange

	 	
The Tel Aviv Stock Exchange Ltd.;

 

	 	
“Principle”

	 	
The unpaid par value of the (Series A) Bonds;

 

	 	
“Special Resolution”

	 	
A resolution adopted at a general meeting of the Bondholders (Series A) in which Bondholders possessing at least fifty percent (50%) of the balance of the par value of Bonds (Series A) were present, either personally or by means of their representatives, or as a postponed meeting at which holders of at least twenty percent (20%) of the said balance of the par value were present either personally or by means of their representatives, and which was adopted (whether at an original meeting or at a postponed meeting) by a majority consisting of at least two thirds (two thirds) of the balance of the par value of the Bonds (Series A) represented in the vote, excluding abstentions;

 

	 	
“Midroog”

	 	
Midroog Ltd.;

 

	 	
The “Rating Agency”

	 	
Any rating agency that receives approval of the Commissioner of Capital Markets at the Ministry of Finance;

 

	 	
The “Nominee Company”

	 	
Mizrahi Tefahot Nominee Company Ltd., or a nominee company that replaces it, provided that all of the securities of the Company that are listed for trade in the Stock Exchange are registered in the name of the same nominee company;

 

 

  

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The “Bonds” or the “Series of Bonds” or the “Bonds (Series A)”

 

	 	
The Bonds (Series A), listed by name, the conditions of each of which are in accordance with the certificate of Bonds (Series A), which will be issued from time to time by the Company, at its sole discretion;

	 	
The “Bondholders” and/or the “Holders of the Bonds” and/or the “Holders”

	 	
The individuals whose names are listed at the time in question in the Register of Bondholders as the holders of the bonds, and in the case of a number of joint holders, the joint holder listed first in the Register of Bondholders.

 

	 	
“Trading Day”

	 	
All day on which trading takes place on the Stock Exchange;

 

	 	
“Business Day”

or “Bank Business Day”

 

	 	
Any day on which most of the banks in Israel are open to carry out transactions.

	 	
“Exchange Clearinghouse”

	 	
The Clearing House of the Tel Aviv Stock Exchange Ltd.;

 

	 	
The “Companies Law”

	 	
The Companies Law, 5759-1999;

 

	 	
“Generally Accepted Accounting Principles”

	 	
US Generally Accepted Accounting Principles (US GAAP), or any other Generally Accepted Accounting Principles on the basis of which the Company’s financial statements are prepared;

 

	 	
“Relative”

	 	
As defined in Section 1 of the Companies Law.

 

  

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2.

	
General

 

	
  

	
2.1.

	
This Deed of Trust is subject to the rules of the Stock Exchange, insofar as they cannot be conditioned upon.

 

	
  

	
2.2.

	
Dates

 

	
  

	
The dates scheduled for payments (hereinafter: the “Dates”) have been determined, inter alia, in accordance with the Stock Exchange Regulations, the guidelines thereunder and the bylaws of the Stock Exchange Clearing House (hereinafter: the “Provisions of the Stock Exchange”) that are in force on the signing of the Deed of Trust.

 

	
  

	
The Provisions of the Stock Exchange may change from time to time, and inter alia, may include various limitations regarding the Dates set forth in the Deed of Trust or the Prospectus.

 

	
  

	
In the event that the Provisions of the Stock Exchange are changed with regard to Dates as stated, the change will also apply to securities issued under this Deed of Trust, unless determined otherwise by the Stock Exchange or the Clearing House of the Stock Exchange.

 

  

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2.3.

	
Appointment of Trustee

 

	
  

	
2.3.1.

	
The Company hereby appoints the Trustee as the first trustee for the Bondholders (Series A), based on the provisions of Chapter E1 of the Law, including those entitled to payments under the Bonds which are not paid after they become due to be paid.

 

	
  

	
2.3.2.

	
If the Trustee is replaced with another trustee, the other trustee will be a trustee for the Bondholders based on the provisions of Chapter E1 of the Law, including for those entitled to payments under the Bonds that are not paid after they become due to be paid.

 

	
  

	
2.4.

	
Entry to Force of the Position

 

	
  

	
The trust for the Bondholders and the functions of the Trustee under this Deed of Trust will enter into force on the allocation date of the bonds under this Deed by the Company.

 

	
  

	
2.5.

	
Term of the Position; Expiry of the Position; Resignation; Dismissal

 

	
  

	
2.5.1.

	
The first trustee will serve as of the date set forth in Section 2.4 above, and the term will end on the date on which a meeting of Holders convenes (hereinafter: the “First Appointment Meeting”), which the Trustee will convene no later than 14 days from the submission of the annual report on the matters of the trust under Section 35h1(a) of the Law. If the First Appointment Meeting (with a simple majority) approves the continued service of the first trustee, it will continue to serve until the end of the first appointment term set forth in the resolution of the First Appointment Meeting (which may be until the final payment date of the Bonds).

 

	
  

	
2.5.2.

	
If the First Appointment Meeting and/or any later meeting that allocates the additional term of appointment of the Trustee terminates the term of appointment by passing a resolution of the Holders as to the continued service and/or appointment of another trustee thereunder.

 

  

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2.5.3.

	
Notwithstanding this Section 2, the provisions of the Law will apply to the appointment, replacement, service, expiration of service, resignation and dismissal of the Trustee.

 

	
  

	
2.6.

	
Functions of the Trustee and its Authorities

 

	
  

	
2.6.1.

	
The Trustee will represent the Bondholders in every matter stemming from the Company's undertaking to them, and may, for this purpose, take action to exercise the rights given to the Holders under the Law or according to the Deed of Trust.

 

	
  

	
2.6.2.

	
The Trustee's actions are valid even if a defect is discovered in the appointment or eligibility.

 

	
  

	
2.6.3.

	
The Trustee will have all of the powers granted thereto under the Law, even if not listed above.

 

	
  

	
2.6.4.

	
The Trustee will use the powers, permissions and authorities granted thereto under this Deed of Trust, at its discretion, or in accordance with the decision of the meeting, all subject to the provisions of any law.

 

	
  

	
2.6.5.

	
In addition to the provisions of the Law and without detracting from them, the positions of the Trustee will be those listed in Appendix 3 of this Deed of Trust.

 

	
  

	
2.6.6.

	
Unless explicitly set forth otherwise in the Law or the provisions of this Deed of Trust, the Trustee is not required to act in a manner which is not expressly detailed in this Deed of Trust so that any information, including about the Company and/or in connection with the Company's ability to meet its obligations to Bondholders comes to his attention, and this is not his role.

 

  

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3.

	
Issuance of the Bonds

 

	
  

	
3.1.

	
The Company intends to issue, under the Prospectus, as supplemented within the supplementary notice, the Bonds (Series A), registered by name, par value NIS 1 each. The Bonds will be payable (principle) in twelve (12) payments, with the payments being consecutive and equal, on June 30 and December 31 of each of the years 2016 through 2021 (with the first payment for the principle being executed on June 30, 2016, and the last payment being executed on December 31, 2021). 1

 

	
  

	
The Bonds shall not be linked to any index or currency.

 

	
  

	
The unpaid balance of the Bonds (Series A) in circulation will bear annual interest at a fixed rate that will be determined in the Tender (without linkage to any index or currency).

 

	
  

	
The interest for the Bonds (Series A) will be paid in thirteen (13) biannual payments, on June 30 and December 31 of each of the years 2015 through 2021 (inclusive), with the first interest payment being made on December 31, 2015, and the last interest payment being made on December 31, 2021, for the period of six (6) months ending on the payment date (hereinafter: the “Interest Period”), other than the first interest payment, which will be made on December 31, 2015, for the period beginning on the first trading day after the closing date of the signatures and ending on the first payment date of the interest (hereinafter: the “First Interest Period”), when calculated on a basis of 365 days per year, based on the number of days in this period. The interest rate that will be paid for a particular interest period (other than the First Interest Period) (meaning, the period that begins on the first day after the end of the interest period immediately prior and ending on the interest payment day immediately after the commencement date) will be calculated as the yearly interest rate divided by two (hereinafter: the "Semiannual Interest Rate"). The Company will publish an immediate report of the results of the Tender relating to the issue of the Bonds (Series A), the first interest rate, the interest rate determined in the Tender as stated, and the biannual interest rate.

 

	
1

	
Each of the first 11 payments will be in a rate of 8.33% of the principal and the last payment will be in a rate of 8.37% of the principal.

 

  

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For additional details, see also Sections 3, 4 and 5 of the overleaf conditions of the Bonds.

 

	
  

	
The Bonds are rated Baa1 by Midroog.

 

	
  

	
The Bonds are not secured by any collateral.

 

	
  

	
The Bonds (Series A) will be listed for trade on the Stock Exchange.

 

	
  

	
3.2.

	
The Expansion of the Series

 

	
  

	
The Company may issue, in any manner (including in a private placement or a public offering), at any time and from time to time at its sole discretion, without requiring the consent of the Bondholders or the Trustee, or providing notice to any of them of the same, including the issue to a Related Holder as defined in Section ‎4.2 below, in accordance with the provisions of any law, the additional Bonds (Series A), whose terms will be identical to the terms of the Bonds, at any price and in any manner it sees fit, and this Deed will also apply regarding all of the additional bonds as stated, which will be issued by the Company, and the additional bonds will be deemed, as of the date of their issue, mutatis mutandis, to be Bonds (Series A).

 

	
  

	
The Trustee will serve as a trustee for the Bonds (Series A), as they may be from time to time in circulation, even in the case of an expansion of a series, and the Trustee will not be required to provide consent for the service as stated for the expanded series.

 

	
  

	
For the avoidance of doubt, the holders of the additional bonds, as stated in this section above, will not be entitled to the principal and/or interest for the interest periods whose effective payment dates occur before the date of their issue.

 

  

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The Bonds (Series A), including those that are issued in a series expansion, if any, may be issued at their par value, at a discount or premium.

 

	
  

	
In the event that the discount rate determined for the Bonds (Series A) following the expansion of a series of the Bonds (Series A) is different from the discount rate of the existing Bonds (Series A) in circulation at the time (if any), the Company will contact the Securities Authority, if required - before the expansion of the series of Bonds, in order to receive its confirmation that regarding withholding tax at source from the discount fees for the aforesaid bonds, a uniform discount rate will be determined for the Bonds, based on a formula that weights the various discount rates, if any.

 

	
  

	
If such approval is received, the Company will calculate, prior to the series expansion, the weighted discount rate for all of the Bonds and will announce the uniform weighted discount rate in an immediate report regarding the results of the issue, and will deduct tax on the payment dates of the aforesaid Bonds, according to said weighted discount rate as stated and in accordance with the provisions of the Law. If the Bonds are issued within a series expansion in a package together with other securities, the Company will announce the weighted discount rate no later than the fourth trading day after they are listed for trade. If no approval is received as stated, the Company will announce in an immediate report, before the expansion of the series, the uniform discount rate, which will be the highest discount rate created for the Bonds. The Company will withhold tax at source upon payment of the Bonds, in accordance with the discount rate reported as stated.

 

	
  

	
Accordingly, there may be cases in which the Company deducts withholding tax on discount fees at a higher rate than the discount fees set for Holders of Bonds (Series A) prior to the series expansion (hereinafter: the “Excess Discount Fees"), in a manner harming them, whether or not approval was received from the Tax Authority for setting a uniform discount rate for the relevant series. In this case, a taxpayer that holds Bonds (Series A) before the expansion of the aforesaid series and until payment of the same bonds will be entitled to submit a tax report to the Securities Authority and receive a tax refund in the amount of the tax withheld from the Excess Discount Fees, if it is entitled to a refund as stated under law.

 

  

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Notwithstanding the above, the Company may not perform an expansion of the Bonds (Series A) if upon the expansion of the series, the Company does not meet any of the financial covenants set forth in Section 5.3 below, or if according to the audited annual consolidated financial statements, or the quarterly consolidated financial results of the Company, as applicable, whichever is published most recently before the expansion date as stated, after the impact of the expansion of the series as stated (if performed before the date to which the financial statements or the quarterly results relate, as stated), the Company does not meet any of the financial covenants set forth in Section 5.3 below. The Company will provide the Trustee with confirmation from a senior office regarding the Company’s compliance with the conditions set forth above, no later than seven business days before the expansion of the series takes place. The Trustee will rely on the Company’s approval, and will not be required to perform additional examinations on its behalf.

 

	
  

	
It is clarified that an additional condition for the issue of additional bonds from the Bonds (Series A) will be receipt of approval in advance by the Rating Agency whereby the expansion of the Bonds (Series A) does not harm the rating of the Bonds (Series A), such that after the expansion of the series as stated, the rating of the Bonds (Series A) is not less than the rating of the Bonds (Series A) before the expansion of the series as stated. If the Company is rated by more than one Rating Agency, for the purpose of this section, the lower of all of the ratings determined for the Company will be applicable.

 

	
  

	
For the avoidance of doubt, it is clarified that the issue of the additional bonds from the Bonds (Series A) will take place with a deed of trust, and the provisions of the Deed of Trust will apply thereto, and the existing bonds from Series A and the additional bonds of the same series (as of the date of their issue) will constitute one series for all intents and purposes.

 

	
  

	
The Company will request that the Stock Exchange list for trade the additional bonds as stated, when offered.

 

  

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3.3.

	
Issue of Additional Securities

 

	
  

	
The Company may issue, at any time and from time to time in any manner (including a private placement or offer to the public), at its sole discretion, without requiring the consent of the Bondholders or the Trustee or providing notice to any of them as to the same, including an issue to an Affiliated Holder as defined in Section ‎4.2 below, bonds of a different class or different series of bonds or other securities or any type or kind, with or without ancillary rights for the purchase of the Company’s shares, with terms of interest, linkage, securities, payment, and other conditions, if the Company sees fit, whether preferential over the terms of the Bonds, equal or inferior to them.

 

	
4.

	
Purchase of Bonds by the Company and/or an Affiliated Holder

 

	
  

	
4.1.

	
The Company reserves the right to purchase, at any time and from time to time, Bonds (Series A) at any price that it seems fit, whether in the Stock Exchange or external thereto or in another manner, without derogating from the payment obligation of the Bonds held by others, other than the Company. Bonds that are purchased by the Company will be cancelled upon their acquisition and delisted from trade in the Stock Exchange, and the Company may not issue the Bonds that it acquires again. In the case of the purchase of Bonds by the Company as stated, the Company will provide the Trustee with notice of the same shortly after the purchase, and will issue an immediate report of the same, all subject to the provisions of the Law. In the case that the Bonds are purchased as stated by the Company during trade in the Stock Exchange, the Company will request the Clearing House of the Stock Exchange to withdraw the certificates.

 

  

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4.2.

	
Any subsidiary of the Company and/or a corporation under its control and/or the controlling shareholder of the Company (directly or indirectly) and/or a corporation under the control of a controlling shareholder of the Company (directly and/or indirectly) and/or their relatives (excluding the Company, for which the provisions of Section ‎4.1 above will apply), which does not hold the Bonds for itself (hereinafter: an “Affiliated Holder”), may purchase at any time and from time to time, including within the issue by the Company and/or sell, at any time and from time to time, Bonds (Series A). The Bonds that are held as stated by an Affiliated Holder will be considered to be an asset of the Affiliated Holder, will not be delisted from trade in the Stock Exchange, other than subject to the rules of the Stock Exchange, and may be transferred in the same manner as the other Bonds of the Company (subject to the provisions of the Deed of Trust and the Bonds). For the purpose of holding a meeting of Bondholders, the provisions of the Second Addendum of the Deed of Trust will apply. Additionally, regarding the legal quorum and the quorum of voters in the general meeting of the Bondholders, the provisions of the Second Addendum of this Deed will apply.

 

	
  

	
4.3.

	
The provisions of this Section ‎4 on their own will not bind the Company or the Bondholders in the purchase of bonds or require them to sell the Bonds in their possession.

 

	
5.

	
Company’s Undertakings

 

	
  

	
5.1.

	
The Company undertakes to pay all of the amounts of principal, interest (including arrears interest as defined in Section ‎5.5 of the overleaf conditions of the Bonds, if applicable) and to comply with all of the other terms and obligations imposed thereon, under the terms of the Bonds and under this Deed. In any event in which a payment date on account of a principal and/or interest amount applies on a day that is not a business day, the payment date will be postponed to the first business day thereafter, without any additional payment, interest or linkage.

 

  

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5.2.

	
Company’s Undertakings Regarding a Distribution

 

	
  

	
5.2.1.

	
As long as the Bonds (Series A) exist in circulation, the Company undertakes not to perform a distribution as defined in the Companies Law (including by way of a buy-back of its shares) in amounts exceeding a rate of 35% of the profit as defined in the Companies Law, based on the Company’s consolidated financial statements, most recently published before the aforesaid distribution date, and less previous dividends distributed as of the issue date of the Bonds (Series A) for the first time.

 

	
  

	
5.2.2.

	
Additionally, as long as the Bonds (Series A) exist in circulation, the Company undertakes not to perform a distribution as defined in the Companies Law (including by way of a buy-back of its shares) following which the Company’s equity will be reduced (excluding minority rights), based on the Company’s consolidated financial statements, most recently published (less impacts arising from revaluation of income-generating real estate, if any), before the declaration date of the dividend, below USD 50 million.

 

	
  

	
5.2.3.

	
Shortly after the declaration of a distribution and no later than five days before the distribution date as stated, the Company will transfer confirmation to the Trustee regarding its compliance with the conditions in Section 5.2 above. The Trustee will rely on the Company’s approval, and will not be required to perform additional examinations on its behalf.

 

	
  

	
5.2.4.

	
As of the date of this Deed of Trust and excluding the provisions of this Section 5 above, the Company is not limited in terms of the distribution of dividend and/or the purchase of a buy-back of its shares. It shall be clarified that the above will not constitute a representation that this limitation will apply throughout the entire term of the Bonds.

 

  

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5.3.

	
Financial Covenants

 

	
  

	
As long as the Bonds (Series A) exist in circulation (meaning, as long as the Bonds (Series A) are not repaid or cleared in full in any manner, including by way of a buy-back and/or early repayment), the Company undertakes as follows:

 

	
  

	
5.3.1.

	
Minimum Equity

 

	
  

	
The equity of the Company (excluding minority rights) will not be less than USD 33 million (hereinafter: the “Minimum Equity”). This amount will not be linked to any index or currency.

 

	
  

	
5.3.2.

	
Equity to Balance Sheet Ratio

 

	
  

	
The ratio between the equity (including minority rights) and the total balance sheet of the Company will not be less than 25% (hereinafter: the “Equity to Balance Sheet Ratio”).

 

	
  

	
The “Total Balance Sheet” - for the purpose of this Section 5.3.2 - the total consolidated balance sheet, based on the Generally Accepted Accounting Principles, all in accordance with the audited consolidated financial statements of the quarterly consolidated financial results of the Company, most recently published.

 

	
  

	
“Equity” - for the purpose of this Section 5.3 - the total equity of the Company, based on the audited consolidated financial statements, or based on the quarterly consolidated financial results of the Company, most recently published, as applicable, including minority rights or excluding minority rights, in accordance with this Section 5.3.

 

	
  

	
5.3.3.

	
Net financial debt to CAP ratio

 

	
  

	
The ratio between the net financial debt and the total capital and net debt (CAP) will not exceed 70% (hereinafter: the “Net Financial Debt to CAP”).

 

	
  

	
The “Total Equity and Net Debt (CAP)” - for the purpose of this Section 5.3.3 - the net financial debt, in addition to the equity including minority rights under the audited consolidated financial statements or based on the quarterly consolidated financial results of the Company most recently published.

 

  

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5.3.4.

	
Net financial debt to EBITDA ratio

 

	
  

	
The ratio between the net financial debt and the equity will not exceed 16 (hereinafter: the “Net Financial Debt to EBITDA”).

 

	
  

	
“EBITDA” - for the purpose of this Section 5.3.4 - profit before tax, financing income/expenses, other income/expenses, depreciation and reductions, all in accordance with the audited consolidated financial statements or the quarterly consolidated financial results of the Company, most recently published, as applicable, of the Company.

 

“Net Financial Debt” - for the purpose of this Section 5.3 - loans and bonds, less cash and cash equivalents, securities held for trade and short-term investments and loans, based on the audited consolidated financial statements or the quarterly consolidated financial results of the Company, most recently published of the Company most recently published, as applicable.

 

Minimum Equity, Equity to Balance Sheet Ratio, Net Financial Debt to CAP, and Net Financial Debt to EBITDA will be hereinafter jointly: the “Financial Covenants” or the “Financial Conditions.”

 

	
  

	
5.3.5.

	
Examination of the Financial Covenants and their Breach The examination regarding the Company’s compliance with the financial conditions set forth in Sections 5.3.1-5.3.2 above will be performed on the publication date of the audited consolidated financial statements of the Company or on the date of the publication of the quarterly consolidated financial statements for each calendar year or calendar quarter, as applicable. At the request of the Trustee, the Company will transfer to the Trustee, no later than five business days from receipt of the Trustee’s request, with confirmation signed by the most senior office in the Company’s financial field regarding the Company’s compliance with the limitations in Sections 5.3.1-.5.3.2 above, in addition to a calculation that will reasonably satisfy the Trustee. The Trustee will rely on approval of the Company and will not demand to perform an additional examination on its behalf.

 

  

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As of the date of the issue of the Bonds (Series A), in the event that it is discovered, based on the audited consolidated financial statements or the quarterly consolidated financial results of the Company, as applicable, that the Company has not met one or more of its obligations as stated in subsection 5.3.1-5.3.2 above, and has not met its obligations as stated in the subsequent quarter as well, pursuant to the audited consolidated financial statements or the quarterly consolidated financial results of the Company, as applicable, the provisions of Section 8 of the Deed of Trust will apply, subject to Section 8.2 of the Deed of Trust. For the avoidance of doubt, it is clarified that the grounds for calling for immediate repayment as stated in Sections 8.1.21, 8.1.22, 8.1.28 and 8.1.29 below will apply only if the Company does not meet the same financial covenants (minimum equity, equity to balance sheet ratio, net financial debt to CAP and net financial debt to EBITDA, as applicable) for two consecutive quarters in a row, and will be established on the date of the publication of the annual audited consolidated financial statements or the public date of the consolidated financial results of the second of the two consecutive quarters mentioned above, subject to the provisions of Section 8.2 below.

 

	
  

	
It shall be clarified that the date of the relevant breach will be considered to be the publication date of the financial statement or the subsequent (two) financial results in which the Company does not meet the relevant financial covenants.

 

  

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5.4.

	
Rating of the Bonds

 

	
  

	
The Company undertakes to act such that until the date of the full, final and precise payment of the Bonds (Series A) and the fulfillment of all of the other obligations of the Company towards the Bondholders (Series A), if it is under its control, the Bonds (Series A) will be rated by a Rating Agency. In this regard, it is clarified that the transfer of the Bonds (Series A) for a watch list or any other similar action performed by the Rating Agency will not be considered to be a cessation or change in the rating.

 

	
  

	
For the purpose of this Section 5.4 below, it is clarified that if the Bonds (Series A) are rated by more than one Rating Agency, the examination of the rating for the purpose of adjusting the interest rate to a change in rating (if and inasmuch as there shall be such a change) shall be done, at all times, according to the lower of the ratings.

 

	
  

	
The interest rate that the Bonds (Series A) will bear will be adjusted for a change in the rating of the Bonds (Series A), as set forth below in this section:

 

	
It shall be clarified that if an adjustment is required of interest in accordance with the mechanism described in this Section 5.4 below, in any event (excluding in the case in which entitlement to arrears interest is established in accordance with Section 5.5 of the overleaf terms), the additional maximum interest rate will not exceed 1% over the interest rate determined in the tender.

 

	
  

	
5.4.1.

	
If the rating of the Bonds by the Rating Agency is updated during any interest period, such that the rating determined for the Bonds is lower by one or more rating (hereinafter: the “Reduced Rating”) below a rating of Baa1 and a parallel rating, if the bonds are rated by more than one Rating Agency (or a parallel rating that will replace it, which will be determined by another Rating Agency, if it replaces the Rating Agency) (hereinafter: the “Base Rating”), the annual interest rate that the unpaid balance of the Bonds as determined in the tender will increase by a rate of 0.25% for each notch below the Base Rating (meaning, as of the decrease to a rating of Baa2) until a maximum interest addition of 1% per year, at most (hereinafter: the “Additional Interest Rate”).

 

  

19

  

	
  

	
5.4.2.

	
In the event that the interest was updated as stated above, the change will apply for the period beginning of the date of the update of the new rating and until the full payment of the unpaid balance of the Bonds (Series A) or until the increase of the Reduced Rating again (at which point, Section 5.4.7 below will apply), whichever is earlier.

 

	
  

	
5.4.3.

	
No later than the end of one business date from receipt of notice from the Rating Agency regarding the reduction of the rating of the Bonds (Series A) to a reduced rating as defined above, the Company will publish an immediate report in which the Company will state: (a) the fact that the rating was reduced, the reduced rating and the date for the commencement of the rating of the Bonds (Series A) with the reduced rating (hereinafter: the “Date of the Reduced Rating”); (b) the precise interest rate that the balance of the Bonds will bear for the period commencing on the current interest period and until the Date of the Reduced Rating (the interest rate will be calculated based on 365 days per year) (hereinafter: the “Original Interest” and the “Original Interest Period,” respectively); (c) the interest rate that the balance of the principal of the Bonds (Series A) will bear, as of the Date of the Reduced Rating and until the actual next payment date, meaning: the Original Interest in addition to the additional interest rate for the year (the interest rate will be calculated based on 365 days per year); (d) the weighted interest rate that the Company will pay to the Bondholders (Series A) on the upcoming interest payment date, arising from subsection (b) and (c) above; (e) the annual interest rate reflected from the weighted interest rate; (f) the annual interest rate and the biannual interest rate (the interest for the biannual interest period will be calculated as the annual interest divided by the number of interest payments per year, meaning: divided by two) for the subsequent periods.

 

  

20

  

	
  

	
5.4.4.

	
In the event that the date of the commencement of the rating of the Bonds (Series A) with the Reduced Rating occurs in the period beginning on the effective date for the payment of any interest (inclusive) and ending on the interest payment date near the effective date as stated (hereinafter: the “Deferral Period”), the Company will pay the Bondholders (Series A), on the date of the next interest payment, the original interest (as the unpaid principal of the Bonds will bear at the same date of the debt) only, while the interest rate arising from the addition of the interest in the rate equal to the additional interest rate for the year during the Deferral Period will be paid on the next interest payment date. The Company will announce the precise interest rate for payment on the next interest payment date in an immediate report.

 

	
  

	
5.4.5.

	
If the Bonds cease to be rated for a reason dependent on the Company (for example, but not limited to, due to the non-fulfillment of the Company’s obligations vis-a-vis the Rating Company, including due to failure to provide payments and/or reports that the Company has undertaken to provide to the Rating Agency), for a period exceeding sixty (60) days before their final payment, the cessation of the rating will be considered to be a reduction in the rating of the Bonds (Series A) by four notches below the Base Rating, such that the additional interest rate will amount to 1%, and the provisions of Sections 5.4.3 - 5.4.5 and 5.4.7 will apply accordingly. For the avoidance of doubt, it is clarified that in the event that the Bonds (Series A) cease to be rated, before their final payment, for a reason independent of the Company, the provisions of this Section 5.4 will not apply.

 

  

21

  

	
  

	
5.4.6.

	
It is clarified that in the case that after the reduction in the rating in a manner that impacts the interest rate that the Bonds (Series A) will bear as stated in Section 5.4.2 above, all of the Rating Agencies (that rate the Bonds (Series A) at the same time) will update the rating of the Bonds (Series A) upward, the interest rate will be reduced in increments of 0.25% per year for each notch (for the increase from Ba2 to the base rating), and if the Rating Agencies update the rating of the Bonds (Series A) upwards to a rating higher than the reduced rating (hereinafter: the “High Rating”) or equal to the base rating, the interest rate paid by the Company to the Bondholders on the relevant interest payment date will be reduced for the period in which the Bonds were rated with the High Rating alone, such that the interest rate that the unpaid balance of the principal of the Bonds will bear will be the interest rate determined in the Tender, as the Company publishes in an immediate report regarding the result of the issue, in addition to the additional interest rate in accordance with the interest additions set forth in Section 5.4.2 above, with respect to the High Rating as it may be at the time, if the high rating is lower than the base rating. In any event, the interest rate that the unpaid balance of the principal of the Bonds will bear at the time will not be less than the rate determined in the Tender, as published by the Company in an immediate report regarding the results of the issue.

 

	
  

	
5.4.7.

	
It is hereby clarified that if the Bonds (Series A) are rated or will be rated simultaneously by more than one Rating Agency, the reduction of rating (or the cessation of rating) for the purpose of this Section 5.4 shall mean the reduction of a rating (or the cessation of a rating, as applicable) to the lowest rating from among all of the ratings determined for the Company. For the avoidance of doubt, it will be clarified that the Company does not guarantee that the Bonds (Series A) will be rated by two Rating Agencies at any time, or at all.

 

	
  

	
5.4.8.

	
Additionally, notwithstanding this Section 5.4 above, the reduction of the rating for the Bonds (Series A) is performed within the update of the rating for all of the companies in Israel that are engagement in the area of activity of the Company, as a result of a change to the methodology of the Rating Agency, will not cause any change to the interest rate that the Bonds (Series A) will bear.

 

  

22

  

	
  

	
5.4.9.

	
For the avoidance of doubt, it is clarified that: (1) a change to the outlook of the rating of the Bonds (Series A) will not cause a change to the interest rate that the Bonds (Series A) will bear as stated in this Section; (2) as long as the Bonds (Series A) are rated by two Rating Agencies, Section 5.4.6 above will not apply other than in a case in which the two Rating Agencies together cease to rate the Bonds (Series A).

 

	
  

	
5.4.10.

	
The Company undertakes to act, to the extent that the same is under its control, to ensure that the Bonds (Series A) will be rated by a Rating Agency during the entire term of the Bonds (Series A) and for the same purpose, the Company undertakes to pay the Rating Agency the payments that it undertook to pay the Rating Agency and to provide the Rating Agency with the reports and information reasonably required thereby within the engagement between the Company and the Rating Company. In this regard, the non-performance of payments that the Company undertook to pay the Rating Agency and the failure to provide reports and information reasonably required by the Rating Company within the engagement between the Company and Rating Agency will be considered to be reasons and circumstances under the Company’s control. In the case of the cessation of the rating of the Bonds (Series A) or the replacement of the Rating Agency, the Company will publish an immediate report of the same and will list the reasons for the change of the Rating Agency. It is clarified that the above will not derogate from the right of the Company to replace, at any time, the Rating Agency, at its sole discretion and for any reason it sees fit.

 

  

23

  

	
  

	
5.5.

	
Principal and Interest Cushion

 

	
  

	
5.5.1.

	
The Company will transfer an amount equal to the amount of the first principal and the first interest amount that is expected to be paid to the Bondholders on June 30, 2016 and December 31, 2015, respectively (hereinafter: the “First Interest and Principal Cushion Amount”) to the Trustee through a transfer of the First Interest and Principal Cushion Amount from the account of the issuance coordination in which the issuance consideration is held to a bank account opened by the Trustee, and in the name of the Trustee in trust for the Bondholders (Series A) alone (it is clarified that as required under the law, the Company will be listed as a beneficiary in the aforesaid account) (hereinafter: the “Interest and Principal Cushion Account”).

 

The transfer of the funds will take place based on a written instruction of the Company to the issuance coordinator, which will be provided as a condition for the transfer of the balance of the funds of the issuance consideration to the Company, a copy of which will be furnished to the Trustee as well, in parallel.

 

	
  

	
5.5.2.

	
The signature rights in the Interest and Principal Cushion Account will be granted to the Trustee alone. Without derogating from the provisions of this Subsection above, the Trustee will invest the funds in the Interest and Principal Cushion Account in accordance with the provisions of Section 16 of the Deed of Trust.

 

	
  

	
5.5.3.

	
If on the morning of the second day of each calendar month after the payment date of the principal or interest, and if the same is not a business day then on the subsequent business day (hereinafter: the “Cushion Completion Date”), the amount deposited in the Interest and Principal Cushion Account will be lower than the upcoming interest and principal payment amount, the company will transfer to the Interest and Principal Cushion Account, on the Cushion Completion Date, an amount equal to the amount required in order for the amount deposited in the Interest and Principal Cushion Account to be the same as the upcoming interest and principal payment amount following the Cushion Completion Date (hereinafter: the “Current Cushion Amount”), within four business days from the Cushion Completion Date.

 

  

24

  

	
  

	
5.5.4.

	
It is clarified that in the event that the series of Bonds (Series A) is expanded in the future, the Company will transfer to the Interest and Principal Cushion Account, as a condition for and before the transfer of the expansion consideration to the Company, the funds that constitute the relative share of the Interest and Principal Cushion Amount for the additional bonds issued within the expansion of the series as stated, or the different required in order for the Interest and Principal Cushion Account to contain an amount equal to the upcoming interest and principal payment amount following the date of the expansion of the series as stated.

 

	
  

	
5.5.5.

	
It is clarified that if the additional interest rate applies, as defined in Section 5.4 above, the Company will deposit in the Interest and Principal Cushion Account, the funds that will constitute the Interest and Principal Cushion Amount in addition to the additional interest rate or the difference required in order for the Interest and Principal Cushion Account to contain an amount equal to the upcoming interest payment amount following the Interest Update Date as stated, whichever is lower, within four business days from the publication of an immediate report regarding the change to the interest rate as stated.

 

	
  

	
5.5.6.

	
For the avoidance of doubt, it is clarified that the obligations of the Company to transfer funds to the Interest and Principal Cushion Account are not secured with a mechanism that will ensure the execution of this undertaking. In the case that the Company does not meet its obligations to transfer the funds to the Interest and Principal Cushion Account, the Trustee will not be able to prevent a breach of this undertaking, but rather will take the measures available to it under law and under the Deed of Trust, to retroactively enforce the Company to fulfill its obligations.

 

  

25

  

	
  

	
5.5.7.

	
It is clarified that since the rights of the Company in the Interest and Principal Cushion Account are not pledged in favor of the Trustee and the Bondholders (Series A), a situation may arise in which any third party (including a functionary on behalf of the court and the like) will claim that the Company has rights in the account, and that the funds deposited therein belong to the Company and/or all of its creditors, and not to the Bondholders (Series A) alone.

 

	
  

	
5.5.8.

	
On the final payment date of the Bonds (Series A), all of the funds in the Interest and Principal Cushion Account will be transferred by the Trustee directly to the Nominee Company for the performance of the final payment as stated, subject to receipt of approval in advance from the Company regarding the amount required to supplement payment of the Bonds as stated, and its transfer by the Company to the Nominee Company in parallel.

 

	
  

	
5.5.9.

	
It is clarified that the Interest and Principal Cushion Account and the Current Cushion Amount, including the profits accrued for the same amounts, will be held by the Trustee in trust for the Bondholders (Series A). The Company will not have any rights or claims with respect to the aforesaid amounts, and the Company will not be entitled to receive these funds in any case.

 

	
  

	
5.6.

	
Undertaking not to Create Pledges (“Negative Pledge”)

 

	
  

	
5.6.1.

	
The Company undertakes not to pledge its property or any part thereof (held by it directly alone) with a general floating pledge or specific pledges (including a current pledge on specific asset/s) without the prior consent of the meeting of the Bondholders (Series A) to the same in an ordinary resolution.

 

  

26

  

	
  

	
5.6.2.

	
Notwithstanding the above, it is clarified that the Company’s undertaking not to create a current pledge or specific pledge will not apply to each of the following actions and pledges:

 

	
  

	
5.6.2.1.

	
A pledge on the assets of the Company and/or a delay and/or other securities on the Company’s assets (in whole or in part), which are created under a specific law or under regulatory requirements, and in accordance with their terms.

 

	
  

	
5.6.2.2.

	
A specific pledge in favor of a party that finances the purchase of any asset by the Company, and that is created to secure the financing provided for the purchase of the same asset (an asset-specific pledge).

 

	
  

	
5.6.2.3.

	
Assets purchased by the Company when a pledge applies to them and/or they are used as a security.

 

	
  

	
5.6.2.4.

	
Offset arrangements and/or “netting” as required from financial activity, based on its natures, with banks and financial institutions and during the ordinary course of the Company’s business.

 

Notwithstanding the above, it is clarified that the Company may create a general floating pledge on its assets, in whole or in part, in favor of a financing entity in Israel that provides financing to the Company itself (including holders of a different series of bonds) without requiring the consent of a meeting of the Bondholders, subject to the fact that together with the creation of a floating pledge as stated, the Company creates a pledge of the same type and rank in favor of the Bondholders (Series A), pari passu based on the ratio of the debts, which will be in force as long as the Bonds (Series A) are not repaid in full. The Company clarifies that as of the signing of this Deed, the Company has not created a general floating pledge as stated.

 

For the avoidance of doubt, it is clarified that subsidiaries of the Company may pledge their assets, in whole or in part, with any pledge (including a floating charge) and in any manner, without the consent of a meeting of the Bondholders (Series A) for the same, and without being required to provide any security for the Bondholders (Series A) in parallel to the creation of the pledge as stated by them.

 

  

27

  

	
6.

	
Collateral

 

	
  

	
6.1.

	
The Bonds (Series A) are not secured by any collateral.

 

	
  

	
6.2.

	
For the avoidance of doubt, it is clarified that the Trustee is not subject to any obligation to examine, and in reality, the Trustee has not examined, the need to provide the securities to secure the payments to the Bondholders. The Trustee will not be requested to perform, and in reality, the Trustee has not performed, a financial, accounting or legal due diligence as to the state of the Company’s business. In its engagement in this Deed of Trust, and with the consent of the Trustee to serve as a trustee for the Bondholders, the Trustee does not express an option, explicitly or implicitly, as to the Company’s ability to meet its obligations vis-a-vis the Bondholders under this Deed of Trust, and the same is not included among its positions. The above will not derogate from the obligations of the Trustee under any law and/or the Deed of Trust, including the obligations of the Trustee (if such obligation applies to the Trustee under any law) to examine the impact of the changes in the Company from the date of the issue and thereafter, if the same detrimentally impacts the Company’s ability to meet its obligations to the Bondholders.

 

	
  

	
6.3.

	
The Company may, from time to time, sell, pledge, lease, assign, furnish or transfer in any other manner, its property, or any part thereof, without being required to receive the consent of the Trustee or the Bondholders, and the Company is not required to notify the Trustee or the Bondholders of the creation of any pledge on its assets.

 

	
7.

	
Degree of Preference

 

All of the Bonds (Series A) that can be offered will have an equal rank as the bonds of the same series with respect to the amounts owed for them, pari passu, amongst themselves, and without a priority right or preference of one over the others for the same series.

 

  

28

  

	
8.

	
Right to Call for Immediate Repayment

 

	
  

	
8.1.

	
Upon the occurrence of once or more of the cases listed in this Section below, the provisions of Section ‎8.2 below will apply, as applicable:

 

	
  

	
8.1.1.

	
If the Company does not repay any amount from the payments that it owes under the terms of the Bonds or under this Deed.

 

	
  

	
8.1.2.

	
If it is discovered that a material representation of the Company’s representations in the Bonds or Deed of Trust is not complete and/or correct, and in the case of a breach that may be remedied - the breach is not remedied within 14 days from the receipt of notice of the breach, during which the Company makes efforts to remedy it.

 

	
  

	
8.1.3.

	
If the Company violates the terms of the Bonds or the Deed of Trust with a material violation, or if any of the substantial obligations within them are not met, and the violation is not remedied within 14 days from the receipt of notice of the violation, during which the Company makes efforts to remedy the violation.

 

	
  

	
8.1.4.

	
If the Company passes a liquidation resolution (excluding a liquidation as a result of a merger with another company, as stated in Section 8.1.19 below) or if a permanent and final liquidation order is given with respect to the Company by a court or if a permanent liquidator is appointed.

 

	
  

	
8.1.5.

	
If a request is filed for receivership or to appoint a receiver (temporary or permanent) on the Company’s assets, all or most of them, or if an order is given for the appointment of a temporary receiver that is not overturned or terminated within 45 days of being submitted or granted, as applicable; or, if an order is granted to appoint a permanent receiver on all or most of the Company’s assets. Notwithstanding the above, the Company will not be given any cure period with respect to requests or orders submitted or granted as stated, as applicable, by the Company or with its consent.

 

  

29

  

	
  

	
8.1.6.

	
If a temporary liquidation order is given by the court, or a temporary liquidator is appointed for the Company, or any judicial resolution is passed of a similar nature or a resolution as stated is not terminated within 45 days from the date on which the order is granted to the decision made, as applicable. Notwithstanding the above, the Company will not be given any cure period with respect to requests or orders submitted or granted as stated, as applicable, by the Company or with its consent.

 

	
  

	
8.1.7.

	
If an attachment is placed on all or most of the Company’s assets, and the attachment is not removed within 45 days of being imposed. Notwithstanding the above, the Company will not be given any cure period with respect to requests or orders submitted or granted as stated, as applicable, by the Company or with its consent.

 

	
  

	
8.1.8.

	
If an execution action is performed against all or most of the Company’s assets, and the action is not terminated within 45 days from being performed. Notwithstanding the above, the Company will not be given any cure period with respect to requests or orders submitted or granted as stated, as applicable, by the Company or with its consent.

 

	
  

	
8.1.9.

	
If the Company ceases or announces its intention to cease to continue to manage its business as it may be from time to time, and if the Company ceases or announces its intention to cease its payments.

 

  

30

  

	
  

	
8.1.10.

	
(a) If the Company submits a motion for a stay of proceedings or if such an order is granted, or if the Company submits a motion for a settlement or arrangement with the Company’s creditors under Section 350 of the Companies Law (excluding for the purpose of a merger with another company, a change to the Company’s structure or a split that is not prohibited under the terms of this Deed, excluding arrangements between the Company and its shareholders that are not prohibited under the terms of this Deed and that do not impact the Company’s ability to repay the Bonds), or if the Company offers a settlement or arrangement as stated to its creditors in another manner, based on the Company’s inability to meet its obligations on time; or (b) if a motion is submitted under Section 350 of the Companies Law regarding a settlement or arrangement with the Company’s creditors against the Company (and without its consent) that is not terminated or overturned within 45 days from being filed.

 

	
  

	
8.1.11.

	
If a substantial deterioration occurred to the Company’s business compared to its state on the date of the issue, and there is a real concern that the Company will be unable to pay its obligations under this Deed of Trust and the Bonds on time.

 

	
  

	
8.1.12.

	
If the Bonds are not repaid on time or no other substantial obligation provided in favor of the Bondholders is upheld.

 

	
  

	
8.1.13.

	
If there is a real concern that the Company would not meet its substantial obligations towards the Bondholders.

 

	
  

	
8.1.14.

	
If the Company does not publish a financial report that it is required to publish under any law within 30 days from the deadline for its publication.

 

	
  

	
8.1.15.

	
If the Bonds are delisted from the Stock Exchange.

 

	
  

	
8.1.16.

	
If the Company expands a series of Bonds in a manner that does not comply with the Company’s obligations regarding the expansion of a series under Section 3.2 above.

 

  

31

  

	
  

	
8.1.17.

	
If the Bonds cease to be rated for a period of time exceeding 60 consecutive days, excluding in a case in which the cessation of the rating results from reasons or circumstances that are not under the Company’s control.

 

	
  

	
8.1.18.

	
If a rating of the Bonds is updated by Midroog, such that the rating determined for the Bonds is lower than a rating of Baa3, or a parallel rating by another rating agency, if one replaces Midroog.

 

	
  

	
8.1.19.

	
If: (a) Another series of bonds issued by the Company (if issued); or (b) a loan provided thereto by a banking corporation (the “Lender”) in an amount exceeding USD 5 million or 15% of the total financial liabilities of the Company, based on the most recent audited financial statements published by the Company before the same date, or based on the quarterly consolidated financial results, as applicable, whichever of the two is higher, excluding a non-recourse loan provided to the Company and the corporations under its control, is called for immediate payment, and the demand to call for immediate repayment is not terminated within 30 days.

 

	
  

	
8.1.20.

	
If the Company sells to a third party (that is not a company under the Company’s control) most of the Company’s assets (excluding assets that are not under the Company’s direct and/or indirect control), such that after the sale as stated, most of the Company’s business activity is not in the field of real estate, without the consent of a meeting of the Bondholders with a simple majority of voters in the meeting in which a legal quorum was present in accordance with Section 35l13(a) of the Law. For the purpose of this subsection, a “sale of most of the Company’s assets” shall mean the same of an asset or assets in the aggregate that are owned by the Company, the value of which exceeds 50% of the total assets of the Company on a consolidated basis, according to the audited consolidated financial statements of the Company or based on the quarterly consolidated financial results, as applicable, most recently published, unless the sale consideration is transferred to a separate account with the Trustee, which is pledged in favor of the Trustee and the Bondholders (Series A). Use of the sale consideration takes place for the purchase of income-generating real estate assets in Western Europe, United States, Canada or Israel, or for the payment of Bonds, meaning: if the Company sells assets the value of which exceeds 50% of the total assets of the Company on a consolidated basis, as stated above, but transferred the sale consideration to a separate account with the Trustee, or alternatively used the sale consideration as stated to purchase income-generating real estate assets in Western Europe, the United States, Canada or Israel, or to repay the Bonds, the same will not be considered a “sale of most of the Company’s assets.” In the case in which the funds as stated are transferred to an account with the Trustee, the Trustee undertakes to cooperate with the Company and allow it to make the use required of the funds in the account as stated, in accordance with the provisions of this Deed of Trust. The Company will transfer to the Trustee confirmation signed by an officer, detailing the use that will be made of the consideration or confirmation regarding its deposit in an account. A pledge on the account will be removed when the Company ceases to use the consideration in the account for the uses set forth in this Deed.

 

  

32

  

	
  

	
8.1.21.

	
If the Company violates its undertakings for minimum equity during two consecutive quarters, as set forth in Section 5.3.1 above.

 

	
  

	
8.1.22.

	
If the Company violates its undertaking for the equity to balance sheet ratio during two consecutive quarters, as set forth in Section 5.3.2 above.

 

	
  

	
8.1.23.

	
If the Stock Exchange suspended trade of the Bonds, excluding their suspension on grounds of the creation of uncertainty, as these grounds are defined in the Fourth Part of the bylaws of the Stock Exchange, and the suspension is not terminated within 60 days.

 

  

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8.1.24.

	
If a merger is performed, as this term is defined in the Companies Law, within which the Company is the absorbing company or the target company, without the prior consent of a meeting of the Holders (with a simple majority), unless the absorbing company declared towards the Bondholders, including through the Trustee, before the date of the merger, that it has undertaken within the merger all of the obligations of the Company vis-a-vis the Bondholders, and that there is no reasonable concern that following the merger the absorbing company will be unable to uphold its obligations vis-a-vis the Bondholders (it is clarified that in such a case, the Trustee will not be required to examine the accuracy of the above in this declaration of the absorbing company).

 

	
  

	
8.1.25.

	
Upon the fulfillment of the following two conditions in the aggregate: (a) the holdings (direct and indirect, including through corporations under their control) of The Capri Family Foundation, of shares of the Company, will fall below a level of 51% of the issued and paid up capital of the Company; (b) the Company has another shareholder whose holdings of the Company’s shares (directly or indirectly, including together with holdings of the other shareholders that are not listed in subsection (a) above) are in a rate that is higher than the rate of the holdings of the parties listed in subsection (a) in shares of the Company at the time.

 

	
  

	
8.1.26.

	
If the Company violated its obligations with respect to the distribution as set forth in Section 5.2 above.

 

	
  

	
8.1.27.

	
If the Company violated its obligations not to create current pledges, as set forth in Section 5.6 above.

 

	
  

	
8.1.28.

	
If the Company violates its undertaking for a net financial debt to CAP ratio during two consecutive quarters, as set forth in Section 5.3.3 above.

 

  

34

  

	
  

	
8.1.29.

	
If the Company violates its undertaking for a net financial debt to EBITDA ratio during two consecutive quarters, as set forth in Section 5.3.4 above.

 

	
  

	
8.2.

	
Upon the occurrence of any of the events in Section 8.1 above and in accordance with the provisions included therein under the subsections herein, the Trustee and the Bondholders may call for immediate repayment of the amounts owed to the Holders under the terms of the Deed of Trust, all subject to the provisions of this Section 8.2 below:

 

	
  

	
8.2.1.

	
The Trustee may, before using its authority to call for immediate repayment, convene a meeting of the Bondholders, which will list on the agenda a resolution regarding calling the entire unpaid balance of the Bonds for immediate repayment.

 

	
  

	
8.2.2.

	
In the event that a meeting of the Bondholders is convened in accordance with Section 8.2.1 above, the date of the convening will be no earlier than seven days and no later than 21 days from the date of convening (however, the Trustee may advance convening the meeting, to at least one day from the date of the invitation, if he believes that this is required for the purpose of defending the holders' rights; should he do so, the Trustee will explain the reasons for advancing the convening date in the report regarding the meeting invitation).

 

	
  

	
8.2.3.

	
A decision of the Holders to call for immediate repayment of the Bonds, as stated above, will be passed in a meeting of the Holders that is convened as stated in Section 8.2.2 above, and that is attended by Holders of at least fifty percent of the balance of the par value of the Bonds, with a majority of the Holders of the balance of the par value of the Bonds represented in the vote or a majority as stated in an Adjourned Meeting that is attended by holders of at least twenty percent of the balance as stated.

 

  

35

  

	
  

	
8.2.4.

	
Notwithstanding this Section 8.2 above, the Trustee and Bondholders may not call the Bonds for immediate repayment, until after the period set forth in Section 8.1 above applies, during which the Company may perform an action or make a decisions as a result of which the grounds to call for immediate repayment are dropped (hereinafter: the “Cure Period”) and the grounds are not dropped.

 

	
  

	
8.2.5.

	
Notwithstanding this Section 8.2 above, the Trustee or the Holders will not call the Bonds for immediate repayment, until after the Company is provided within written notice seven days in advance of its intention to do so; however, the Trustee or the Holders are not required to provide the Company with notice as stated if there is a reasonable concern that furnishing the notice will harm the possibility of calling the Bonds for immediate repayment. Additionally, the Trustee may shorten the period set forth in this Section if it deems necessary to protect the rights of the Holders.

 

	
  

	
8.2.6.

	
A copy of the notice to convene a meeting as stated that is sent by the Trustee to the Company immediately upon publication of the notice or publication of an invitation to the meeting on the MAGNA system will constitute prior written notice to the Company of the intention of the Trustee or Holders to act as stated in Section 8.2.5 above.

 

	
  

	
8.2.7.

	
The Trustee will inform the Bondholders of the occurrence of an event that constitutes grounds for calling for immediate repayment after being actually made aware of the same. Notice as stated will be published in accordance with the provisions of Section 24 below.

 

	
  

	
8.2.8.

	
For the avoidance of doubt, it is clarified that the right to call for immediate repayment as stated above and/or calling for immediate repayment will not derogate from or harm any other or additional remedy available to the Bondholders or the Trustee under the Deed of Trust and the provisions of this Deed or under law, and calling the debt for immediate repayment upon the occurrence of any of the cases set forth in Section 8.1 above will not constitute any waiver of the rights of the Bondholders or the Trustee as stated.

 

  

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8.3.

	
In the case in which the Company is provided with notice that the Bonds were called for immediate payment under the provisions of this Section 8, the Company undertakes to pay the Bondholders and the Trustees all of the amounts owed to them and/or that will be owed to them under the terms of the Deed of Trust, whether the charge date for them has transpired or otherwise (“acceleration”), within seven days from the date of notice as stated in Section 8.2.5 above.

 

	
  

	
8.4.

	
For the purpose of this Section 8 - written notice to the Company, signed by the Trustee, confirming that the action required thereby within its authorities is a reasonable action will constitute prima facie evidence of the same.

 

	
  

	
8.5.

	
Upon the occurrence of any of the events in Section 8.1 above, and upon the occurrence of the conditions in accordance with the provisions of Section 8.2 above, the Trustee and/or the Holders may immediately take all of the measures that they deem fit. The Trustee may act as it sees fit and beneficial, including in accordance with the relevant law, in the relevant territory, for any security and may appoint, itself and/or by the court, a trustee, receiver or manager of assets provided as a security, in whole or in part.

 

	
9.

	
Claims and Proceedings Instituted by the Trustee

 

	
  

	
9.1.

	
In addition to any provision of this Deed and as a right and independent authority, the Trustee will take, without additional notice, all of the same proceedings, including legal proceedings, as it sees fit and subject to the provisions of any law to protect the rights of the Bondholders.

 

	
  

	
9.2.

	
The above will not harm and/or derogate from the right of the Trustee to initiate legal proceedings and/or others, even if the Bonds (Series A) are not called for immediate repayment and all to protect the Bondholders (Series A) and/or to provide any order relating to the trust matters and subject to the provisions of any law. Notwithstanding this Section ‎9, it is clarified that the right to call for immediate repayment will only be established in accordance with the provisions of Section ‎8 above, and not under this Section ‎9.

 

  

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9.3.

	
The Trustee may, in accordance with the sole discretion and without being required to notify the Company, petition the competent court with a request for instructions regarding any matter related to the trust and/or arising from this Deed.

 

	
  

	
9.4.

	
The Trustee will be required to act as stated in Section 9.1 above if required to do so by a special decision (as defined in Section 7.1) passed in the general meeting of the Bondholders (Series A), unless it determines that under the circumstances, the same is not just and/or it is not reasonable to do so, and petitioned the competent court with a request for instructions on the matter, on the first reasonable date.

 

	
  

	
9.5.

	
The Trustee may, before taking proceedings as stated above, convene a meeting of Bondholders (Series A) such that the Holders pass a special resolution as to which proceedings to take to exercise their rights under this Deed. The Trustee may again convene meetings of the Bondholders (Series A) to pass resolutions with respect to managing the proceedings as stated. The actions of the Trustee will be performed in cases as stated without delay, and on the first reasonable potential date (subject to the provisions of the Second Addendum of this Deed on the matter of convening a meeting of Holders). For the avoidance of doubt, it is clarified that the Trustee may not delay proceedings to call for immediate repayment that were resolved in a meeting of the Bondholders under Section ‎8 above, if the delay may harm the rights of the Holders.

 

	
  

	
9.6.

	
Subject to the provisions of this Deed of Trust, the Trustee may, but is not required to convene, at any time, a general meeting of the Bondholders in order to discuss and/or receive its instructions regarding any matter related to this Deed. For the avoidance of doubt, it is clarified that the Trustee may not delay the convening of the meeting in the case in which the delay may harm the rights of the Bondholders (Series A).

 

  

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9.7.

	
As long as the Trustee is required, under the terms of this Deed, to perform any action, including initiating proceedings or filing claims at the request of the Bondholders (Series A) as stated in this Section, the Trustee may refrain from taking any such action until instructions are received from the meeting of the Holders and/or instructions of the Court petitioned by the Trustee, at its sole discretion, with a request for instructions in the case in which it believes that it needs instructions as stated. For the avoidance of doubt, it is clarified that the Trustee may not delay proceedings to call for immediate repayment determined by a meeting of the Bondholders under Section ‎8 above, if the delay may harm the right of the Holders.

 

	
  

	
9.8.

	
In cases as stated in Sections ‎9.5 and ‎9.7above, the Trustee will make efforts to convene the meeting without delay (subject to the provisions of the Second Addendum of this Deed regarding convening meetings of holders), will not refrain from acting (including actions required to protect the rights of the Bondholders (Series A)) if the avoidance may substantially risk the rights of the Bondholders (Series A).

 

	
10.

	
Order of Priorities in Collection; Distribution of Receipts

 

All of the receipts received by the Trustee, excluding the wages and payment of any debt towards it, in any manner, including but not limited to as a result of calling the Bonds for immediate repayment and/or as a result of proceedings taken, if any, against the Company, will be held in trust and used thereby for the purposes and based on the order of priorities in collection as follows:

 

First - for payment of any debt for the Trustee’s wages and expenses; Second - for payment of any other amount based on the “indemnification undertaking” (as this term is defined in Section ‎23 below); Third - for payment to holders that bore payments under Section ‎23.7 below; Fourth - for payment to the Bondholders of the arrears interest (if determined) and interest arrears owed to them under the terms of the Bonds, pari passu, and relative to the interest amount in arrears that is owed to each of them, without preference or priority right regarding any of them; Fifth - for payment to the Bondholders of the principal arrears owed to them under the terms of the Bonds, pari passu and relative to the principal amount in arrears owed to each of them, without preference or priority right regarding any of them; Sixth - for payment to the Bondholders of the interest amounts owed to them under the Bonds held by them, pari passu, whose payment date has not yet occurred and relative to the amounts owed to them, without any preference in connection with priority in time of the issuance of Bonds by the Company or in another manner; Seventh - for payment to the Bondholders of the principal amounts owed to them under the Bonds held by them, pari passu, whose payment date has not yet occurred, and relative to the amounts owed to them, without any preference in connection with priority in time of the issuance of the Bonds by the Company or in another manner; Eighth - the surplus, if any, will be paid by the Trustee to the Company or its replacement, as applicable.

 

  

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Tax will be withheld at source from the payments to the Bondholders, if there is an obligation to withhold it under any law.

 

Payment of the amounts by the Trustee to the Bondholders as stated above, from the receipts received thereby, is subject to the rights of the other creditors of the Company, which precede or are equal to those of the Bondholders under law, if any exist in accordance with the provisions of the Law.

 

	
11.

	
Authority to Demand Payment to the Holders Through the Trustee

 

Subject to an ordinary resolution of the Bondholders, the Trustee may instruct the Company in writing to transfer to the Trustee’s account, for the Bondholders and instead of the performance of the payment to them, part or all of the next payment (interest and/or principal), in order to finance proceedings and/or expenses and/or wages of the Trustee under this Deed. The Company may not refuse to act based on the notice of the Trustee, and will consider the Company to have complied with its obligation towards the aforesaid holders if it transfers the amount required by the Trustee to credit the accounts the details of which are included in the Trustee’s notice. The above will not release the Company from its obligation to bear payment of the expenses and the additional wages, if any, in the event in which it is required to bear them under this Deed or under law. Additionally, the above will not derogate from the obligation of the Trustee to act reasonably to collect the funds as stated from the Company, in the event in which the obligation to pay them applies to the Company under this Deed or under law.

 

  

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12.

	
Powers to Delay the Distribution of Funds

 

	
  

	
12.1.

	
The Trustee will be required to distribute the funds accrued for it within a reasonable time after their receipt or on the payment date of the principal and/or interest following the same date.

 

	
  

	
12.2.

	
Notwithstanding Section 12.1 above, in the event that the financial amount received as a result of taking the aforesaid proceedings and that is available at any time for distribution, as stated in the same section, is less than NIS 1 million, the Trustee will not be required to distribute it and may invest the aforesaid amount, in whole or in part, in the investments permitted under this Deed and replace the same investments from time to time with other permitted investments as it sees fit.

 

	
  

	
12.3.

	
When the aforesaid investments and their profit reach, together with the additional funds that the Trustee receives for the purpose of their payment to the Bondholders, if any, the amount sufficient for payment of the aforesaid total, the Trustee will be required to use the aforesaid amounts based on the order of priorities set forth in Section ‎10 above, and to distribute the aforesaid amount on the next payment date of the principal or interest. Notwithstanding the above, payment of the Trustee’s wages and expenses will be made from the aforesaid funds immediate upon becoming due, even if the amounts that the Trustee receives are lower than the amount of NIS 1 million.

 

	
  

	
12.4.

	
Notwithstanding the above, the Bondholders may, through passing a special resolution in a meeting of Holders, require the Trustee to pay them the amounts accrued with the Trustee even if the same does not reach NIS 1 million, all subject to the order of priorities in Section ‎10 above.

 

  

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13.

	
Notice of Distribution and Deposit With the Trustee

 

	
  

	
13.1.

	
The Trustee will inform the Bondholders of the date and place at which any payment from the payments mentioned in Sections ‎10 and ‎12 above will be performed, with prior notice 14 days in advance, which will be provided in the manner set forth in Section‎ 24 below.

 

	
  

	
13.2.

	
After the date set forth in the notice, the Bondholders will be entitled to the interest for the Bonds based on the rate set forth in the Bonds, solely on the balance of the principal amount (if any) after reducing the amount paid or offered to them to be paid as stated.

 

	
  

	
13.3.

	
The funds distributed, as stated in Section ‎13.1above, will be considered to be payment on account of the repayment.

 

	
  

	
13.4.

	
Any amount owed to the Bondholder that is not actually paid on the effective date for the payment, for a reason independent of the Company, while the Company was prepared to pay it, will cease to bear interest as of the date scheduled for its payment, and the Bondholder will be entitled solely to the same amounts to which it would have been entitled under the terms of the Bonds on the date determined for payment of the same amount on account of the principal and interest.

 

	
  

	
13.5.

	
The Company will provide the Trustee, within 15 business days from the date scheduled for the same payment, with the amount of the payment that was not paid on time, as stated in Section ‎13.4 above, and will inform the Bondholders through the MAGNA system, and the aforesaid deposit will be considered to be clearance of the same payment, and in the case of clearance of all amounts owed for the Bonds, as redemption of the Bonds as well.

 

  

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13.6.

	
The Trustee will invest, within the trust accounts in its name and for its deposit, the funds transferred thereto as stated in Section ‎13.5 above in investments permitted to the Trustee under this Deed (as stated in Section ‎16 below). In the event that the Trustee does so, it will not owe the entitled parties for the same amounts but rather will owe the consideration received from the exercise of the investments, less the reasonable expenses related to the aforesaid investment and management of the trust accounts, the reasonable fees and less the compulsory payments applicable on account of the trust. In the event that the impediment to the performance of the actual payment to the Holders is removed, the Trustee will transfer from the funds as stated amounts to the Bondholders entitled to them, as soon as possible after the Trustee is provided with the reasonable evidence and confirmations regarding their right to the same amounts, and less the reasonable expenses.

 

	
  

	
13.7.

	
The Trustee will hold the aforesaid funds and investment them in the aforesaid manner, until the end of one year from the final payment date of the Bonds (or until the date of their payment to the Bondholders, whichever is earlier). After the aforesaid date, the Trustee will transfer to the Company the amounts as stated in Section ‎13.6 above, including profits arising from their investment, less the expenses, if any remain at the time. The Company will hold the same amounts in trust for the Bondholders entitled to the same amounts, and with respect to amounts transferred thereto by the Trustee as stated above, the provisions of Section ‎13.6 above will apply, mutatis mutandis.

 

	
  

	
13.8.

	
The Company will confirm to the Trustee in writing that it holds the amounts and that they were received by the Trustee in trust for the aforesaid Bondholders.

 

	
  

	
13.9.

	
The Company will hold the same amounts in trust for the Bondholders entitled to the same amounts during one additional year from the date of their transfer thereto from the Trustee, and will not make any use thereof and will invest them in accordance with the provisions of this Deed. Funds that are not demanded from the Company by the Bondholders until the end of two years from the final payment date of the Bonds will be transferred to the Company, which may use the remaining funds for any purpose. The above will not derogate from the Company’s right towards the Bondholders, to pay the funds to which they are entitled as stated under any law, even after the period of two years as stated, subject to the period of limitation set forth by law.

 

  

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14.

	
Receipt from the Bondholders and the Trustee

 

	
  

	
14.1.

	
A signed receipt from the Trustee regarding the deposit of the principal and interest amounts therewith for the credit of the Bondholders will absolutely release the Company with respect to all matters related to the performance of the payment of the amounts set forth in the receipt.

 

	
  

	
14.2.

	
A signed receipt from the Bondholders for the principal and interest amounts paid thereto by the Trustee for the debt will absolutely release the Company with respect to all matters related to the performance of the payment of the amounts set forth in the receipt.

 

	
  

	
14.3.

	
The funds distributed, as stated in Section ‎13above, will be considered to be payment on account of the payment of the Bonds.

 

	
15.

	
Presentation of Bonds to the Trustee and Records in Connection With Partial Payment

 

	
  

	
15.1.

	
The Trustee may demand from the Bondholders the presentation to the Trustee, upon payment of any interest payment or partial payment of the principal and interest amount in accordance with the provisions of Sections ‎10, ‎12 and ‎13 above, the certificate of Bonds for which the payments are made, and the Bondholder will be required to present the Bond certificate as stated, provided that the same does not require the Bondholder to bear any payment and/or expense and/or impose on the Bondholders any liability and/or debt.

 

	
  

	
15.2.

	
The Trustee may add a note to the Bond certificate regarding the amounts paid as stated above and the payment date thereof.

 

	
  

	
15.3.

	
The Trustee may, in any special case, at its discretion, waive the presentation of the Bond certificate after the Bondholder provides it with a letter of indemnity and/or sufficient guarantee to its satisfaction for the damage that may be caused as a result of the failure to add a notice as stated, all as it sees fit.

 

  

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15.4.

	
Notwithstanding the above, the Trustee may, at its discretion, keep records in another manner regarding partial payments as stated.

 

	
16.

	
Investment of Funds

 

All of the funds that the Trustee may invest under this Deed will be invested thereby with the bank/s rated with a rating of “AA-” or higher, in its name or for its deposit, in investments in securities of the State of Israel or other securities that the laws of the State of Israel allow for the investment of trust funds, as it sees fit, all subject to the terms of this Deed of Trust, provided that any investment in securities will be made with securities rated by a rating agency with a rating that is not less than “AA-” or a parallel rating.

 

	
17.

	
The Company’s Undertakings Towards the Trustee

 

The Company hereby undertakes towards the Trustee, as long as the Bonds have not yet been repaid in full, as follows:

 

	
  

	
17.1.

	
To maintain and manage its business in an orderly and proper manner.

 

	
  

	
17.2.

	
To manage orderly financial records in accordance with the generally accepted accounting principles, to keep the records and documents used thereby as references that must be kept according to law, and to allow any authorized representative of the trustee to review, at any reasonable time coordinated in advance with the Company, any record and/or document as stated that the Trustee requests to review, if, in the reasonable opinion of the Trustee, review as stated is required for the application and operation of the authorities, proof and authorizations of the Trustee under the Deed of Trust, provided that the Trustee acts in good faith and subject to the obligations of confidentiality as stated in Section ‎18.2 below.

 

	
  

	
17.3.

	
To inform the Trustee in writing as soon as possible and no later than seven business days from the date on which the Company was made aware of the same, of the occurrence of any of the events set forth in Section 8.1 above (and its subsections).

 

  

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17.4.

	
To provide the Trustee, at his request, with a copy of any document or information that the Company has provided to the Bondholders (Series A), if any. Publication of the document or information as stated on the MAGNA system will be considered to be provided to the Trustee for the purpose of this Section 17.

 

	
  

	
17.5.

	
The Company will provide the Trustee or its authorized representative who is an attorney and/or accountant by professional (and for whom notice of appointment is provided by the Trustee to the Company upon the appointment thereof) with additional information regarding the Company (including explanations, documents and calculations related to the Company, its business or assets), upon the reasonable written request of the Trustee, if, in the Trustee’s reasonable opinion, the information is required for the Trustee to apply and use its powers, authorities and authorizations and/or those of its representative under the Deed of Trust, including information that may be essential and required for the protection of the rights of the Bondholders (Series A), provided that the Trustee acts in good faith, subject to the confidentiality undertakings as stated in Section ‎18.2 below.

 

	
  

	
17.6.

	
To provide, at the request of the Trustee, no later than the end of 30 days from the date of the first issue of the Bonds or the date of the expansion of the series (in any manner, including but not limited to a private placement or through a prospectus) of a payment schedule (updated) for payment of the Bonds (Series A) (principal and interest) in an Excel file.

 

	
  

	
17.7.

	
To invite the Trustee to the general meetings (whether to ordinary general meetings or extraordinary general meetings of the Company’s shareholders), without providing the Trustee a voting right in these meetings. Publication of an invitation to a general meeting of the Company’s shareholders in the MAGNA system will be considered to be an invitation for the Trustee for the purpose of this section.

 

  

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17.8.

	
To provide the Trustee with the reports and reporting listed in Section ‎28 below.

 

	
  

	
17.9.

	
To perform all of the actions required and/or necessary reasonably under the provisions of any law to give force to the operation of authorities, powers and authorizations of the Trustee and/or its counsel in accordance with the provisions of the Deed of Trust.

 

	 	
17.10.

	
Until May 31 of each year and as long as this Deed is in force, at the request of the Trustee, the Company will provide the Trustee with confirmation that to the best of its knowledge, in the period from the date of issue of the Bonds or a period beginning as of the date of the previous confirmation provided to the Trustee under this Section ‎17.10, whichever of the two is later, and until the date on which approval is provided, there was no material breach on the part of the Company of the Deed of Trust (including with respect to provisions in specific provisions of the Deed with respect to which the Trustee will request the Company’s reference in this confirmation), unless the matter is stated in the confirmation.

 

	
18.

	
Additional Undertakings

 

	
  

	
18.1.

	
After and if the Bonds are called for immediate repayment under the provisions of Section ‎8 above, the Company will perform, from time to time and as long as required by the Trustee, all of the reasonable actions in order to allow the operation of all of the authorities granted to the Trustee, and particularly, the Company will perform all of the following actions, insofar as reasonable:

 

	
  

	
18.1.1.

	
Will make the declarations and/or sign the documents and/or perform and/or cause the performance of all of the actions required and/or necessary in accordance with the law to give force to the operation of authorities, powers and authorizations of the Trustee and/or its counsel in accordance with the provisions of the Deed of Trust.

 

  

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18.1.2.

	
Will provide all of the notices, deposits and instructions that the Trustee deems beneficial and is required for the application of the provisions of this Deed.

 

	
  

	
18.2.

	
Subject to the provisions of all laws and what is stated in this Deed of Trust, the Trustee undertakes, by his signing this Deed, to maintain in confidentiality all information provided to him by the Company and/or a subsidiary of the Company and/or a corporation under its control and/or a controlling shareholder of the Company (directly or indirectly) and/or a corporation under the control of the Company’s controlling shareholder (directly and/or indirectly) and/or their relatives and/or a party on behalf of those listed above (hereinafter: the “Information”), will not disclose it to another and will not use it unless the disclosure or use is required for the fulfillment of its obligation under the Securities Law, under the Deed of Trust, or under an order of the Court, provided that the disclosure of the Information as stated will be limited to the minimum extent and scope required in order to meet the requirements of the law, and that the Trustee coordinates with the Company in advance, to the extent permissible, the content and timing of the disclosure, in order to allow the Company reasonable time to petition the courts and prevent the transfer of the Information as stated. The Trustee will maintain the absolute confidentiality of the information, at least with the same level of care with which it maintains the confidentiality of its own information, and will take no less than a high level of care. Without derogating from the generality of the above, if the Trustee provides information as stated to its authorized representatives and/or professional advisors, it will ensure that the confidentiality undertakings will be kept by them in a similar manner. The transfer of information as stated to the authorized representatives and/or professional advisors of the Trustee (hereinafter jointly: the “Consultants”) will take place subject to having the Consultants sign letters of confidentiality such that the provisions of this section will also apply to the agents of the Trustee and its Consultants.

 

  

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19.

	
Reporting by the Trustee

 

	
  

	
19.1.

	
In the event that the Trustee becomes aware of a substantial breach of the Deed of Trust by the Company, it will inform the Bondholders of the breach within a reasonable time and without delay, subject to the provisions of the law. This obligation will not apply to an incident published by the Company under the law.

 

	
  

	
19.2.

	
The Trustee will prepare, every year on the date set forth in the Law, and the absence of the determination of a date as stated, by the end of the second quarter of each calendar year, an annual report of trust matters (hereinafter: the “Annual Report”).

 

The Annual Report will include detail of the following matters:

 

	
  

	
19.2.1.

	
Ongoing details of the process of the trust matters in the past year.

 

	
  

	
19.2.2.

	
Reporting of extraordinary events in connection with the trust that occurred during the past year.

 

The Holders may review the Annual Report at the offices of the Trustee during normal working hours and may receipt a copy of the report upon request.

 

	
20.

	
Trustee’s Wages

 

The Company will pay the Trustee wages for his services, in accordance with the Third Addendum of this Deed of Trust.

 

	
21.

	
Special Powers

 

	
  

	
21.1.

	
The Trustee may, within the performance of the trust matters under this Deed, commission an opinion or written counsel of any attorney, accountant, assessor, appraiser, surveyor, broker or other expert (hereinafter: the “Consultants”), whether such opinion or counsel was prepared at the request of the Trustee and/or by the Company, and to act based on its conclusions, and the Trustee will not be responsible for any loss or damage caused as a result of any action or omission performed thereby in reliance on the counsel or opinion as stated, unless the Trustee acted negligently (excluding negligence exempt under law, as the case may be from time to time) and/or in bad faith and/or maliciously. The Trustee will provide a copy of the opinion or counsel as stated for the review of the Bondholders and the Company, at their request. The Company will bear all of the wages and reasonable expenses of hiring the advisors appointed as stated. The Trustee and the Company will reach an agreement as to a list of no more than three reputable consultant firms with relevant expertise, which the Trustee may contact for fee proposals as stated. The Company will select one offer from the offers submitted, and may conduct negotiations with the offices as to their proposals.

 

  

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21.2.

	
Any such counsel or opinion may be provided, sent or received through a letter, telegram, facsimile or any other electronic means for the transfer of information, and the Trustee will not be responsible for actions performed in reliance on counsel or information or knowledge transferred in one of the methods mentioned above, despite the same containing errors or not being authentic, unless the errors or lack of authenticity could have been discovered with a reasonable examination, provided that the Trustee did not act negligently (excluding negligence exempt under law, as it may be from time to time) and/or in bad faith and/or maliciously. It is clarified that the documents may be transferred on the one hand, and the Trustee may rely on them, on the other hand, only in the event in which they are received in a clear manner, and when no difficulty arises in reading them. In any other case, the Trustee will be responsible to demand their receipt in a manner enabling their proper reading and understanding.

 

	
  

	
21.3.

	
The Trustee will not be required to inform any party of signing this Deed and may not intervene in any manner in the management of the Company’s business or affairs. This section will not limit the Trustee in actions that it is required to perform in accordance with this Deed of Trust.

 

	
  

	
21.4.

	
The Trustee will act with the trust, powers, authorizations and permissions granted thereto under this Deed of Trust at its absolute discretion, and will not be responsible for any damage caused following a mistake in discretion as stated, unless the Trustee acted negligently (excluding negligence exempt under law, as it may be from time to time) and/or in bad faith and/or maliciously.

 

  

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22.

	
The Trustee’s Power to Employ Agents

 

Subject to providing notice to the Company in advance, and provided that the Trustee does not feel that the same may harm the rights of the Bondholders, the Trustee may appoint an agent/s to act in its place, whether an attorney or otherwise, in order to perform or participate in the performance of special actions that must be performed in connection with the trust, and pay reasonable wages to any such agent. Without derogating from the generality of the above, the same includes taking legal actions or representations in merger or division proceedings of the Company. The Company may oppose such appointment in the case in which the agent is a competitor, directly or indirectly, in the business of the Company or corporations under its control and/or in the case in which there is a concern that the agent may be found, directly or indirectly, in a case of a conflict of interests between the appointment and its position as an agent and its personal affairs, and its other roles or connections to the Company or the corporations under its control, provided that notice of the Company’s objection as stated has been provided to the Trustee no later than ten business days from the date on which the Trustee was provided with notice of its intention to appoint an agent as stated. It is clarified that the appointment of an agent will not derogate from the responsibility of the Trustee for its actions and the actions of the agent. The Trustee may pay, at the Company’s expense, the reasonable wages of such an agent, and the Company will repay the Trustee, at its first request, any expense as stated, provided that prior to the appointment of the agent as stated, the Trustee will inform the Company in writing of the appointment in addition to detail of the wages of the agent and the purpose of its appointment, and that the circumstances of the cost of the wages of the agents does not deviate from the boundaries of reasonable and acceptable. It is clarified that the publication of the results of the decision of the Bondholders regarding the appointment of agents will constitute notice as stated, provided that before the appointment as stated, the Trustee has provided the Company with all of the information and detail as stated above. For the avoidance of doubt, the Company will not repay the Trustee for the wages or expenses of an agent that was present on the Trustee’s behalf in a meeting of the Bondholders or an agent that completed the ordinary actions that the Trustee is required to perform under this Deed of Trust, since the performance of these actions is included in the fees that the Trustee receives from the Company under the provisions of Section 20 above. For the avoidance of doubt, in the case that the Bonds are called for immediate payment, the actions that the Trustee is required to take in connection with the same will not be considered to be ordinary actions that the Trustee is required to perform under this Deed of Trust for the purpose of this section.

 

  

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23.

	
Indemnification

 

	
  

	
23.1.

	
The Company and the Bondholders (on the relevant date, as stated in Section ‎23.5 below, each for its obligations as stated in Section ‎23.3 below) hereby undertake to indemnify the Trustee and any officer thereof, its employees, shareholders, agent or an expert appointed and other entities on behalf of the Trustee under the terms of the Deed of Trust and/or a decision passed in a meeting of the Bondholders (hereinafter: the “Parties Entitled to Indemnification”), provided that there is no dual indemnification or compensation in the same matter:

 

	
  

	
23.1.1.

	
For any reasonable expense, damage, payment or financial charge under a judgment or arbitral judgment (for which no stay of proceedings is ordered) or under a settlement concluded (and if the settlement relates to the company, the Company provides its consent to the settlement), the grounds of any of which relate to actions performed by the Parties Entitled to Indemnification or that the Parties Entitled to Indemnification failed to perform (as applicable) or are required to perform under the provisions of this Deed and/or a law and/or provision of the competent authority and/or any law and/or the demand of the Bondholders and/or based on the request of the Company, all in connection with this Deed of Trust; and

 

  

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23.1.2.

	
For wages owed to the Parties Entitled to Indemnification and reasonable expenses incurred and/or that will be incurred following the execution and/or use of the powers and authorities under this Deed or under law or in connection with such actions, which they reasonably believed must be performed, all provided that none of the following situations takes place:

 

	
  

	
23.1.2.1.

	
The matter for which the indemnification is provided cannot be delayed (without derogating from their right to demand retroactive indemnification, if they become eligible);

 

	
  

	
23.1.2.2.

	
The Parties Entitled to Indemnification acted in bad faith;

 

	
  

	
23.1.2.3.

	
The Parties Entitled to Indemnification acted outside of the framework of their duties and/or contrary to the terms of the Deed and/or the provisions of the law;

 

	
  

	
23.1.2.4.

	
The Parties Entitled to Indemnification were negligent (excluding negligence exempt under law, as it may be from time to time);

 

	
  

	
23.1.2.5.

	
The Parties Entitled to Indemnification acted with malice;

 

	
  

	
23.1.2.6.

	
The Parties Entitled to Indemnification did not inform the Company in writing, immediately upon being made aware of the charge, and did not allow the Company to manage the proceedings (excluding in cases in which the proceedings were managed by the insurance company of the trustee or if the Company is in a conflict of interests).

 

  

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The indemnification undertaking under this Section ‎23.1 will be the: “Indemnification Undertaking.”

 

It is clarified that even if the case in which claims are made against the Parties Entitled to Indemnification that they are not entitled to indemnification due to subsection 23.1.2.2-23.1.2.4 above, the Trustee alone (and not the other Parties Entitled to Indemnification, including its agents) will be entitled, immediately upon its first request, to payment of the amount owed thereto for the “Indemnification Undertaking.” In the case in which it is determined in any judicial decision (even if the decision as stated is subject to appeal) that the Trustee does not have the right to indemnification, the Trustee will return the Indemnification Undertaking amounts paid thereto.

 

	
  

	
23.2.

	
Without derogating from the validity of the Indemnification Undertaking in Section 23.1 above and subject to the Securities law, as long as the Trustee is required under the terms of the Deed of Trust and/or under law and/or a provision of a competent authority and/or any law and/or at the request of the Bondholders and/or at the request of the Company to perform any action, including but not limited to initiating proceedings or filing a claim for the Bondholders as stated in this Deed, the Trustee may refrain from taking any such action until it receives a financial deposit to its satisfaction from the Company, and in the event that the Company does not provide a financial deposit for any reason, from the Bondholders to cover the Indemnification Undertaking (hereinafter: the “Financing Cushion”). The Trustee will contact the Bondholders that held [Bonds] on the effective date (as stated in Section 23.5 below), with a request that they provide the Financing Cushion amount, each based on its relative share (as this term is defined below). In the case that the Bondholders do not actually deposit the entire Financing Cushion amount, the Trustee will not be required to take an action or the relevant proceedings. The above will not exempt the Trustee from taking an urgent action required in order to prevent substantial detrimental harm to the rights of the Bondholders.

 

  

54

  

	
  

	
23.3.

	
The Indemnification Undertaking:

 

	
  

	
23.3.1.

	
Will apply to the Company for the following cases: (1) an action performed and/or that must be performed under the terms of the Deed of Trust or to protect the rights of the Bondholders; and (2) actions performs and/or that must be performed at the request of the Company.

 

	
  

	
23.3.2.

	
Will apply to the Holders that hold the relevant bonds on the effective date (as stated in Section 23.5 below) in the following cases: (1) actions performed at the request of the Bondholders (excluding actions as stated that are taken at the request of Holders, for the grounds set forth in this Deed of Trust, to protect the rights of the Bondholders); and (2) in the case of non-payment by the Company of all or part of the “Indemnification Undertaking” amount, as applicable, applicable thereto under Section 23.1 above (subject to the provisions of Section 23.7 below). It is clarified that the payment in accordance with this subsection (2) will not derogate from the Company’s obligation to bear the Indemnification Undertaking in accordance with the provisions of Section 23.3.1.

 

	
  

	
23.4.

	
In any case in which the Company does not pay the amounts required to cover the Indemnification Undertakings and/or in the case that the Indemnification Undertaking applies to Holders under the provisions of Section 23.3.2 above and/or the Holders are requested to deposit the Financing Cushion amount under Section 23.2 above, the following provisions will apply:

 

	
  

	
23.4.1.

	
The funds will be collected in the following manner:

 

	
  

	
23.4.1.1.

	
First - the amount will be financed from the interest funds and/or principal that the Company must pay to the Bondholders after the date of the required action, and the provisions of Section 11 above will apply;

 

	
  

	
23.4.1.2.

	
Second - if, if the Trustee’s opinion, the amounts deposited in the Financing Cushion are not sufficient to cover the Indemnification Undertaking, the Holders that hold on the effective date (as stated in Section 23.5 below) will deposit the missing amount, each based on its relative share (as this term is defined) with the Trustee. The amount deposited by each Bondholder will bear annual interest at an amount equal to the interest set forth for the Bonds, and will be paid based on the priority as stated in Section 11 above.

 

  

55

  

“Relative Share” shall mean - the relative share of the Bonds held by the Holder on the relevant effective date as stated in Section 23.5 below, from the total par value in circulation at the time. It is clarified that calculating the relative share will remain constant even if after the same date, a change occurs to the par value of the Bonds held by the Holder.

 

	
  

	
23.5.

	
The effective date for the determination of liability in the Indemnification Undertaking and/or the effective date for payment of the Financing Cushion is as follows:

 

	
  

	
23.5.1.

	
In any case in which the Indemnification Undertaking and/or the Financing Cushion payment are required due to a resolution or urgent action that is required to prevent substantial detrimental harm to the rights of the Bondholders, without a prior decision of a meeting of the Bondholders, the effective date for the charge will be the end of the trading day on the day on which the action was taken or the date of the decision, and if the same is not a trading day, the preceding trading day.

 

	
  

	
23.5.2.

	
In any event in which the Indemnification Undertaking and/or Financing Cushion payment are required based on a decision of a meeting of the Bondholders - the effective date for the charge will be the effective date for participation in the meeting (as determined in the invitation notice), and will also apply to a holder that is not present or a participant in the meeting.

 

  

56

  

	
  

	
23.6.

	
The payment by the holders in lieu of the Company of any amount imposed on the Company under this Section 23 will not release the Company from its obligation to bear payment as stated.

 

	
  

	
23.7.

	
The reimbursement to the Bondholders which bore payments under this section will take place based on the order of priorities set forth in Section 10 above.

 

	
24.

	
Notices

 

	
  

	
24.1.

	
Any notice on behalf of the Company and/or the Trustee to the Bondholders will be provided through the publication of an immediate report in the MAGNA system, and in the following cases, the notice will also be published in two daily newspapers distributed in Israel in Hebrew: (a) a settlement arrangement under Section 350 of the Companies Law; (b) a merger. Any notice published or that is sent as stated will be considered to have been delivered to the Bondholders on the publication date as stated (on the MAGAN, Edgar or newspapers, as applicable).

 

	
  

	
24.2.

	
The Trustee may instruct the Company, and the Company will be required to immediately report to MAGNA on behalf of the Trustee, of any report with its wording as provided in writing by the Trustee to the Company.

 

	
  

	
24.3.

	
In the case in which the Company ceases to be a foreign corporation (as this term is defined by law), to which the provisions of Chapter E3 of the Law apply, and ceases to be a “reporting corporation” as this term is defined in the Securities Law, any notice on behalf of the Company and/or Trustee to the Bondholders will be provided by being sent via registered mail based on the most recent address of the registered holders of the Bonds, as set forth in the Register of Bondholders and/or by its publication in two daily newspapers distributed in Israel in Hebrew. Any notice sent via mail as stated will be considered to have been provided to the Bondholder three (3) business days from the date of its dispatch with registered mail.

 

  

57

  

	
  

	
24.4.

	
Copies of notices and invitations provided by the Company to the Bondholders will be sent to the Trustee as well. It is clarified that notices and invitations as stated do not include ongoing reports of the Company to the public. Copies of the notices and invitations provided by the Trustee to the Bondholders will be sent to the Company as well.

 

	
  

	
24.5.

	
Any notice or demand on behalf of the Trustee to the Company or on its behalf to the Trustee may be provided by a letter sent via registered mail based on the address set forth in the Deed of Trust (or based on another address which one party will inform the other of in writing) or through facsimile (in addition to telephone confirmation regarding its receipt by the recipient) or by sending it via email with email confirmation being received of its receipt (not automatic delivery confirmation) by the receiving party, and any such notice or demand will be considered to be notice received by the party to which it was sent three business days from being delivered via registered mail, about one business day from being sent via email or facsimile, or on the first business day after the date of its delivery via courier or being offered for acceptance by the sender, as applicable.

 

	
25.

	
Waiver, Settlement and/or Changes to the Terms of the Bonds and the Deed of Trust

 

	
  

	
25.1.

	
Subject to the provisions of the Law and the regulations enacted or that will be enacted thereunder, the Trustee may, from time to time and at any time, if convinced that there is no harm to the rights of the Bondholders or that the same will benefit the Bondholders, waive any breach or any non-fulfillment of any of the conditions of the Bonds or this Deed by the Company.

 

	
  

	
25.2.

	
Subject to the provisions of the Law and with prior consent in a special resolution (as defined in Section ‎1.7 above), the Trustee may, whether before or after the principal of the Bonds is called for repayment, settle with the Company in connection with any right or claim of the Bondholders (Series A) or any of them, and agree with the Company to any arrangement on their rights, including to waive any right or claim of the Company and/or the Bondholders (Series A) or any of them towards the Company.

 

  

58

  

	
  

	
25.3.

	
Subject to the provisions of the Law and the regulations enacted or that will be enacted thereunder, the Company and the Trustee may, whether before or after the principal of the Bonds is called for repayment, change the Deed of Trust and/or the terms of the Deed, if one of the following is met:

 

	
  

	
25.3.1.

	
Excluding a change to the identity of the Trustee or its wages, or to appoint a trustee in the place of a Trustee whose service is concluded, if the Trustee is convinced that the change does not harm the Bondholders.

 

	
  

	
25.3.2.

	
The change proposed is approved by a special resolution (as defined in Section ‎1.7 above).

 

	
  

	
25.4.

	
The Company will provide the Bondholders with written notice of any change as stated under Section 25.1, Section 25.2 or Section 25.3 above, as soon as possible after its execution.

 

	
  

	
25.5.

	
In any event of use of a right of the Trustee under this Section, the Trustee may demand from the Bondholders to provide it or the Company with the certificate of the Bonds to record a note thereon regarding any settlement, arrangement, change or amendment as stated, and at the request of the Trustee, the Company will add a note as stated on a certificate provided thereto. In any event of use of any of the Trustee’s rights under this Section, it will inform the Bondholders of the same immediately and as soon as possible.

 

  

59

  

	
  

	
25.6.

	
Without derogating from the above, the conditions of the Bonds may be amended even within a settlement or arrangement, certified by the court, under Section 350 of the Companies Law.

 

	
26.

	
The Bondholder Registry

 

	
  

	
26.1.

	
The Company will hold and manage at its registered office a registry of the Bondholders, which will contain the names of the Bondholders, their addresses, the numbers and par value of the Bonds listed in their names. The Bondholders Registry will list any transfer of ownership of the Bonds. The Trustee and any Bondholder may review the Registry of Bondholders as stated at any reasonable time. The Company may close the Registry of Bondholders from time to time for a period or periods that do not exceed, jointly, thirty days each year.

 

	
  

	
26.2.

	
The Company will not be required to record in the Registry of Bondholders any notice regarding explicit trust, implicit or estimated trust, or a pledge or lien of any type or kind, or any equitable right, claim or offset, or any other right in connection with the Bonds. The Company will only recognize ownership of a person in whose name the Bonds are registered. The lawful heirs, estate managers or executors of the estate of the registered holder, and any person entitled to the Bonds due to the bankruptcy of any registered Holder (and if the same is a corporation - due to its liquidation) may be registered as Holders thereof after providing evidence that, in the Company’s opinion, will be sufficient for evidence of their right to be registered as their holders.

 

	
27.

	
Certificates and Splitting Certificates

 

	
  

	
27.1.

	
In respect of the bonds (Series A) registered in the name of one holder, the holder shall be issued one certificate, or at his request, he shall be issued a number of certificates in a reasonable amount (and the certificates mentioned in this section shall hereinafter be called: the “Certificates”), each in a minimum quantity of NIS 1,000 (one thousand) par value (hereinafter: the “Minimum Quantity”).

 

  

60

  

	
  

	
27.2.

	
Each certificate may be split into certificates where the total par value of the Bonds included therein is equal to the amount of the par value of the Bonds included in the certificate that is requested to be split, provided that the par value for each certificate is not less than the Minimum Quantity. The split will take place based on a split request that is signed by the registered holder of the Bonds at the subject of the certificate that was split, against the transfer of the certificate that is requested to be split to the Company at its registered offices. The split will take place within 30 days from the end of the month in which the certificate is provided together with the request to be split in the registered office of the Company. The new bond certificates that are issued following the split will be in amounts of the par value in full new shekels, each. All of the costs involved in the split, including taxes and levies, if such shall apply, will fall on the party requesting the split.

 

	
28.

	
Report to the Trustee

 

	
  

	
28.1.

	
In addition to Section ‎17 above, the Company will prepare and the Trustee with the following, as long as the Bonds are not repaid:

 

	
  

	
28.1.1.

	
Consolidated and audited financial statements of the Company for the financial year ending on December 31 of the previous year, immediately after the publication by the Company.

 

	
  

	
28.1.2.

	
Any publication of quarterly consolidated financial results of the Company, immediately upon their publication by the Company.

 

	
  

	
28.1.3.

	
A copy of any document that the Company provides the Bondholders.

 

	
  

	
28.2.

	
Publication of the reports and/or information as stated above on the MAGNA system by the Company will be considered to be its delivery to the Trustee.

 

  

61

  

	
29.

	
Application of the Securities Law

 

Any matter not mentioned in this deed as well as in any event of a contradiction between provisions of the law and its regulations (that may not be conditioned upon) and between this Deed, the parties will act in accordance with the provisions of the law and its regulations.

 

	
30.

	
Bondholders’ Meetings

 

The general meetings of Bondholders will be convened and conducted in accordance with the conditions set forth in the Second Addendum of the Deed of Trust.

 

	
31.

	
Early Payment of the Bonds Initiated by the Stock Exchange

 

In the case in which the Stock Exchanged decides to delist the Bonds in circulation due to the value of the series of Bonds being less than the amount determined in the guidelines of the Stock Exchange regarding delisting Bonds from trade, the Company will act in the following manner:

 

	
  

	
31.1.

	
Within 45 days from the date of the decision of the board of directors of the Stock Exchange to delist from trade as stated, the Company will announce the date of early payment at which the Bondholders (Series A) may be repaid. The Company will pay the Holder the principal in addition to interest based on the terms of the Bonds (Series A) accrued until the actual payment date.

 

	
  

	
31.2.

	
Notice of the early repayment date will be published in an immediate report that will be sent to the Authority and Stock Exchange and in two daily newspapers distributed in Israel in Hebrew, and will be provided in writing to all of the registered Holders (if any) of the Bonds (Series A).

 

	
  

	
31.3.

	
The early payment date will apply no earlier than 17 days before the publication of the notice and no later than 45 days from the aforesaid date, but not in the period between the effective date for payment of interest and the date of its actual payment.

 

	
  

	
31.4.

	
On the early repayment date, the Company will repay the Bonds (Series A) that holders have requested to redeem, based on the balance of the par value thereof in addition to the interest that has accrued on the principal until the actual redemption date (the calculation of the interest will be performed on a basis of 365 days per year).

 

  

62

  

	
  

	
31.5.

	
The determination of the early payment date as stated above will not harm the redemption rights set forth in the Bonds of any of the Bondholders that do not redeem them on the early redemption date as stated above, but the Bonds (Series A) will be delisted from trade in the Stock Exchange and will be subject to, inter alia, the tax implications arising from the same.

 

	
  

	
31.6.

	
Early redemption of the Bonds (Series A) as stated above will not grant any party holding the Bonds that are redeemed as stated will the right for payment of the interest for the period following the redemption date.

 

	
32.

	
Early Redemption Initiated by the Company

 

	
  

	
32.1.

	
The Company will be entitled (but is not required), at its sole discretion, to perform early redemption, in whole or in part, of the Bonds (Series A), at any time, but not before at least 60 days transpire from the date on which the Bonds are listed for trade in the Stock Exchange, and in such a case, the following provisions will apply, all subject to the guidelines of the Securities Authority and the provisions of the bylaws of the Stock Exchange as they may be from time to time.

 

	
  

	
32.2.

	
The minimum amount of any early redemption will not be less than NIS 3,000,000 million. Notwithstanding the above, the Company may perform early redemption in a scope lower than NIS 3,000,000 million, provided that the frequency of the redemption as stated does not exceed one per year.

 

	
  

	
32.3.

	
Upon the Company’s board of directors reaching a resolution regarding the performance of early redemption as stated, the Company will publish an immediate report regarding the performance of early redemption for the Bondholders (Series A), with a copy to the Trustee, for which the effective date will be determined in the immediate report and will occur no less than 17 days and no more than 45 days before the performance of the early redemption. The early payment date will not occur in the period between the effective date for the payment of interest for the Bonds (Series A) and between the actual interest payment date. In the immediate report as stated, the Company will publish the principal amount that will be repaid in the early redemption, as well as the interest that has accrued for the aforesaid principal amount until the date of the early redemption, in accordance with the following.

 

  

63

  

	
  

	
32.4.

	
Partial redemption will not occur more frequently than once per calendar quarter, and if partial redemption does occur in a quarter in which interest and/or principal payments are made, the partial early redemption will take place on the date on which the aforesaid payment is performed.

 

	
  

	
32.5.

	
Early redemption will not be performed for part of the series of the Bonds if the last redemption amount is less than NIS 3.2 million. On the date of the partial early redemption, if any, the Company will announce the following in an immediate report:

 

	
  

	
32.5.1.

	
The partial redemption rate in terms of the unpaid balance;

 

	
  

	
32.5.2.

	
The partial redemption rate in terms of the original series;

 

	
  

	
32.5.3.

	
The partial redemption interest rate on the redeemed part;

 

	
  

	
32.5.4.

	
The interest rate that will be paid with partial redemption, calculated regarding the unpaid balance;

 

	
  

	
32.5.5.

	
An update of the partial redemption rates remaining, in terms of the original series;

 

	
  

	
32.5.6.

	
The effective date for entitlement to receive the early redemption of the principal of the Bonds, which is 12 days before the date determined for the early repayment.

 

	
  

	
32.6.

	
Partial early repayment will be performed, pari passu, for each of the Bondholders.

 

  

64

  

	
  

	
32.7.

	
The amount paid to the Bondholders (Series A) in the case of early redemption will be the higher of the following amounts:

 

	
  

	
32.7.1.

	
The market value of the Bonds (Series A) in circulation, which will be determined based on the average closing price of the Bonds (Series A) in thirty (30) trading days before the date on which a resolution is passed by the board of directors regarding early redemption;

 

	
  

	
32.7.2.

	
The liability value of the Bonds (Series A) that are available for early repayment in circulation, meaning: the principal in addition to interest, until the actual early redemption date.

 

	
  

	
32.7.3.

	
The balance of the cash flow of the Bonds (Series A) available for early repayment (principal in addition to interest), when discounted based on the yield of government bonds (as defined below) in addition to interest at an annual rate of 1.5%; discounting the Bonds (Series A) available for early redemption will be calculated as of the early redemption date and until the last payment date determined with respect to the Bonds (Series A), available for early redemption, as determined in the first offering report.

 

In this regard: the “Yield on Government Bonds” means the average yield (gross) for redemption, in a period of seven business days, ending two business days before the date of notice of the early redemption, of three series of government shekel bonds whose average lifespan is the closest to the average lifespan of the Bonds (Series A) on the relevant date.

 

	
33.

	
Addresses

 

The addresses of the parties will be as they appear in the preamble to this Deed, or any other address of which one party notifies the other in writing.

 

	
34.

	
Applicable Law and Jurisdiction

 

The law applicable to this Deed of Trust and its appendices is Israeli law. The sole and exclusive jurisdiction with respect to this Deed will be granted to the competent courts of Tel Aviv Jaffa.

 

	
35.

	
Authority to Report to MAGNA

 

The Trustee, by signing this Deed, authorizes the electronic authorized signatories of the Company, as they may be, to report in its name on MAGNA regarding its engagement in this Deed and signature, to the extent required by law.

 

  

65

  

  

	
36.

	
General

 

Without derogating from the other provisions of this Deed and of the Bonds, any waiver, extension, discount, silence, refraining from taking action ("Waiver") on the part of the Trustee regarding non-fulfillment or partial fulfillment or improper fulfillment of any obligation to the Trustee according to this Deed and the Bonds will not be considered as a Waiver on the part of the Trustee of any right, but rather limited consent to the special opportunity in which it was granted. Without derogating from the other provisions of this Deed and the Bond, any change in undertakings to the Trustee requires receipt of the Trustee's prior written consent Any other consent, whether oral or by means of Waiver and refraining from taking action or in any other way which is not written will not be considered consent of any kind. The Trustee's rights according to this agreement are individual and independent of one another, and are in addition to any right existing and/or which shall be granted to the Trustee according to law and/or agreement (including this Deed and the Bond).

In witness whereof the parties have signed:

 

	
/s/ Dan Avnon

	  	
/s/ Amir Philips

 

/s/ Yakir Ben-Naim

 

	
Hermetic Trusts (1975) Ltd.

	  	
Optibase Ltd.

 

I, the undersigned, Adv. Adva Bitan, certify that this Deed of Trust was duly signed by OptiBase Ltd. (hereinafter: the “Company”) under its articles of association, through Amir Phillips and Yakir Ben Naim, whose signature bind the Company in connection with this Deed.

 

/s/ Adva Bitan

Adv. Adva Bitan

  

66

  

Optibase Ltd.

First Addendum

Bond Certificates (Series A)

 

Bonds (Series A), which are payable in in twelve (12) payments, are hereby issued, with the payments being consecutive and equal, on June 30 and December 31 of each of the years 2016 through 2021 (with the first payment for the principle being executed on June 30, 2016, and the last payment being executed on December 31, 2021), bearing annual interest at a rate determined in the Tender, as stated below.

 

The Bonds (Series A), registered by name

 

Certificate Number: [__]

 

Total par value of the Bonds in this certificate is NIS [___].

 

The registered owners of the Bonds in this certificate: Mizrahi Tefahot Nominee Company Ltd.

 

	
1.

	
This certificate attests to the fact that OptiBase Ltd. (hereinafter: the “Company”) will pay on June 30 and December 31 of each of the years 2016 through 2021 8.33% of the par value of the Bonds in this certificate (excluding the last payment in a rate of 8.37% of the par value of the Bonds in this certificate), to a party that is the registered holder (as defined in the overleaf conditions) of the Bonds on the effective date for the same payment, all subject to the terms on the overleaf and the Deed of Trust dated August 2, 2015 between the Company on the one hand and Hermetic Trust (1975) Ltd. and/or any party that serves from time to time as a trustee of the Bondholders under the Deed of Trust (the “Trustee”).

 

	
2.

	
This Bond bears interest in the annual rate set forth above, which will be paid on the dates, all in accordance with the overleaf conditions.

 

	
3.

	
This Bond will not be linked (principal and interest), all as set forth in the overleaf conditions.

 

	
4.

	
This Bond is issued as part of Series A of the Bonds (Series A) whose terms are identical to the terms of this Bond, subject to the terms set forth in the overleaf and in accordance with the Deed of Trust (hereinafter: the “Deed of Trust”) dated August 2, 2015, signed between the Company and the Trustee.

 

	
5.

	
The Bonds are not secured by any collateral.

 

	
6.

	
It is clarified that the provisions of the Deed of Trust will constitute an integral part of the provisions of this Bond and will bind the Company and the Holders of the Bonds included in Series A. In any event of a conflict between this certificate and the Deed of Trust, the provisions of the Deed of Trust shall prevail.

 

	
7.

	
Payment of the principal and the last payment of the interest will be performed against the delivery of the Bonds to the Company at its registered office, as stated in the overleaf conditions or in any other place announced by the Company, no later than five business days before the payment date.

 

	
8.

	
All of the Bonds (Series A) will rank equally amongst each other (pari passu), without having any priority of one over the other.

 

	
9.

	
The Company may issue, at any time and from time to time in any manner (including a private placement or offer to the public), at its sole discretion, without requiring the consent of the Bondholders or the Trustee or providing notice to any of them as to the same, including an issue to an Affiliated Holder as defined in Section ‎4.2 of the Deed of Trust, bonds of a different class or different series of bonds or other securities or any type or kind, with or without ancillary rights for the purchase of the Company’s shares, with terms of interest, linkage, securities, payment, and other conditions, if the Company sees fit, whether preferential over the terms of the Bonds, equal or inferior to them. The Company also reserves the right to increase the Series from time to time at its sole discretion, in accordance with the provisions of any law and subject to the provisions of Section 3.2 of the Deed of Trust.

 

	
10.

	
Any transfer of the Bonds is subject to the transfer limitations set forth in Section 9 of the overleaf conditions of the certificate of the Bond.

 

  

67

  

Signed by the Company on [_____].

 

	 	
 

 Optibase Ltd.

	 

 

	By: Authorized Signatory: [________] 	Authorized Signatory: [_________]	 

 

I the undersigned, ____________, Adv., certify that this Bond certificate was duly signed by OptiBase Ltd. company according to its bylaws, by means of Mr. ____________________ and his signature binds the Company for____________________ purposes of this Bond.

 

[__________], Adv.

 

  

68

  

 

The Terms Listed on the Overleaf

 

	
1.

	
General

 

Unless explicitly stated otherwise, the terms of the Bonds (including the terms on the overleaf) will have the meanings granted to them in the Deed of Trust to which this Bond is attached.

 

The terms of the Bonds (the terms on the overleaf) are an integral part of the provisions of the Deed of Trust and the provisions of the Deed of Trust will be considered to have been explicitly included in the terms of these bonds. In any event of a conflict between this Bond and the Deed of Trust, the provisions of the Deed of Trust shall prevail.

 

	
2.

	
The Bonds

 

	
  

	
2.1.

	
The Bonds (Series A), in this certificate are part of a series of Bonds (Series A), registered by name.

 

	
  

	
2.2.

	
The Bonds bear interest, as set forth in Section ‎3 through ‎5 below.

 

The Bonds in this certificate will be listed for trade in the Stock Exchange.

 

	
  

	
2.3.

	
The Expansion of the Series

 

For details, see Section ‎3.2 of the Deed of Trust.

 

	
  

	
2.4.

	
Issue of Additional Securities

 

For details, see Section ‎3.3 of the Deed of Trust.

 

	
  

	
2.5.

	
Collateral

 

For details, see Section 6 of the Deed of Trust.

 

	
3.

	
Principal

 

The Bonds will be payable (principle) in twelve (12) payments, with the payments being consecutive and equal, on June 30 and December 31 of each of the years 2016 through 2021 (with the first payment for the principle being executed on June 30, 2016, and the last payment being executed on December 31, 2021). 2

 

The Bonds shall not be linked to any index or currency.

 

	
2

	
Each of the first 11 payments will be in a rate of 8.33% of the principal and the last payment will be in a rate of 8.37% of the principle.

  

69

  

	
4.

	
The Interest

 

The unpaid balance of the Bonds (Series A) in circulation will bear annual interest at a fixed rate that will be determined in the Tender (without linkage to any index or currency) (but subject to adjustments in the case of a deviation from the Financial Covenants as set forth in Section 5.3 of the Deed of Trust).

 

The interest for the Bonds (Series A) will be paid in thirteen (13) biannual payments, on June 30 and December 31 of each of the years 2015 through 2021 (inclusive), with the first interest payment being made on December 31, 2015, and the last interest payment being made on December 31, 2021, for the period of six (6) months ending on the payment date (hereinafter: the “Interest Period”), other than the first interest payment, which will be made on June 30, 2015, for the period beginning on the first trading day after the closing date of the signatures and ending on the first payment date of the interest (hereinafter: the “First Interest Period”), when calculated on a basis of 365 days per year, based on the number of days in this period. The interest rate that will be paid for a particular interest period (other than the First Interest Period) (meaning, the period that begins on the first day after the end of the interest period immediately prior and ending on the interest payment day immediately after the commencement date) will be calculated as the yearly interest rate divided by two (hereinafter: the "Semiannual Interest Rate"). The Company will publish an immediate report of the results of the tender relating to the issue of the Bonds (Series A), the first interest rate, the interest rate determined in the Tender as stated, and the biannual interest rate.

  

70

  

 

	
5.

	
Interest and Principle Payments on the Bonds

 

	
  

	
5.1.

	
The payments on account of principal in respect of the Bonds (Series A) will be paid to the individuals that hold the Bonds (Series A) on June 18 and December 19 of each of the years 2016 through 2021 (inclusive), which precede the payment date on the relevant payment, other than the final payment.

 

	
  

	
5.2.

	
The payments on account of interest in respect of the Bonds (Series A) will be paid to the individuals that hold the Bonds (Series A) on June 18 and December 19 of each of the years 2015 through 2016 (inclusive), as of December 2015 and until December 2021 (inclusive), which precede the payment date on the relevant payment, other than the final payment.

 

	
  

	
5.3.

	
Notwithstanding the aforesaid, the final payment of principal and interest that will be made in exchange for the delivery of the certificates of the Bonds (Series A) to the Company on the payment date, will take place at the Company's registered office or in any other place which the Company shall indicate. The Company’s notice regarding the aforesaid payment will be published no later than five (5) business days before the date of the final payment.

 

It is clarified that anyone who is not included amongst the Register of Bondholders (Series A) on the effective date will not be entitled to an interest payment in respect of the interest period that began prior to that same date.

 

	
  

	
5.4.

	
In any event in which a date for payment on account of principal and/or interests falls on a day which is not a business day, the payment date will be postponed to the first business day thereafter, without additional payment and the "Effective Date" for the purpose of determining entitlement for redemption or interest will not change as a result.

 

	
  

	
5.5.

	
Every payment on account of the principal and/or interest which shall be paid with a delay exceeding 7 days from the date stipulated for its payment according to this Bond, for reasons that are dependent on the Company, shall bear arrears interest applicable from the effective date for payment and until the date of actual payment. In this regard, arrears interest will mean annual interest at a rate of 2% in excess of the interest borne by the same Bond. In the case in which arrears interest is paid, the Company will issue and immediate report at least two business days before payment as stated, in which it announces the rate and date of payment of the interest as stated.

 

  

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5.6.

	
The payment of the principal and interest are not linked to any index or currency.

 

	
  

	
5.7.

	
Payment to those who are so entitled will be done by check or bank transfer to credit the bank account of the individuals whose names are listed in the Register of Bondholders (Series A), and stated in the details provided to the Company in writing in advance, in accordance with Section 5.8 below. If the Company cannot pay any amount to those so entitled, for a reason independent on the Company, the provisions of Section 6 below will apply.

 

	
  

	
5.8.

	
A Bondholder (Series A) will notify the Company of the details of the bank account to be credited with payments to that same Holder according to the Bonds (Series A) as aforesaid, or of a change in the details of said account or his address, as applicable, in a written notice that will be sent by registered mail to the Company. The Company shall be required to act in accordance with the notice from the Holder regarding said change after the passing of fifteen (15) business days from the date on which the Holder's notice reached the Company.

 

	
  

	
5.9.

	
If a Bondholder who is entitled to payment as stated did not provide the Company with details regarding his bank account in advance, every such payment on account of the principal and interest will be made by check which will be sent by registered mail to his last address registered in the Registry of Bondholders (Series A). Sending of a check to one so entitled by registered mail as aforesaid will be considered for all intents and purposes as payment of the amount determined therein on the date of its sending by mail, provided that the check is deposited upon being properly presented for collection.

 

  

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5.10.

	
Any compulsory payment required under law will be withheld from any payment for the Bonds (Series A).

 

	
6.

	
Refraining from Payment for a Reason Which is not Dependent on the Company

 

For details, see Section ‎13 of the Deed of Trust.

 

	
7.

	
Transfer of Bonds

 

	
  

	
7.1.

	
Subject to Section ‎7.3 below, the Bonds may be transferred in their full par value, provided that it shall be in whole New Israel Shekels. Every Bond transfer shall be done by a letter of transfer in an accepted wording for the transfer of shares, duly signed by a the registered holder or his legal representatives and by the recipient of the transfer or his legal representatives, which shall be provided to the Company at its registered office together with the bond certificates transferred in accordance therewith, as well as any other reasonable proof required by the Company for the purpose of proving the transferor’s right to transfer them.

 

Subject to the above, procedural provisions included in the Company’s articles of association with respect to the manner of the transfer of the shares will apply, mutatis mutandis as applicable, with respect to the manner of transfer of the Bonds and their assignment.

 

	
  

	
7.2.

	
If any compulsory payment shall apply to the letter of transfer of the Bonds, reasonable proof of their payment shall be provided to the Company by the party requesting the transfer.

 

	
  

	
7.3.

	
In the event of a transfer of only a portion of the amount of the determinate principle in a Bond in this certificate, it is necessary to first split, according to the provisions of Section ‎8below, the certificate into a number of bond certificates as required by the same, such that the sum of all of the determinate principle amounts therein will be equal to the amount of the determinate principle of said bond certificate.

 

  

73

  

	
  

	
7.4.

	
After the fulfillment of all of the aforesaid conditions, the transfer will be recorded in the Register of Bondholders, and the recipient will be subject to all of the terms set forth in the Deed of Trust and this Bond.

 

	
  

	
7.5.

	
All of the expenses and fees involved in the transfer will be borne by the party requesting the transfer.

 

	
8.

	
Splitting Bond Certificates

 

For the purpose of splitting a bond certificate, see Section ‎27 of the Deed of Trust.

 

	
9.

	
Early Payment of the Bonds (Series A) Initiated by the Stock Exchange

 

For details, see Section ‎31 of the Deed of Trust.

 

	
10.

	
Early Redemption Initiated by the Company

 

For details, see Section ‎32 of the Deed of Trust.

 

	
11.

	
Forced Early Redemption

 

For details, see Section 33a of the Deed of Trust.

 

	
12.

	
Purchase of Bonds by the Company and/or an Affiliated Holder

 

For details, see Section ‎4 of the Deed of Trust.

 

	
13.

	
General Provisions

 

	
  

	
13.1.

	
The principal and interest amount are payable and transferable without considering any equitable right or any offset right or existing counterclaims or those that will be formed between the Company and a previous Holder, including the original holder of the Bonds.

 

	
  

	
13.2.

	
Any party that becomes entitled to the Bonds as a result of a bankruptcy or as a result of liquidation proceedings of the Bondholders will have the right, when the same evidence is presented as requested by the Company from time to time, to be registered in the Register of Bondholders as a holder of the Bonds, or subject to the conditions set forth above in this certificate, to transfer them.

 

  

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13.3.

	
The Bondholders may operate their rights under the Bonds and the Deed of Trust through the Trustee or based on a decision of the general meeting of the Bondholders in the manners set forth in the Bonds and the Deed of Trust. Notwithstanding the above, in the event that the Trustee acts in a manner contrary to the provisions of the Deed of Trust and the Bonds, the Bondholders may operate their rights, including based on the decision of the general meeting.

 

	
  

	
13.4.

	
The provisions of the Deed of Trust, including the right to call the Bonds for immediate repayment, set forth in Section ‎8 of the Deed of Trust, will be considered to be an integral part of this Deed.

 

	
14.

	
Waiver, Settlement and/or Changes to the Terms of the Bonds

 

For details, see Section ‎25 of the Deed of Trust.

 

	
15.

	
General Meetings of the Bondholders

 

The general meetings of Bondholders will be convened and conducted in accordance with the Second Addendum of the Deed of Trust.

 

	
16.

	
Receipts as Proof

 

Without derogating from any other condition other than these terms, a receipt signed by a Holder of Bonds in this certificate shall constitute evidence of the full payment of any payment set forth in the receipt, which is performed by the Company or the Trustee, as applicable, for the Bonds in this certificate.

 

  

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17.

	
Replacement of Bond Certificates

 

In the case that the Bond Certificate is defaced, lost or destroyed, the Company may issue a new certificate for the Bonds in its place, under the same conditions regarding proof, indemnification and coverage of the reasonable expenses incurred to the Company to clarify the ownership right of the Bonds, as the Company sees fit, provided that in the case of wear and tear, the damaged Bond certificate will be returned to the Company before the new certificate is issued. Fees and other expenses involved in the issuance of the new certificate, if applicable, will be borne by the party requesting the replacement of the certificate as stated.

 

	
18.

	
Notices

 

For details, see Section ‎24 of the Deed of Trust.

 

  

76

  

Second Addendum of the Deed of Trust

 

General Meetings of the Bondholders

 

Subject to the provisions of the Securities Law, convening a meeting of Bondholders, the manner of its management and the various terms about the meetings, are as follows:

 

Convening a Meeting

 

	
  

	
1.

	
The Trustee will convene, no later than the end of fourteen (14) days from the submission of the second annual report of trust matters (under Section 19.1 of the Deed of Trust) a meeting of Holders, for each series of bonds separately. The meeting will convene no later than the end of sixty (60) days from the submission of the aforesaid report. The agenda of the aforesaid meeting will include the appointment of the Trustee for the period determined, a discussion of the annual report of the trust matters and any other matter determined in the agenda as stated in Section 35l2 of the Securities Law.

 

	
  

	
2.

	
The Trustee will convene a meeting of the Bondholders if it deems necessary, or based on a written request of the Bondholders, holding, individually or jointly, at least five percent (5%) of the balance of the par value of the Bonds in circulation.

 

	
  

	
3.

	
In the event that those requesting the convening of the meeting are Bondholders, the Trustee will be entitled to require indemnification from the requesters, including in advance, for the reasonable expenses involved in the same.

 

	
  

	
4.

	
The Trustee that is requested to convene a meeting of Holders under the provisions of Section 2 will convene the meeting within 21 days from the date on which the request that it be convened is submitted to him, on a date which shall be stipulated in the invitation, and provided that the date of convening will not be earlier than seven days and no later than 21 days from the date of the invitation; however, the Trustee is entitled to advance the convening of the meeting to at least one day after the invitation date, if he believes that this is required for the purpose of defending the Holders' rights; should he do so, the Trustee will explain the reasons for advancing the convening date in the report regarding the meeting invitation.‎

 

  

77

  

	
  

	
5.

	
The Trustee may, at its reasonable discretion, change the date of convening a meeting that he summons and at the request of the Company, in the case in which the meeting is called by the Company.

 

	
  

	
6.

	
In the case in which the Trustee calls a meeting of Bondholders other than at the request of the Bondholders, the Trustee may determine that the meeting will be held via electronic means.

 

	
  

	
7.

	
If the Trustee did not call a meeting of Holders according to the Holders’ request, within the date as stated in Section 4 above, the Holder may convene the meeting, provided that the date of convening will be within 14 days of the end of the period in which the Trustee must call the meeting, and the Trustee will bear the expenses incurred by the Holder in connection with convening the meeting.‎

 

	
  

	
8.

	
In the even that a meeting of Holders is held as stated in Section 1 or 2 above, the Court may, at the request of a Holder, order that a meeting be convened.‎

 

	
  

	
9.

	
In the event that the Court orders as stated in Section 8 above, the Trustee will bear the reasonable expenses incurred by the applicant in the court proceedings, as determined by the court.‎

 

	
  

	
10.

	
The Company may convene, at any time, a meeting of Bondholders in coordination with the Trustee. If the Company called such a meeting, it must immediately send the Trustee written notice of the location, day and time in which the meeting will take place as well as the matters to be presented for discussion therein, and the Trustee or his representative will be entitled to participate in the said meeting without having the right to vote. A meeting as stated will be convened for the date determined in the order, provided that the date of convening is not earlier than seven days and no later than 21 days from the date of the invitation.

 

  

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11.

	
In the event that there is no practical way to convene a meeting of Holders or manage it in the manner determined in the Deed of Trust or the Law, the Court may, at the request of the Company, Bondholder entitled to vote in a meeting or Trustee, instruct that a meeting will be convened or managed in the manner determined by the Court, and may provide supplementary instructions as it sees fit.

 

Flaw in convening

 

	
  

	
12.

	
The Court may, at the request of the Holder, overturn a resolution passed in a meeting of Holders that convened or was managed without the conditions set forth for the same in the Law or under this Deed being met.

 

	
  

	
13.

	
In the event that the flaw in the convening relates to notice regarding the place of convening the meeting or its time, a Holder that arrives to the meeting despite the flaw may not demand that the resolution is overturned.

 

Notice of Convening a Meeting

 

	
  

	
14.

	
Notice of a meeting of Holders will be published under the provisions of Chapter G1 of the Law (“electronic reporting”) and will be provided to the Company by the Trustee before the reporting and in accordance with the Regulations.

 

	
  

	
15.

	
The notice of convening will include the agenda, resolutions proposed and the arrangements for the purpose of voting in writing under the provisions of Sections 28 and 30 below.‎

 

Meeting Agenda

 

	
  

	
16.

	
The Trustee will determine the agenda in a meeting of Holders, and include the matters for which the meeting of Bondholders was required to convene based on Sections 1 and 2 above, and any matter required as stated in Section 18 at the request of a Holder.‎

 

	
  

	
17.

	
If a meeting is convened as stated in Section ‎10 above, the Company will determine the agenda in the meeting.

 

  

79

  

	
  

	
18.

	
One or more Holder with at least five percent (5%) of the balance of the par value of the series of Bonds may request that the Trustee include a matter on the agenda of the meeting of Holders that will convene in the future, provided that the matter is suitable for being discussed in a meeting as stated.

 

	
  

	
19.

	
In a meeting of Holders, resolutions will be passed regarding matters listed on the agenda alone.

 

Place for Convening a Meeting

 

	
  

	
20.

	
A meeting of Holders will take place in Israel at the offices of the Company or another place which the Company or Trustee will announce. The Trustee may change the address of convening the meeting. The Company will bear the costs of convening the meeting at an address that is not its offices.

 

The effective date for ownership of Bonds

 

	
  

	
21.

	
Holders entitled to participate and vote in a meeting of Holders are holders of Bonds on the date determined in a resolution to convene a meeting of Holders, provided that the same date is not more than three days before the convening of a meeting of Holders and is not less than one day before the convening date.

 

Chairman of the Meeting

 

	
  

	
22.

	
In each meeting of Holders, the Trustee or the person appointed by the Trustee will serve as chairman of the same meeting.

 

	
  

	
23.

	
The Trustee will prepare minutes of a meeting of the Bondholders, and will keep them in its registered offices for a period of seven (7) years from the meeting date. The minutes of the Meeting may be prepared by way of recording. Minutes, if prepared in writing, will be signed by the chairman of the meeting. Any minutes signed by the chairman of the meeting constitute prima facie evidence of the contents thereof. The registry of minutes will be kept in the registered office of the Trustee, and will be open for the review of Holders and the Company during working hours and with prior coordination, and a copy will be sent to each holder that requests the same.

 

  

80

  

	
  

	
24.

	
The declaration of a chairman of the meeting whereby a resolution in the meeting of Holders has been passed or rejected, whether unanimously or by a given majority, will be prima facie evidence of what is stated therein.

 

Legal quorum; Adjourned or postponed meeting

 

	
  

	
25.

	
A meeting of Bondholders will be commenced by the chairman of the meeting after it is determined that the legal quorum required for any of the matters on the agenda of the meeting is present, as follows:

 

	
  

	
25.1.

	
The legal quorum required to hold a meeting of Bondholders will be the presence of at least two Bondholders, present themselves or by counsel, who have at least twenty five percent (25%) of the voting rights in circulation, within the half hour from the time scheduled for the meeting to commence, unless another requirement by Law states differently.

 

	
  

	
25.2.

	
If within half an hour from the time stipulated for the opening of the meeting, a legal quorum is not present, the meeting will be postponed to a different date which shall not be earlier than two business days after the date stipulated for holding the original meeting or one business day, if the Trustee believes that this is required for the purpose of protecting the rights of the Holders; if the meeting is postponed, the Trustee will explain the reasons for this in the report regarding convening the meeting.

 

	
  

	
25.3.

	
In the event that no legal quorum is presented in an adjourned meeting as stated in Section 25.2 above, within half an hour after the date scheduled for the meeting, the meeting will take place with any number of participants, unless another requirement is set forth by law.‎

 

	
  

	
25.4.

	
Notwithstanding the provisions of Section 25.3 above, in the event that a meeting of Holders is convened at the request of Holders as stated in Section 2 above, the adjourned meeting of holders will only convene if Bondholders are present that hold at least the number required to convene a meeting as stated in the same section (meaning: at least five percent (5%) of the balance of the par value of the Bonds in circulation).‎

 

  

81

  

	
  

	
26.

	
According to the decision of the Trustee or a resolution with a simple majority of the voters in a meeting of Holders in which a legal quorum was present, the continuation of the original meeting will be postponed from time to time, the discussion or passing a resolution on the matter set forth on the agenda to a later date and place determined, as determined by the Trustee or meeting as stated (hereinafter: the “Postponed Meeting”). At a Postponed Meeting, no matter will be discussed other than a matter that is on the agenda and for which no resolution was passed.

 

In the event that a meeting of Holders is postponed without changing its agenda, requests will be provided regarding the new date for the Postponed Meeting, as early as possible, no later than 12 hours before the Postponed Meeting. The requests as stated will be provided based on Sections 14 and 15 above.‎

 

Participation and voting

 

	
  

	
27.

	
The Trustee, in accordance with its reasonable discretion and subject to the provisions of any law, may split the meeting into meetings by class and determine who may participate in each type of meeting.

 

	
  

	
28.

	
A holder of Bonds may vote in a meeting of Holders, itself or through a proxy, and with a voting document which lists the manner of his vote, pursuant to the provisions of Section 30 below.‎

 

	
  

	
29.

	
A decision in the meeting of Holders will be passed based on counting votes.

 

	
  

	
30.

	
The voting document will be sent by the Trustee to all of the Bondholders; a holder of Bonds may state the manner of his vote in the voting document and send it to the Trustee.

 

A voting document in which the Holders indicates his vote, which the Trustee receives before the deadline determined for the same will be considered to be presence at the meeting for the purpose of the legal quorum, as stated in Section 25 above.‎

 

A voting document received by the Trustee as stated above, regarding a certain matter for which no vote was held in a meeting of Holders will be considered to be an abstention from a vote in the same meeting regarding the decision of whether to hold an adjourned meeting of Holders under the provisions of Section 26 above, and it will be counted in the adjourned meeting Holders held under the provisions of Section 26 or 25.3 and 25.4 above.‎

 

  

82

  

	
  

	
31.

	
Each NIS 1 par value of Bonds represented in the vote will grant the Holder thereof one vote. In the event of joint holders of Bonds, only the vote of the person listed first in the Registry will be accepted.

 

	
  

	
32.

	
A Bondholder may vote for part of the Bonds in its possession, and may divide the vote such that some of them are used to vote in favor of a resolution, and another part is used to vote against it and another part to abstain, all as he sees fit.

 

	
  

	
33.

	
A Bondholder who is a controlling shareholder of the Company, a relative or corporation under the control of any of them will not be taken into account for the determination of the legal quorum in the meeting of Holders, and their votes will not be counted in the votes in a meeting as stated.

 

Resolutions

 

	
  

	
34.

	
Resolutions in a meeting of Holders will be passed with a regular majority, unless another majority is determined in the Law or Deed of Trust.

 

	
  

	
35.

	
The number of votes of participants in a meeting will not include abstentions from voting.

 

	
  

	
36.

	
A proposed resolution will be passed with a simple majority, unless it is determined below that it will be passed with a special majority.

 

	
  

	
37.

	
The matters below will be passed in a meeting of Holders with a majority that is not a simple majority. The matters are as follows:

 

	
  

	
37.1.

	
A change, including an addition and/or amendment to the provisions of the Bonds and the Deed of Trust as stated in Section 25 of this Deed.

 

	
  

	
37.2.

	
Any other matter that the Deed of Trust determines to be subject to a majority that is not a simple majority.

 

	
  

	
37.3.

	
A resolution to replace the Trustee will be passed with a majority of at least fifty percent (50%) of the unpaid balance of the Bonds in circulation.

 

  

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Vote and actions through a proxy / counsel

 

	
  

	
38.

	
A letter appointment appointing a proxy will be in written and will be signed by the appointing party or by his representatives that are duly authorized to do so in writing. In the event that the appointing party is a corporation, the appointment will be performed in writing and signed with the corporation’s stamp, in addition to the signature of the corporation’s authorized signatories.

 

	
  

	
39.

	
A letter of appointment of an agent will be prepared in any manner acceptable by the Trustee.

 

	
  

	
40.

	
A proxy is not required to be a Bondholder himself.

 

	
  

	
41.

	
A letter of appointment and power of attorney, and any other certificate based on which the letter of appointment is signed or a certified copy of the same power of attorney will be provided to the Trustee by the date on which the meeting is convened, unless determined otherwise in a notice convening the meeting.

 

	
  

	
42.

	
The Trustee will participate in a meeting through its employees, officers, functionaries or another person appointed thereby, but will not have a voting right.

 

	
  

	
43.

	
The Company and any other person excluding the Trustee will be precluded from participating in the meeting of Bondholders or any part thereof, based on the decision of the Trustee or an ordinary resolution of the Bondholders. Notwithstanding this Section 43, the Company may participate in commencing a meeting for expressing its position in connection with any matter on the agenda of the meeting and/or the presentation of a specific matter (as applicable).‎

 

Contacting Bondholders

 

	
  

	
44.

	
The Trustee, and one or more Holders with at least five percent (5%) of the balance of the par value of the Bonds in circulation, through the Trustee, may contact the Holders in writing in order to convince them of the manner of their vote regarding any of the matters for discussion in the same meeting (hereinafter: the “Position Statement”).

 

  

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45.

	
In the event that a meeting of Holders is convened under Section 2 above, the Holder may contact the Trustee and request that he publish, under the provisions of Chapter G1 of the Law, a Position Statement on his behalf to the other Bondholders.

 

	
  

	
46.

	
The Trustee or the Company may send a Position Statement to the Bondholders in response to the Position Statement sent as stated in Section 44 and 45 above, or in response to another request to the Bondholders.

 

Examination of Conflicts of Interest

 

	
  

	
47.

	
In the event that a meeting of Holders is convened, the Trustee will examine the existence of conflicts of interests by Holders, whether it is a matter stemming from their holding of the Bonds or whether it is another matter related to them, as determined by the Trustee (in this Section – "Other Matter"); in accordance with the provisions of any law as they may at the time; the Trustee is entitled to require that the Holder participating in the Holders' meeting notify him, before the vote, of any Other Matter of his as well as whether he has such a conflict of interests.

 

	
  

	
48.

	
In counting the number of votes in a vote that takes place in a meeting of Holders, the Trustee will not take into account the votes of Holders who do not meet the requirements as stated in Section 47 above or Holders for which the Trustee determines that there is a conflict of interests as stated in Section 47 above (hereinafter: the “Holders with a Conflict of Interests”).

 

	
  

	
49.

	
Notwithstanding what is stated in Section 48 above, if the total holdings participating in the vote, who do not possess a conflict of interest, is a less than a rate of five percent (5%) of the balance of the Bonds' par value, the Trustee will take into account when counting votes, the votes of Holders with a Conflict of Interest as well.‎

 

Convening a meeting of Holders for consultation

 

	
  

	
50.

	
The provisions of Sections 2, 4, 7, 16, 18 and 19 above will not derogate from the authority to the Trustee to convene a meeting of Holders, if the Trustee would like to consult with them; in convening a meeting as stated, the matters on the agenda will not be specified and the date for convening will be at least one day after the invitation date.‎2‎4‎7‎16‎18‎19

 

In a meeting as stated, a vote will not take place, resolutions will not be passed and it will not be subject to the provisions of Sections 2, 4, 7, 16, 18, 19, 28, 30, 8, 8, 15, 26, 25, 45 and 21, and as set forth by law.‎

  

85

  

 

Third Addendum to the Trust Deed

 

The Company will pay the Trustee wages for his services, in accordance with this Date of Trust, as detailed below:

 

	
  

	
1.

	
For the Bonds (Series A) issued under the Prospectus and this Deed of Trust, and for which the Trustee will serve as a trustee, the Company will pay the Trustee wages for its services, in accordance with this Deed, as set forth below -

 

	
  

	
1.1.

	
A one-time payment for negotiations regarding the wording of the Deed in the amount of NIS 5,000.

 

	
  

	
1.2.

	
For the first year of the trust, with the first year of the trust starting on the date of the issue of the Bonds (Series A), the Trustee will be paid annual wages in the amount of NIS 20,000.

 

	
  

	
1.3.

	
For each additional year of the trust, as of the second year, the Trustee will pay annual wages in the amount of NIS 18,000.

 

The amounts in Sections 1.1-1.2 above will be hereinafter: the “Annual Wages.”

 

	
  

	
2.

	
The Annual Wages will be paid to the Trustee at the beginning of each year of the trust, within 15 days from the issuance of a payment request by the Trustee. The Annual Wages will be paid to the Trustee for the period until the end of the term of the Trust under the terms of the Deed of Trust, even if a receiver and/or managing receiver is appointed for the Company and/or if the trust under the Deed of Trust is managed under the supervision of a Court or otherwise.

 

	
  

	
3.

	
To the extent that the Trustee's service as described in this Deed of Trust shall come to an end, the Trustee will not be entitled to payment of his wages as of the date of the day on which his service expires. In the event that the service of the Trustee expires during the trust year, the wages paid for the months in which the Trustee did not serve as a trustee for the Company will be returned. This Section will not apply regarding the first year of the trust.

 

  

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4.

	
The Trustee will be entitled to a reimbursement for “reasonable expenses” incurred, as defined below: amounts expended by the Trustee within the fulfillment of his position and/or under the authorities granted to him under the Deed of Trust, including expenses and costs for convening a meeting of the Bondholders and expenses for deliveries, including publications in newspapers related to convening a meeting.

 

	
  

	
5.

	
The Trustee is entitled to additional payment other than the reasonable expenses, as defined above, for special actions performed, including those that it must perform in order to fulfill its legal requirement under the Securities Law (including amendments 50 and 51 of the Securities Law) and the regulations enacted following the aforesaid amendments, as well as actions arising from a breach of this Deed of Trust by the Company and/or from a breach of any other party that provides an undertaking or security included in the Deed and/or for actions that the Trustee must perform in connection with calling the Bonds for immediate repayment, exercise of securities and undertakings and/or special actions that he is required to perform, if any, for the fulfillment of his position, including under the Deed of Trust, all in addition to and without harming the payments owed thereto under this Section.

 

	
  

	
6.

	
The Trustee will be entitled to additional payment as stated in the amount of NIS 600 per hour of work of the CEO, attorney or accountant, and NIS 250 per hour of work of the administrative team. Without derogating from the above.

 

	
  

	
7.

	
For all of the meetings of shareholders (in addition to the payment under Section 6 above) in which the Trustee participates, including his presence in a meeting that is not started due to the absence of a legal quorum, additional wages will be paid of NIS 500 per meeting, in addition to the repayment of expenses for travel. The aforesaid amount will be paid within 15 business days from the issue of a payment request by the Trustee.

 

	
  

	
8.

	
VAT, if applicable, will be added to payments owed to the Trustee, under the provisions of this Section, and will be paid by the Company.

 

	
  

	
9.

	
All of the amounts listed in this Appendix are linked to the consumer price index known on the issue date of the Bonds (Series A), but in any case, no amount will be paid that is lower than the amounts listed in this Appendix.

 

	
  

	
10.

	
In the event that a trustee is appointed in the place of a trustee whose service was terminated under Sections 35b(a1) or 35n(d) of the Securities Law, the Holders of the Bonds (Series A) will bear the difference in the increase in the wages of the trustee appointed as stated and the wages that had been paid to the trustee who was replaced, if the aforesaid difference is unreasonable and the provisions of the law relevant on the replacement date as stated will apply.

 

	
* * *

  

87

  

 

Appendix 3

 

Roles of the Trustee

 

Current Positions

 

	
  

	
1.

	
To examine based on the reports of the Company published in MAGNA (hereinafter: the “Company’s Public Reports”) and based on the confirmations and documents furnished by the Company to the Trustee under the provisions of this Deed:

 

	
  

	
1.1.

	
That the principal and interest payments by the Company were performed on time.

 

	
  

	
1.2.

	
That the uses made by the Company of the issuance consideration meet the objectives determined in the Deed of Trust and/or the chapter discussion the designation of the consideration in the issuance prospectus, if determined.

 

	
  

	
1.3.

	
That the Company meets the milestones determined in the Deed of Trust for its operation, if any.

 

	
  

	
1.4.

	
If any of the grounds for calling for immediate repayment set forth in the Deed of Trust are met.

 

	
  

	
2.

	
Convening meetings of Bondholders under the provisions of the Second Addendum of the Deed of Trust.

 

	
  

	
3.

	
Participation (including through electronic means) in meetings of the Company’s shareholders.

 

	
  

	
4.

	
The preparation of an annual report of trust matters as stated in Section 19.2 of the Deed of Trust and presenting it for the review of the Bondholders.

 

	
  

	
5.

	
Notice to the Bondholders of a substantial breach of the Deed of Trust on the part of the Company shortly after being made aware of the breach and notice of the actions that are taken to prevent it or for the fulfillment of the Company’s obligations, as applicable.

 

  

88

  

	
  

	
6.

	
To examine, based on the Company’s public reports and the confirmations and documents furnished by the Company to the Trustee under the provisions of this Deed of Trust:

 

	
  

	
6.1.

	
That the Company meets its obligations vis-a-vis the Bondholders, including the fulfillment of grounds for calling for immediate repayment.

 

	
  

	
6.2.

	
That the Company complies with all of its obligations as set forth in the Deed of Trust.

 

	
  

	
6.3.

	
That the Company meets the Financial Covenants set forth in the Deed of Trust.

 

	
  

	
6.4.

	
If any change occurs to the rating of the Bonds, if they are rated.

 

Special Positions

 

	
  

	
7.

	
Taking all of the actions required to ensure the Company’s obligations vis-a-vis the Bondholders, which are set forth in Sections 1-6 of this Appendix above.

 

	
  

	
8.

	
Examination of extraordinary events based on the Company’s public reports, as set forth below:

 

	
  

	
8.1.

	
That the Company meets its obligations vis-a-vis the Bondholders, including the fulfillment of grounds to call for immediate repayment.

 

	
  

	
8.2.

	
That the Company complies with all of its obligations as set forth in the Deed of Trust.

 

	
  

	
8.3.

	
That the Company meets the financial covenants set forth in the Deed of Trust.

 

	
  

	
9.

	
To apply the resolutions of the meeting of Bondholders that impose an obligation on the Trustee and to take all of the proceedings and actions required to protect rights of the Bondholders subject to the Trustee having available the financing to implement and adopt them, as required.

 

	
  

	
10.

	
To take urgent actions required to prevent substantial detrimental harm to the rights of the Bondholders where waiting to convene a meeting is not possible.

 

  

89

  

	
  

	
11.

	
Initiating negotiations with the Company, whether at the request of the Company or at the request of the Bondholder, regarding the requests or proposals related to the provisions of the Deed of Trust.

 

	
  

	
12.

	
In the case in which the Trustee believes that there is a true concern that the Company will not be able to repay the Bonds on time, to perform extraordinary examinations regarding the examination of the aforesaid circumstances and to make efforts to protect the Holders in the manner that it deems most appropriate; and may, inter alia:

 

	
  

	
12.1.

	
To examine the aforesaid circumstances arising from actions or transactions performed by the Company, including a distribution as defined in the Companies Law, performed in violation of the law; however, the Trustee will not perform an examination as stated if an expert is appointed for the Bondholders as defined in Section 350r of the aforesaid Law, who is entrusted with its preparation.

 

	
  

	
12.2.

	
To manage, on behalf of the Bondholders, negotiations with the Company to change the terms of the Bonds.

 

	
  

	
12.3.

	
In this regard, convening a meeting of the Bondholders by the Trustee will not be considered, for receipt of instructions as to how to operate, as a breach of its obligations, provided that convening the meeting does not materially harm the rights of the Holders.

 

	
  

	
12.4.

	
In the event that a meeting of Bondholders is convened as stated in Section 12.3 above, and a lawful resolution is passed in the meeting, the Trustee will act in accordance with the resolution; in the event that it does so, its actions under the same decision will be considered to be compliant with the provisions of this Section relating to the resolution.

 

	
  

	
13.

	
To distribute to the Bondholders, as stipulated in the Deed of Trust, funds that the Bondholders are entitled to receive, obtained by the Trustee.

 

	
  

	
14.

	
To supervise the process of exercising rights of the Bondholders in the event in which a functionary is appointed for the Company or its assets.

 

 

90EX-10.1

 Exhibit 10.1 

[EXECUTION COPY] 

UNIT PURCHASE AGREEMENT 
 BY AND
AMONG 
 STERLING NATIONAL BANK, 

NEWSTAR BUSINESS CREDIT LLC, 
 AND

 NEWSTAR FINANCIAL, INC. 

Dated as of March 31, 2016 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE I
	 	DEFINITIONS	  	 	1	  
			
	 1.1.
	 	Certain Definitions	  	 	1	  
			
	 ARTICLE II
	 	SALE AND EXCHANGE OF UNITS	  	 	13	  
			
	 2.1.
	 	Purchase of Units	  	 	13	  
			
	 2.2.
	 	Tax Classification	  	 	13	  
			
	 ARTICLE III
	 	CLOSING; PURCHASE PRICE	  	 	13	  
			
	 3.1.
	 	Closing Date	  	 	13	  
			
	 3.2.
	 	Purchase Price	  	 	14	  
			
	 3.3.
	 	Pre-Closing Estimate	  	 	14	  
			
	 3.4.
	 	Closing Payments and Deliveries	  	 	14	  
			
	 3.5.
	 	Post-Closing Adjustments	  	 	16	  
			
	 3.6.
	 	Allocation	  	 	18	  
			
	 ARTICLE IV
	 	REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY AND ITS SUBSIDIARIES	  	 	19	  
			
	 4.1.
	 	Organization and Good Standing	  	 	19	  
			
	 4.2.
	 	Authorization of Agreement	  	 	20	  
			
	 4.3.
	 	Conflicts; Consents of Third Parties	  	 	20	  
			
	 4.4.
	 	Capitalization	  	 	21	  
			
	 4.5.
	 	Subsidiaries	  	 	22	  
			
	 4.6.
	 	Financial Statements	  	 	22	  
			
	 4.7.
	 	No Undisclosed Liabilities	  	 	22	  
			
	 4.8.
	 	Absence of Certain Developments	  	 	23	  
			
	 4.9.
	 	Taxes	  	 	24	  
			
	 4.10.
	 	Personal Property	  	 	25	  
			
	 4.11.
	 	Intellectual Property	  	 	26	  
			
	 4.12.
	 	Material Contracts	  	 	27	  
			
	 4.13.
	 	Employee Benefits Plans	  	 	29	  
			
	 4.14.
	 	Labor; Business Employees	  	 	29	  
			
	 4.15.
	 	Litigation	  	 	30	  
			
	 4.16.
	 	Compliance with Laws; Permits	  	 	30	  
			
	 4.17.
	 	Real Property	  	 	31	  

 TABLE OF CONTENTS 

(continued) 
  

							
	 	 	 	  	Page	 
	 4.18.
	 	Financial Advisors	  	 	31	  
			
	 4.19.
	 	Banks	  	 	31	  
			
	 4.20.
	 	Insurance	  	 	31	  
			
	 4.21.
	 	Transactions with Affiliates, Seller, Officers, Directors and Others	  	 	32	  
			
	 4.22.
	 	Loans	  	 	32	  
			
	 4.23.
	 	Loans and Advances	  	 	33	  
			
	 4.24.
	 	Environmental Matters	  	 	34	  
			
	 4.25.
	 	Books and Records	  	 	34	  
			
	 4.26.
	 	No Other Representations or Warranties; Schedules	  	 	34	  
			
	 ARTICLE V
	 	SELLER REPRESENTATIONS AND WARRANTIES	  	 	34	  
			
	 5.1.
	 	Organization	  	 	34	  
			
	 5.2.
	 	Power and Authority	  	 	34	  
			
	 5.3.
	 	Ownership	  	 	35	  
			
	 5.4.
	 	Conflicts; Consents of Third Parties	  	 	35	  
			
	 5.5.
	 	No Legal Proceedings	  	 	35	  
			
	 ARTICLE VI
	 	REPRESENTATIONS AND WARRANTIES OF PURCHASER	  	 	36	  
			
	 6.1.
	 	Organization and Good Standing	  	 	36	  
			
	 6.2.
	 	Authorization of Agreement	  	 	36	  
			
	 6.3.
	 	Conflicts; Consents of Third Parties	  	 	36	  
			
	 6.4.
	 	Financial Advisors	  	 	36	  
			
	 6.5.
	 	Condition of the Business	  	 	37	  
			
	 6.6.
	 	Litigation	  	 	37	  
			
	 ARTICLE VII
	 	COVENANTS	  	 	37	  
			
	 7.1.
	 	Retention and Access to Records	  	 	37	  
			
	 7.2.
	 	Indemnification, Exculpation and Insurance	  	 	38	  
			
	 7.3.
	 	Public Announcements	  	 	39	  
			
	 7.4.
	 	Tax Matters	  	 	39	  
			
	 ARTICLE VIII
	 	[RESERVED]	  	 	44	  
			
	 ARTICLE IX
	 	INDEMNIFICATION	  	 	44	  
			
	 9.1.
	 	Indemnification of Purchaser	  	 	44	  
			
	 9.2.
	 	Indemnification of Seller	  	 	47	  

  
 ii 

 TABLE OF CONTENTS 

(continued) 
  

							
	 	 	 	  	Page	 
	 9.3.
	 	Notice of Claim	  	 	47	  
			
	 9.4.
	 	Procedures for Indemnification – Third Party Claims	  	 	47	  
			
	 9.5.
	 	Procedures for Indemnification – Other Claims	  	 	48	  
			
	 9.6.
	 	Survival of Representations, Warranties and Covenants	  	 	49	  
			
	 9.7.
	 	Indemnification With Respect to Covered Loans	  	 	49	  
			
	 9.8.
	 	Exclusive Remedy	  	 	51	  
			
	 9.9
	 	Tax Treatment of Indemnification Payments	  	 	51	  
			
	 ARTICLE X
	 	MISCELLANEOUS	  	 	52	  
			
	 10.1.
	 	Payment of Sales, Use or Similar Taxes	  	 	52	  
			
	 10.2.
	 	Expenses	  	 	52	  
			
	 10.3.
	 	Submission to Jurisdiction; Consent to Service of Process; Waiver of Jury Trial	  	 	52	  
			
	 10.4.
	 	Entire Agreement; Amendments and Waivers	  	 	53	  
			
	 10.5.
	 	Governing Law	  	 	53	  
			
	 10.6.
	 	Notices	  	 	53	  
			
	 10.7.
	 	Severability	  	 	54	  
			
	 10.8.
	 	Binding Effect; Assignment	  	 	54	  
			
	 10.9.
	 	Retention of Counsel	  	 	54	  
			
	 10.10.
	 	No Recourse or Personal Liability	  	 	55	  
			
	 10.11.
	 	Counterparts	  	 	55	  
			
	 10.12.
	 	Release	  	 	55	  

  
 iii 

 TABLE OF CONTENTS 

(continued) 
  

 Schedules 
  

			
	Schedule 1	 	Business Employee Retention Payments
	Schedule 3.5(f)	 	Working Capital Methodology

 Exhibits 
  

			
	Exhibit A	  	Covered Loans
	Exhibit B	  	Loans

 Disclosure Schedules 
  

			
	Schedule 4.1(a)	  	Company Organization and Good Standing
	Schedule 4.1(b)	  	Company Subsidiaries’ Organization and Good Standing
	Schedule 4.3(a)	  	No Conflicts
	Schedule 4.3(b)	  	Consents of Third Parties
	Schedule 4.4(b)	  	Capitalization of the Company
	Schedule 4.4(c)	  	Capitalization of the Company Subsidiaries
	Schedule 4.5	  	Company Subsidiary Activities
	Schedule 4.6	  	Financial Statements
	Schedule 4.7	  	No Undisclosed Liabilities
	Schedule 4.8	  	Absence of Certain Developments
	Schedule 4.9	  	Taxes
	Schedule 4.9(i)	  	Tax Returns
	Schedule 4.11(a)	  	Intellectual Property
	Schedule 4.11(b)	  	Licenses
	Schedule 4.11(d)	  	Infringement Notice
	Schedule 4.12	  	Material Contracts
	Schedule 4.13(a)	  	Employee Benefit Plans
	Schedule 4.13(b)	  	Benefit Plan Compliance with Laws
	Schedule 4.13(c)	  	Defined Benefit Plans
	Schedule 4.14(c)	  	Business Employees
	Schedule 4.14(d)	  	Payment Obligations
	Schedule 4.15	  	Litigation
	Schedule 4.16(b)	  	Compliance with Laws; Permits
	Schedule 4.17	  	Leased Real Property
	Schedule 4.19	  	Banks; Powers of Attorney
	Schedule 4.20	  	Insurance
	Schedule 4.21	  	Transactions with Affiliates

  
 iv 

 UNIT PURCHASE AGREEMENT 

THIS UNIT PURCHASE AGREEMENT, dated as of March 31, 2016 (the “Agreement”), is by and among Sterling National Bank, a
national banking association (“Purchaser”), NewStar Business Credit LLC, a Delaware limited liability company (the “Company”), and NewStar Financial, Inc., a Delaware corporation (the “Seller”).

 R E C I T A L S: 

Seller owns of record and beneficially all of the issued and outstanding membership interests of the Company (the “Units”).

 Seller desires to assign, transfer, convey and sell the Units to Purchaser for cash, and Purchaser desires to purchase the Units from
Seller for cash, on the terms and conditions set forth herein. 
 As a result of its acquisition of the Units, Purchaser will acquire 100%
of the outstanding equity interests in the Company. 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereby agree as follows: 
 ARTICLE I 

DEFINITIONS 
 1.1.
Certain Definitions. 
 (a) For purposes of this Agreement, the following terms shall have the meanings specified in this
Section 1.1: 
 “Accounting Fees” has the meaning set forth in Section 3.5(d). 

“Adjustment Time” means 12:01 a.m., Dallas, Texas time, on the Closing Date. 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, such Person. 
 “Affiliated Group” means
any affiliated group within the meaning of Code §1504(a) (or any similar group defined under a similar provision of state, local or foreign Law) or any consolidated, combined, unitary or similar Tax group. 

“Aggregate Covered Loan Liability Cap” means $3,000,000. 

“Agreement” has the meaning set forth in the introduction to this Agreement. 

“Asset Allocation” has the meaning set forth in Section 3.6(a). 

 “Assets” has the meaning set forth in Section 4.10. 

“Balance Sheet Date” has the meaning set forth in Section 4.6. 

“Base Purchase Price” means (i) the product of (A) 1.06 multiplied by (B) Gross Loan Receivables plus
(ii) related accrued and unpaid fees as of the Closing Date minus (iii) $500,000 and minus (iv) $100,000 (which amount shall be paid by the Purchaser or the Company to the Business Employees listed on Schedule 1 when and in the
amounts listed on Schedule 1). 
 “Basket” has the meaning set forth in Section 9.1(c). 

“Benefit Plan” means any “employee benefit plan” (within the meaning of Section 3(3) of ERISA, whether or not
subject to ERISA) and any other written or unwritten plan, contract, agreement, policy or other arrangement providing for employment, compensation, incentive, change in control, bonus, severance, deferred compensation, performance awards, stock or
stock-related awards, fringe benefits, disability benefits, supplemental employment benefits, vacation benefits, paid time-off, educational assistance, retirement benefits, profit-sharing, post-retirement benefits, or other employee benefits or
remuneration of any kind, in each case, entered into, maintained, sponsored, contributed or required to be contributed to by Seller or any of its Affiliates or ERISA Affiliates or with respect to which Seller or any of its Affiliates or ERISA
Affiliates has any liability. 
 “Business Day” means any day of the year on which national banking institutions in Dallas,
Texas are open to the public for conducting business and are not required or authorized to close. 
 “Business Employee”
means any individual employed by Seller, the Company or any of the Company Subsidiaries and who has, at any time since the Balance Sheet Date, committed a material portion of his or her time and attention to the actual business of the Company or any
Company Subsidiary (which, for the avoidance of doubt, shall not include time and attention to the process of negotiating this Agreement and preparing for the consummation of the transactions contemplated hereby given by employees of Seller who are
not primarily engaged in the actual business of the Company and the Company Subsidiaries). 
 “Business Intellectual
Property” has the meaning set forth in Section 4.11(a). 
 “Cap” has the meaning set forth in
Section 9.1(c). 
 “Claim” has the meaning set forth in Section 9.3. 

“Claim Objection Notice” has the meaning set forth in Section 9.5(a). 

“Claim Objection Period” has the meaning set forth in Section 9.5(a). 

“Closing” has the meaning set forth in Section 3.1. 

“Closing Cash” means the cash and cash equivalents of the Company and the Company Subsidiaries. 

  
 2 

 “Closing Date” has the meaning set forth in Section 3.1. 

“Closing Net Working Capital” means (i) all current assets (including Closing Cash) of the Company as of the Adjustment
Time (but before taking into account the consummation of the transactions contemplated hereby and excluding any amounts taken into account in the calculation of Base Purchase Price), minus (ii) all current liabilities (excluding any
items constituting Company Indebtedness and Company Transaction Expenses and any other liabilities for which an adjustment to the Base Purchase Price is otherwise being made, paid at Closing pursuant to Section 3.4(c)) of the Company as of the
Adjustment Time (but before taking into account the consummation of the transactions contemplated hereby), determined in accordance with the methodology, and in each case including only those line items, set forth in Schedule 3.5(f). 

“Closing Statement” has the meaning set forth in Section 3.5(a). 

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

“Company” has the meaning set forth in the introduction to this Agreement. 

“Company Benefit Plan” means a Benefit Plan that is entered into, maintained or contributed to solely by one or more of the
Company and the Company Subsidiaries; provided, however, that “Company Benefit Plan” shall not include any Benefit Plan which is sponsored, contributed to or required to be contributed to by Seller or any of its Affiliates or ERISA
Affiliates (other than solely by any of the Company and the Company Subsidiaries), or with respect to which Seller or any of its Affiliates or ERISA Affiliates has any liability. 

“Company Breaches” has the meaning set forth in Section 9.1(a)(i). 

“Company Documents” has the meaning set forth in Section 4.2. 

“Company Indebtedness” means, without duplication of any item in this definition or of any item included in the
definition of Company Transaction Expenses or Closing Net Working Capital, (a) all indebtedness of the Company and the Company Subsidiaries for borrowed money (including all principal, interest, premiums, penalties, and breakage fees),
including without limitation the obligations of the Company and the Company Subsidiaries under the Warehouse Agreements, (b) all obligations of the Company and the Company Subsidiaries evidenced by notes, bonds, debentures or similar
instruments, (c) all obligations (including breakage costs) payable by the Company or the Company Subsidiaries under interest rate protection agreements or in respect of any interest rate, currency or commodity derivative or hedging
transaction, (d) all obligations of the Company and the Company Subsidiaries for (i) the deferred purchase price of property or services (including the full amount of any actual or potential earn-out obligations), (ii) any deferred
compensation liabilities to the extent an obligation of the Company or any of the Company Subsidiaries, or (iii) any unpaid bonus amounts with respect to any Business Employee, (e) all obligations under capital leases, and (f) all
indebtedness or other obligations of the type referred to above of any other Person that is directly or indirectly guaranteed by the Company or any Company Subsidiary. 

  
 3 

 “Company LLC Agreement” means that certain Third Amended and Restated Limited
Liability Company Agreement, by and between the Company and Seller, dated as of April 1, 2011. 
 “Company Material Adverse
Effect” means any event, occurrence, fact, condition or change that, individually or in the aggregate, is, or would reasonably be expected to be, materially adverse to the condition (financial or otherwise), business, properties,
liabilities or results of operations of the Company and the Company Subsidiaries, taken as a whole, but, in each case, changes or effects resulting directly or indirectly from the following, either alone or in combination, shall not be deemed to
constitute, or be taken into account in determining whether there has been, such a material adverse effect: (a) changes in general economic, geographic market, financial or capital market, regulatory or political conditions in the United
States, (including changes in interest rates) or anywhere else in the world impacting such general conditions in the United States (including foreign exchange rates), (b) terrorism, war or the outbreak or worsening of hostilities, or natural
disasters anywhere in the world, whether commencing before or after the date of this Agreement, (c) changes in conditions generally applicable to the asset-based lending industry in which the Company operates, (d) changes in the Law or
accounting regulations or principles or interpretations thereof, (e) any failure by the Company to meet any internal or published projections, forecasts, or revenue or earnings predictions (but including the causes of any such failures),
(f) as a result of any action consented to or taken at the request of Purchaser, (g) any matter that is set forth in any Disclosure Schedule or (h) the execution or announcement of this Agreement, including the identity of Purchaser,
or the taking of any action contemplated or required by this Agreement, or the consummation of the transactions contemplated hereby; provided, however, that, any matter of the type listed in clauses (a), (b), (c) or (d) above
may only be taken into account in determining whether there has been or will be, or would reasonably be expected to be, a Company Material Adverse Effect to the extent such matter has had, or would reasonably be expected to have, a disproportionate
adverse impact on the Company as compared to unrelated Persons engaged in the business of the Company. 
 “Company
Subsidiary” means each of (i) NewStar Business Funding 2010-1 LLC and (ii) NewStar Business Funding 2012-1 LLC, and “Company Subsidiaries” means both of such entities, collectively. 

“Company Transaction Expenses” means, without duplication of any item included in the calculation of Company Indebtedness or
Closing Net Working Capital, the fees and expenses incurred by the Company at or before the Closing, whether on behalf of Seller, the Company, the Company Subsidiaries or otherwise, and payable or owing to third parties and relating to or arising
out of the drafting, negotiating, execution or delivery of this Agreement or the other Company Documents or the consummation of the transactions contemplated hereby or thereby, including travel, legal, accounting, investment banking and other
professional fees, in each case that are not paid prior to the Closing Date. For the avoidance of doubt, Company Transaction Expenses shall not include any fees or expenses included in the calculation of Closing Net Working Capital or any fees and
expenses incurred by Purchaser. 

  
 4 

 “Consent” means, with respect to any Person, any approval, authorization,
exemption, waiver, permission or consent of any kind of such Person. 
 “Contract” means any written or oral (to the extent
legally binding) contract, lease, commitment or agreement. 
 “Copyrights” has the meaning set forth in clause
(iii) of the “Intellectual Property” definition. 
 “Covered Loan Default Notice” has the meaning set forth
in Section 9.7(c). 
 “Covered Loan Indemnity Liabilities” means, to the extent arising out of or resulting from any
Defaulted Covered Loan, any actual charge-offs and actual and documented reasonable costs of collection relating thereto (including the amount of any discount on sale or other disposition but excluding any write-down or valuation adjustment), if
any, realized upon final pay-down, negotiated settlement, or sale or other disposition of any such Defaulted Covered Loan, but excluding the amount of any advance after the Closing Date (other than advances to the extent either required pursuant to
the applicable loan documents as in effect on the Closing Date (i.e., without amendment thereof) or pursuant to applicable Law or constituting over-advances with respect to which Purchaser has requested Seller’s consent in writing and Seller
has, during the three (3) Business Day period following receipt of such request, either notified Purchaser in writing of its consent to such request or failed to notify Purchaser in writing of its denial of such consent), in each case
(i) subject to the terms, conditions and procedures set forth in Section 9.7 of this Agreement, (ii) subject to the Aggregate Covered Loan Liability Cap, and (iii) only to the extent that such actual charge-offs and actual and
documented reasonable costs of collection relating thereto are, with respect to each Covered Loan, incurred during the Covered Loan Survival Period. 

“Covered Loan Parties” means, with respect to each Covered Loan, the borrower or borrowers (and any guarantor) under such
Covered Loan. 
 “Covered Loan Refinance Notice” has the meaning set forth in Section 9.7(c). 

“Covered Loan Survival Period” means, with respect to each Covered Loan, the eighteen (18)-month anniversary of the Closing
Date. 
 “Covered Loans” means the Loans set forth on Exhibit A under the heading “Covered Loans.” 

“Damages” has the meaning set forth in Section 9.1(a). 

“Defaulted Covered Loan” means any Covered Loan with respect to which either (A) the applicable Covered Loan Parties
are, at Closing or any time during the Covered Loan Survival Period, under the applicable loan documents, in default or violation of (i) any payment obligation, (ii) any financial covenant, or (iii) any other covenant that, pursuant
to the terms of the applicable loan documents, would permit Purchaser or the Company, as lender, to accelerate the payment obligations in respect of such Covered Loan, in each case that has not been cured or,

  
 5 

 
in Purchaser’s sole discretion, waived, but only to the extent that Purchaser or the Company, as lender, actually exercises such right to accelerate such payment obligations, (B) the
applicable Covered Loan Parties fail to refinance such Covered Loan within 120 days after receipt of the Covered Loan Refinance Notice, or (C) the Company or Purchaser is required, by applicable Law or by Order of any Governmental Body having
regulatory jurisdiction over either Purchaser or the Company, to sell or otherwise dispose of such Covered Loan. 
 “Delivery
Date” has the meaning set forth in Section 3.5(a). 
 “Disclosure Schedules” has the meaning set forth in the
introductory paragraph to Article IV. 
 “Dispute Notice” has the meaning set forth in Section 3.5(c)(i). 

“Disputed Items” has the meaning set forth in Section 3.5(c)(i). 

“D&O Indemnitees” has the meaning set forth in Section 7.2(a). 

“Environmental, Health, and Safety Requirements” means all Laws and Orders concerning public health and safety, worker health
and safety, and pollution or protection of the environment, including all those relating to the presence, use, production, generation, handling, transportation, treatment, recycling, reuse, storage, disposal, distribution, labeling, testing,
processing, discharge, Release, threatened Release, control, or cleanup of any Hazardous Material, as such requirements are enacted and in effect on or prior to the Closing Date. 

“ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder. 
 “ERISA Affiliate” means (i) with respect to Seller, any trade or business (whether or not
incorporated) under common control with Seller within the meaning of Section 4001(b)(1) of ERISA, or which together with Seller is treated as a single employer under Section 414(t) of the Code; and (ii) with respect to the Company and
the Company Subsidiaries, any trade or business (whether or not incorporated) under common control with the Company and the Company Subsidiaries within the meaning of Section 4001(b)(1) of ERISA, or which together with the Company and the
Company Subsidiaries are treated as a single employer under Section 414(t) of the Code). 
 “Estimated Base Purchase
Price” has the meaning set forth in Section 3.3. 
 “Estimated Closing Net Working Capital” has the meaning
set forth in Section 3.3. 
 “Estimated Purchase Price” has the meaning set forth in Section 3.3. 

“Final Purchase Price” has the meaning set forth in Section 3.5(e). 

“Financial Statements” has the meaning set forth in Section 4.6. 

  
 6 

 “Fundamental Representations” means, collectively, the following representations
and warranties set forth in this Agreement: Section 4.1 (Organization and Good Standing), Section 4.2 (Authorization of Agreement), Section 4.4 (Capitalization), Section 4.5 (Subsidiaries), Section 4.9 (Taxes),
Section 4.18 (Financial Advisors), Section 5.2 (Power and Authority), Section 5.3 (Ownership), Section 6.1 (Organization and Good Standing), Section 6.2 (Authorization of Agreement), Section 6.4 (Financial Advisors).

 “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time and
applied consistently throughout the periods involved applying the respective historical accounting principles, policies, practices and methods of the Company. 

“Governmental Body” means any government or governmental or regulatory body thereof, or political subdivision thereof,
whether federal, state, or local, or any agency, instrumentality or authority thereof, or any court or arbitrator (public or private). 

“Gross Loan Receivables” means, as of the Closing Date, the aggregate outstanding principal balance of all of the Loans plus
accrued and unpaid interest thereon. 
 “Guarantees” means all guarantees, surety bonds, fidelity bonds, performance bonds
and letters of credit issued by or on behalf of the Company. 
 “Hazardous Material” means any material or substance
subject to regulation under any applicable Environmental, Health, and Safety Requirements, including but not limited to any hazardous wastes, or other wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals,
petroleum products or byproducts, asbestos, polychlorinated biphenyls, or radiation regulated under, including any material, substance or waste defined as a “hazardous waste,” “hazardous material,” “hazardous
substance,” “toxic waste,” “ hazardous pollutant” or “toxic substance” in, the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.), the
Occupational Health and Safety Act (29 U.S.C. Section 651, et. seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801, et. seq.), the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901, et. seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601, et. seq.), the Federal Water Pollution Control Act, as amended by the Clean Water Act, 33 U.S.C.
Section 1251 et seq.; the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Atomic Energy Act (42 U.S.C. Section 2014, et seq.), and the Energy Reorganization Act (42 U.S.C. Section 5801 et seq.), each and all as amended, and
each state counterpart, or any other Environmental, Health, and Safety Requirements. 
 “Income Tax” means any federal,
state, local or foreign income, franchise, net profits, or similar Tax (however denominated) measured in whole or part by income, including any interest, penalty or addition thereto, whether disputed or not. 

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

  
 7 

 “Indemnitee” has the meaning set forth in Section 9.3. 

“Indemnitor” has the meaning set forth in Section 9.3. 

“Independent Accountants” has the meaning set forth in Section 3.5(d). 

“Intellectual Property” means any and all of the following: (i) patents and applications therefor, including
continuations, divisionals, continuations-in-part, or reissues of patent applications and patents issuing thereon (collectively, “Patents”), (ii) trademarks, service marks, trade names, service names, brand names, trade dress
rights, logos, Internet domain names and corporate names, together with the goodwill associated with any of the foregoing, and all applications, registrations and renewals thereof (collectively, “Marks”), and (iii) copyrights
and registrations and applications therefor, works of authorship and mask work rights (collectively, “Copyrights”). 

“Interim Balance Sheet” has the meaning set forth in Section 4.6. 

“IRS” means the Internal Revenue Service. 

“Knowledge of the Company” means the knowledge of Michael Haddad, Robert Brown, Katrina Mikulesky, and Joseph
Kinkenon. For purposes of this Agreement, any such individual shall be deemed to have Knowledge of a particular fact or matter if (a) such individual is actually aware of such fact or matter or (b) a prudent individual would reasonably be
expected to discover or otherwise become aware of such fact or matter after reasonable inquiry of (y) other Business Employees or Support Employees who reasonably would be expected to have additional knowledge about the subject matter in
question and (z) such Company and Company Subsidiaries’ files and records that are reasonably likely to contain information relating to the subject matter in question.  

“Law” means any federal, state or local law, statute, code, ordinance, rule or regulation. 

“Legal Proceeding” means any judicial, administrative or arbitral actions, suits or proceedings (public or private) by or
before a Governmental Body. 
 “Licenses” has the meaning set forth in Section 4.11(b). 

“Lien” means any lien, pledge, mortgage, security interest, option, or other similar encumbrance (other than licenses of
Intellectual Property to a third party). 
 “Loan Documents” has the meaning set forth in Section 4.22(b). 

“Loans” means the outstanding loans and commitments of the Company set forth on Exhibit B attached hereto. 

“Marks” has the meaning set forth in clause (ii) of the Intellectual Property definition. 

“Material Contracts” has the meaning set forth in Section 4.12(a). 

  
 8 

 “Notice of Claim” has the meaning set forth in Section 9.3. 

“Order” means any order, injunction, judgment, decree, ruling, writ, award, decision, determination, subpoena, verdict,
assessment or arbitration award of a Governmental Body or any arbitrator. 
 “Ordinary Course of Business” means the
ordinary and usual course of the Company’s and Company Subsidiaries’ businesses, consistent with past custom and practice. 

“Payoff Amount” has the meaning set forth in Section 3.4(a)(iii). 

“Payoff Letters” has the meaning set forth in Section 3.4(a)(iii). 

“Patents” has the meaning set forth in clause (i) of the Intellectual Property definition. 

“Permits” means any approvals, authorizations, licenses, permits, certificates of authority, qualifications or similar
document or authority that has been issued or granted by a Governmental Body. 
 “Permitted Liens” means (i) all
exceptions, restrictions, easements, rights of way and similar encumbrances of record affecting title of real property, if any, that do not impair, in any material respect, the use or occupancy of such real property or the business of the Company;
(ii) statutory liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves have been
established on the Financial Statements in accordance with GAAP; (iii) mechanics,’ carriers,’ workers,’ repairers’ and similar Liens arising or incurred in the Ordinary Course of Business or imposed by operation of Law
(provided the underlying obligations are not yet due and payable); and (iv) zoning, entitlement and other land use and environmental regulations or restrictions by any Governmental Body that are not violated by the current use or occupancy of
the applicable real property. 
 “Person” means any individual, corporation, partnership, limited liability company, firm,
joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Body, or other entity. 

“Policies” has the meaning set forth in Section 4.20. 

“Post-Closing Straddle Period” means, with respect to each Straddle Period, the portion of such Straddle Period that begins
the day after the Closing Date and ends on and includes the last day of such Straddle Period. 
 “Pre-Closing Calculation”
has the meaning set forth in Section 3.3. 
 “Pre-Closing Straddle Period” means, with respect to each Straddle
Period, the portion of such Straddle Period that begins on the first day of such Straddle Period and ends on and includes the Closing Date. 

  
 9 

 “Pre-Closing Tax Period” means any taxable period that ends on or prior to the
Closing Date. 
 “Pre-Closing Tax Return” has the meaning set forth in Section 7.4(b)(i). 

“Purchase Price” has the meaning set forth in Section 3.2. 

“Purchaser” has the meaning set forth in the introduction to this Agreement. 

“Purchaser Documents” has the meaning set forth in Section 6.2. 

“Purchaser Indemnified Persons” has the meaning set forth in Section 9.1(a). 

“Sale or Paydown Notice” has the meaning set forth in Section 9.7(b). 

“Qualified Benefit Plan” has the meaning set forth in Section 4.13(b). 

“Registered Intellectual Property” means all Patents and Patent applications, all Copyright registrations, and all
registrations for Marks that, in each case, constitute Business Intellectual Property, including all Business Intellectual Property underlying such registrations and applications. 

“Related Party Agreements” has the meaning set forth in Section 4.12(a)(viii). 

“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, or
leaching into the environment. 
 “Released Claim” has the meaning set forth in Section 10.12. 

“Releasee” or “Releasees” has the meaning set forth in Section 10.12. 

“Releasing Parties” has the meaning set forth in Section 10.12. 

“Repurchase Price” has the meaning set forth in Section 9.7(b). 

“ROFR Repurchase Election” has the meaning set forth in Section 9.7(b). 

“Securities Act” means the Securities Act of 1933, as amended. 

“Seller Benefit Plan” means a Benefit Plan that is not a Company Benefit Plan. 

“Seller Documents” has the meaning set forth in Section 5.2. 

“Seller Indemnified Persons” has the meaning set forth in Section 9.2. 

“Shared Tax Claim” has the meaning set forth in Section 7.4(d)(ii). 

“Straddle Period” means any taxable period beginning on or before the Closing Date and ending after the Closing Date. 

  
 10 

 “Straddle Period Return” means any Tax Return that is required to be filed by
the Company or a Company Subsidiary subsequent to the Closing Date that relates to a Straddle Period. 
 “Subsidiary” means
any Person of which fifty percent (50%) or more of the outstanding voting securities or other voting equity interests are owned, directly or indirectly, by the pertinent Person. 

“Support Employee” means an employee of Seller who is not a Business Employee but who from time to time provides material
administrative, credit management, operational or other support to the Company and the Company Subsidiaries. 
 “Survival
Date” has the meaning set forth in Section 9.6. 
 “Target Closing Net Working Capital” means $0. 

“Tax Claim” has the meaning set forth in Section 7.4(d)(i). 

“Tax Dispute” has the meaning set forth in Section 7.4(e). 

“Tax” or “Taxes” means all (i) taxes, or other similar charges, fees, duties, levies or assessments
which are imposed by any Taxing Authority, including income, gross receipts, capital stock, net proceeds, ad valorem, payroll, employment, turnover, real, personal and other property (tangible and intangible), escheat or unclaimed property, sales,
use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, customs duties, environmental (including under Code § 59A), occupational, interest equalization, windfall profits, unitary, severance and
employees’ income withholding, unemployment and social security taxes, duties, assessments and charges (including the recapture of any tax items such as investment tax credits); (ii) all interest, penalties, fines, additions to tax or
additional amounts imposed by any Taxing Authority in connection with any item described in clause (i); and (iii) liability of any Person for payment of any amount described in clauses (i) or (ii) as a result of being or having been a
member of an Affiliated Group, as a transferee or successor, by Contract or otherwise. 
 “Taxing Authority” means each
national, state, provincial or local government or any governmental, administrative or regulatory authority, agency, court, commission, tribunal, body or instrumentality of any government that imposes, regulates, administers, collects or regulates
the collection of Taxes in any applicable jurisdiction. 
 “Tax Return” means any return, declaration, report, estimate,
claim for refund, information return or statement related to Taxes, including any schedule or attachment thereto and including any amendment thereof. 

“Third-Party Claim” has the meaning set forth in Section 9.3. 

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

  
 11 

 “Unresolved Items” has the meaning set forth in Section 3.5(d). 

“Warehouse Agreements” means, collectively, (i) Fourth Amended and Restated Revolving Credit Agreement, dated as of
June 19, 2015, by and among NewStar Business Credit, LLC, NewStar Financial, Inc., NewStar Business Funding 2010-1, LLC Autobahn Funding Company LLC, DZ Bank AG Deutsche Zentral-Genossenschaftsbank Frankfurt AM Main, Keybank National
Association, and U.S. Bank National Association, and (ii) Loan and Security Agreement, dated as of December 7, 2012, by and among NewStar Business Funding 2012-1, LLC, NewStar Business Credit, LLC, Wells Fargo Bank, National Association,
and U.S. Bank National Association (as amended by (A) that certain Joinder Agreement and First Amendment by and between NewStar Business Funding 2012-1, LLC, as Borrower, Wells Fargo Bank, National Association, and RBS Citizens Business
Capital, dated as of April 1, 2014, (B) that certain Second Amendment to Loan and Security Agreement, dated as of May 5, 2014, by and among NewStar Business Funding 2012-1, LLC, NewStar Business Credit, LLC, Wells Fargo Bank, National
Association, RBS Citizens Business Capital, and U.S. Bank National Association (C) that certain Third Amendment to Loan and Security Agreement dated as of December 8, 2014, by and among NewStar Business Funding 2012-1, LLC, NewStar
Business Credit, LLC, Wells Fargo Bank, National Association, Citizens Business Capital, and U.S. Bank National Association and (D) that certain Joinder Agreement and Fourth Amendment to Loan and Security Agreement dated as of June 19,
2015, by and among, NewStar Business Funding 2012-1, LLC, NewStar Business Credit, LLC, Wells Fargo Bank, National Association, Citizens Business Capital, Fifth Third Bank, and U.S. Bank National Association. 

(b) Other Definitional and Interpretive Matters. Unless otherwise expressly provided, for purposes of this Agreement, the following
rules of interpretation shall apply: 
 (i) Calculation of Time Period. When calculating the period of time before
which, within which, or following which, any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the
period in question shall end on the next succeeding Business Day. 
 (ii) Dollars. Any reference in this Agreement to
“$” shall mean U.S. dollars. 
 (iii) Exhibits/Schedules. The Exhibits and Schedules to this
Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in, and made a part of, this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement. 

(iv) Gender and Number. Any reference in this Agreement to gender shall include all genders, and words imparting the
singular number only shall include the plural and vice versa. 

  
 12 

 (v) Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect, or be utilized in, construing or interpreting this Agreement. All references in this Agreement to any
“Section” are to the corresponding Section of this Agreement unless otherwise specified. 
 (vi)
Herein. The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear
unless the context otherwise requires. 
 (vii) Including. The word “including” or any variation
thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it. 

(viii) Or. The word “or” shall be construed to be disjunctive but not necessarily exclusive. 

(c) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this
Agreement. 
 ARTICLE II 

SALE AND EXCHANGE OF UNITS 

2.1. Purchase of Units. Subject to the terms and conditions of this Agreement, Seller hereby sells, conveys, transfers, assigns and
delivers to Purchaser, and Purchaser hereby purchases and acquires from Seller, the Units, free and clear of all Liens, for the Purchase Price. 

2.2. Tax Classification. The parties agree that the purchase and sale of the Units pursuant to this Agreement shall be treated as the
purchase and sale of all of the Company’s assets between Purchaser and Seller for U.S. federal and state income tax purposes. Each party (and its respective Affiliates) shall file all applicable Tax Returns consistent with the foregoing, and no
party shall take any position that is inconsistent with such Tax treatment. 
 ARTICLE III 

CLOSING; PURCHASE PRICE 

3.1. Closing Date. Subject to the terms and conditions hereof, the consummation of the transactions contemplated hereby (the
“Closing”) shall take place virtually by the electronic transfer of funds and the electronic exchange of signature pages and documents (or in such other manner or at such other place as the Company and Purchaser may designate in
writing) at 11:00 a.m. (Dallas, Texas time) on the date hereof. The date on which the Closing is held is actually referred to in this Agreement as the “Closing Date.” 

  
 13 

 3.2. Purchase Price. The aggregate cash consideration payable to or for the benefit of
Seller for the Units pursuant to this Agreement shall be an amount in cash equal to the result of the following (the “Purchase Price”): 

(a) Base Purchase Price; minus 

(b) the amount by which Target Closing Net Working Capital exceeds Closing Net Working Capital; or plus 

(c) the amount by which Closing Net Working Capital exceeds Target Closing Net Working Capital. 

The Estimated Purchase Price (as defined in Section 3.3) is being paid at Closing in accordance with Section 3.4(c), and is subject to adjustment
after the Closing in accordance with Section 3.5. 
 3.3. Pre-Closing Estimate. Prior to the Closing, Seller delivered, or
caused the Company to deliver, to Purchaser a worksheet (the “Pre-Closing Calculation”) setting forth, among other things, the Company’s estimate of the Purchase Price (the “Estimated Purchase Price”),
including a presentation in reasonable detail of an estimate of the Base Purchase Price (the “Estimated Base Purchase Price”) and an estimate of the Closing Net Working Capital (the “Estimated Closing Net Working
Capital”), together with (i) calculations of Company Transaction Expenses as of the Closing Date (and wire instructions for the payment thereof) and Company Indebtedness. The parties acknowledge that the Estimated Base Purchase Price
used for purposes of Closing is $351,452,538, the Estimated Closing Net Working Capital used for purposes of Closing is $0, and the Estimated Purchase Price used for purposes of Closing is $351,452,538, all as set forth on the Pre-Closing
Calculation. 
 3.4. Closing Payments and Deliveries. At the Closing: 

(a) Seller Deliveries. Seller shall have delivered to Purchaser: 

(i) assignment documents or other instruments of transfer sufficient to transfer to Purchaser all right, title and interest in
the Units to Purchaser, duly executed by Seller and in form and substance reasonably satisfactory to Purchaser; 
 (ii) a
non-foreign affidavit, dated as of the Closing Date, prepared in accordance with Treasury Regulations Section 1.1445-2(b), in form and substance reasonably satisfactory to Purchaser duly executed by Seller and sworn under penalty of perjury;

 (iii) payoff and Lien release letters (in each case, in form and substance reasonably satisfactory to Purchaser) (the
“Payoff Letters”) executed by the obligees of the Company Indebtedness, including the Warehouse Agreements, 

  
 14 

 
which set forth, among other customary provisions, (x) the amount required to repay in full all Company Indebtedness owed to such obligee on the Closing Date (the “Payoff
Amount”), (y) the wire transfer instructions for the repayment of such Company Indebtedness to such obligee, and (z) a release of all Liens granted by the Company or any of the Company Subsidiaries to such obligee or otherwise
arising with respect to the applicable Company Indebtedness, effective upon receipt of the applicable Payoff Amount, together with such obligee’s commitment to deliver any necessary UCC authorizations or other releases as may be reasonably
required to evidence such release of all Liens; 
 (iv) resignations of each officer and director of the Company in form
reasonably satisfactory to Purchaser; 
 (v) a certificate, dated the Closing Date, signed by the Secretary or any Assistant
Secretary of Seller, attesting to the completion of all necessary corporate action by Seller and the Company to execute and deliver this Agreement and the other Company Documents, to the extent applicable, and to consummate the transactions
contemplated hereby and thereby, and including copies of the bylaws of Seller and the Company and all corporate resolutions required in connection with this Agreement; 

(vi) a copy of the certificate of incorporation of Seller and the certificate of formation of the Company, in each case
certified by the Secretary of State of the State of Delaware; 
 (vii) a certificate, dated as of a recent date, as to the
good standing of each of Seller and the Company from the Secretary of State of the State of Delaware; 
 (viii) each of the
Consents, if any, set forth in Schedule 3.4(a)(ix), each in form and substance reasonably satisfactory to Purchaser; 

(ix) evidence reasonably satisfactory to Purchaser that each of the Related Party Agreements has been terminated; and 

(xii) a transition services agreement, duly executed by Seller. 

(b) Purchaser Deliveries. Purchaser shall have delivered to Seller: 

(i) a certificate, dated the Closing Date, signed by the Secretary or any Assistant Secretary of Purchaser, attesting to the
completion of all necessary corporate action by Purchaser to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and including copies of all corporate resolutions required in connection with this Agreement; and

 (ii) a transition services agreement, duly executed by Purchaser. 

  
 15 

 (c) Purchaser Payments. Purchaser shall: 

(i) repay, or cause to be repaid, on behalf of and for the account of the Company and the Company Subsidiaries, all Company
Indebtedness then outstanding, including Company Indebtedness outstanding under the Warehouse Agreements, by wire transfer of immediately available funds to the applicable lenders in accordance with, and to the accounts set forth by such lenders in,
their respective Payoff Letters; 
 (ii) pay, or cause to be paid, on behalf of the Company, all outstanding Company
Transaction Expenses, if any, by wire transfer of immediately available funds in the amounts and to the accounts designated by the Company and set forth in the Pre-Closing Calculation; and 

(iii) pay the Estimated Purchase Price less the aggregate amounts paid in accordance with clauses (i) and (ii) of
this Section 3.4(c) to Seller by wire transfer of immediately available funds to the account designated by the Company and set forth in the Pre-Closing Calculation. 

3.5. Post-Closing Adjustments. 

(a) No later than the 60th calendar day following the Closing Date (the date of actual
delivery, the “Delivery Date”), Purchaser will prepare and deliver to Seller a statement (the “Closing Statement”) setting forth in reasonable detail Purchaser’s calculation of the Purchase Price, together with
each of the components thereof and the amount by which such calculation varies from the Pre-Closing Calculation with respect to each such component. 

(b) During the forty-five (45) calendar-day period immediately following the Delivery Date, or in the event Purchaser shall fail to
deliver the Closing Statement on or prior to the 60th calendar day following the Closing Date (in which case, at Seller’s option, the Pre-Closing Calculation delivered in accordance with
Section 3.3 will be deemed to be the Closing Statement and the Estimated Purchase Price set forth therein will be deemed to be the Final Purchase Price for all purposes hereof), Seller and its representatives (i) will be permitted to
review, during normal business hours and upon reasonable notice, the Company’s and Purchaser’s books and records and the working papers to the extent related to the preparation of the Closing Statement (including the determinations
included therein), and (ii) will be given access, during normal business hours and upon reasonable notice, to knowledgeable employees and accounting professionals of Purchaser and the Company in order to facilitate Seller’s review of the
Closing Statement. 
 (c) The Closing Statement (including the determinations included therein) will become final, binding and conclusive
upon Purchaser and Seller upon the earliest to occur of: 
 (i) the forty-fifth (45th) calendar day following the Delivery Date, unless Purchaser receives from Seller prior to such forty-fifth (45th) calendar day written
notice of Seller’s disagreement (a “Dispute Notice”) with any amount or determination set forth in the Closing Statement, which Dispute Notice shall specify in reasonable detail the nature and dollar amount of any disagreement
so asserted (collectively, the “Disputed Items”); 

  
 16 

 (ii) written notification by Seller to Purchaser that Seller does not dispute the
Closing Statement; 
 (iii) in the event that Purchaser shall have failed to deliver the Closing Statement on or prior to the
date that is sixty (60) calendar days following the Closing Date, written election by Seller that the Pre-Closing Calculation delivered in accordance with Section 3.3 will be deemed to be the Closing Statement; 

(iv) the date on which Purchaser and Seller resolve in writing all differences they have with respect to the Disputed Items;
and 
 (v) the date on which all of the Unresolved Items are finally resolved in writing by the Independent Accountants in
accordance with Section 3.5(d). 
 (d) During the thirty (30) calendar days following delivery of a Dispute Notice, Purchaser and
Seller will seek in good faith to resolve in writing any differences that they have with respect to all of the Disputed Items. Any Disputed Item resolved in writing by Purchaser and Seller will be deemed final, binding and conclusive on Purchaser
and Seller. If Purchaser and Seller do not reach agreement on all of the Disputed Items during such thirty (30) calendar-day period (or such longer period as they shall mutually agree), then at the end of such thirty (30) calendar-day (or
longer) period Purchaser and Seller will submit all unresolved Disputed Items (collectively, the “Unresolved Items”) to Grant Thornton LLP, or if Grant Thornton LLP is unwilling or unable to serve in such role, another accounting
firm acceptable to Purchaser and Seller (the “Independent Accountants”) to review and resolve such matters. The Independent Accountants will determine each Unresolved Item (the amount of which may not be more favorable to Purchaser
than the related amount reflected in the Closing Statement nor more favorable to Seller than the related amount set forth in the Dispute Notice) in accordance with Section 3.5(f) as promptly as may be reasonably practicable, and Purchaser and
Seller will instruct the Independent Accountants to endeavor to complete such process within a period of no more than thirty (30) calendar days. The Independent Accountants may conduct such proceedings as the Independent Accountants believe, in
their sole discretion, will assist in the determination of the Unresolved Items; provided, however, that, except as Purchaser and Seller may otherwise agree, all communications between Purchaser and Seller or any of their respective
representatives, on the one hand, and the Independent Accountants, on the other hand, will be in writing with copies simultaneously delivered to the non-communicating party. The Independent Accountants’ determination of the Unresolved Items
will be final, binding and conclusive on Purchaser and Seller, effective as of the date the Independent Accountants’ written determination is received by Purchaser and Seller. Each of Purchaser and Seller will bear its own legal, accounting and
other fees and expenses of participating in such dispute resolution procedure. The fees and expenses of the Independent Accountants incurred pursuant to this Section 3.5(d) (the “Accounting Fees”) shall be allocated one-half
(1/2) to Purchaser and one-half (1/2) to Seller. 

  
 17 

 (e) Upon final determination of the Purchase Price pursuant to Section 3.5 (the
“Final Purchase Price”), an adjustment to the Purchase Price will be determined and paid as follows: 
 (i)
If the Estimated Purchase Price exceeds the Final Purchase Price, Seller shall, within three (3) Business Days of the determination of the Final Purchase Price, pay to Purchaser the amount of such excess by wire transfer of immediately
available funds to the account specified by Purchaser. 
 (ii) If the Final Purchase Price exceeds the Estimated Purchase
Price, Purchaser shall, within three (3) Business Days of the determination of the Final Purchase Price, pay to Seller the amount of such excess by wire transfer of immediately available funds to the account specified by Seller. 

(iii) If the Final Purchase Price is equal to the Estimated Purchase Price, there will be no adjustment to the Purchase Price
pursuant to this Section 3.5(e). 
 (f) For the purposes of this Article III, each amount included in the Pre-Closing Calculation and
the Closing Statement shall be prepared and calculated in accordance with the methodology reflected on Schedule 3.5(f) hereto. 

3.6. Allocation. 
 (a) For
all U.S. federal and state income tax purposes, the Purchase Price and any other amounts treated as consideration for U.S. federal and state income tax purposes shall be allocated in accordance with Code Section 1060 and the final and proposed
Treasury Regulations promulgated thereunder (the “Asset Allocation”) and shall be determined in good faith by Purchaser and delivered to Seller within thirty (30) calendar days of the determination of the Final Purchase Price
pursuant to Section 3.5. If Seller does not give written notice to Purchaser within twenty (20) calendar days after receipt from Purchaser of Purchaser’s proposed Asset Allocation that Seller disagrees with any matters set forth
therein, then the Asset Allocation shall be deemed to be agreed upon by Seller and Purchaser for purposes of this Section 3.6. If Seller does give notice of any such objection, then from that time until the expiration of thirty
(30) calendar days after Seller’s receipt of Purchaser’s proposed Asset Allocation, Purchaser and Seller shall negotiate in good faith to reach mutual agreement regarding any matters subject to such objection and if Purchaser and
Seller do reach such agreement within such period, then the Asset Allocation shall, for purposes of this Section 3.6, be as agreed upon by Purchaser and Seller pursuant to such agreement. If Purchaser and Seller are unable to reach an agreement
during such period, the Asset Allocation shall be based on the fair market value of the Company’s assets as determined by the Independent Accountants. All costs relating to the Independent Accountants incurred pursuant to this Section 3.6
shall be borne one-half (1/2) by Purchaser and one-half (1/2) by Seller. The Independent Accountants shall be provided with sufficient documentary evidence to permit an accurate independent determination of the proper Asset Allocation, and
the results of the appraisal shall be deemed conclusive in the absence of fraud, malfeasance, or gross negligence. 

  
 18 

 (b) Each of Purchaser and Seller (and their respective Affiliates) shall file all Tax Returns
(including IRS Form 8594) consistent with the Asset Allocation as finally agreed upon or determined pursuant to this Section 3.6. No party (or any of its respective Affiliates) shall take any position inconsistent with the Asset Allocation as
finally agreed upon or determined pursuant to this Section 3.6 in connection with any Tax proceeding, except that Purchaser’s cost for the assets of the Company and the Company Subsidiaries may differ from the amount so allocated to the
extent necessary to reflect its capitalized acquisition costs not included in the amount realized by Seller; provided, however, that nothing in this Section 3.6 shall prohibit any party (or any of its respective Affiliates) from
settling any proposed deficiency or adjustment by any Taxing Authority based upon, or arising out of, the Asset Allocation and the parties (and any of their respective Affiliates) shall not be required to litigate before any court any proposed
deficiency or adjustment by any Taxing Authority challenging the Asset Allocation. In the event any Taxing Authority questions, audits, examines, challenges or disputes any portion of the Asset Allocation, the party receiving notice thereof shall
provide written notice thereof to the other party within five (5) Business Days following receipt and shall keep the other party reasonably updated and informed of substantive developments regarding such question, audit, exam, challenge or
dispute. 
 (c) Purchaser and Seller shall be entitled to revise and supplement the Asset Allocation to appropriately take into account any
payments made under this Agreement that are treated as an adjustment to the Purchase Price for tax purposes in accordance with the allocation principles as set forth above. 

ARTICLE IV 

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY AND ITS SUBSIDIARIES 

Subject to the exceptions set forth in a numbered section of the schedules to this Agreement (the “Disclosure Schedules”)
referencing a representation or warranty herein (each of which exceptions, in order to be effective, shall indicate the section and, if applicable, the subsection of this Article IV to which it relates, and each of which exceptions shall also be
deemed to be representations and warranties made by the Company and Seller under this Article IV), the Company and Seller, jointly and severally, represent and warrant to Purchaser as follows: 

4.1. Organization and Good Standing. 

(a) The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware
and has all requisite limited liability company power and authority to own, lease and operate its properties and to carry on its business as now conducted. Except as set forth in Schedule 4.1(a), the Company is duly qualified or authorized to
do business as a foreign corporation and the Company is in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification or authorization, except where the
failure to be so qualified, authorized or in good standing would not have a Company Material Adverse Effect. 

  
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Each jurisdiction in which the Company is qualified or otherwise authorized to transact business is listed on Schedule 4.1(a). The Company has made available to Purchaser correct and complete
copies of its certificates of formation and the Company LLC Agreement, in each case as amended to date, is not currently in default under or in violation of any provision thereof, and has at all times been operated in material compliance with all
provisions thereof. 
 (b) The Company Subsidiaries are duly organized, validly existing and in good standing under the laws of the State of
Delaware and have all requisite power and authority to own, lease and operate their properties and to carry on their business as now conducted. Except as set forth in Schedule 4.1(b), the Company Subsidiaries are duly qualified or authorized to
do business as foreign corporations and the Company Subsidiaries are in good standing under the laws of each jurisdiction in which the conduct of their business or the ownership of their properties requires such qualification or authorization,
except where the failure to be so qualified, authorized or in good standing would not have a Company Material Adverse Effect. Each jurisdiction in which the Company Subsidiaries are qualified or otherwise authorized to transact business is listed on
Schedule 4.1(b). The Company has made available to Purchaser correct and complete copies of the Company Subsidiaries’ certificates of formation and LLC agreements, in each case as amended to date, and the Company Subsidiaries are not currently
in default under or in violation of any provision thereof, and have at all times been operated in material compliance with all provisions thereof. 

4.2. Authorization of Agreement. The Company has all requisite power and authority to execute and deliver this Agreement and each other
agreement, document, or instrument or certificate to be executed by the Company and delivered pursuant to Section 3.4(a) (the “Company Documents”), and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and the Company Documents and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite limited liability company action on the part of the
Company. This Agreement and each of the Company Documents have been duly and validly executed and delivered by the Company and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement
constitutes legal, valid and binding obligations of the Company, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally. 
 4.3. Conflicts; Consents of Third Parties. 

(a) The execution and delivery by the Company of this Agreement and the Company Documents do not, and except as set forth on
Schedule 4.3(a), the consummation of the transactions contemplated hereby or thereby, or compliance by the Company with any of the provisions hereof or thereof will not, result in any violation of or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination, acceleration, modification or cancellation or require notification under, any provision of (i) the certificate of formation of the Company or the Company LLC Agreement,
(ii) the certificates of formation of the Company Subsidiaries or the Company Subsidiaries LLC agreements, (iii) any Contract or Permit to which the Company or any Company Subsidiary is a party or by which any of the properties or assets
of 

  
 20 

 
the Company or the Company Subsidiaries is bound, or (iv) any applicable Law or any Order of any Governmental Body applicable to the Company or by which any of the properties or assets of
the Company are bound; other than in the case of clauses (iii) and (iv), such violations, defaults, terminations, accelerations, modifications, cancellations or notifications that are not, individually or in the aggregate, material. 

(b) No Consent, Order, Permit of, or declaration or filing with, or notification to, any Governmental Body or other Person is required on
the part of the Company or the Company Subsidiaries in connection with the execution and delivery of this Agreement or the Company Documents or the compliance by the Company or the Company Subsidiaries with any of the provisions hereof or thereof,
or the consummation of the transactions contemplated hereby or thereby, except for such Consents, Orders, Permits or notifications as are specified on Schedule 4.3(b) hereto. 

4.4. Capitalization. 
 (a)
All of the Units are owned of record and beneficially by Seller, and no Units are held by the Company as treasury units. All of the issued and outstanding Units have been duly authorized for issuance and are validly issued and outstanding, fully
paid and non-assessable. 
 (b) The Company has not granted any preemptive rights, rights of first refusal or other similar rights with
respect to any of the membership interests of the Company and there is no option, warrant, call, right or Contract of any kind or character relating to the issuance, conversion, registration, voting, sale or transfer of membership interests or other
capital securities of the Company or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase membership interests or other capital securities of the Company or obligating the Company to purchase or
redeem any of its membership interests or declare any dividends. Except as set forth on Schedule 4.4(b) and except for the Company LLC Agreement, the Company is not a party to any voting trust or other Contract with respect to the
voting, redemption, sale, transfer or other disposition of the capital securities of the Company. 
 (c) The outstanding units of the Company
Subsidiaries are wholly owned by the Company. All of the issued and outstanding units of the Company Subsidiaries have been duly authorized for issuance and are validly issued and outstanding, fully paid and non-assessable. The Company Subsidiaries
have not granted any preemptive rights, rights of first refusal or other similar rights with respect to any of the membership interests of the Company Subsidiaries, and there is no option, warrant, call, right or Contract of any kind or character
relating to the issuance, conversion, registration, voting, sale or transfer of membership interests or other capital securities of the Company Subsidiaries or other securities convertible into, exchangeable for or evidencing the right to subscribe
for or purchase membership interests or other capital securities of the Company Subsidiaries or obligating the Company Subsidiaries to purchase or redeem any of its membership interests or declare any dividends. Except as set forth on
Schedule 4.4(c) and except for the Company Subsidiaries’ LLC agreements, the Company Subsidiaries are not parties to any voting trust or other Contract with respect to the voting, redemption, sale, transfer or other disposition of
the capital securities of the Company Subsidiaries. 

  
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 4.5. Subsidiaries. The Company Subsidiaries engage only in the activities as provided on
Schedule 4.5. Except for the Company Subsidiaries, the Company does not have and has not at any time since the Balance Sheet Date had, any Subsidiaries. The Company Subsidiaries do not have and have not at any time since the Balance Sheet
Date had, any Subsidiaries. Neither the Company nor the Company Subsidiaries own any capital securities or other equity interests of any other Person and do not hold any options or warrants and is not a party to any Contract of any kind or character
that would require the Company or the Company Subsidiaries, respectively, to subscribe for or purchase any capital securities or other equity interests of any other Person. 

4.6. Financial Statements. The Company has delivered to Purchaser true and complete copies of (i) the audited consolidated balance
sheet of the Company as of December 31, 2013 and December 31, 2014, and the related audited statements of income and of cash flows of the Company and the Company Subsidiaries for the years then ended, (ii) the unaudited consolidated
balance sheet of the Company as of December 31, 2015 (the “Balance Sheet Date”), and the related unaudited statements of income and of cash flows of the Company and the Company Subsidiaries for the years then ended, and
(iii) the unaudited consolidated balance sheets of the Company and the Company Subsidiaries as of February 29, 2016 (the “Interim Balance Sheet”) and the related unaudited consolidated statements of income and cash flows
of the Company and the Company Subsidiaries for the two (2)-month period then ended (such audited and unaudited statements, including the related notes and schedules thereto, are referred to herein as the “Financial Statements”).
Except as set forth in the notes thereto and as disclosed in Schedule 4.6, each of the Financial Statements has been prepared in accordance with GAAP consistently applied and presents fairly in all material respects the consolidated
financial condition, position, results of operations and cash flows of the Company and the Company Subsidiaries as at the dates and for the periods indicated therein; provided, that the Financial Statements described in clauses (ii) and
(iii) are subject to normal year-end adjustments and lack footnotes and other presentation items, none of which, individually or in the aggregate, are material. The Financial Statements were prepared from, and are consistent with, the books and
records of the Company and the Company Subsidiaries and do not contain any items of a special or non-recurring nature that would equal or exceed $100,000 individually, except as expressly stated therein. 

4.7. No Undisclosed Liabilities. Except for facts and matters subject to the other representations set forth in this Article IV, the
Company and the Company Subsidiaries do not have any material liabilities that would be required to be disclosed in a balance sheet prepared in accordance with GAAP, including any liabilities arising in connection with the Company Subsidiaries or
other former Affiliates, other than liabilities that (i) are reflected in or otherwise described in the Financial Statements, (ii) have been incurred in the Ordinary Course of Business after the Balance Sheet Date, (iii) have been or
are incurred in connection with the transactions contemplated hereby, or (iv) are set forth on Schedule 4.7. 

  
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 4.8. Absence of Certain Developments. As of the date hereof, except as contemplated by
this Agreement or as set forth on Schedule 4.8, since the Balance Sheet Date, the Company and the Company Subsidiaries have conducted their businesses only in the Ordinary Course of Business and there has not been any: 

(a) Company Material Adverse Effect; 

(b) (i) adoption, material amendment or material modification of a Benefit Plan, (ii) grant of severance or termination pay to any
director or manager of the Company or any Company Subsidiary or any Business Employee, or (iii) material increase in the compensation of, or payment of any bonus to, any director or manager of the Company or any Company Subsidiary or any
Business Employee, except, in each of (i) through (iii), as required by the terms of the applicable Benefit Plan or by applicable Law; 

(c) sale, assignment, transfer, hypothecation, conveyance, lease, or other disposition or acquisition of any material asset or property of the
Company or any Company Subsidiary, except in the Ordinary Course of Business, or mortgage, pledge, or imposition of any material Lien on any asset or property of the Company or any Company Subsidiary, except for Permitted Liens in the Ordinary
Course of Business; 
 (d) failure to pay when due any material liabilities arising out of the operations of the businesses of the Company or
any of the Company Subsidiaries; 
 (e) material loss, destruction or damage to any property or assets of the Company or any of the Company
Subsidiaries, whether or not insured; 
 (f) waiver of any material right of the Company or any of the Company Subsidiaries or cancellation
of any indebtedness or claim held by the Company or any of the Company Subsidiaries; 
 (g) loan made by the Company or any of the Company
Subsidiaries to any member, officer, director or manager of the Company or any of the Company Subsidiaries or any of the Business Employees or Support Employees; 

(h) (i) change or revocation of any material Tax election, (ii) compromise or settlement of any material Tax liability, (iii) consent
to any extension or waiver of the limitations period applicable to any material Tax claim or assessment, (iv) amendment to any material Tax Return, (v) surrender of any right to claim a refund of a material amount of Taxes, or
(vi) entering into of any Tax allocation agreement, Tax sharing agreement, Tax indemnification agreement or closing agreement relating to any Tax; 

(i) material change in accounting policies, principles, methods, practices or procedures or revaluation of any assets; 

(j) cancellation of or failure to renew any insurance policy, receipt of any notice of cancellation or termination from any insurance provider
or failure to give all notices and present all claims (if any) under all policies in a timely fashion; 

  
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 (k) amendment, modification or termination of any Material Contract (other than those that expire
or terminate in accordance with their existing terms) or express waiver of any material benefits under any Material Contract, in each case other than in the Ordinary Course of Business; or 

(l) agreement by the Company or any Company Subsidiary to do any of the foregoing. 

4.9. Taxes. Except as set forth on Schedule 4.9: 

(a) The Company and each Company Subsidiary has filed all of its Tax Returns that they were required to file on or before the Closing Date. All
such Tax Returns were true and complete in all material respects, and all Taxes due and owing by the Company or any Company Subsidiary (whether or not shown on such Tax Returns) have been paid. Except as set forth on Schedule 4.9(a), none of
the Company or any Company Subsidiary is currently the beneficiary of any extension of time within which to file any Tax Return. No claim has been made by a Taxing Authority in a jurisdiction where the Company or any Company Subsidiary does not file
a Tax Return that the Company or any Company Subsidiary is or may be subject to taxation in such jurisdiction with respect to Taxes that are subject of such Tax Return. 

(b) The unpaid Taxes of the Company and each Company Subsidiary (A) did not, as of the Balance Sheet Date, exceed the reserve for Taxes
payable by the Company and each Company Subsidiary set forth on the face of the Financial Statements; and (B) will not exceed that reserve as adjusted for operations and transactions through the Closing Date in accordance with the past custom
and practice of the Company and each Company Subsidiary in filing their Tax Returns. 
 (c) Except as set forth on Schedule 4.9(c), no
Tax Return of the Company or any Company Subsidiary for taxable periods ended on or after December 31, 2011 has been audited. There are currently no material deficiencies for Taxes due from the Company or any Company Subsidiary that have been
claimed, proposed or assessed by any Taxing Authority in writing for any Tax period for which the period of assessment remains open. There are no proceedings in process, or to the Knowledge of the Company pending, by any Taxing Authority for or
relating to Taxes of the Company or any Company Subsidiary. None of the Company or any Company Subsidiary has received written notice from any Taxing Authority indicating an intent to open an audit or other review (other than audits that are
currently in process, pending or already closed). 
 (d) Neither the Company nor any Company Subsidiary has waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, which waiver or extension is currently in effect. 

(e) Neither the Company nor any Company Subsidiary is a party to, or bound by, any Tax allocation agreement, Tax sharing agreement or similar
Contract. 

  
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 (f) Each of the Company and each Company Subsidiary has withheld (or collected) and paid all
Taxes required to have been withheld (or collected) and paid in connection with any amounts paid or owing to or by any employee, independent contractor, creditor, stockholder or other third party and all Forms W-2 and 1099 required with respect
thereto have been properly completed and timely filed. 
 (g) There are no Liens on any of the assets of the Company or any asset of a
Company Subsidiary that arose in connection with any failure (or alleged failure) to pay any Tax other than Liens for Taxes that are not yet due and payable or for Taxes being contested in good faith by appropriate proceedings and for which adequate
reserves for such Taxes have been made in accordance with GAAP. 
 (h) Neither the Company nor any Company Subsidiary (A) is or has been
a member of an Affiliated Group (other than an Affiliated Group consisting solely of Seller and/or any of its Subsidiaries) or (B) has a liability for the Taxes of another Person under Treasury Regulations Section 1.1502-6 (or any similar
provision of state, local or foreign Law) or as a transferee or successor. 
 (i) Schedule 4.9(i) lists (i) all state or local
Income Tax Returns for jurisdictions that do not conform with Treasury Regulations Section 301.7701-3(b)(1)(ii) in treating the Company and each Company Subsidiary as disregarded from Seller for Tax purposes; and (ii) all non-Income Tax
Returns, in each case filed by the Company or any Company Subsidiary for taxable periods ending on or after December 31, 2011. 
 (j)
Neither the Company nor any Company Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any
(a) change in method of accounting for a taxable period ending on or prior to the Closing Date; (b) use of an improper method of accounting for a taxable period ending on or prior to the Closing Date; (c) “closing agreement”
as described in Code Section 7121 (or any corresponding or similar provision of state, local or non-U.S. income tax law); (d) installment sale or open transaction disposition made on or prior to the Closing Date; or (e) prepaid amount
received on or prior to the Closing Date. 
 (k) Neither the Company nor any Company Subsidiary is or has been a party to (A) any
“listed transaction,” as defined in Code §6707A(c)(2) and Treasury Regulations Section 1.6011-4(b)(2) (or any similar state or local Law) or (B) any “reportable transaction” as defined in Treasury Regulations
Section 1.6011-4(b)(1) that has not been properly reported on the relevant Tax Returns. 
 (l) Except as set forth on Schedule
4.9(l), the Company and each Company Subsidiary has been, since the date of its formation, treated as an entity that is disregarded from Seller within the meaning of Treasury Regulation Section 301.7701-3(b)(1)(ii). 

4.10. Personal Property. The Company and the Company Subsidiaries own, lease or have the legal right to use all of their respective
personal properties and assets used in the conduct of its respective business or reflected in the Interim Balance Sheet or acquired since the date thereof (all such material properties and assets of the Company and the Company Subsidiaries being the
“Assets”). The Company and the Company Subsidiaries have good and 

  
 25 

 
marketable title to, or, in the case of leased Assets, valid and subsisting leasehold interests in, all of their Assets, free and clear of all Liens, except for Permitted Liens and, for the
avoidance of doubt, those Liens securing the obligations under the Warehouse Agreements, which shall be released at Closing. The Assets of the Company are free from material defects so as to permit it to operate its business in all material respects
as presently conducted, and are suitable in all material respects for the purposes for which they are presently used. The Company owns or has valid rights to use all of properties and assets reasonably necessary for the continued conduct of the
business of the Company in the manner and to the extent conducted by the Company and the Company Subsidiaries in the Ordinary Course of Business prior to Closing. 

4.11. Intellectual Property. 

(a) Schedule 4.11(a) lists all Intellectual Property owned or used by or licensed to the Company or any of the Company Subsidiaries
in connection with their respective businesses, and all Intellectual Property that was developed or acquired by Seller for use, in whole or in part, in connection with the business of the Company or the Company Subsidiaries (collectively, the
“Business Intellectual Property”). Except as set forth on Schedule 4.11(a), all Registered Intellectual Property is owned solely by the Company. 

(b) Schedule 4.11(b) sets forth a complete list of all licenses granted by any Person to the Company or any Company Subsidiary as
of the date hereof or which the Company or any Company Subsidiary has granted to any Person of Business Intellectual Property (the “Licenses”), excluding non-exclusive licenses to “off the shelf” or commercially available
software. The Licenses are in full force and effect and no material default exists on the part of the Company or, to the Knowledge of the Company, on the part of the other parties thereto. The conduct of business by the Company and the Company
Subsidiaries in the Ordinary Course of Business has not infringed, violated or misappropriated the Intellectual Property of any third party. 

(c) The Company owns free and clear of all Liens (except Permitted Liens) or has valid rights to use all Business Intellectual Property used by
it for the continued operation of its businesses as currently conducted. The Company is not in default (or with the giving of notice or lapse of time or both, would be in default) under any material license it has to use Business Intellectual
Property. 
 (d) Except as set forth on Schedule 4.11(d), neither Seller, the Company nor any Company Subsidiary has received any
notice or other communication (in writing or otherwise) of any claim from any Person asserting that the Company or any Company Subsidiary is or was infringing or may be infringing, misappropriating or violating any Intellectual Property rights of
another Person. The Company has no Knowledge of any existing or threatened infringement, misappropriation, or competing claim by any third party on the right to use or own any of the Business Intellectual Property. 

(e) To the Knowledge of the Company, none of the activities of the Business Employees or any consultants or independent contractors of the
Company or any Company Subsidiary violates any agreements or arrangements which such Persons have with former employers or any other third parties, including any non-competition, non-solicitation and/or

  
 26 

 
confidentiality agreements. No Business Employee, Support Employee or any current or former employee, officer, manager, member, consultant or independent contractor of the Company or any Company
Subsidiary has any right, claim or interest in or with respect to any of the Business Intellectual Property. 
 (f) The Company, the Company
Subsidiaries and Seller use commercially reasonable efforts to maintain, police and protect each item of Business Intellectual Property material to the business of the Company or the Company Subsidiaries, and require all Business Employees and
Support Employees who are provided with or otherwise exposed to any trade secrets or confidential information to attest to their obligations of confidentiality with respect to such trade secrets or confidential information within their employee
handbook. 
 4.12. Material Contracts. 

(a) Schedule 4.12 lists the following Contracts to which the Company or any of the Company Subsidiaries is a party or by which any
of them is bound (collectively, the “Material Contracts”), a complete and correct copy of each of which, together with any amendments or other modifications thereto, or, in the case of oral Contracts, an accurate summary of the
material terms thereof, has been made available to Purchaser: 
 (i) any Contract relating to Company Indebtedness, any
Contract under which the Company or any Company Subsidiary guaranteed indebtedness of any other Person in each case in excess of $25,000, or any Contract relating to the issuance of letters of credit; 

(ii) any Contract providing for the sale, assignment, lease, license or other disposition of any asset of the Company or any
Company Subsidiary with a value in excess of $50,000; 
 (iii) any Contract granting a Lien upon any material asset of the
Company or any Company Subsidiary; 
 (iv) any partnership, limited liability company or joint venture agreement in which the
Company or any Company Subsidiary participates as a partner, member or joint venturer; 
 (v) all leases or subleases of the
leased real property listed on Schedule 4.17; 
 (vi) any sales agency, sales representation, distributorship, broker
or franchise Contract that is not terminable without penalty on 90 days’ notice or less; 
 (vii) any Contract granting
rights in Intellectual Property of third parties to the Company or any Company Subsidiary, other than non-exclusive licenses of generally commercially available “off the shelf” software, requiring annual fees of less than $25,000; 

  
 27 

 (viii) any Contract with Seller or any current or former officer, manager,
director, member or owner (or any family member of any such officer, manager, member or owner) or Affiliate of Seller, the Company or any Company Subsidiary (the “Related Party Agreements”); 

(ix) any employment or consulting agreements, or similar Contracts providing for compensation, bonus, profit-sharing or similar
arrangements; 
 (x) any Contract for the disposition of any material asset; 

(xi) powers of attorney or other similar agreements or grants of agency authority; 

(xii) any Contract that requires payment by the Company or any Company Subsidiary of amounts in excess of $25,000 per annum or
in which $50,000 in the aggregate remains to be paid by the Company or a Company Subsidiary, as applicable, under such Contract, or provides for the Company or any Company Subsidiary to receive any payments in excess of, or any property with a fair
market value in excess of, $25,000 per annum or in which $50,000 in the aggregate remains payable to the Company or a Company Subsidiary, as applicable; or 

(xiii) any commitment to enter into any of the foregoing. 

(b) None of the Company or any Company Subsidiary is in violation in any material respect of any of the terms or conditions of any Material
Contract and, to the Knowledge of the Company, all of the material covenants to be performed by any other party thereto have been performed in all material respects. Under each Material Contract, (A) with respect to the Company or the Company
Subsidiaries, there is no existing default or breach or event of default (or event that with the notice or lapse of time, or both, would constitute a breach or default), or (B) with respect to the other party, to the Knowledge of the Company,
there is no existing default or breach or event of default (or event that with the notice or lapse of time, or both, would constitute a breach or default). 

(c) Each Material Contract: 

(i) is in full force and effect; and 

(ii) is valid, binding and enforceable against the Company or Company Subsidiary party thereto and, to the Knowledge of the
Company, is binding against the other parties thereto, except in each case as enforceability of such agreements may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar Laws now or hereafter in effect relating to or
limiting creditors’ rights generally and general principles of equity relating to the availability of specific performance and injunctive and other forms of equitable relief. 

  
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 4.13. Employee Benefits Plans. 

(a) Schedule 4.13(a) contains a complete and correct list of (and separately identifies) (i) each Company Benefit Plan, and
(ii) each material Seller Benefit Plan in which any Business Employee participates. Seller has made available to Purchaser correct and complete copies of (i) each Company Benefit Plan, (ii) each material Seller Benefit Plan in which
any Business Employee participates, (iii) all trust documents, insurance contracts, service agreements, and other material documents related to each Company Benefit Plan, and (iv) all material correspondence with any Governmental Body
during the three (3) most recent years regarding any Company Benefit Plan. 
 (b) Except as set forth in Schedule 4.13(b), each
Company Benefit Plan complies with all applicable Laws (including ERISA and the Code and the regulations promulgated thereunder). Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (a “Qualified Benefit
Plan”) has received a favorable determination letter from the IRS, or with respect to a prototype plan, can rely on an opinion letter from the IRS to the prototype plan sponsor, to the effect that such Qualified Benefit Plan is so qualified
and that the plan and the trust related thereto are exempt from federal income Taxes under Sections 401(a) and 501(a), respectively, of the Code, and, to Seller’s knowledge and Knowledge of the Company, nothing has occurred that could
reasonably be expected to cause the revocation of such determination letter from the IRS or the unavailability of reliance on such opinion letter from the IRS, as applicable. Except as set forth in Schedule 4.13(b), all benefits,
contributions and premiums required by and due under the terms of each Company Benefit Plan or applicable Law have been timely paid in accordance with the terms of such Company Benefit Plan and all applicable Laws. 

(c) Except as set forth in Schedule 4.13(c), (i) neither the Company nor the Company Subsidiaries, nor any of their ERISA
Affiliates, currently has, or in the past six (6) years had, an obligation to contribute to a “defined benefit plan” as defined in Section 3(35) of ERISA, a pension plan subject to the funding standards of Section 302 of
ERISA or Section 412 of the Code, a “multiemployer plan” as defined in Section 3(37) of ERISA or Section 414(f) of the Code, a plan described in Section 413 of the Code, or a “multiple employer welfare
arrangement” as defined in Section 3(40) of ERISA, and (ii) no liability under Title IV or Section 302 of ERISA has been incurred by the Company or the Company Subsidiaries that has not been satisfied in full, and no condition
exists that would reasonably be expected to present a risk to the Company or the Company Subsidiaries of incurring any such liability. 

4.14. Labor; Business Employees. With respect to the Business Employees: 

(a) Neither Seller, the Company nor any Company Subsidiary is a party to any labor or collective bargaining agreement. 

(b) Since January 1, 2013, (i) no strike, work stoppage, work slowdown or lockout has occurred and, to the Knowledge of the Company,
none was threatened against or involving the Business Employees, and (ii) no material unfair labor practice charge, grievance or complaint has been made or filed and, to the Knowledge of the Company, none was threatened by or on behalf of any
Business Employee or group of Business Employees. 

  
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 (c) Attached as Schedule 4.14(c) is a list of each Business Employee employed by
Seller on the date hereof, together with his or her (i) title, (ii) annual salary, (iii) principal work location, and (iv) job description. 

(d) Except as set forth on Schedule 4.14(d), (i) neither the Company nor any Company Subsidiary has at any time had any employees
or has any payment obligation of any kind to any Business Employee or Support Employee, (ii) each of the Business Employees and Support Employees is or was, as applicable, employed by Seller, (iii) Seller is not (A) delinquent in
payments to any of the Business Employees for any wages, salaries, commissions, bonuses or other compensation for or in respect of any services performed by them or amounts required to be reimbursed to such employees or any Taxes or any penalty for
failure to comply with any of the foregoing, or (B) liable for any payment to any trust or other fund or to any Governmental Body with respect to unemployment compensation benefits, social security or otherwise for or in respect of any of the
Business Employees (other than routine non-delinquent payments to be made in the Ordinary Course of Business by Seller and consistent with past practice), and (iv) Seller has, at all times since January 1, 2013, complied with all
applicable Laws pertaining to the employment, classification and termination of all Business Employees, including all such Laws relating to labor relations, equal employment opportunities, immigration, wage and hour laws, health and safety, fair
employment practices, workers’ compensation, prohibited discrimination and other similar employment activities. 
 (e) Each Business
Employee listed on Schedule 4.14(c) was, to the Knowledge of the Company, as of immediately prior to the Closing, available for hire by the Company upon the Closing without any restrictions or limitation in favor of Seller or any Affiliate of
Seller. 
 4.15. Litigation. Except as set forth on Schedule 4.15, as of the date hereof there are no Legal Proceedings
pending or, to the Knowledge of the Company, threatened against Seller, the Company, the Company Subsidiaries or any of their respective Affiliates or that involves the Company properties or that enjoins or seeks to enjoin the consummation of the
transactions contemplated by this Agreement. To the Knowledge of the Company (without application of clause (b) of such definition), no event has occurred or circumstance exists that would reasonably be expected to give rise to, or serve as a
basis for, the commencement of any such Legal Proceeding. 
 4.16. Compliance with Laws; Permits. 

(a) The Company and the Company Subsidiaries are, and at all times since January 1, 2013 have been, in material compliance with all
applicable Laws and Permits. None of Seller, the Company or the Company Subsidiaries has, at any time since January 1, 2013, received any written notice, order or other communication from any Governmental Body of any alleged, actual or
potential liability or violation of or failure to comply with, or been charged with a material violation of, any applicable Laws in any material respect. 

  
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 (b) Schedule 4.16(b) contains a complete and accurate list of all material Permits
required for the operation of the business of the Company and the Company Subsidiaries as currently conducted and held by the Company and the Company Subsidiaries, each of which is in full force and effect without any default or violation thereunder
in any material respect by the Company or any Company Subsidiary or, to the Knowledge of the Company, by any other party thereto. No Legal Proceeding is pending or, to the Knowledge of the Company, threatened in writing by any Governmental Body to
revoke or deny the renewal of any such Permit, and none of Seller, the Company nor any Company Subsidiary has been notified in writing that any such Permit may not in the ordinary course be renewed upon its expiration or that by virtue of the
transactions contemplated by this Agreement, any such Permit may not be granted or renewed. All applications required to have been filed for the renewal of any such Permit have been duly filed on a timely basis with the appropriate Governmental
Body, and all other filings required to have been made with regard to any such Permit have been duly made on a timely basis with the appropriate Governmental Body and all fees related thereto have been paid. Except for the Permits listed on
Schedule 4.16(b), there are no material Permits required for the continued operation of the business of the Company and Company Subsidiaries as conducted prior to Closing by the Company and the Company Subsidiaries. 

4.17. Real Property. Neither the Company nor any Company Subsidiary owns any real property. Schedule 4.17 contains a true
and complete list of the real property leased by the Company and the Company Subsidiaries, which leased real properties are (i) free from material defects so as to permit after Closing the continued operation by the Company of its business in
all material respects as presently conducted and (ii) suitable in all material respects for the purposes for which they are presently used. Each of the Company and the Company Subsidiaries has valid leasehold interests in all of its respective
leased real properties, free and clear of all Liens (other than Permitted Liens). Neither the Company nor any Company Subsidiary has received any notice of violation or alleged violation of any zoning, building or safety ordinance, regulation or
requirement or other Law applicable to the operation of its leased real properties with which it has not fully complied and, to the Knowledge of the Company, neither the Company nor any Company Subsidiary is, in its capacity as lessee, in material
violation of any such zoning, building or safety ordinance, regulation or requirement or other Law. 
 4.18. Financial Advisors. No
Person has acted, directly or indirectly, as a broker, finder or financial advisor for Seller, the Company or the Company Subsidiaries in connection with the transactions contemplated by this Agreement and no Person is entitled to any fee or
commission or like payment from Seller, the Company or the Company Subsidiaries in respect thereof. 
 4.19. Banks.
Schedule 4.19 lists as of the date hereof (i) the names and locations of all banks in which the Company or the Company Subsidiaries has accounts or safe deposit boxes, and (ii) the name of each Business Employee who is an
authorized signatory thereon. 
 4.20. Insurance. Schedule 4.20 contains a true and complete list of each material
insurance policy owned by, or maintained for the benefit of, the Company and the Company Subsidiaries (the “Policies”). None of the Company or the Company Subsidiaries is in material default under any of the Policies. All premiums
due in respect of the Policies have been paid, and none of the Company or the Company Subsidiaries has received any written notice of cancellation of any such Policy or written notice with respect to any refusal of coverage thereunder. There are no
outstanding unpaid claims under any such Policy or binder. 

  
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 4.21. Transactions with Affiliates, Seller, Officers, Directors and Others. Except
as set forth in Schedule 4.21, neither the Company nor any of the Company Subsidiaries has any liabilities for indebtedness for borrowed money owing to Seller or to any director, officer, member, consultant, Business Employee or Support
Employee (except for amounts due as normal salaries, wages, benefits or reimbursements of ordinary business expenses) or any of their respective family members. No director, officer, member, stockholder, consultant, Business Employee or Support
Employee or any of their respective family members has any liability for any indebtedness for borrowed money owing to the Company or any Company Subsidiary except for ordinary business expense advances. Except as set forth in
Schedule 4.21, no officer, director, member, consultant, Business Employee or Support Employee (or any of their respective family members) or Affiliate of the Company or any entity which any such Person or individual owns any beneficial
interest, is a party to any Contract that will survive Closing or transaction with the Company that will survive Closing or has any material interest in any property used by the Company (including any Business Intellectual Property). 

4.22. Loans. 
 (a) The
information contained on Exhibit B is true, correct and complete in all material respects, and sets forth the complete list of all Loans, including, for each Loan, (i) the legal name of the borrower(s) and any guarantor(s) or other
obligor(s) with respect to the Loan, (ii) the aggregate commitment under the Loan, (iii) the commitment of the Company or Company Subsidiary, as the case may be, under the Loan, (iv) the administrative agent with respect to the Loan,
(v) the maturity date of the Loan, and (vi) the outstanding balance of the Loan, in each case as of the date hereof. 
 (b) Except
as set forth on Schedule 4.22(b), no payment of principal of any Loan is past due and no payment of any other amount due pursuant to any Loan is more than five (5) calendar days past due and, to the Knowledge of the Company, no borrower,
guarantor or other obligor is in default of any financial covenant pursuant to the respective terms of the Loan or the underlying loan documents related thereto (the “Loan Documents”). 

(c) There has been no prepayment of any principal or other amount under any Loan except as reflected in the outstanding balances set forth in
Exhibit B. 
 (d) Except as set forth in Exhibit B, the Company and applicable Company Subsidiary has good and marketable title
to, and is the sole owner of, each Loan, and neither Seller, the Company nor any Company Subsidiary has sold, assigned, transferred, encumbered, conveyed or pledged any Loan or the right to receive any payments from any Loan to any third party. 

(e) Each Loan, together with the underlying Loan Documents related thereto, constitutes a legal, valid and binding obligation of the respective
borrower(s), guarantor(s) and other obligor(s), enforceable against such borrower(s), guarantor(s) and obligor(s) in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or
affecting creditors’ rights and general equitable principles. 

  
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 (f) No Loan is subject to any right of rescission, set-off, abatement, diminution, counterclaim
or defense that materially affects the ability of the Company or applicable Company Subsidiary to enforce the provisions of the applicable Loan Documents, and to the Knowledge of the Company, no such claims have been asserted with respect to such
Loan, and neither the Company nor any applicable Company Subsidiary has granted any rebate, set-off, allowance, credit memo, adjustment, or entered into any waiver, settlement, modification or amendment to any Loan, other than in compliance with the
Company or applicable Company Subsidiary’s standard loan servicing and operating procedures and such waivers, settlements, modifications or amendments are set forth in the loan files provided to Purchaser prior to the date hereof. No borrower,
guarantor or other obligor with respect to a Loan has (i) contested the validity or enforceability of, or purported to revoke, terminate or rescind, any provision of any Loan Document relating to such Loan or (ii) denied that it has any
further liability or obligation under any such Loan Document. 
 (g) The Loan Documents relating to each Loan included in the Loan files are
true, complete and correct copies of the documents they purport to be and have not been superseded, amended, modified, cancelled or otherwise modified in any respect except as set forth in the loan files provided to Purchaser prior to the date
hereof. 
 (h) The loan file for each Loan includes all material documents, or copies thereof, relating to the Loan, and all such loan files
have been provided to Purchaser. 
 (i) Each Loan is secured by a valid, enforceable and perfected first priority lien in favor of the
Company as lender or as administrative agent for the benefit of itself and the lenders on the collateral as to which a security interest was purported to be granted in the applicable security agreement, mortgage, pledge, hypothecation, charge,
collateral assignment or other security documents for such Loan, and, to the Knowledge of the Company, no fact, event, circumstance or condition exists or has occurred that would prevent the Company or applicable Company Subsidiary from continuing
to hold a valid first priority perfected security interest in the collateral underlying the Loan. 
 (j) The transfer of the Units to
Purchaser does not require any borrower or obligor or any third party under any Loan to consent to such transfer, except such consent as has been obtained. 

(k) Each Loan which is secured is not cross-collateralized with any other loan except for another Loan. 

4.23. Loans and Advances. Except for the Loans, neither the Company nor any Company Subsidiary has any outstanding loans or advances to
any Person or is obligated to make any such loans or advances, except, in the case of the Company, for advances to Company employees in respect of reimbursable business expenses incurred in the Ordinary Course of Business in connection with their
performance of services for the Company in an aggregate amount for all such employees not in excess of $10,000. 

  
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 4.24. Environmental Matters. The Company and the Company Subsidiaries are and have been in
compliance, in all material respects, with all Environmental, Health, and Safety Requirements applicable to them in the conduct of their respective businesses. None of the Company or the Company Subsidiaries has (i) held, released or disposed
of any Hazardous Materials on, under, from or at any of their current or former properties (other than in amounts that individually or in the aggregate were not material), or (ii) received any written notice requiring the response to, or
remediation of, Hazardous Materials, or demanding payment for, response to or remediation of Hazardous Materials. 
 4.25. Books and
Records. The books of account, all minute books and all stock record books of the Company and each Company Subsidiary have been made available to Purchaser. Such books and records are complete and correct in all material respects. All of such
books and records of the Company and each Company Subsidiary are in the possession of the Company or its agents. 
 4.26. No Other
Representations or Warranties; Schedules. Except for the representations and warranties contained in this Article IV and Article V (as qualified by the Disclosure Schedules hereto), neither the Company nor any other Person makes any other
express or implied representation or warranty with respect to the Company or the Company Subsidiaries or the transactions contemplated by this Agreement, and the Company and Seller disclaim any other representations or warranties, whether made by
the Company, Seller or any of their respective Affiliates, officers, managers, directors, employees, agents or representatives. Except for the representations and warranties contained in this Article IV and Article V (as qualified by the Disclosure
Schedules hereto), the Company and Seller hereby disclaim all liability and responsibility for, or any use by Purchaser or its Affiliates or representatives of, any representation, warranty, projection, forecast, statement, or information made,
communicated, or furnished (orally or in writing) to Purchaser or its Affiliates or representatives (including any opinion, information, projection or advice that may heretofore have been or may hereafter be made available to Purchaser or its
Affiliates or representatives, including in any “data rooms” (including the Intralinks data site established by Seller). 

ARTICLE V 
 SELLER
REPRESENTATIONS AND WARRANTIES 
 Except as set forth in the Disclosure Schedules, Seller for itself and no other Person hereby
represents and warrants to Purchaser as follows: 
 5.1. Organization. Seller is duly organized or otherwise formed, validly existing
and in good standing under the laws of the State of its organization. 
 5.2. Power and Authority. Seller has all requisite power and
authority to execute and deliver this Agreement and each other agreement, document, or instrument or certificate contemplated by this Agreement to be executed by Seller in connection with the consummation of the transactions contemplated by this
Agreement (the “Seller Documents”), to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and Seller Documents and the
consummation of the transactions contemplated hereby and thereby will have been duly authorized by all requisite actions on the part of Seller. This Agreement has been, and each of 

  
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Seller Documents will be at or prior to the Closing, duly and validly executed and delivered by Seller and (assuming the due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity). 
 5.3. Ownership. All of the Units are held of record by Seller and are free and clear of all
Liens. The Units represent all equity securities Seller has in the Company. Neither the Company nor Seller with respect to the Company is a party to any (a) option, warrant, purchase right or other Contract that could require such Person to
sell, transfer or otherwise dispose of any Units (other than this Agreement) or (b) any Contract that could entitle Seller to receive (i) any option, warrant or purchase right with respect to Units or other securities of the Company or
(ii) any capital securities or interest in capital securities or other securities of the Company. Seller is not a party to any voting trust, proxy or other agreement or understanding with respect to the voting of any Units other than the
Company LLC Agreement. 
 5.4. Conflicts; Consents of Third Parties. 

(a) The execution and delivery by Seller of this Agreement or Seller Documents do not, and the consummation of the transactions contemplated
hereby or thereby, or compliance by Seller with any of the provisions hereof or thereof will not, result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination or cancellation
under, any provision of (i) the certificate of incorporation and by-laws or comparable organizational documents of Seller; or (ii) any applicable Law or any Order of any Governmental Body applicable to Seller or by which the Units are
bound, other than, in the case of clause (ii), such violations, defaults, terminations or cancellations, that could not reasonably be expected to result in Seller being unable to perform its obligations hereunder on a timely basis. 

(b) No consent, waiver, Order, Permit of, or declaration or filing with, or notification to, any Governmental Body or other Person is required
on the part of Seller in connection with the execution and delivery of this Agreement or Seller Documents or the compliance by Seller with any of the provisions hereof or thereof, or the consummation of the transactions contemplated hereby or
thereby. 
 5.5. No Legal Proceedings. No actions, suits or Legal Proceedings are pending or, to the knowledge of Seller, threatened
to restrain (or which would have the effect of so restraining) the entry into, performance of, compliance with and enforcement of any of the obligations of Seller hereunder. 

  
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 ARTICLE VI 

REPRESENTATIONS AND WARRANTIES OF PURCHASER 

Purchaser hereby represents and warrants to Seller as follows: 

6.1. Organization and Good Standing. Purchaser is a national banking association duly formed, validly existing and in good standing
under the laws of the United States and has all requisite power (corporate and otherwise) and authority to own, lease and operate properties and carry on its business. 

6.2. Authorization of Agreement. Purchaser has all requisite power (corporate and otherwise) and authority to execute and deliver this
Agreement and each other agreement, document, instrument or certificate to be executed by it and delivered pursuant to Section 3.4(b) (the “Purchaser Documents”), and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance by it of this Agreement and each Purchaser Document have been duly authorized by all necessary action on behalf of Purchaser. This Agreement has been, and each Purchaser Document will be at or prior
to the Closing, duly executed and delivered by it and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each Purchaser Document when so executed and delivered will
constitute, the legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights
and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in
equity). 
 6.3. Conflicts; Consents of Third Parties. 

(a) The execution and delivery by Purchaser of this Agreement or Purchaser Documents do not, and the consummation of the transactions
contemplated hereby or thereby, or compliance by it with any of the provisions hereof or thereof will not, result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination or
cancellation under, any provision of (i) its certificate of incorporation or by-laws; (ii) any Contract or Permit to which it is a party or by which any of its properties or assets of it are bound; or (iii) any applicable Law or any
Order of any Governmental Body applicable to it or by which any of its properties or assets are bound. 
 (b) No consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with, or notification to, any Governmental Body is required on the part of Purchaser in connection with the execution and delivery of this Agreement or Purchaser Documents or the compliance
by it with any of the provisions hereof or thereof. 
 6.4. Financial Advisors. No Person has acted, directly or indirectly, as a
broker, finder or financial advisor for it in connection with the transactions contemplated by this Agreement and no Person is entitled to any fee or commission or like payment in respect thereof. 

  
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 6.5. Condition of the Business. Notwithstanding anything contained in this Agreement to
the contrary, Purchaser acknowledges and agrees that neither the Company nor Seller is making any representations or warranties, express or implied, beyond those expressly given by the Company and Seller in Article IV and Article V (as qualified by
the Disclosure Schedules hereto). Any claims Purchaser may have for breach of representation or warranty shall be based solely on the representations and warranties of Seller and the Company set forth in Article IV and Article V (as qualified by the
Disclosure Schedules hereto). Purchaser further represents that none of Seller, Company nor any of their respective Affiliates nor any other Person has made any representation or warranty, express or implied, as to the accuracy or completeness of
any information regarding the Company, Seller or the transactions contemplated by this Agreement not expressly set forth in this Agreement, and none of the Company, Seller nor any of their respective Affiliates or any other Person will have or be
subject to any liability to Purchaser or any other Person resulting from the distribution to Purchaser or its representatives or Purchaser’s use of, any such information, including any confidential memoranda distributed on behalf of the Company
relating to the Company or other publications or data room information provided to Purchaser or its representatives, or any other document or information in any form provided to Purchaser or its representatives in connection with the sale of the
Company and the transactions contemplated hereby. 
 6.6. Litigation. There are no Legal Proceedings pending or, to the knowledge of
Purchaser, threatened against Purchaser, nor to the knowledge of Purchaser is there any pending investigation by any Governmental Body, which would give any third party the right to enjoin or rescind the transactions contemplated hereby or otherwise
prevent Purchaser from complying with the terms and provision of this Agreement. 
 ARTICLE VII 

COVENANTS 
 7.1.
Retention and Access to Records. 
 (a) Following the Closing Date for a period of seven (7) years, Purchaser shall cause the
Company to maintain all books and records of the Company relating to periods ending on or prior to the Closing Date as relates to Taxes and regulatory documentation and shall not dispose of such documentation without first giving reasonable prior
notice to Seller and offering to surrender to Seller such books and records or any portion thereof which Purchaser or the Company may intend to dispose of, and shall make them, and any individuals responsible for maintenance of such books and
records, available to Seller upon reasonable advance notice during normal business hours in connection with such related matter(s) relating to the operation of the Company’s business prior to Closing or arising out of this Agreement;
provided that, notwithstanding the foregoing, (i) such access does not unreasonably interfere with the normal operations of the Company or Purchaser, and (ii) nothing herein shall require Purchaser to provide access to, or
disclose any information to, Seller if such access or disclosure (A) would cause competitive harm to the Company or Purchaser, (B) would waive any legal privilege, or (C) would be in violation of applicable Law (including
anti-competition Laws) or the provisions of any agreement to which the Company or Purchaser or their Affiliates are a party. Seller shall 

  
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cooperate with the Company and shall use its reasonable efforts to minimize any disruption to the business of the Company and Purchaser. If at any time after Closing, Seller requires a copy of
any such book or record, it shall have the right to promptly obtain a copy thereof, at its sole cost, from Purchaser. 
 (b) In the event and
for so long as any party hereto is actively contesting or defending against any Legal Proceeding in connection with any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing Date involving the Company or any of the Company Subsidiaries (except, in each case, for Legal Proceedings between or among the parties or their Affiliates), each of the other parties shall cooperate with
such party and such party’s counsel in the defense or contest, make reasonably available their personnel, and provide such testimony and access to their books and records as shall be reasonably necessary in connection with the defense or
contest, all at the sole cost and expense of the contesting or defending party (unless the contesting or defending party is entitled to indemnification therefor under Article IX hereof). 

7.2. Indemnification, Exculpation and Insurance. 

(a) Purchaser agrees that all rights to indemnification for acts or omissions occurring prior to or as of the Closing Date now existing in
favor of the managers and officers of the Company who were, as of and prior to the Closing Date, covered by the officers’ and directors’ liability insurance policies of the Company with respect to actions and omissions occurring prior to
and on the Closing Date and under the Company’s governance documents (collectively, the “D&O Indemnitees”) as provided in their respective organizational documents shall survive the transactions contemplated by this
Agreement and be obligations of the Company and shall continue in full force and effect in accordance with their terms for a period of not less than six (6) years from the Closing Date. 

(b) Purchaser shall obtain, at Seller’s sole expense, an officers’ and directors’ liability insurance tail policy, which tail
policy shall provide coverage in respect of claims arising from facts or events that occurred on or prior to the Closing Date for a period of at least six (6) years commencing from the Closing Date, for the D&O Indemnitees, on terms which
are no less favorable to the D&O Indemnitees than the terms of such current insurance in effect for the Company prior to the Closing. In the event that any D&O Indemnitees is or would have been entitled to coverage under such tail policy
pursuant to this Section 7.2(b) and such policy has been terminated by the Company or Purchaser, Purchaser shall pay, or shall cause the Company to pay, such D&O Indemnitees such amounts and provide any other coverage or benefits as they
would have received pursuant to such tail policy. 
 (c) From and after the Closing Date until the sixth (6th) anniversary of the Closing Date, Purchaser shall, or shall cause the Company to, cause (i) the organizational documents of the Company to contain provisions no less favorable to the
D&O Indemnitees with respect to limitation of liabilities to the beneficiaries of such provisions than are set forth as of the date of this Agreement in the Company LLC Agreement and (ii) the certificate of formation and operating agreement
or comparable organizational documents of the Company to retain the current provisions set forth as of the date of this Agreement in the certificate of formation of the 

  
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Company and in the Company LLC Agreement regarding indemnification of directors, officers, employees and agents, which provisions in each case shall not be amended, repealed or otherwise modified
in a manner that would adversely affect the rights thereunder of the D&O Indemnitees unless such modification is required by applicable Law. 

(d) The provisions of this Section 7.2: (i) are intended to be for the benefit of, and shall be enforceable by, each D&O
Indemnitee, his or her heirs and his or her representatives; and (ii) are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such person may have by Contract or otherwise. 

(e) In the event that Purchaser or any of its successors or assigns (i) consolidates with or merges into any other Person and is not the
continuing or surviving corporation or entity of such consolidation or merger; or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that
the successors and assigns of Purchaser shall assume all of the obligations thereof set forth in this Section 7.2. 
 (f) The
obligations of Purchaser under this Section 7.2 shall not be terminated or modified in such a manner as to adversely affect any D&O Indemnitee to whom this Section 7.2 applies without the Consent of the affected D&O Indemnitee (it
being expressly agreed that the D&O Indemnitees to whom this Section 7.2 applies shall be third party beneficiaries of this Section 7.2). 

7.3. Public Announcements. Each of Purchaser and Seller may issue any press release or other public statements (including the filing of
a Current Report on Form 8-K or otherwise and disclosures in satisfaction of, or otherwise required by, applicable Law, including securities disclosure rules) with respect to the transactions contemplated by this Agreement, provided that the issuing
party receives the other party’s approval, which shall not be unreasonably withheld, except that disclosures in satisfaction of, or otherwise required by, applicable Law (including securities disclosure rules) shall not be subject to such
approval. 
 7.4. Tax Matters. 

(a) Tax Indemnification. Seller shall indemnify Purchaser, the Company, the Company Subsidiaries and each of their Affiliates and hold
them harmless from and against (i) all Taxes (or the non-payment thereof) of Seller; (ii) all Taxes (or the non-payment thereof) of the Company and the Company Subsidiaries for any Pre-Closing Tax Period or any Pre-Closing Straddle Period;
(iii) all Taxes of any member or an Affiliated Group of which the Company or any Company Subsidiary (or any predecessor of any of the foregoing) is or was a member on or prior to the Closing Date, including pursuant to Treasury Regulations
Section 1.1502-6 or any analogous or similar state, local or non-U.S. Law or regulation; (iv) any and all Taxes of any Person imposed on the Company or any Company Subsidiary as a transferee or successor, by contract or pursuant to any
Law, rule or regulation, to the extent such Taxes relate to an event or transaction occurring before the Closing; and (v) all Taxes which are the responsibility of Seller pursuant to Section 10.1; provided, however, Seller
shall have no obligation to indemnify Purchaser, the Company, the Company Subsidiaries or their Affiliates for (y) any Taxes relating to a transaction occurring on the Closing Date after the Closing outside the Ordinary Course of Business
(other than the transactions contemplated by this Agreement); or (z) Taxes identified in clauses (ii), (iii) or (iv) above to the extent such Taxes were taken into account in the adjustment to the Purchase Price provided by
Section 3.6 of this Agreement. 

  
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 (b) Preparation and Filing of Tax Returns. 

(i) Seller shall prepare or cause to be prepared on a timely basis all Tax Returns that are required to be filed by the Company
and each Company Subsidiary for any taxable period ending on or before the Closing Date that are due after the Closing Date (collectively, the “Pre-Closing Tax Returns”). The Pre-Closing Tax Returns shall be prepared in a manner
consistent with the past practice of the Company and each Company Subsidiary in preparing and filing its Tax Returns unless otherwise required by Law. Seller shall deliver each Pre-Closing Tax Return to Purchaser for review and comment at least
thirty (30) calendar days prior to the due date (including valid extensions) for the filing of such Pre-Closing Tax Return (except in the case where such 30-calendar day period is not practical, in which case as soon as practical). Within
fifteen (15) calendar days of receiving a draft of such Pre-Closing Tax Return (except in the case where such 15-calendar day period is not practical, in which case as soon as practical) Purchaser shall provide its reasonable written comments
to Seller, and if Purchaser does not deliver such written comments to Seller within such 15-calendar day period, Purchaser shall (A) be deemed to accept such Pre-Closing Tax Return in the form delivered by Seller; and (B) file or cause to
be filed such Pre-Closing Tax Return in the form delivered by Seller prior to the due date (including valid extensions) for the filing of such Pre-Closing Tax Return. In the event Purchaser does deliver written comments to Seller within the
prescribed 15-day calendar period, (Y) Purchaser and Seller shall attempt to resolve any dispute relating to the preparation of such Pre-Closing Tax Return through good faith negotiation subject to the dispute resolution procedures of
Section 7.4(e); and (Z) Purchaser shall file or cause to be filed on a timely basis all Pre-Closing Tax Returns prior to their due date (including valid extensions) in the form agreed upon by Purchaser or Seller or, if applicable,
subsequent to the resolution of the dispute resolution procedures of Section 7.4(e). In no event shall the failure of Purchaser and Seller to agree on the form of a Pre-Closing Tax Return prevent Purchaser from timely filing any Pre-Closing Tax
Return (including any applicable extensions); provided, however, that in the event that the Independent Accountants have not yet resolved any such Tax Dispute prior to the deadline for filing such Pre-Closing Tax Return (including any
applicable extensions), Purchaser shall be entitled to file such Pre-Closing Tax Return (or amendment) as prepared by Seller as adjusted to incorporate Purchaser’s reasonable written comments subject to amendment to reflect the resolution when
rendered by the Independent Accountants. Purchaser shall provide Seller with a copy of any Pre-Closing Tax Return filed under this Section 7.4(b)(i) not later than ten (10) calendar days after such Pre-Closing Tax Return is filed. 

  
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 (ii) Purchaser shall prepare or cause to be prepared and file or cause to be
filed on a timely basis all Tax Returns that are required to be filed by the Company and each Company Subsidiary after the Closing Date, other than the Pre-Closing Tax Returns prepared by Seller pursuant to Section 7.4(b)(i), including, without
limitation, the Straddle Period Returns. The Straddle Period Returns shall be prepared by Purchaser in a manner consistent with the past practice of the Company and each Company Subsidiary in preparing and filing its Tax Returns unless otherwise
required by Law. Purchaser shall deliver each Straddle Period Return to Seller for review and comment at least thirty (30) calendar days prior to the due date (including valid extensions) for the filing of such Straddle Period Return (except in
the case where such 30-calendar day period is not practical, in which case as soon as practical). Within fifteen (15) calendar days of receiving a draft of such Straddle Period Return (except in the case where such 15-calendar day period is not
practical, in which case as soon as practical) Seller shall provide its reasonable written comments to Purchaser, and if Seller does not deliver such written comments to Purchaser within such 15-calendar day period, Seller shall be deemed to accept
such Straddle Period Return in the form delivered by Purchaser. Purchaser and Seller shall attempt to resolve any dispute relating to the preparation of any Straddle Period Return through good faith negotiation subject to the dispute resolution
procedures of Section 7.4(e). In no event shall the provision of comments by Seller prevent Purchaser from timely filing any Straddle Period Return (including any applicable extensions); provided, however, that in the event that the Independent
Accountants have not yet resolved any such Tax Dispute prior to the deadline for filing such Straddle Period Return (including any applicable extensions), Purchaser shall be entitled to file such Straddle Period Return (or amendment) as prepared by
Purchaser subject to amendment to reflect the resolution when rendered by the Independent Accountants. Purchaser shall provide Seller with a copy of any Straddle Period Return filed under this Section 7.4(b)(ii) not later than ten
(10) calendar days after such Straddle Period Return is filed. 
 (iii) No later than three (3) Business Days prior
to the due date of the filing of each Pre-Closing Tax Return or Straddle Period Return (including any applicable extensions) Seller shall pay, or cause to be paid, to Purchaser (y) the amount of Taxes shown as due on each Pre-Closing Tax
Return; and (z) the amount of Taxes shown as due on each Straddle Period Return that are allocable to a Pre-Closing Straddle Period as determined in accordance with the provisions of Section 7.4(b)(iv) provided, however, that (A) if a
Pre-Closing Tax Return remains subject to resolution pursuant to Section 7.4(b)(i), the amount to be paid by Seller to Purchaser no later than three (3) Business Days prior to the due date of filing such Pre-Closing Tax Return shall only
be the amount of Taxes that would be owed by Seller if such Pre-Closing Tax Return was filed as initially prepared by Seller; or (B) if a Straddle Period Return is subject to resolution pursuant to Section 7.4(b)(ii), the amount to be paid
by Seller to Purchaser no later than three (3) Business Days prior to the due date of filing such Straddle Period Return shall only be the amount of Taxes that would be owed by Seller if 

  
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Seller’s reasonable comments were timely delivered and incorporated into such Straddle Period Return, in each case subject to Seller’s responsibility to pay Purchaser any remaining
Taxes within five (5) Business Days of resolution by the Independent Accountants if such resolution serves to increase the amount of Taxes previously paid by Seller to Purchaser with respect to such Pre-Closing Tax Return or Straddle Period
Return. Notwithstanding the foregoing sentence, Seller shall not be required to pay Purchaser for any Taxes shown as due on a Pre-Closing Tax Return or a Straddle Period Return to the extent the amount of such Taxes were taken into account in the
adjustment to the Purchase Price provided by Section 3.6 of this Agreement. 
 (iv) In the case of any sales or use
taxes, value-added taxes, employment taxes, withholding taxes, and any Tax based on or measured by income, receipts or profits, obligations shall be allocated to the Pre-Closing Straddle Period or the Post-Closing Straddle Period, as applicable, by
assuming that the Pre-Closing Straddle Period and the Post-Closing Straddle Period consisted of two (2) taxable years or periods, one which ended at the close of the Closing Date and the other which began at the beginning of the day following
the Closing Date and items of income, gain, deduction, loss or credit shall be allocated between such two (2) taxable years or periods on a “closing of the books basis” by assuming that the books were closed at the close of the
Closing Date; provided, however, that exemptions, allowances or deductions that are calculated on an annual basis, such as deductions for depreciation, shall be allocated to the Pre-Closing Straddle Period and Post-Closing Straddle
Period in the manner described in the immediately following sentence. In the case of any other Taxes, obligations shall be allocated to the Pre-Closing Straddle Period and the Post-Closing Straddle Period based upon a fraction, the numerator of
which is the number of calendar days in the period ending on the close of the Closing Date, in the case of an allocation to a Pre-Closing Straddle Period, or the number of calendar days in the period beginning the day following the Closing Date and
ending on the last day of the period, in the case of an allocation to a Post-Closing Straddle Period, and in each case the denominator of which is the number of calendar days in the entire period. 

(c) Cooperation and Controversies. Seller, Purchaser and the Company shall reasonably cooperate, and shall cause their respective
Affiliates, agents, auditors, representatives, officers and employees to reasonably cooperate, in preparing and filing all Tax Returns (including amended returns and claims for refund), determining a liability for Taxes or a right to a refund of
Taxes, or participating in or conducting any audit or similar examination of the Company, including maintaining and making available to each other all records necessary in connection with Taxes and with respect to any claim with respect to the Taxes
of the Company, which cooperation shall include but not be limited to (i) providing all relevant information that is available to Purchaser, Seller and/or the Company, as the case may be, with respect to such Tax claim; (ii) making
personnel available at reasonable times; and (iii) preparation of responses to requests for information; provided, that the foregoing shall be done in a manner so as to not unreasonably interfere with the conduct of business by
Purchaser, the Company or any of their 

  
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Affiliates, as the case may be. None of Seller, Purchaser, Company or any of their Affiliates shall dispose of any Tax Returns, Tax schedules, material Tax work-papers or any material books or
records with respect to the Company relating to a Pre-Closing Tax Period or Straddle Period unless it first offers in writing to the party the right to take possession of such materials at such other party’s sole expense and the other party
fails to accept such offer within fifteen (15) calendar days of the offer being made. Any information obtained under this Section 7.4(c) shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax
Returns or claims with respect to any Tax. 
 (d) Tax Controversies. 

(i) If any Taxing Authority issues written notice of any inquiries, claims, assessments, audits or similar events with respect
to Taxes of the Company or a Company Subsidiary relating to a Pre-Closing Tax Period or a Pre-Closing Straddle Period for which Seller may be liable under this Agreement (such inquiry, claim, assessment, audit or similar event, a “Tax
Claim”), then the party hereto first receiving notice of such Tax Claim shall provide written notice thereof to the other party hereto describing the claim, the amount thereof (if known or quantifiable) and the basis thereof within five
(5) Business Days following receipt, provided, however, that the failure to provide such notice shall not relieve the other party from any of its obligations under this Section 7.4 except to the extent that such other party is materially
prejudiced as a consequence of such failure. 
 (ii) Purchaser shall have the right to control all Tax Claims;
provided, however, that if the Tax Claim relates to or includes Taxes for which Seller may be liable under this Agreement (a “Shared Tax Claim”), then (i) Purchaser shall provide Seller with a timely and
reasonably detailed account of each phase of such Shared Tax Claim, (ii) Purchaser shall consult with Seller before taking any significant action in connection with such Shared Tax Claim, (iii) Purchaser shall consult with Seller and offer
Seller an opportunity to comment before submitting any written materials prepared or furnished in connection with such Shared Tax Claim, (iv) Purchaser shall defend such Shared Tax Claim diligently and in good faith, (v) Seller, at its
sole cost and expense, shall have the right to participate in such Shared Tax Claim and receive copies of any written materials relating to such Shared Tax Claim received from the relevant Taxing Authority, and (vi) Purchaser shall not agree to
settle such Shared Tax Claim without the written consent of Seller, which consent shall not be unreasonably withheld, conditioned or delayed. 

(e) Tax Disputes. Notwithstanding any other provision of this Agreement, any dispute, controversy or claim arising out of or relating to
this Section 7.4 (a “Tax Dispute”) that Purchaser and Seller through reasonable best efforts are not able to resolve through direct good-faith negotiation, shall be resolved in accordance with the procedures set forth in this
Section 7.4(e). If there has been no resolution of the Tax Dispute after direct negotiation, then any party may seek resolution of the Tax Dispute through binding arbitration administered by tax experts

  
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of the Independent Accountants. The place of the arbitration shall be Westchester County, New York and the arbitration shall be conducted in the English language. The Independent Accountants
shall be instructed to resolve the Tax Dispute and such resolution shall be (A) set forth in writing and signed by the Independent Accountants, (B) delivered to each party involved in the Tax Dispute as soon as practicable after the Tax
Dispute is submitted to the Independent Accountants but no later than the fifteenth (15th) day after the Independent Accountants are instructed to resolve the Tax Dispute, (C) made in accordance with this Agreement, and (D) final,
binding and conclusive on the parties involved in the Tax Dispute on the date of delivery of such resolution in the absence of fraud, malfeasance, or gross negligence. The Independent Accountants shall only be authorized on any one issue to decide
in favor of and choose the position of a party involved in the Tax Dispute or to decide upon a compromise position between the ranges presented by the parties to the Independent Accountants. The Independent Accountants shall base its decision solely
upon the presentations of the parties to the Independent Accountants at a hearing held before the Independent Accountants and upon any materials made available by a party and not upon independent review. The fees and expenses of the Independent
Accountants shall be borne equally by Seller, on the one hand, and Purchaser, on the other hand. Purchaser, Seller and the Company shall keep the decision of the Independent Accountants confidential, except to the extent required by Law or pursuant
to disclosure of Tax Returns. 
 (f) Tax Sharing Agreements. All tax-sharing agreements or similar agreements with respect to or
involving the Company or any Company Subsidiary shall be terminated as of the Closing Date and, after the Closing Date, neither the Company nor a Company Subsidiary shall be bound thereby or have any liability thereunder. 

(g) Purchase Price Adjustment. For U.S. federal, state and local Tax purposes, any payments made under this Section 7.4 shall be
treated by Purchaser and Seller as an adjustment to the Purchase Price. 
 ARTICLE VIII 

[RESERVED] 
 ARTICLE IX

 INDEMNIFICATION 

9.1. Indemnification of Purchaser. 

(a) Seller agrees that, after the Closing, Purchaser, the Company and the Company Subsidiaries and their respective officers, directors,
members, controlling shareholders within the meaning of the Securities Act, successors and assigns and Affiliates (each hereinafter referred to individually as a “Purchaser Indemnified Person” and collectively as “Purchaser
Indemnified Persons”), shall be indemnified and held harmless by Seller from and against any and all claims, demands, suits, actions, causes of action, losses, costs, damages, liabilities and out-of-pocket expenses incurred or paid,
including reasonable attorneys’ fees, but specifically 

  
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excluding incidental, consequential or indirect damages, lost revenues or profits, diminution of value (except, in each case, to the extent such damages were reasonably foreseeable at the time of
the breach giving rise thereto) or punitive and exemplary damages (except to the extent such damages are awarded to a third party) (hereinafter collectively referred to as “Damages”), to the extent such Damages arise out of or
result from or constitute: 
 (i) any breach of any of the representations or warranties made by the Company or Seller in
this Agreement (collectively, “Company Breaches”); 
 (ii) any default in, or failure to perform, any of the
covenants or agreements given or made by the Company or Seller in this Agreement; 
 (iii) Covered Loan Indemnity
Liabilities, subject to the terms, conditions and limitations set forth in Section 9.7 below; 
 (iv) any Company
Indebtedness and Company Transaction Expenses to the extent not taken into account in determining the Final Purchase Price; 

(v) any and all claims for payment of fees and/or expenses of a broker or finder in connection with the origin, negotiation or
execution of this Agreement or the other Company Documents or the consummation of the transactions contemplated hereby or thereby based upon any Contract between the claimant and Seller, the Company or the Company Subsidiaries or their respective
agents or representatives; 
 (vi) the Company’s failure for periods prior to the Closing Date to maintain its prior
California finance lender’s license, which was forfeited by the California Franchise Tax Board; 
 (vii) one-half
(1/2) of any retention payment amounts due as a result of any claim brought pursuant to the officers’ and directors’ liability insurance tail policy provided for in Section 7.2(b); and 

(viii) any outstanding loans and commitments of Seller to Asheboro Elastic Corp. or any of its Affiliates. 

(b) Any claim for indemnification made by a Purchaser Indemnified Person under this Section 9.1 must be raised in a writing (setting forth
in reasonable detail the amount (if known) and nature of the Damages, the provisions of this Agreement on which the claim is based and the facts giving rise to such claim) delivered to Seller by no later than the applicable Survival Date (as defined
below) and, if raised by such date, such claim shall survive the Survival Date until final resolution thereof. 
 (c) Subject to the last
sentence of this paragraph (c), Seller’s aggregate liability for Damages under clause (i) (other than for the breach of any Fundamental Representations) of Section 9.1(a) shall (i) be limited to $21,000,000 minus the amount of
Damages paid by Seller with respect to Covered Loan Indemnity Liabilities (the “Cap”) and (ii)

  
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shall not apply unless and until the aggregate of such Damages exceeds a cumulative aggregate amount equal to $500,000 (the “Basket”), in which event Purchaser Indemnified
Persons shall, subject to the Cap and the other limitations herein, be indemnified for only such Damages in excess of the Basket. Neither the Basket nor the Cap shall be applicable to Damages under clauses (a)(i) as relates to Fundamental
Representations, (a)(ii), (a)(iii), (a)(iv), (a)(v), (a)(vi), (a)(vii), or (a)(viii) of Section 9.1 or to liabilities for fraud or criminal misconduct; provided that Seller’s obligations under clause (a)(iii) of
Section 9.1 is subject to the Aggregate Covered Loan Liability Cap; and provided further that the Basket shall not be applicable to Damages under breaches of representations and warranties set forth in Section 4.13
(Employee benefits Plans) and Section 4.14 (Labor; Business Employees). For clarity, and by way of illustration of this Section 9.1(c): (x) if no Damages are paid by Seller with respect to clause (a)(iii) of Section 9.1 (Covered
Loan Indemnity Liabilities), then Purchaser may seek Damages up to $21,000,000 under clause (a)(i) (subject to the other applicable limitations set forth in this Article IX), and (y) if, by way of further example, Seller pays $3,000,000 of
Damages with respect to clause (a)(iii) of Section 9.1(Covered Loan Indemnity Liabilities), then Purchaser may seek Damages up to $18,000,000 under clause (a)(i) (subject to the other applicable limitations set forth in this Article IX). 

(d) The amount to which a Purchaser Indemnified Person may become entitled under this Article IX shall be net of any actual recovery (whether
by way of payment, discount, credit, off-set, counterclaim or otherwise) of insurance proceeds or any indemnity, contribution or other similar payment from a third party, less, in each case, any cost associated with collecting or receiving such
recovery. To the extent that any Purchaser Indemnified Party actually recovers insurance proceeds or indemnity, contribution or other similar payments in respect of a matter for which such Purchaser Indemnified Party was indemnified pursuant to
Section 9.1, Purchaser shall cause such Purchaser Indemnified Party to promptly pay over to Seller an amount equal to the actual amount of such insurance proceeds or other payments received, less any costs of recovery (but not in excess of the
actual amount of the indemnification payment previously paid by or on behalf of Seller with respect to such Damages). Each Purchaser Indemnified Party shall use commercially reasonable efforts to collect amounts available under insurance coverages,
provided that the foregoing shall not obligate such Purchaser Indemnified Party to commence a Litigation Proceeding against any insurer. Each party hereto shall take all reasonable steps to mitigate its Damages upon and after becoming aware of any
event which could reasonably be expected to give rise to any Damages. 
 (e) Damages in respect of Covered Loan Indemnity Liabilities shall
be subject to the Aggregate Covered Loan Liability Cap. 
 (f) Seller shall have no right of contribution, reimbursement, subrogation or
indemnity against the Company in connection with any indemnification obligation to which Seller may become subject under or in connection with this Agreement. 

(g) For purposes of determining the amount of Damages subject to indemnification pursuant to this Section 9.1, but not for purposes of
determining whether the representations and warranties giving rise to such right to indemnification have been breached, such Damages shall be determined without regard to any qualifications or exception contained in such representation or warranty
relating to materiality, Company Material Adverse Effect or similar qualification. 

  
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 9.2. Indemnification of Seller. Purchaser shall, or shall cause the Company to, after the
Closing, indemnify, defend and hold harmless Seller and its officers, directors, members, successors and assigns and Affiliates (the “Seller Indemnified Persons”), from and against any and all Damages (a) arising out of or
resulting from any breach of any representation, warranty or covenant made by Purchaser in this Agreement and (b) incurred in connection with any and all claims for payment of fees and/or expenses of a broker or finder in connection with the
origin, negotiation or execution of this Agreement or the other Company Documents or the consummation of the transactions contemplated hereby or thereby based upon any Contract between the claimant and Purchaser or any of its agents or
representatives. 
 9.3. Notice of Claim. As used herein, the term “Claim” means a claim for indemnification by
Purchaser or any other Purchaser Indemnified Person or any Seller Indemnified Person, as the case may be, for Damages under this Article IX (such Person making a Claim, an “Indemnitee”). An Indemnitee shall give notice of a Claim
under this Agreement, whether for its own Damages or for Damages incurred by any other Purchaser Indemnified Person or Seller Indemnified Person, as applicable, pursuant to written notice of such Claim executed by an officer of Purchaser or Seller,
as applicable, and describing, in reasonable detail, the facts, circumstances or events giving rise to the alleged Damages and, if known, the amount thereof (a “Notice of Claim”), and delivered to Seller or Purchaser, as applicable
(such receiving party, the “Indemnitor”), promptly after such Indemnitee becomes aware of the existence of any potential Claim by such Indemnitee for indemnification under this Article IX, but in any event before the applicable
Survival Date, arising out of or resulting from: (a) any item indemnified pursuant to the terms of Section 9.1 or 9.2, or (b) the assertion, whether orally or in writing, against any Indemnitee of a claim, demand, suit, action,
arbitration, investigation, inquiry or proceeding brought by any Person who is not a party to this Agreement (or an Affiliate thereof) against any Indemnitee (in each such case, a “Third Party Claim”). So long as such Notice of
Claim is given on or prior to the applicable Survival Date, no delay on the part of an Indemnitee in giving the Indemnitor a Notice of Claim shall limit or reduce the Indemnitee’s right to indemnity hereunder, nor relieve the Indemnitor from
any of its obligations under this Article IX, unless (and then only to the extent that) the Indemnitor is materially prejudiced thereby. 

9.4. Procedures for Indemnification – Third Party Claims. 

(a) Except with respect to Tax Claims, which are addressed in Section 7.4, promptly after receipt by or assertion against an Indemnitee
under Sections 9.1 or 9.2 of any Third Party Claim that may give rise to a Claim, then the Indemnitee shall as promptly as practicable send notice in writing and in reasonable detail of the Third Party Claim (including the factual basis for the
Third Party Claim, and, to the extent known, the amount of the Third Party Claim) to the Indemnitor, but the failure to notify the Indemnitor will not relieve the Indemnitor of any liability that it may have to any Indemnitee, except to the extent
that the Indemnitor demonstrates that the defense of such action is prejudiced by the Indemnitee’s failure to give such notice. 

  
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 (b) If any Third Party Claim referred to in Section 9.4(a) is brought against an Indemnitee and
it gives notice to the Indemnitor of the commencement of such Third Party Claim, the Indemnitor will be entitled to participate in such Third Party Claim and, to the extent that it wishes (unless (i) the Indemnitor is also a party to such Third
Party Claim and the Indemnitee determines in good faith that joint representation would be inappropriate, or (ii) the Indemnitor fails to provide reasonable assurance to the Indemnitee of its financial capacity to defend such Third Party Claim
and provide indemnification with respect to such Third Party Claim), to assume the defense of such Third Party Claim with counsel satisfactory to the Indemnitee and, after notice from the Indemnitor to the Indemnitee of its election to assume the
defense of such Third Party Claim, the Indemnitor will not, as long as it diligently conducts such defense, be liable to the Indemnitee under this Article IX for any fees of other counsel or any other expenses with respect to the defense of such
Third Party Claim, in each case subsequently incurred by the Indemnitee in connection with the defense of such Third Party Claim, other than reasonable costs of investigation. The Indemnitor will have thirty (30) calendar days from receipt of a
notice of a Third Party Claim from an Indemnitee pursuant to Section 9.4(a) to assume the defense thereof. If the Indemnitor does not, or is not pursuant to the foregoing permitted to, assume the defense of a proceeding, the Indemnitee shall
have the right to assume the defense and employ separate counsel to represent such Indemnitee and the reasonable fees and expenses of such separate counsel shall be paid by such Indemnitor. If the Indemnitor assumes the defense of a Third Party
Claim, (i) it will be conclusively established for purposes of this Agreement that the claims made in that Third Party Claim are within the scope of and subject to indemnification; (ii) no compromise or settlement of such claims may be
effected by the Indemnitor without the Indemnitee’s consent unless (A) there is no finding or admission of any violation of Law or any violation of the rights of any Person and no effect on any other claims that may be made against the
Indemnitee, and (B) the sole relief provided is monetary damages that are paid in full by the Indemnitor; and (iii) the Indemnitee will have no liability with respect to any compromise or settlement of such claims effected without its
consent. If notice is given to an Indemnitor of the commencement of any Third Party Claim and the Indemnitor does not, within thirty (30) calendar days after the Indemnitee’s notice is given, give notice to the Indemnitee of its election
to assume the defense of such Third Party Claim, the Indemnitor will be bound by any determination made in such Third Party Claim or any compromise or settlement effected by the Indemnitee. 

(c) Notwithstanding the foregoing, if an Indemnitee determines in good faith that there is a reasonable probability that a Third Party Claim
may adversely affect it or its Affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the Indemnitee may, by notice to the Indemnitor, assume the exclusive right to defend,
compromise, or settle such Third Party Claim, but the Indemnitor will not be bound by any compromise or settlement effected without its consent (which may not be unreasonably withheld). 

9.5. Procedures for Indemnification – Other Claims 

(a) If an Indemnitee timely delivers a Notice of Claim (other than in respect of a Third Party Claim) to an Indemnitor, the Indemnitor shall
have thirty (30) calendar days (the “Claim Objection Period”) after the date of receipt of such claim to object to such claim by 

  
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giving written notice of such objection (a “Claim Objection Notice”) to Purchaser (if the Indemnitee is a Seller Indemnified Person) or to Seller (if the Indemnitee is a
Purchaser Indemnified Person), which Claim Objection Notice shall specify (i) each such amount to which the Indemnitor objects and (ii) the nature and basis of each such objection in reasonable detail. If a Claim Objection Notice is not so
delivered during the Claim Objection Period, the claim set forth in the Notice of Claim shall be final and binding on the parties and Seller (if the Indemnitee is a Seller Indemnified Person) or Purchaser (if the Indemnitee is a Purchaser
Indemnified Person) shall pay, by wire transfer of immediately available funds to such account as is specified by the Indemnitee, the full amount thereof within three (3) Business Days following the end of the Claim Objection Period. 

(b) If the Indemnitor provides a Claim Objection Notice prior to the expiration of the Claim Objection Period, Purchaser and Seller shall
attempt in good faith to resolve the dispute and, if they are able to do so in whole or in part, shall promptly acknowledge such resolution in writing specifying such resolution and the agreed amount, if any, of the claim (or portion thereof). To
the extent a dispute is resolved in whole or in part, such agreed amount shall, if the Indemnitee is a Seller Indemnified Person, be paid by Seller to or as directed by Purchaser or, if the Indemnitee is a Purchaser Indemnified Person, to or as
directed by Seller, in either case within three (3) Business Days following such resolution. 
 (c) If and to the extent that Purchaser
and Seller are unable to fully resolve a disputed non-Third Party Claim as set forth above, then the dispute (or the unresolved portion of the dispute, as the case may be) shall be settled pursuant to Sections 10.3 and 10.5 and, upon receipt of a
final non-appealable order of a court of competent jurisdiction, and the awarded amount, if any, shall be paid, by wire transfer of immediately available funds to such account as is specified, if the Indemnitee is a Seller Indemnified Person, by
Seller or, if the Indemnitee is a Purchaser Indemnitee, by Purchaser, in either case within three (3) Business Days following such final resolution. 

9.6. Survival of Representations, Warranties and Covenants. All (i) representations and warranties of Seller, the Company and
Purchaser contained in this Agreement, as qualified by, where applicable, the Disclosure Schedules hereto, shall remain operative and in full force and effect until the date that is fifteen (15) months after the Closing Date; provided
that the Fundamental Representations (other than Section 4.9 (Taxes)) shall survive in perpetuity and the representations and warranties in Section 4.9 (Taxes) shall survive until the date that is thirty (30) calendar days
after the expiration of the applicable statute of limitations, and (ii) all covenants or other agreements contained in this Agreement shall survive the Closing until fully performed or for the period contemplated by its terms (provided, that
the obligation to indemnify pursuant to Section 9.1(a)(vi) shall survive until the date that is thirty (30) calendar days after the expiration of the applicable statute of limitations) (as applicable, the “Survival Date”).

 9.7. Indemnification With Respect to Covered Loans. 

(a) Subject to Section 9.7(d), Purchaser shall, and shall cause the Company and the Company Subsidiaries to, use commercially reasonable
efforts to collect all amounts outstanding under the Covered Loans, including by, in each case to the extent consistent with 

  
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Purchaser’s bona fide credit policies and procedures as in effect from time to time, exercising commercially reasonable rights and remedies available under (i) the agreements governing
the Covered Loans as in effect on the Closing Date, (ii) applicable Law and (iii) collection practices that are customary for asset-based lending activities. Claims, if any, in respect of Covered Loan Indemnity Liabilities shall be subject
to the Claim procedures set forth in Section 9.5. 
 (b) If Purchaser or the Company proposes to sell any Defaulted Covered Loan
(including any Covered Loan that becomes a Defaulted Covered loan in accordance with clause (B) of the definition thereof) to a third party or to enter into a proposed payoff of a Defaulted Covered Loan, in either case at a sale or payoff price
that would result in Purchaser’s right to make an indemnification claim under Section 9.1(a)(iii) of this Agreement, then Purchaser shall first provide written notice (a “Sale or Paydown Notice”) to Seller of such proposed
sale or payoff price. Seller shall have the right, within five (5) Business Days after the receipt by Seller of each Sale or Paydown Notice, to provide to Purchaser a written repurchase commitment to repurchase the Defaulted Covered Loan(s)
subject to the Sale or Paydown Notice at a price (the “Repurchase Price”) equal to one hundred percent (100%) of the outstanding balance thereof, including accrued interest thereon, fees in respect thereof and reasonable and
documented costs of collection incurred prior to the repurchase date (a “ROFR Repurchase Election”), in which case Seller shall be entitled and obligated to repurchase each such Defaulted Covered Loan at the Repurchase Price within
five (5) Business Days after delivery of the applicable repurchase commitment to Purchaser. If Seller fails to either deliver a ROFR Repurchase Election within the five (5) Business Day period after receipt of the applicable Sale or
Paydown Notice or pay the Repurchase Price to or as directed by Purchaser by wire transfer of immediately available funds within the five (5) Business Day period after delivery of the applicable repurchase commitment, then Purchaser (or the
Company or applicable Company Subsidiary) may, during the subsequent ninety (90)-day period, proceed and sell or settle the Defaulted Covered Loan(s) subject to the Sale or Paydown Notice at such price and on such other terms as Purchaser may
determine in its reasonable discretion (subject to its obligation to mitigate Damages under Section 9.1(c)) and seek indemnification under Section 9.1(a)(iii) of this Agreement with respect to Covered Loan Indemnity Liabilities, if any,
resulting from such transaction (subject to the other terms and conditions set forth herein), provided that if the Purchaser or the Company do agree to sell or settle the Defaulted Covered Loan(s) that were subject to such Sale or
Paydown Notice at a price that is lower than the price that was set forth in the Sale or Paydown Notice during such ninety(90)-day period, then the Purchaser or the Company, as applicable, shall provide to the Seller another Sale or Paydown Notice
with respect thereto setting forth the proposed new sale or payoff price, and the Seller shall be entitled to deliver a ROFR Repurchase Election and repurchase the applicable Defaulted Covered Loan(s) at the Repurchase Price, but only if the Seller
delivers such ROFR Repurchase Election within two (2) calendar days after receipt of the new Sale or Paydown Notice and pays the Repurchase Price to or as directed by Purchaser by wire transfer of immediately available funds within the five
(5) Business Day period after delivery of the applicable repurchase commitment, and provided further that if Purchaser or the Company does not sell or settle such Defaulted Covered Loans within the ninety (90) day
period following the initial Sale or Paydown Notice, then Purchaser must follow the procedures set forth in this Section 9.7(b) if it subsequently desires to sell such Defaulted Covered Loan. 

  
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 (c) Purchaser shall (i) within a reasonable period of time after Closing (and, in any event,
within thirty (30) days after Closing), request, or cause the Company or applicable Company Subsidiary to request, that the Covered Loan Parties in respect of each Covered Loan refinance or repay such Covered Loan as soon as practically
possible, but in no event later than 120 days after delivery of such notice (the “Covered Loan Refinance Notice”), (ii) provide, or cause the Company to provide, to Seller, not less than once during each calendar quarter during
the Covered Loan Survival Period, a Covered Loan status report setting forth, in reasonable detail, the then-current status of each Covered Loan, and (iii) promptly notify Seller in writing of any Covered Loan that becomes a Defaulted Covered
Loan (each such notice a “Covered Loan Default Notice”), which Covered Loan Default Notice shall be accompanied by an outline, in reasonable detail, of Purchaser’s or the Company’s anticipated workout strategy with respect
to such Defaulted Covered Loan; provided, however, that any failure by Purchaser to satisfy its obligations under this Section 9.7(C) shall not limit or reduce Purchaser’s right to indemnity for Covered Loan Indemnity
Liabilities unless (and then only to the extent that) Seller is prejudiced thereby. 
 (d) Notwithstanding anything in this Agreement to the
contrary, Purchaser may (or may cause the Company to), in its sole discretion, at any time and for any reason, (i) charge off, write-down or sell or otherwise dispose of (at a discount or otherwise) any Covered Loan, (ii) extend (or not
extend) the maturity of any Covered Loan, (iii) make (or not make) any advance or over-advance in respect of any Covered Loan, and (iv) otherwise administer the Covered Loans in any respect as it deems necessary or appropriate; provided,
however, Damages, if any, resulting from any such action shall not be indemnifiable pursuant to Section 9.1(a)(iii) unless and to the extent such Damages constitute Covered Loan Indemnity Liabilities and are not excluded under
Section 9.7(a). 
 (e) Following expiration of the Covered Loan Survival Period, if and to the extent that Purchaser Indemnified Party
has recovered, or recovers, from the applicable Covered Loan Parties principle payments in respect of all Covered Loans for which such Purchaser Indemnified Party was indemnified pursuant to Section 9.1(a)(iii) that exceed the aggregate principle
payments included in Covered Loan Indemnity Liabilities actually incurred and previously recovered from Seller, Purchaser shall, or shall cause the applicable Purchaser Indemnified Party to, promptly pay over to Seller an amount equal to such excess
(net of any costs incurred in connection with the collection thereof). 
 9.8. Exclusive Remedy. Except as may be required to
specifically enforce post-Closing covenants hereunder, after the Closing Date, the indemnification rights set forth in this Article IX are and shall be the sole and exclusive remedies of Purchaser, Purchaser Indemnified Persons, the Seller, and
Seller Indemnified Persons with respect to this Agreement and the transactions contemplated hereby. Notwithstanding the foregoing, nothing in this Agreement shall limit any Person’s liability for such Person’s fraud or criminal misconduct.

 9.9 Tax Treatment of Indemnification Payments. Purchaser and Seller agree to treat any indemnification payment made pursuant to
this Agreement as an adjustment to the Purchase Price for all Tax purposes, unless otherwise required by Law. 

  
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 ARTICLE X 

MISCELLANEOUS 
 10.1.
Payment of Sales, Use or Similar Taxes. All sales, use, transfer, intangible, recordation, documentary stamp or similar Taxes or charges, of any nature whatsoever, applicable to, or resulting from, the transactions contemplated by this
Agreement shall be borne one-half by Seller and one-half by Purchaser. 
 10.2. Expenses. Whether or not the transactions
contemplated hereby are consummated, all costs and expenses (including any brokerage commissions or any finder’s or investment banker’s fees and including attorneys’ and accountants’ fees) incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document and instrument contemplated hereby and the consummation of the transactions contemplated hereby and thereby shall be paid by the party incurring such expenses. 

10.3. Submission to Jurisdiction; Consent to Service of Process; Waiver of Jury Trial. 

(a) The parties hereto irrevocably submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware over any dispute
arising out of or relating to this Agreement or any of the transactions contemplated hereby and each party hereby irrevocably agrees that all claims in respect of such dispute or any suit, action proceeding related thereto may be heard and
determined in such court. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 

(b) Each of the parties hereto hereby consents to process being served by any party to this Agreement in any suit, action or Legal Proceeding
by delivery of a copy thereof in accordance with the provisions of Section 10.6. 
 (c) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
THAT CANNOT BE WAIVED, EACH PARTY HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON OR IN CONNECTION WITH THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION 10.3 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. 

  
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 10.4. Entire Agreement; Amendments and Waivers. This Agreement (including the Schedules)
and the Confidentiality Agreement represent the entire understanding and agreement between the parties hereto with respect to the subject matter hereof. This Agreement can be amended, supplemented or changed, and any provision hereof can be waived,
only by written instrument making specific reference to this Agreement signed by Purchaser, on the one hand, and Seller, on the other hand. No action taken pursuant to this Agreement, including without limitation, any investigation by or on behalf
of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 

10.5. Governing Law. This Agreement shall be governed by, and are to be interpreted and enforced in accordance with, the internal Laws
of the State of Delaware applicable to contracts entered into and performed entirely within the State of Delaware, without giving effect to any choice of Law or conflict of Laws rules or provisions (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware. 
 10.6. Notices.
All notices and other communications under this Agreement shall be in writing and shall be deemed given (a) when delivered personally to the recipient, (b) when sent to the recipient by facsimile or electronically scanned transmission
(including e-mail), so long as the sender of such electronically scanned transmission has, in the case of a facsimile, received confirmation of transmission, or has not, in the case of e-mail, received an automatic e-mail from the applicable e-mail
server indicating delivery failure, (c) one Business Day following the day sent by commercial overnight courier, or (d) three (3) Business Days after being mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid, in each case at the following addresses and facsimile numbers (or to such other address or facsimile number as a party may have specified by notice given to the other party pursuant to this provision): 

If to Seller, to: 

NewStar Financial, Inc. 

500 Boylston Street, Suite 1250 

Boston, MA 02116 

Attn: Robert K. Brown 

Email: rbrown@newstarfin.com 

Fax: (617) 848-4300 

  
 53 

 With a copy to: 

Locke Lord LLP 

111 Huntington Avenue 

Boston, MA 02199-7613 

Attn: George Ticknor, Esq. 

Email: george.ticknor@lockelord.com 

Fax: (866) 955-9167 

If to Purchaser, to: 

Sterling National Bank 

400 Rella Blvd. 

Montebello, New York 10901 

Attn: Thomas X. Geisel and Catherine Birch 

Email: tgeisel@snb.com and cbirch@snb.com 

Fax: (212) 764-0579 

With a copy to: 

Squire Patton Boggs (US) LLP 

221 E. Fourth Street, Suite 2900 

Cincinnati, OH 45202 

Attn: James J. Barresi, Esq. 

E-Mail: James.Barresi@SquirePB.com 

Fax: (513) 361-1201 

10.7. Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any Law or
public policy, all other terms or provisions of this Agreement shall nevertheless remain in full force and effect. 
 10.8. Binding
Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Nothing in this Agreement shall create or be deemed to create any third party beneficiary
rights in any person or entity not a party to this Agreement except as contemplated by Section 9.7. No assignment of this Agreement or of any rights or obligations hereunder may be made by either the Company or Purchaser, directly or indirectly
(by operation of Law or otherwise), without the prior written Consent of the other parties hereto and any attempted assignment without the required consents shall be void. No assignment of any obligations hereunder shall relieve the parties hereto
of any such obligations. Upon any such permitted assignment, the references in this Agreement to Purchaser shall also apply to any such assignee unless the context otherwise requires. 

10.9. Retention of Counsel. In any dispute or Legal Proceeding arising under or in connection with this Agreement following the
Closing, Seller shall have the right, at its election, to retain Locke Lord LLP to represent it in such matter, and Purchaser, for itself and the Company and for their respective successors and assigns, hereby irrevocably waives and consents to any
such representation in any such matter and the communication by such counsel 

  
 54 

 
to Seller in connection with any such representation of any fact known to such counsel arising by reason of such counsel’s prior representation of the Company. Purchaser, for itself and the
Company and for its and such respective Persons’ Affiliates, successors and assigns, irrevocably acknowledges and agrees that all communications between any of the Company, Seller and counsel made in connection with the negotiation,
preparation, execution, delivery and Closing under, or any dispute or proceeding arising under or in connection with this Agreement or otherwise that, immediately prior to the Closing, would be deemed to be privileged communications of any of the
Company, Seller and their counsel and would not be subject to disclosure to Purchaser in connection with any process relating to a dispute arising under or in connection with, this Agreement or otherwise, shall continue after the Closing and for all
purposes be deemed to be privileged communications between Seller and such counsel and neither Purchaser nor any Person purporting to act on behalf of or through Purchaser shall seek to obtain the same by any process on the grounds that the
privilege attaching to such communications, belongs to the Company, and not Seller. 
 10.10. No Recourse or Personal Liability.
Notwithstanding anything that may be expressed or implied in this Agreement to the contrary, Purchaser agrees and acknowledges, both for itself and its Affiliates, that no recourse under this Agreement or any documents or instruments delivered in
connection with this Agreement shall be had against any current or future manager, officer, employee, equityholder, member of the Company or of any Affiliate or assignee thereof, whether in their capacity as such or otherwise, whether by the
enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on
or otherwise be incurred by any current or future manager, officer, employee, equityholder, or Seller, or of any Affiliate or assignee thereof, whether in their capacity as such or otherwise, for any obligation of the Company under this Agreement or
any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation. 

10.11. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. 
 10.12. Release.
Effective as of the Closing, Seller, for itself and its Affiliates and their respective directors, managers, officers, shareholders, members, partners and representatives (collectively, the “Releasing Parties,” as applicable, hereby
releases and forever discharges Purchaser and the Company, and each of Purchaser’s and the Company’s respective individual, joint or mutual, past, present and future representatives, Affiliates, principals, officers, employees, agents,
attorneys, representatives, insurers, subrogors, subrogees, licensees, predecessors, members, directors, managers, stockholders, controlling persons, subsidiaries, successors and assigns (individually a “Releasee” and collectively,
the “Releasees”) from any and all claims, demands, Legal Proceedings (including those arising out of or in any way related to any Law prohibiting discrimination on the basis of age, race, color, religion, disability, sex, national
origin, citizenship or other protected classification, including, without limitation, claims under Title VII, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, and the Americans With Disabilities Act), Orders,
obligations, rights of 

  
 55 

 
indemnification, contribution or subrogation, contracts, agreements, debts and liabilities whatsoever, whether known or unknown, by statute, at law and in equity (the “Released
Claims”) which Seller (or any of the other Releasing Parties) now has, has ever had or may hereafter have against the respective Releasees on account of or arising out of any matter, cause or event occurring contemporaneously with or prior
to the Closing and, in either case, related to the ownership of the Units, service as an officer, manager or director of the Company or any Company Subsidiary, or the business and affairs of the Company or any Company Subsidiary, including, without
limitation, all such Released Claims arising under or in connection with any financing, guaranty or other financial accommodation (and all subrogation rights that may arise in the future on account thereof), investment, advance, loan, lease,
provision of goods or services, Contracts or other undertaking or transaction entered into with or on behalf of the Company or any Company Subsidiary by Seller (or any of the other Releasing Parties); provided, however, that nothing contained herein
shall operate to release any obligation of the Company or Purchaser arising pursuant to this Agreement or the other documents delivered in connection herewith. Seller acknowledges that it may hereafter discover claims or facts in addition to or
different from those which it now knows or believes to exist with respect to the subject matter of this release and which, if known or suspected at the time of executing this release, may have materially affected its willingness to enter into this
release. Nevertheless, Seller, on behalf of itself and the other Releasing Parties, hereby waives any right, claim, or cause of action that might arise as a result of such different or additional claims or facts. 

** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK ** 

  
 56 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first written above. 
  

			
	PURCHASER:
	
	STERLING NATIONAL BANK
		
	By:	 	 /s/ Thomas X. Geisel

	Name:	 	Thomas X. Geisel
	Title:	 	Executive Vice President, Specialty Finance
	
	COMPANY:
	
	NEWSTAR BUSINESS CREDIT LLC
		
	By:	 	NewStar Financial, Inc., its
		 	sole member
		
	By:	 	 /s/ Robert K. Brown

	Name:	 	Robert K. Brown
	Title:	 	Secretary
	
	SELLER:
	
	NEWSTAR FINANCIAL, INC.
		
	By:	 	 /s/ Robert K. Brown

	Name:	 	Robert K. Brown
	Title:	 	Secretary

 Signature Page to Unit Purchase Agreement

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