SEC Investigation. Reference is made to the investigation conducted by the Securities and Exchange Commission (“SEC”) related to the advertising and sale of securities by NNN Holdings in connection with its registered offering, as further described in Note 10 of Notes to Consolidated Financial Statements of NNN Holdings’ September 30, 2018 Form 10-Q (the “SEC Investigation”). Borrower represents, warrants and covenants that the SEC Investigation has been settled and terminated with respect to Borrower pursuant to the terms described in NNN Holdings’ Form 8-K filed with the Securities and Exchange Commission on September 26, 2019 (the “SEC Settlement”) and that such terms include the temporary suspension of the sale of shares of NNN Holdings and Brix REIT (the “Suspended Share Sales”). Borrower shall promptly notify Lender, in writing, of all material new developments related to the SEC Settlement, and shall provide Lender with written updates of the status of the SEC Settlement (including such information and copies of filings, correspondence, pleadings and other documents as Lender shall request in Lender’s Good Faith Business Judgment) from time to time as Lender shall request in Lender’s Good Faith Business Judgment. Any breach of, default under or other failure to comply with the terms of the SEC Settlement shall constitute an Event of Default under this Loan Agreement. If the Suspended Share Sales are not re-opened for sale, through a FINRA-licensed broker dealer and in accordance with SEC requirements, on or before December 31, 2019, such failure to be re-opened for sale shall not constitute an Event of Default under this Loan Agreement but shall constitute a “Resolution Failure Trigger Event” (as used above with respect to the Triggered Guaranties). If the Suspended Share Sales are not re-opened for sale, through a FINRA-licensed broker dealer and in accordance with SEC requirements, on or before January 31, 2020, such failure to be re-opened for sale shall constitute an Event of Default under this Loan Agreement.
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Sources: Loan and Security Agreement (Rw Holdings NNN Reit, Inc.)
SEC Investigation. Reference is made to the investigation being conducted by the Securities and Exchange Commission (“SEC”) related to the advertising and sale of securities by NNN Holdings Parent in connection with its registered offering, as further described in Note 10 9 of Notes to Consolidated Financial Statements of NNN Holdings’ Parent’s September 30, 2018 Form 10-Q (the “SEC Investigation”). Borrower representsOn or before the date hereof, warrants and covenants that Parent shall provide Lender, in writing, with the most current status of the SEC Investigation has been settled Investigation, including such information and terminated with respect to Borrower pursuant to copies of filings, correspondence, pleadings and other documents as Lender shall request in Lender’s Good Faith Business Judgment. After the terms described in NNN Holdings’ Form 8-K filed with the Securities and Exchange Commission on September 26date hereof, 2019 (the “SEC Settlement”) and that such terms include the temporary suspension of the sale of shares of NNN Holdings and Brix REIT (the “Suspended Share Sales”). Borrower Parent shall promptly notify Lender, in writing, of all material new developments related to in the SEC SettlementInvestigation, and shall provide Lender with written updates of the status of the SEC Settlement Investigation (including such information and copies of filings, correspondence, pleadings and other documents as Lender shall request in Lender’s Good Faith Business Judgment) from time to time as Lender shall request in Lender’s Good Faith Business Judgment. Any breach ofBorrower agrees and covenants that the SEC Investigation shall be resolved to the satisfaction of Lender in Lender’s Good Faith Business Judgment, default under or other and to provide documentation of such resolution to Lender satisfactory to Lender in Lender’s Good Faith Business Judgment, by July 31, 2019; provided that (y) at Parent’s request Lender shall reasonably consider extending such dates to the extent that U.S. government shutdowns has delayed said interviews, and (z) the failure to comply with the terms of the SEC Settlement Investigation to be resolved in such time frame shall constitute not be an Event of Default under this Loan Agreement. If the Suspended Share Sales are not re-opened for sale, through a FINRA-licensed broker dealer and in accordance with SEC requirements, on or before December 31, 2019, such failure to be re-opened for sale shall not constitute an Event of Default under this Loan Agreement but shall constitute a “Resolution Failure Trigger Event” (as used above with respect to the Triggered Guaranties). If the Suspended Share Sales are not re-opened for sale, through a FINRA-licensed broker dealer and in accordance with SEC requirements, on or before January 31, 2020, such failure to be re-opened for sale shall constitute an Event of Default under this Loan Agreement.
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