UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
August 30, 2007
Date of report (Date of earliest event reported)
REALTY INCOME CORPORATION
(Exact Name of Registrant as Specified in Charter)
Maryland |
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1-13374 |
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33-0580106 |
(State or Other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
600 La Terraza Boulevard
Escondido, California 92025
(Address of Principal Executive Offices) (Zip Code)
(760) 741-2111
(Registrants telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 |
Other Events. |
On August 30, 2007, Realty Income Corporation (the Company) entered into a purchase agreement with Banc of America Securities LLC and Citigroup Global Markets Inc., as representatives of the underwriters (the Underwriters), pursuant to which the Company agreed to issue and sell $550,000,000 aggregate principal amount of its 6.750% Notes due 2019. The transaction closed on September 5, 2007. Total net proceeds of the offering (after deducting the underwriting discount and other estimated expenses) were approximately $545 million. The Company intends to use the net proceeds from the offering to fund certain property acquisitions that have closed or are expected to close in 2007. Any remaining net proceeds will be used for general corporate purposes, which may include additional acquisitions.
Item 9.01 |
Financial Statements and Exhibits. |
(d) |
Exhibits. |
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1.1 |
Purchase Agreement, dated August 30, 2007, between the Underwriters and the Company. |
4.1 |
Indenture, dated as of October 28, 1998, between the Company and The Bank of New York Trust Company, N.A., as successor trustee (filed as an exhibit to the Companys Form 8-K, filed on October 28, 1998 and incorporated herein by reference). |
4.2 |
Form of 6.750% Notes due 2019. |
4.3 |
Officers Certificate pursuant to Sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Trust Company, N.A., as successor trustee, establishing a series of securities entitled 6.750% Notes due 2019. |
5.1 |
Opinion of Venable LLP. |
5.2 |
Opinion of Latham & Watkins LLP. |
12.1 |
Calculation of Ratio of Earnings to Fixed Charges. |
23.1 |
Consent of Venable LLP (contained in the opinion filed as Exhibit 5.1 hereto). |
23.2 |
Consent of Latham & Watkins LLP (contained in the opinion filed as Exhibit 5.2 hereto). |
25.1 |
Form T-1 (filed as an exhibit to the Companys Form 8-K, filed on September 6, 2006 and incorporated herein by reference). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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REALTY INCOME CORPORATION |
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Date: September 5, 2007 |
By: |
/s/ Michael R. Pfeiffer |
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Name: |
Michael R. Pfeiffer |
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Title: |
Executive Vice President, General
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Exhibit 1.1
REALTY INCOME CORPORATION
(a Maryland Corporation)
$550,000,000
6.750% Notes due 2019
PURCHASE AGREEMENT
August 30, 2007
Table of Contents
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SECTION 1. |
REPRESENTATIONS AND WARRANTIES |
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SECTION 2. |
SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING |
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SECTION 3. |
COVENANTS OF THE COMPANY |
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SECTION 4. |
PAYMENT OF EXPENSES |
21 |
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SECTION 5. |
CONDITIONS OF UNDERWRITERS OBLIGATIONS |
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SECTION 6. |
INDEMNIFICATION |
23 |
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SECTION 7. |
CONTRIBUTION |
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SECTION 8. |
REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY |
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SECTION 9. |
TERMINATION OF AGREEMENT |
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SECTION 10. |
DEFAULT BY ONE OR MORE OF THE UNDERWRITERS |
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SECTION 11. |
NOTICES |
28 |
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SECTION 12. |
PARTIES |
28 |
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SECTION 13. |
NO ADVISORY OR FIDUCIARY RESPONSIBILITY; TAX DISCLOSURE |
28 |
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SECTION 14. |
INTEGRATION |
29 |
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SECTION 15. |
GOVERNING LAW AND TIME |
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SECTION 16. |
EFFECT OF HEADINGS AND TABLE OF CONTENTS; COUNTERPARTS |
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Schedule A |
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List of Underwriters |
Sch A-1 |
Schedule B |
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Price Schedule |
Sch B-1 |
Schedule C |
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Pricing Term Sheet |
Sch C-1 |
Schedule D |
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Issuer General Use Free Writing Prospectuses |
Sch D-1 |
Schedule E |
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Subsidiaries of the Company |
Sch E-1 |
Exhibit A |
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Form of Opinion of Latham & Watkins LLP |
A-1 |
Exhibit B |
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Form of Opinion of Michael R. Pfeiffer |
B-1 |
Exhibit C |
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Form of Opinion of Venable LLP |
C-1 |
i
REALTY INCOME CORPORATION
(a Maryland corporation)
$550,000,000
6.750% Notes due 2019
PURCHASE AGREEMENT
August 30, 2007
Banc of America Securities LLC
Hearst Tower
214 North Tryon Street
Charlotte, North Carolina 28255
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
As Representatives of the several Underwriters
Ladies and Gentlemen:
Realty Income Corporation, a Maryland corporation (the Company), confirms its agreement with the underwriters named in Schedule A hereto (the Underwriters which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Banc of America Securities LLC (BAS) and Citigroup Global Markets Inc. (Citi) are acting as representatives (BAS and Citi, in such capacity, the Representatives), with respect to the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of $550,000,000 aggregate principal amount of the Companys 6.750% Notes due 2019 (the Securities). The Securities are to be issued pursuant to an indenture dated as of October 28, 1998 (the Indenture) between the Company and The Bank of New York Trust Company, N.A., as successor trustee (the Trustee) to The Bank of New York, the original trustee (the Original Trustee).
The Company understands that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the Commission) an automatic shelf registration statement on Form S-3 (No. 333-133241) (the Current Registration Statement) for the registration of shares of its common stock, par value $1.00 per share (the Common Stock), shares of its preferred stock, par value $1.00 per share (the
Preferred Stock), and its debt securities (including the Securities) under the Securities Act of 1933, as amended (the 1933 Act), including the related preliminary prospectus or prospectuses. Promptly after execution and delivery of this Agreement, the Company will prepare and file a final prospectus supplement and the Base Prospectus (as hereinafter defined) in accordance with the provisions of Rule 430B (Rule 430B) of the rules and regulations of the Commission under the 1933 Act (the 1933 Act Regulations) and paragraph (b) of Rule 424 (Rule 424(b)) of the 1933 Act Regulations. Any information included in such final prospectus supplement or the Base Prospectus that was omitted from the Current Registration Statement at the time it became effective but that is deemed to be part of and included in the Current Registration Statement pursuant to paragraph (f) of Rule 430B under the 1933 Act Regulations is referred to as the Rule 430B Information. Each prospectus, together with the related prospectus supplement, relating to the Securities that omitted the Rule 430B Information or that was captioned Subject to Completion or Preliminary (or a similar caption) that was used after the date on which the Current Registration Statement first became effective and prior to the execution and delivery of this Agreement is herein called, together with the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, a preliminary prospectus and all references herein to any preliminary prospectus shall be deemed to include the Statutory Prospectus (as hereinafter defined). The Current Registration Statement, at any given time, including the amendments thereto at such time, the exhibits and any schedules thereto at such time, if any, and documents incorporated and deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at such time, and the documents and information (including, without limitation, any 430B Information) otherwise deemed to be a part thereof or included therein by the 1933 Act Regulations at such time, are hereinafter called, collectively, the Registration Statement. The prospectus dated April 12, 2006 (the Base Prospectus) and the final prospectus supplement relating to the offering of the Securities, including the documents incorporated and deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished (electronically or otherwise) to the Underwriters for use in connection with the offering of the Securities (whether to meet the requests of purchasers pursuant to Rule 173 under the 1933 Act Regulations or otherwise) or, if not furnished to the Underwriters, in the form first filed by the Company pursuant to Rule 424(b), are herein called, collectively, the Prospectus. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Statutory Prospectus, the Prospectus or any Issuer Free Writing Prospectus (as hereinafter defined) or any amendment or supplement to any of the foregoing shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (EDGAR).
All references in this Agreement to financial statements and schedules and other information which is described, disclosed, contained, included or stated in the Registration Statement, any preliminary prospectus, the Statutory Prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated or deemed to be incorporated by reference in or otherwise deemed by the 1933 Act Regulations (including, without limitation, Rule 430B(f) of the 1933 Act Regulations) to be a part of or included in, the Registration Statement, such preliminary prospectus, the Statutory Prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus, the Statutory Prospectus or the Prospectus shall be deemed to mean and
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include the filing of any document under the Securities Exchange Act of 1934, as amended (the 1934 Act), which is incorporated or deemed to be incorporated by reference in the Registration Statement, such preliminary prospectus, the Statutory Prospectus, or the Prospectus, as the case may be.
All references in this Agreement to properties or improvements owned by or of the Company or any of its subsidiaries shall be deemed to mean and include all properties and improvements which are leased by the Company or any of its subsidiaries, as lessee.
The Registration Statement became effective upon filing under Rule 462(e) of the 1933 Act Regulations (Rule 462(e)) on April 12, 2006, and any post-effective amendment thereto also became effective upon filing under Rule 462(e). No stop order suspending the effectiveness of the Registration Statement has been issued under the
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1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with.
Any offer that was a written communication relating to the Securities made by the Company or any person acting on its behalf (within the meaning, for this paragraph only, of Rule 163(c) of the 1933 Act Regulations) prior to the time that the Registration Statement was originally filed has been filed with the Commission in accordance with the exemption provided by Rule 163 of the 1933 Act Regulations (Rule 163) and otherwise complied with the requirements of Rule 163, including without limitation the legending requirement, to qualify such offer for the exemption from Section 5(c) of the 1933 Act provided by Rule 163.
At the respective times the Registration Statement originally became effective and any amendment thereto became effective, at the time the Companys most recent Annual Report on Form 10-K was filed with the Commission, at each new effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, and at the Closing Time, the Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the applicable requirements of the 1933 Act, the 1933 Act Regulations, the 1939 Act, and the rules and regulations of the Commission under the 1939 Act (the 1939 Act Regulations), and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and, at the date hereof and at the Closing Time, neither the Prospectus nor any amendments or supplements thereto contained or will contain any untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Each preliminary prospectus and Prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act and the 1933 Act Regulations and, if applicable, each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T of the Commission.
As of the Applicable Time, neither (x) all Issuer General Use Free Writing Prospectuses (as defined below) issued at or prior to the Applicable Time and the Statutory Prospectus, considered together (collectively, the General Disclosure Package), nor (y) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, included or will include any untrue statement of a material fact or omitted or will omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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As used in this subsection and elsewhere in this Agreement:
Applicable Time means 12:48 p.m. (New York time) on August 30, 2007 or such other time as agreed by the Company and the Representatives.
Issuer Free Writing Prospectus means any issuer free writing prospectus, as defined in Rule 433 of the 1933 Act Regulations (Rule 433), relating to the Securities that (i) is required to be filed with the Commission by the Company, (ii) is a road show that is a written communication within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Companys records pursuant to Rule 433(g).
Issuer General Use Free Writing Prospectus means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being specified in Schedule D hereto.
Issuer Limited Use Free Writing Prospectus means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
Statutory Prospectus means the Base Prospectus and the preliminary prospectus dated August 30, 2007 relating to the Securities, including the documents incorporated and deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished (electronically or otherwise) to the Underwriters for use in connection with the offering of the Securities.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Securities or until any earlier date that the Company notified or notifies the Representatives as described in Section 3(f), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, the Statutory Prospectus or the Prospectus, including any document incorporated by reference therein that has not been superseded or modified.
The representations and warranties in this subsection 1(a)(i) shall not apply to statements in or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use therein.
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Payment shall be made to the Company by wire transfer of immediately available funds to an account at a bank designated by the Company, against delivery to the Representatives for the respective accounts of the Underwriters of certificates for the Securities to be purchased by them. It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Securities, which it has agreed to purchase. Citi, individually and not as a Representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Securities to be purchased by any Underwriter whose payment therefor has not been received by the Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder.
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provided , however , that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).
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The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus bear to the aggregate initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters respective obligations to contribute pursuant to this Section 7 are several in proportion to the aggregate principal amount of Securities set forth opposite their respective names in Schedule A hereto and not joint.
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SECTION 8. Representations, Warranties and Agreements to Survive Delivery . All representations, warranties and agreements contained in this Agreement and in certificates of officers of the Company submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriters.
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No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Company shall have the right to postpone the Closing Time, for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term Underwriter includes any person substituted for an Underwriter under this Section 10.
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[Signature Page Follows]
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriters and the Company in accordance with its terms.
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Very truly yours, |
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REALTY INCOME CORPORATION |
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By: |
/s/ Michael R. Pfeiffer |
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Michael R. Pfeiffer |
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Executive Vice President, |
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General Counsel and Secretary |
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CONFIRMED AND ACCEPTED, |
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as of the date first above written: |
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BANC OF AMERICA SECURITIES LLC |
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By: |
/s/ Lily Chang |
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Authorized Signatory |
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CITIGROUP GLOBAL MARKETS INC. |
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By: |
/s/ Scott Eisen |
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Authorized Signatory |
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For themselves
and as Representatives of the
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SCHEDULE A
Name of Underwriter |
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Principal
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Banc of America Securities LLC |
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$ |
233,750,000 |
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Citigroup Global Markets Inc. |
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233,750,000 |
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BMO Capital Markets Corp. |
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16,500,000 |
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BNY Capital Markets, Inc. |
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16,500,000 |
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Morgan Keegan & Company, Inc. |
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16,500,000 |
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Piper Jaffray & Co. |
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16,500,000 |
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Wells Fargo Securities, LLC |
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16,500,000 |
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Total |
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$ |
550,000,000 |
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Sch A- 1
SCHEDULE B
Price Schedule
1. The initial public offering price for the Securities shall be 99.827% of the principal amount thereof, plus accrued interest from September 5, 2007 if settlement occurs after that date.
2. Underwriting discounts and commissions for the Securities shall be 0.675% of the principal amount thereof. Accordingly, the purchase price to be paid for the Securities by the several Underwriters shall be 99.152% of the principal amount thereof, plus accrued interest from September 5, 2007 if settlement occurs after that date.
Sch B- 1
SCHEDULE C
Issuer Free
Writing Prospectus
Filed Pursuant to Rule 433
Registration No. 333-133241
August 30, 2007
REALTY INCOME CORPORATION
PRICING TERM SHEET
6.750% Notes due 2019
Issuer: |
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Realty Income Corporation |
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Security: |
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6.750% Notes due 2019 |
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Size: |
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$550,000,000 |
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Maturity Date: |
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August 15, 2019 |
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Coupon: |
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6.750%, accruing from September 5, 2007 |
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Interest Payment Dates: |
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February 15 and August 15, commencing February 15, 2008 |
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Price to Public: |
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99.827% |
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Underwriting Discount: |
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0.675% |
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Net Proceeds, Before Expenses, to
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$545,336,000 |
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Spread to Benchmark Treasury: |
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+225 bp |
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Benchmark Treasury: |
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4.750% due 8/17 |
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Benchmark Treasury Yield: |
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4.522% |
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Reoffer Yield: |
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6.772% |
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Make-Whole Call: |
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Treasury Rate +35 basis points |
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Expected Settlement Date: |
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September 5, 2007 |
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CUSIP/ISIN: |
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756109AK0/US756109AK03 |
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Anticipated Ratings: |
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Baa1 by Moodys Investors Service, Inc. (stable
outlook)
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Joint Book-Running Managers: |
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Banc of America Securities LLC
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Co-Managers: |
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BMO Capital Markets Corp.
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Sch C- 1
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus and supplement thereto in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering.
You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by contacting Banc of America Securities LLC by telephone (toll free) at 1-800-294-1322 or by email at dg.prospectus_distribution@bofasecurities.com or by contacting Citigroup Global Markets Inc. by telephone (toll free) at 1-877-858-5407.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM
Sch C- 2
SCHEDULE D
Issuer General Use Free Writing Prospectuses
1. Free Writing Prospectus dated August 30, 2007
Sch D- 1
SCHEDULE E
Subsidiaries of the Company
Name |
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Jurisdiction of
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Type of Entity |
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Realty Income Texas Properties, L.P. |
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Delaware |
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Limited Partnership |
Realty Income Texas Properties, Inc. |
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Delaware |
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Corporation |
Crest Net Lease, Inc. |
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Delaware |
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Corporation |
Crestnet 1, LLC |
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Delaware |
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Limited Liability Company |
Realty Income Pennsylvania Properties Trust |
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Maryland |
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Business trust |
RI GA 1, LLC |
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Delaware |
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Limited Liability Company |
RI TN 1, LLC |
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Delaware |
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Limited Liability Company |
RI TN 2, LLC |
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Delaware |
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Limited Liability Company |
RI CS 1, LLC |
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Delaware |
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Limited Liability Company |
RI CS 2, LLC |
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Delaware |
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Limited Liability Company |
RI CS 3, LLC |
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Delaware |
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Limited Liability Company |
RI CS 4, LLC |
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Delaware |
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Limited Liability Company |
RI SE, LLC |
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Delaware |
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Limited Liability Company |
Crestnet 2, LLC |
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Delaware |
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Limited Liability Company |
O CHK, Inc. |
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Delaware |
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Corporation |
O ICE, LLC |
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Delaware |
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Limited Liability Company |
2921 Ross Clark Cir, LLC* |
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Delaware |
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Limited Liability Company |
3904 Pepperell Pkwy, LLC* |
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Delaware |
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Limited Liability Company |
4081 US Highway 231, LLC* |
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Delaware |
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Limited Liability Company |
4675 Center Point Rd, LLC* |
|
Delaware |
|
Limited Liability Company |
730 Academy Dr, LLC* |
|
Delaware |
|
Limited Liability Company |
316 Commons Dr, LLC* |
|
Delaware |
|
Limited Liability Company |
1453 Montgomery Hwy, LLC* |
|
Delaware |
|
Limited Liability Company |
812 Creighton Rd, LLC* |
|
Delaware |
|
Limited Liability Company |
4834 S Orange Ave, LLC* |
|
Delaware |
|
Limited Liability Company |
4797 S Semoran Blvd, LLC* |
|
Delaware |
|
Limited Liability Company |
Sch E- 1
3113 Gulf Breeze Pkwy, LLC* |
|
Delaware |
|
Limited Liability Company |
2237 Capital Circle NE, LLC* |
|
Delaware |
|
Limited Liability Company |
1735 Cobb Parkway SE, LLC* |
|
Delaware |
|
Limited Liability Company |
2205 Riverside Pkwy, LLC* |
|
Delaware |
|
Limited Liability Company |
5029 Floyd Rd SW, LLC* |
|
Delaware |
|
Limited Liability Company |
406 Grayson Hwy, LLC* |
|
Delaware |
|
Limited Liability Company |
4095 Pleasant Hill Rd, LLC* |
|
Delaware |
|
Limited Liability Company |
6000 Jimmy Carter Blvd, LLC* |
|
Delaware |
|
Limited Liability Company |
1008 Whitlock Ave, LLC* |
|
Delaware |
|
Limited Liability Company |
3527 Old Norcross Rd, LLC* |
|
Delaware |
|
Limited Liability Company |
2035 W Spring St, LLC* |
|
Delaware |
|
Limited Liability Company |
6942 Douglas Blvd, LLC* |
|
Delaware |
|
Limited Liability Company |
9777 Highway 92, LLC* |
|
Delaware |
|
Limited Liability Company |
Sch E- 2
Exhibit A
FORM OF OPINION OF
LATHAM & WATKINS LLP
TO BE DELIVERED PURSUANT TO SECTION 5(b)
1. Based solely on certificates from public officials, the Company is qualified to do business in, and is in good standing under, the laws of the State of California.
2. Each of Realty Income Texas Properties, Inc., Crest Net Lease, Inc., and O CHK, Inc. is a corporation organized under the laws of the State of Delaware. Based solely on certificates from public officials, each of Realty Income Texas Properties, Inc., Crest Net Lease, Inc. and O CHK, Inc. is validly existing as a corporation and is in good standing under the laws of the State of Delaware. Each of Realty Income Texas Properties, Inc., Crest Net Lease, Inc. and O CHK, Inc. has the power and authority as a corporation to own, lease and operate its properties and to conduct its business as described in the General Disclosure Package, the Prospectus and the documents incorporated or deemed to be incorporated by reference therein (the Incorporated Documents); each of Crest Net Lease, Inc. and O CHK, Inc. is, based solely on certificates from public officials, qualified to do business in and is in good standing in the State of California; and all of the issued and outstanding shares of capital stock of Realty Income Texas Properties, Inc. and Crest Net Lease, Inc. have been duly authorized and validly issued, are fully paid and non-assessable and, to the best of our knowledge and except as disclosed in the General Disclosure Package, the Prospectus and the Incorporated Documents, are owned of record by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim.
3. Realty Income Texas Properties, L.P. (the Partnership) is a limited partnership organized under the laws of the State of Delaware. Based solely on certificates from public officials, the Partnership is validly existing as a limited partnership and is in good standing under the laws of the State of Delaware. The Partnership has the power and authority as a limited partnership to own, lease and operate its properties and to conduct its business as described in the General Disclosure Package and the Prospectus and the Incorporated Documents and is, based solely on certificates from public officials, qualified to do business in and is in good standing in the State of Texas. All of the issued and outstanding partnership interests of the Partnership represent valid general or limited partnership interests in the Partnership, and, to the best of our knowledge, the sole general partner interest in the Partnership is owned by the Company and the sole limited partner interest in the Partnership is owned by a wholly-owned corporate subsidiary of the Company, in each case free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim.
4. Each of CrestNet 1, LLC, CrestNet 2, LLC, RI SE, LLC, RI GA 1, LLC, RI TN 1, LLC (RITN1), RI TN 2, LLC (RITN2), RI CS1, LLC (RICS1), RI CS2, LLC, RI CS3, LLC, RI CS4, LLC, and O ICE, LLC (collectively, the LLC Subsidiaries) is a limited liability company organized under the laws of the State of Delaware. Based solely on certificates from public officials, each of the LLC Subsidiaries is validly existing as a limited liability company and is in good standing under the laws of the State of Delaware. Each of the LLC Subsidiaries
has the power and authority as a limited liability company to own, lease and operate its properties and to conduct its business as described in the General Disclosure Package, the Prospectus and the Incorporated Documents; each of RITN1 and RITN2 is, based solely on certificates from public officials, qualified to do business in and is in good standing in the State of Tennessee; RICS1 is, based solely on certificates from public officials, qualified to do business in and is in good standing in the State of Louisiana; and, to the best of our knowledge, all of the issued and outstanding limited liability company interests of each of the LLC Subsidiaries are owned by the Company directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim.
5. The issuance of the Securities is not subject, to the best of our knowledge, to preemptive or other similar rights arising under any agreement or instrument to which the Company or any of its subsidiaries is a party.
6. The Registration Statement has become effective under the 1933 Act. Based, with your consent, solely on a telephonic confirmation by a member of the Staff of the Commission on the business day immediately preceding the date of this opinion, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings therefor have been initiated by the Commission. To the best of our knowledge, the Statutory Prospectus and the Prospectus have each been filed pursuant to Rule 424(b) under the 1933 Act in the manner and within the time period required by Rule 424(b) (without reference to Rule 424(b)(8)) and any required filing of each Issuer Free Writing Prospectus, if any, pursuant to Rule 433 has been made in the manner and within the time period required by Rule 433(d).
7. The Registration Statement and any amendments thereto, as of their respective effective dates, and the Prospectus and any amendments or supplements thereto, as of their respective issue dates, each appeared on its face to be appropriately responsive in all material respects to the requirements of Form S-3 under the 1933 Act and the 1933 Act Regulations; it being understood, however, that we express no opinion with respect to Regulation S-T, any Statement of Eligibility on Form T-1 (a Form T-1) or the financial statements, schedules or other financial data included in, incorporated by reference in, or omitted from the Registration Statement or any amendment thereto or the Prospectus or any amendment or supplement thereto.
8. The Incorporated Documents, when they were filed with the Commission, appeared on their face to be appropriately responsive in all material respects to the applicable requirements of the 1934 Act and the 1934 Act Regulations for reports and registration statements, as the case may be, on Form 8-A, Form 10K, Form 10Q and Form 8-K, and proxy statements under Regulation 14A, as the case may be; it being understood, however, that we express no opinion with respect to Regulation S-T, any Form T-1 or the financial statements, schedules, or other financial data included in, incorporated by reference in, or omitted from, the Incorporated Documents.
9. The statements in the preliminary Prospectus Supplement dated August 30, 2007 and the final Prospectus Supplement dated August 30, 2007 under the caption United States Federal Income Tax Considerations for Holders of the Notes and in the Base Prospectus dated April 12, 2006 under the caption United States Federal Income Tax Considerations Related to
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Our REIT Election and the statements in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2006 under the captions Risk FactorsIf we fail to qualify as a real estate investment trust, the amount of dividends we are able to pay would decrease, which could adversely affect the market price of our capital stock and could adversely affect the value of our debt securities and Risk FactorsDistribution requirements imposed by law limit our flexibility, insofar as such statements purport to constitute summaries of United Sates federal income tax laws or regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects.
10. No authorization, approval, consent or order of any court or governmental authority is required to be obtained by the Company on or prior to the date of this opinion under any federal or California state statute, rule or regulation applicable to the Company that has not been obtained in connection with the execution or delivery of the Purchase Agreement, or for the issuance or sale of the Securities by the Company to the Underwriters pursuant to the Purchase Agreement;
11. The execution, delivery and performance on or prior to the date hereof of the Purchase Agreement, the Indenture and the Securities by the Company (including the issuance and sale of the Securities to the Underwriters pursuant to the Purchase Agreement and the use of the proceeds from the sale of the Securities as described in the preliminary Prospectus Supplement dated August 30, 2007 and the final Prospectus Supplement dated August 30, 2007 under the caption Use of Proceeds) do not and will not, whether with or without the giving of notice or lapse of time or both, constitute a breach or violation of, or default or Repayment Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, the Credit Agreement, dated as of June 17, 2005, among the Company, the banks named therein, Wells Fargo Bank, National Association, as Administrative Agent and co-lead Arranger, Bank of New York, as Documentation Agent and co-lead Arranger, Bank of America, N.A. and Wachovia Bank, National Association, as co-Syndication Agents, and AmSouth Bank, U.S. Bank National Association, Bank of Montreal and Chevy Chase Bank, FSB, as amended by the First Amendment to Credit Agreement, dated as of October 16, 2006 (as amended, the Acquisition Credit Agreement), the Indenture, the indenture dated as of May 6, 1997 between the Company and the Trustee, as successor trustee to BONY (as amended and supplemented by the First Supplemental Indenture dated as of May 28, 1997 (as so amended and supplemented, the 1997 Indenture)), or any securities outstanding under the Indenture or the 1997 Indenture as of the date of this opinion, nor to the best of our knowledge, any applicable provision of any federal or State of California law, statute, administrative regulation or any administrative or court decree applicable to the Company.
12. With your consent, based as to factual matters solely on a certificate of an officer of the Company, the Company is not, and immediately after giving effect to the sale of the Securities in accordance with the Purchase Agreement and the application of the net proceeds therefrom as described in the preliminary Prospectus Supplement dated August 30, 2007 and the final Prospectus Supplement dated August 30, 2007 under the caption Use of Proceeds, will not be required to be registered as an investment company within the meaning of the 1940 Act, as amended.
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13. Commencing with the Companys taxable year ended December 31, 1994, the Company has been organized and has operated in conformity with the requirements for qualification and taxation as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the Code), and its proposed method of operation will enable the Company to continue to meet the requirements for qualification and taxation as a real estate investment trust under the Code.
14. The Indenture is the legally valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors rights generally or by general equitable principles.
15. The Securities, when duly executed, issued and authenticated in accordance with the terms of the Indenture (assuming due authorization, execution and delivery of the Indenture by the Trustee) and delivered to and paid for by the Underwriters in accordance with the terms of the Purchase Agreement, will be legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors rights generally or be general equitable principles.
16. The Indenture has been qualified under the 1939 Act.
17. The statements in the preliminary Prospectus Supplement dated August 30, 2007 and the final Prospectus Supplement dated August 30, 2007 under the caption Description of Notes and in the Base Prospectus dated April 12, 2006 under the caption Description of Debt Securities, insofar as they purport to summarize or describe certain provisions of the Securities or the Indenture, are accurate summaries or descriptions in all material respects.
In addition, Latham & Watkins LLP will provide a letter addressed to the Underwriters, dated as of the Closing Time, and in form and substance satisfactory to counsel for the Underwriters, to the effect that no facts have come to their attention that have caused them to believe that:
(a) the Registration Statement or any amendment thereto, at the respective times they first became effective, in each case together with the Incorporated Documents at those respective times, contained an untrue statement of a material fact or omitted (excepting the Rule 430B Information permitted to be omitted from the Registration Statement at such time) to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or
(b) the Registration Statement, as amended (if applicable), at each new effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, including the Rule 430B Information (together with the Incorporated Documents at that time), contained an untrue statement of a material fact or omitted to state a
A- 4
material fact required to be stated therein or necessary to make the statements therein not misleading, or
(c) the General Disclosure Package, as of the Applicable Time (together with the Incorporated Documents at that time) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or
(d) the Prospectus or any amendment or supplement thereto, as of the date of the Prospectus Supplement dated August 30, 2007, as of the date of any amendment or supplement thereto, or as of the date of such opinion (in each case together with the Incorporated Documents as of those respective dates), contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
it being understood that such counsel shall express no belief with respect to (A) the financial statements, schedules or other financial data included or incorporated by reference in, or omitted from, the Registration Statement or any amendment thereto, the Prospectus or any amendment or supplement thereto, the General Disclosure Package or the Incorporated Documents or (B) any Form T 1. Such counsel may state that in such letter that, in the course of acting as special counsel to the Company in connection with the preparation by the Company of the Registration Statement, any amendments thereto, the Prospectus and any amendments or supplements thereto and the General Disclosure Package, such counsel reviewed the Registration Statement, any amendments thereto, the Prospectus, any amendments or supplements thereto, the General Disclosure Package and the Incorporated Documents, and participated in conferences and telephone conversations with officers and other representatives of the Company, the independent public accountants for the Company, representatives of the Underwriters and their counsel, during which conferences and conversations the contents of the Registration Statement, any amendments thereto, the Prospectus and any amendments or supplements thereto and the General Disclosure Package (in each case including portions of the Incorporated Documents) and related matters were discussed and, further, that such counsel has reviewed and relied upon certain corporate records and documents, letters from counsel and accountants, and oral and written statements of officers and other representatives of the Company and others as to the existence and consequence of certain factual and other matters. The reports and proxy and registration statements filed by the Company with the Commission and, in each case giving effect to Rule 412 under the 1933 Act, incorporated in the Registration Statement, the Statutory Prospectus, or the Prospectus by reference, are herein called the Incorporated Documents.
In rendering such opinions, such counsel may rely insofar as such opinion involves factual matters, to the extent they deem proper, on certificates of responsible officers of the Company and public officials. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
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The matters set forth in paragraphs 9 and 13 above (collectively, the Tax Opinions) may be covered in one or more separate legal opinions, which may be subject to such assumptions, limitations and qualifications as shall be satisfactory to counsel for the Underwriters. In particular, the Tax Opinions may be conditioned upon certain representations made by the Company as to factual matters through a certificate of an officer of the Company (the Officers Certificate). In rendering the Tax Opinions, Latham & Watkins LLP may assume the accuracy of an opinion of Venable LLP, special Maryland counsel to the Company, with respect to the enforceability of the stock ownership limits set forth in the Companys charter, so long as such opinion of special Maryland counsel (i) is dated the same date as such opinion of Latham & Watkins LLP, (ii) is addressed to the Representatives and the Underwriters or contains a statement to the effect that the Representatives and the Underwriters may rely upon such opinion as if it were addressed to them and (iii) is otherwise in form and substance satisfactory to counsel for the Underwriters, and a copy of such opinion of special Maryland counsel is delivered to the Representatives together with such opinion of Latham & Watkins LLP. In addition, the Tax Opinions may be based upon the factual representations of the Company concerning its business and properties as set forth in the Registration Statement and Prospectus. The Tax Opinions may state that they relate only to the federal income tax laws of the United States and such counsel need not express any opinion with respect to the applicability thereto, or the effect thereon, of other federal laws, the laws of any state or other jurisdiction or as to any matters of municipal law or the laws of any other local agencies within any state. The Tax Opinions may state that they are based on various statutory provisions, regulations promulgated thereunder and interpretations thereof by the Internal Revenue Service and the courts having jurisdiction over such matters, all of which are subject to change either prospectively or retroactively, that any such change may affect the conclusions stated therein, and that any variation or difference in the facts from those set forth in the Registration Statement, the Prospectus or the Officers Certificate may affect the conclusions stated therein. Moreover, the Tax Opinions may state that the Companys qualification and taxation as a real estate investment trust depends upon the Companys ability to meet the various qualification tests imposed under the Code, including through actual annual operating results, asset composition, distribution levels and diversity of stock ownership, the results of which have not been and will not be reviewed by such counsel, and, accordingly, no assurance can be given that the actual results of the Companys operation for any one taxable year will satisfy such requirements.
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Exhibit B
FORM OF OPINION OF
MICHAEL R. PFEIFFER
TO BE DELIVERED PURSUANT TO SECTION 5(b)
1. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not have a Material Adverse Effect.
2. Realty Income Texas Properties, L.P. is not required to qualify as a foreign partnership to transact business in any jurisdiction other than the State of Texas and is not required to be in good standing in any jurisdiction other than the States of Delaware and Texas; Realty Income Texas Properties, Inc. is not required to qualify as a foreign corporation to transact business in any jurisdiction and is not required to be in good standing in any jurisdiction other than the State of Delaware; Crest Net Lease, Inc. is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not result in a Material Adverse Effect; O CHK, Inc. is duly qualified as a foreign corporation to transact business and is in good standing, and each of CrestNet 1, LLC, CrestNet 2, LLC, RI GA 1, LLC, RI TN 1, LLC, RI TN 2, LLC, RI CS1, LLC, RI CS2, LLC, RI CS3, LLC, RI CS4, LLC, RI SE LLC and O ICE, LLC is duly qualified as a foreign limited liability company to transact business and is in good standing, in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not result in a Material Adverse Effect.
3. The information in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2006 under Risk Factors As a property owner, we may be subject to unknown environmental liabilities and Legal Proceedings, to the extent that it constitutes matters of law, summaries of legal matters, instruments or agreements or legal proceedings, or legal conclusions, has been reviewed by me and is correct in all material respects.
4. To the best of my knowledge and information, there is not pending or threatened any action, suit, proceeding, inquiry or investigation to which the Company or any subsidiary is a party, or to which the property of the Company or any subsidiary is subject, before or brought by any court or governmental agency or authority, which could reasonably be expected to result in a Material Adverse Effect, or which could reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the Purchase Agreement or the performance by the Company of its obligations under the Purchase Agreement, the Indenture or the Securities.
5. All descriptions in the Prospectus of leases, contracts and other documents to which the Company or any subsidiary is a party are accurate in all material respects.
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6. To the best of my knowledge and information, there are no franchises, contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described in the Registration Statement or to be filed as exhibits thereto other than those described therein or filed or incorporated by reference as exhibits thereto, and the descriptions thereof and references thereto are correct in all material respects.
7. To the best of my knowledge and information, neither the Company nor any of its subsidiaries is in violation of its charter or bylaws, its partnership agreement, its declaration of trust or trust agreement, or its limited liability company agreement (or other similar agreement), as applicable, and no default by the Company or any of its subsidiaries exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Registration Statement, the General Disclosure Package or the Prospectus or filed or incorporated by reference as an exhibit to the Registration Statement.
8. The execution, delivery and performance of the Purchase Agreement, the Indenture and the Securities by the Company (including the issuance and sale of the Securities to the Underwriters pursuant to the Purchase Agreement and the use of the proceeds from the sale of the Securities as described in the preliminary Prospectus Supplement dated August 30, 2007 and the final Prospectus Supplement dated August 30, 2007 under the caption Use of Proceeds) and compliance by the Company with its obligations under the Purchase Agreement, the Indenture and the Securities will not, whether with or without the giving of notice or lapse of time or both, constitute a breach or violation of, or default or Repayment Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, known to me, to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, except for such breaches, violations or defaults or liens, charges or encumbrances that, individually or in the aggregate, would not have a Material Adverse Effect, nor will such action result in any violation of the provisions of the charter or bylaws of the Company or the partnership agreement, declaration of trust or trust agreement, limited liability company agreement (or other similar agreement) or charter or bylaws, as the case may be, of any of its subsidiaries, or, to the best of my knowledge and information, any applicable provision of any law, statute or administrative regulation of the State of California, or, to the best of my knowledge and information, any judgment, order, writ or decree of any government instrumentality or court, domestic or foreign, applicable to the Company or any of its subsidiaries or any of their respective properties, assets or operations.
In rendering such opinion, such counsel may rely as to matters of fact (but not as to legal conclusions), to the extent he deems proper, on certificates of responsible officers of the Company and public officials. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
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Exhibit C
FORM OF OPINION OF
VENABLE LLP
TO BE DELIVERED PURSUANT TO SECTION 5(b)
1. The Company has been duly incorporated and is validly existing under and by virtue of the laws of the State of Maryland and is in good standing with the State Department of Assessments and Taxation of Maryland (the SDAT). The Company has the corporate power to own, lease and operate its current properties and to conduct its business as described in its most recent Annual Report on Form 10-K under the captions Item 1.BusinessThe Company and Item 1.BusinessProperties, and to enter into and perform its obligations under the Purchase Agreement, the Indenture and the global certificate evidencing the Securities (the Global Security) and any other certificates evidencing the Securities.
2. The authorized, issued and outstanding stock of the Company is as set forth in the line items Preferred Stock and paid in capital and Common Stock and paid in capital set forth in the consolidated balance sheet as of June 30, 2007 contained in the Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (except for subsequent issuances or forfeitures of Common Stock pursuant to employee benefit plans or the exercise of options referred to in the Statutory Prospectus and the Prospectus or the documents incorporated or deemed to be incorporated by reference therein). The shares of the Companys issued and outstanding Common Stock and Preferred Stock, par value $1.00 per share (collectively, the Outstanding Shares), have been duly authorized and validly issued and are fully paid and non-assessable and none of the Outstanding Shares was issued in violation of preemptive rights arising under the Maryland General Corporation Law (the MGCL) or the charter or bylaws of the Company.
3. The Securities have been duly authorized by all necessary corporate action on the part of the Company and the Global Security has been duly executed by the Company and, when duly authenticated by the Trustee in the manner provided in the Indenture (assuming due authorization, execution and delivery of the Indenture by the Trustee) and delivered against payment of the purchase price therefor specified in the Purchase Agreement, the Securities will be duly and validly issued by the Company.
4. The Purchase Agreement and the Indenture have been duly authorized by all necessary corporate action on the part of the Company. The Purchase Agreement and the Indenture have been duly executed and, so far as is known to us, delivered by the Company.
5. No authorization, approval, consent or order of any Maryland state government authority or agency (other than as may be required under Maryland securities or blue sky laws) is required in connection with the due authorization, execution or delivery of the Purchase Agreement, the Indenture or the Securities or for the offering, issuance or sale of the Securities.
6. The execution, delivery and performance by the Company of the Purchase Agreement, the Indenture and the Global Security and any other certificates evidencing the Securities (including the issuance and sale of the Securities to the Underwriters and the use of the
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proceeds from the sale of the Securities as described in the preliminary Prospectus Supplement dated August 30, 2007 and the final Prospectus Supplement dated August 30, 2007 under the caption Use of Proceeds) do not result in any violation of the charter or bylaws of the Company or, so far as is known to us, any applicable provision of any Maryland law, statute, administrative regulation or administrative or court decree applicable to the Company.
In rendering such opinion, such counsel shall state that each of Latham & Watkins LLP and Sidley Austin LLP, in rendering their opinions pursuant to the Purchase Agreement, may rely upon such opinion of special Maryland counsel as to all matters arising under or governed by the laws of the State of Maryland. In addition, in rendering such opinion, such counsel may rely insofar as such opinion involves factual matters, to the extent they deem proper, on certificates of responsible officers of the Company and public officials. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). In the event that Latham & Watkins LLP, in rendering the Tax Opinions (as defined in Exhibit A to the Purchase Agreement), relies upon a separate opinion (the Separate Opinion) of such special Maryland counsel, such Separate Opinion of special Maryland counsel shall also be addressed to the Representatives and the Underwriters or shall contain a statement to the effect the Representatives and the Underwriters may rely upon such opinion as if it were addressed to them and shall also comply with the other applicable requirements set forth in the last paragraph of Exhibit A to the Purchase Agreement.
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Exhibit 4.2
PRINCIPAL AMOUNT
$550,000,000
REGISTERED NO.: R-1
CUSIP NO.: 756109AK0
ISIN NO.: US756109AK03
REALTY INCOME CORPORATION
6.750% NOTES DUE 2019
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND, UNLESS AND UNTIL IT IS EXCHANGED FOR SECURITIES IN DEFINITIVE FORM AS AFORESAID, MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ITS NOMINEE TO A SUCCESSOR DEPOSITARY OR ITS NOMINEE.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (DTC), 55 WATER STREET, NEW YORK, NEW YORK TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SUCH SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Realty Income Corporation, a Maryland corporation (the Company, which term shall include any successor under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Five Hundred Fifty Million Dollars on August 15, 2019, and to pay interest thereon from September 5, 2007 or from the most recent date to which interest has been paid or duly provided for, semi-annually in arrears on February 15 and August 15 of each year (the Interest Payment Dates), commencing February 15, 2008, at the rate of 6.750% per annum, until the entire principal amount hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered in the Security Register applicable to the Notes at the close of business on February 1 or August 1 (the Regular Record Dates), as the case may be, immediately preceding the applicable Interest Payment Date regardless of whether the Regular Record Date is a Business Day. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the
Indenture. Interest will be computed on the basis of a 360-day year of twelve 30-day months. If any principal of or premium, if any, or interest on any of the Notes is not paid when due, then such overdue principal and, to the extent permitted by law, such overdue premium or interest, as the case may be, shall bear interest, until paid or until such payment is duly provided for, at the rate of 6.750% per annum.
Payments of principal, premium, if any, and interest in respect of this Note will be made by the Company in Dollars. If this Note is a Global Security, all payments of principal, premium, if any, and interest in respect of this Note will be made by wire transfer of immediately available funds to an account maintained by the payee located in the United States. If this Note is not a Global Security (a Certificated Note), payments of interest on this Note may, at the Companys option, be made by mailing a check to the address of the Person entitled thereto as such address appears in the Security Register for the Notes or by wire transfer to an account maintained by the payee located inside the United States, all on the terms set forth in the Indenture; provided, however, that a Holder of $5 million or more in aggregate principal amount of Certificated Notes will be entitled to receive payments of interest due on any Interest Payment Date by wire transfer of immediately available funds to an account maintained by such Holder in the United States so long as such Holder has given appropriate wire transfer instructions to the Trustee or a Paying Agent for the Notes at least 15 calendar days prior to the applicable Interest Payment Date. Any such wire transfer instruction will remain in effect until revoked by such Holder or until such Person ceases to be a Holder of $5 million or more in aggregate principal amount of Certificated Notes.
Payments of principal of and premium, if any, and interest on Certificated Notes that are due and payable on the Final Maturity Date, any Redemption Date or any other date on which principal of such Notes is due and payable will be made by wire transfer of immediately available funds to accounts maintained by the Holders thereof in the United States, so long as such Holders have given appropriate wire transfer instructions to the Trustee or a Paying Agent for the Notes, against surrender of such Notes to the Trustee or a Paying Agent for the Notes; provided that installments of interest on Certificated Notes that are due and payable on any Interest Payment Date falling on or prior to such Final Maturity Date, Redemption Date or other date on which principal of such Notes is payable will be paid in the manner described in the preceding paragraph to the Persons who were the Holders of such Notes (or one or more Predecessor Securities) registered as such at the close of business on the relevant Regular Record Dates according to their terms and the provisions of the Indenture.
This Note is one of a duly authorized issue of Securities of the Company (herein called the Notes), issued as a series of Securities under an indenture dated as of October 28, 1998 (herein called, together with all indentures supplemental thereto, the Indenture), between the Company and The Bank of New York Trust Company, N.A. (successor trustee to The Bank of New York), as trustee (the Trustee, which term includes any successor trustee under the Indenture with respect to the Notes), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the duly authorized series designated as the 6.750% Notes due 2019, limited (subject to exceptions provided in the Indenture and subject to the right of the Company to reopen such series for the issuance of additional Securities of such series on the terms and subject to the conditions specified in the Indenture) in aggregate principal amount to $550,000,000. All terms used in this Note which are defined in the Indenture and not defined herein shall have the meanings assigned to them in the Indenture.
The Notes may be redeemed at any time at the option of the Company, in whole at any time or from time to time in part, at a Redemption Price equal to the greater of:
(a) 100% of the principal amount of the Notes to be redeemed, and
(b) the sum of the present values of the remaining scheduled payments of principal of and interest on the Notes to be redeemed (exclusive of interest accrued to the applicable Redemption Date) discounted to such Redemption Date on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate plus 35 basis points,
plus, in the case of both clauses (a) and (b) above, accrued and unpaid interest on the principal amount of the Notes being redeemed to such Redemption Date. Notwithstanding the foregoing, installments of interest on Notes whose Stated Maturity is on or prior to the relevant Redemption Date will be payable to the Holders of such Notes (or one or more Predecessor Securities) registered as such at the close of business on the relevant Regular Record Dates according to their terms and the provisions of the Indenture.
Notice of any redemption by the Company will be mailed at least 30 days but not more than 60 days before the applicable Redemption Date to each Holder of Notes to be redeemed.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Company on the Notes and (b) certain restrictive covenants and the related defaults and Events of Default applicable to the Company, in each case, upon compliance by the Company with certain conditions set forth in the Indenture, which provisions apply to this Note.
In addition to the covenants of the Company contained in the Indenture, the Company makes the following covenants with respect to, and for the benefit of the Holders of, the Notes:
Limitation on Incurrence of Total Debt . The Company will not, and will not permit any Subsidiary to, incur any Debt, other than Intercompany Debt, if, immediately after giving effect to the incurrence of such additional Debt and the application of the proceeds therefrom on a pro forma basis, the aggregate principal amount of all outstanding Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with GAAP is greater than 60% of the sum of (i) the Companys Total Assets as of the end of the latest fiscal quarter covered in the Companys Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently filed with the Commission (or, if such filing is not required under the Securities Exchange Act of 1934, as amended (the Exchange Act), with the Trustee) prior to the incurrence of such additional Debt and (ii) the increase, if any, in Total Assets from the end of such quarter including, without limitation, any increase in Total Assets caused by the application of the proceeds of such additional Debt (such increase together with the Companys Total Assets are referred to as the Adjusted Total Assets).
Limitation on Incurrence of Secured Debt. The Company will not, and will not permit any Subsidiary to, incur any Secured Debt, other than Intercompany Debt, if, immediately after giving effect to the incurrence of such additional Secured Debt and the application of the proceeds therefrom on a pro forma basis, the aggregate principal amount of all outstanding Secured Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with GAAP is greater than 40% of the Companys Adjusted Total Assets.
Debt Service Coverage. The Company will not, and will not permit any Subsidiary to, incur any Debt, other than Intercompany Debt, if the ratio of Consolidated Income Available for Debt Service to the Annual Debt Service Charge for the period consisting of the four consecutive
fiscal quarters most recently ended prior to the date on which such additional Debt is to be incurred is less than 1.5 to 1.0, on a pro forma basis after giving effect to the incurrence of such Debt and the application of the proceeds therefrom, and calculated on the assumption that (i) such Debt and any other Debt incurred by the Company or any of its Subsidiaries since the first day of such four-quarter period and the application of the proceeds therefrom (including to refinance other Debt since the first day of such four-quarter period) had occurred on the first day of such period, (ii) the repayment or retirement of any other Debt of the Company or any of its Subsidiaries since the first day of such four-quarter period had occurred on the first day of such period (except that, in making such computation, the amount of Debt under any revolving credit facility, line of credit or similar facility shall be computed based upon the average daily balance of such Debt during such period), and (iii) in the case of any acquisition or disposition by the Company or any Subsidiary of any asset or group of assets since the first day of such four-quarter period, including, without limitation, by merger, stock purchase or sale, or asset purchase or sale, such acquisition or disposition had occurred on the first day of such period with the appropriate adjustments with respect to such acquisition or disposition being included in such pro forma calculation. If the Debt giving rise to the need to make the foregoing calculation or any other Debt incurred after the first day of the relevant four-quarter period bears interest at a floating rate then, for purposes of calculating the Annual Debt Service Charge, the interest rate on such Debt shall be computed on a pro forma basis as if the average interest rate which would have been in effect during the entire such four-quarter period had been the applicable rate for the entire such period.
Maintenance of Total Unencumbered Assets . The Company will maintain at all times Total Unencumbered Assets of not less than 150% of the aggregate outstanding principal amount of the Unsecured Debt of the Company and its Subsidiaries, computed on a consolidated basis in accordance with GAAP.
Certain Definitions . As used herein, the following terms have the meanings set forth below:
Annual Debt Service Charge as of any date means the amount which is expensed in any 12-month period for interest on Debt of the Company and its Subsidiaries.
Business Day means any day, other than a Saturday or a Sunday, that is not a day on which banking institutions in The City of New York are authorized or required by law, regulation or executive order to close.
Comparable Treasury Issue means, with respect to any Redemption Date for the Notes, the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes to be redeemed.
Comparable Treasury Price means, with respect to any Redemption Date for the Notes:
(a) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(b) if the Trustee obtains fewer than four but more than one such Reference Treasury Dealer Quotations for such Redemption Date, the average of all such quotations, or
(c) if the Trustee obtains only one such Reference Treasury Dealer Quotation for such Redemption Date, that Reference Treasury Dealer Quotation.
Consolidated Income Available for Debt Service for any period means Consolidated Net Income plus, without duplication, amounts which have been deducted in determining Consolidated Net Income during such period for (i) Consolidated Interest Expense, (ii) provisions for taxes of the Company and its Subsidiaries based on income, (iii) amortization (other than amortization of debt discount) and depreciation, (iv) provisions for losses from sales or joint ventures, (v) provisions for impairment losses, (vi) increases in deferred taxes and other non-cash charges, (vii) charges resulting from a change in accounting principles, and (viii) charges for early extinguishment of debt, and less, without duplication, amounts which have been added in determining Consolidated Net Income during such period for (a) provisions for gains from sales or joint ventures, and (b) decreases in deferred taxes and other non-cash items.
Consolidated Interest Expense for any period, and without duplication, means all interest (including the interest component of rentals on capitalized leases, letter of credit fees, commitment fees and other like financial charges) and all amortization of debt discount on all Debt (including, without limitation, payment-in-kind, zero coupon and other like securities) but excluding legal fees, title insurance charges, other out-of-pocket fees and expenses incurred in connection with the issuance of Debt and the amortization of any such debt issuance costs that are capitalized, all determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.
Consolidated Net Income for any period means the amount of consolidated net income (or loss) of the Company and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.
Debt means any indebtedness of the Company or any Subsidiary, whether or not contingent, in respect of (i) money borrowed or evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness secured by any mortgage, pledge, lien, charge, encumbrance, trust deed, deed of trust, deed to secure debt, security agreement or any security interest existing on property owned by the Company or any Subsidiary, (iii) letters of credit or amounts representing the balance deferred and unpaid of the purchase price of any property except any such balance that constitutes an accrued expense or trade payable or (iv) any lease of property by the Company or any Subsidiary as lessee that is reflected on the Companys consolidated balance sheet as a capitalized lease in accordance with GAAP, in the case of items of indebtedness under (i) through (iii) above to the extent that any such items (other than letters of credit) would appear as liabilities on the Companys consolidated balance sheet in accordance with GAAP, and also includes, to the extent not otherwise included, any obligation of the Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise (other than for purposes of collection in the ordinary course of business), indebtedness of another Person (other than the Company or any Subsidiary) of the type referred to in (i), (ii), (iii) or (iv) above (it being understood that Debt shall be deemed to be incurred by the Company or any Subsidiary whenever the Company or such Subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof).
Executive Group means, collectively, those individuals holding the offices of Chairman, Vice Chairman, Chief Executive Officer, President, Chief Operating Officer, or any Vice President of the Company.
Final Maturity Date means August 15, 2019.
Independent Investment Banker means, with respect to any Redemption Date for the Notes, Banc of America Securities LLC and its successors or Citigroup Global Markets Inc. and its successors (whichever shall be appointed by the Trustee after consultation with the Company) or, if all such firms or the respective successors, if any, to such firms, as the case may be, are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee after consultation with the Company.
Intercompany Debt means indebtedness owed by the Company or any Subsidiary solely to the Company or any Subsidiary.
Reference Treasury Dealer means with respect to any Redemption Date for the Notes, Banc of America Securities LLC and Citigroup Global Markets Inc. and their respective successors (provided, however, that if any such firm or any such successor, as the case may be, ceases to be a primary U.S. Government securities dealer in The City of New York (a Primary Treasury Dealer), the Trustee, after consultation with the Company, shall substitute therefor another Primary Treasury Dealer) and two other Primary Treasury Dealers selected by the Trustee after consultation with the Company.
Reference Treasury Dealer Quotations means, with respect to each Reference Treasury Dealer and any Redemption Date for the Notes, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.
Secured Debt means Debt secured by any mortgage, lien, charge, encumbrance, trust deed, deed of trust, deed to secure debt, security agreement, pledge, conditional sale or other title retention agreement, capitalized lease, or other security interest or agreement granting or conveying security title to or a security interest in real property or other tangible assets.
Subsidiary means (i) any corporation, partnership, joint venture, limited liability company or other entity the majority of the shares, if any, of the non-voting capital stock or other equivalent ownership interests of which (except directors qualifying shares) are at the time directly or indirectly owned by the Company, and the majority of the shares of the voting capital stock or other equivalent ownership interests of which (except for directors qualifying shares) are at the time directly or indirectly owned by the Company, any other Subsidiary or Subsidiaries, and/or one or more individuals of the Executive Group (or, in the event of death or disability of any of such individuals, his/her respective legal representative(s), or such individuals successors in office as an officer of the Company), and (ii) any other entity the accounts of which are consolidated with the accounts of the Company. This definition shall apply only for purposes of the covenants set forth above under the captions Limitation on Incurrence of Total Debt, Limitation on Incurrence of Secured Debt, Debt Service Coverage, and Maintenance of Total Unencumbered Assets, the other definitions set forth herein under this caption Certain Definitions, and, insofar as Section 801 of the Indenture is applicable to the Notes, the term Subsidiary, as used in Section 801(2) of the Indenture, shall have the meaning set forth in this definition (instead of the meaning set forth in Section 101 of the Indenture).
Treasury Rate means, with respect to any Redemption Date for the Notes:
(a) the yield, under the heading that represents the average for the immediately preceding week, appearing in the most recently published statistical release designated H.15(519) or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption Treasury Constant Maturities, for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Final Maturity Date of the Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month), or
(b) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
The Treasury Rate shall be calculated on the third Business Day preceding the applicable Redemption Date.
Total Assets as of any date means the sum of (i) Undepreciated Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP (but excluding accounts receivable and intangibles).
Total Unencumbered Assets as of any date means Total Assets minus the value of any properties of the Company and its Subsidiaries that are encumbered by any mortgage, charge, pledge, lien, security interest, trust deed, deed of trust, deed to secure debt, security agreement, or other encumbrance of any kind (other than those relating to Intercompany Debt), including the value of any stock of any Subsidiary that is so encumbered determined on a consolidated basis in accordance with GAAP. For purposes of this definition, the value of each property shall be equal to the purchase price or cost of each such property and the value of any stock subject to any encumbrance shall be determined by reference to the value of the properties owned by the issuer of such stock as aforesaid.
Undepreciated Real Estate Assets as of any date means the amount of real estate assets of the Company and its Subsidiaries on such date, before depreciation and amortization, determined on a consolidated basis in accordance with GAAP.
Unsecured Debt means Debt of the Company or any Subsidiary that is not Secured Debt.
If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes, the Holders of not less than 25% in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity and the Trustee shall not have received from the Holders of a majority in principal
amount of the Notes at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal of, or premium, if any, or interest on, this Note on or after the respective due dates therefor.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Notes. The Indenture also contains provisions permitting the Holders of not less than a majority in principal amount of the Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the Holders of not less than a majority of the aggregate principal amount of the Outstanding Notes to waive, in certain circumstances, on behalf of all Holders of the Notes, certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and premium, if any, and interest on, this Note at the times, places and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any Place of Payment for the Notes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar for the Notes duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of different authorized denominations, as requested by the Holder surrendering the same.
The Notes of this series are issuable only in registered form without interest coupons in denominations of $1,000 and any integral multiple thereof. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of, or premium, if any, or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any past, present or future stockholder, employee, officer or director, as such, of the Company or of any successor, either directly or
through the Company or any successor, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the correctness or accuracy of such CUSIP numbers as printed on the Notes, and reliance may be placed only on the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by the Trustee by manual signature of one of its authorized signatories, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
The headings included in this Note are for convenience only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
[Seal]
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Thomas A. Lewis |
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Vice Chairman of the Board and |
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Michael R. Pfeiffer |
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Executive Vice President, General Counsel |
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TRUSTEES CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee |
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By: |
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Authorized Signatory |
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Dated: September 5, 2007 |
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers to
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(Please Print or Typewrite Name and Address
including Zip Code of Assignee)
the within Note of REALTY INCOME CORPORATION, and |
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hereby does irrevocably constitute and appoint |
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Attorney to transfer said Note on the books of the within-named Company with full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as it appears on the first page of the within Note in every particular, without alteration or enlargement or any change whatever.
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guarantee medallion program) |
Exhibit 4.3
Officers Certificate
Pursuant to Sections 201, 301 and 303 of the Indenture
Dated: September 5, 2007
The undersigned, Paul M. Meurer, Executive Vice President, Chief Financial Officer and Treasurer, and Michael R. Pfeiffer, Executive Vice President, General Counsel and Secretary, of Realty Income Corporation, a Maryland corporation (the Company), hereby certify as follows:
The undersigned, having read the appropriate provisions of the Indenture dated as of October 28, 1998 (the Indenture) between the Company and The Bank of New York Trust Company, N.A., as successor trustee (the Trustee), including Sections 201, 301 and 303 thereof and the definitions in such Indenture relating thereto, and certain other corporate documents and records, and having made such examination and investigation as, in the opinion of the undersigned, each considers necessary to enable the undersigned to express an informed opinion as to whether or not conditions set forth in the Indenture relating to the establishment of the title and terms of the Companys 6.750% Notes due 2019 (the Securities) and the form of certificate evidencing the Securities have been complied with, and whether the conditions in the Indenture relating to the authentication and delivery by the Trustee of the Securities have been complied with, certify that (i) the title and terms of the Securities were established by the undersigned pursuant to authority delegated to them by resolutions duly adopted by the Board of Directors of the Company on August 22, 2007 (the Resolutions) and such terms are set forth in Annex I hereto (it being understood that, in the event that Securities are ever issued in definitive certificated form, the legends appearing as the first two paragraphs on the first page of such form of Securities may be removed), (ii) the form of certificate evidencing the Securities was established by the undersigned pursuant to authority delegated to them by the Resolutions and shall be in substantially the form attached as Annex II hereto, (iii) a true, complete and correct copy of the Resolutions, which were duly adopted by the Board of Directors of the Company and are in full force and effect in the form adopted on the date hereof, are attached as Annex III hereto and are also attached as an exhibit to the Certificate of the Secretary of the Company of even date herewith, (iv) the form, title and terms of the Securities have been established pursuant to and in accordance with Sections 201 and 301 of the Indenture and comply with the Indenture and, in the opinion of the undersigned, all conditions provided for in the Indenture (including, without limitation, those set forth in Sections 201, 301 and 303 of the Indenture) relating to the establishment of the title and terms of the Securities, the form of certificate evidencing the Securities and the execution, authentication and delivery of the Securities have been complied with and (v) to the best knowledge of the undersigned, no Event of Default (as defined in the Indenture) has occurred and is continuing with respect to the Securities.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, we have hereunto set our hands as of the date first written above.
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/s/ Paul M. Meurer |
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Paul M. Meurer |
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Executive Vice President, Chief Financial Officer |
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and Treasurer |
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/s/ Michael R. Pfeiffer |
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Michael R. Pfeiffer |
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Executive Vice President, General Counsel and |
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Secretary |
ANNEX I
Exhibit 5.1
[Venable LLP Letterhead]
September 5, 2007
Realty Income Corporation
220 West Crest Street
Escondido, California 92025-1707
Re: Registration Statement on Form S-3 (333-133241)
Ladies and Gentlemen:
We have served as Maryland counsel to Realty Income Corporation, a Maryland corporation (the Company), in connection with certain matters of Maryland law arising out of the registration of up to $550,000,000 aggregate principal amount of 6.750% Notes due 2019 (the Securities), pursuant to a Purchase Agreement, dated as of August 30, 2007 (the Purchase Agreement), by and among the Company and Banc of America Securities LLC, and Citigroup Global Markets Inc., as representatives of the underwriters named therein. The Securities are covered by the above-referenced Registration Statement and all amendments thereto (collectively, the Registration Statement) filed by the Company with the Securities and Exchange Commission (the Commission) pursuant to the Securities Act of 1933, as amended (the 1933 Act). This firm did not participate in the drafting or negotiation of the Purchase Agreement.
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the Documents):
3. The charter of the Company (the Charter), certified as of a recent date by the State Department of Assessments and Taxation of Maryland (the SDAT);
4. The Bylaws of the Company, certified as of the date hereof by an officer of the Company;
5. Resolutions adopted by the Board of Directors of the Company relating to, among other matters, the sale, issuance and registration of the Securities, certified as of the date hereof by an officer of the Company;
7. The Purchase Agreement;
8. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
9. A certificate executed by an officer of the Company, dated as of the date hereof; and
10. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such partys obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been
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no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
1. The Company is a corporation, duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.
2. The issuance of the Securities by the Company has been duly authorized.
The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with any federal or state securities laws, including the securities laws of the State of Maryland. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof. To the extent that any matter as to which our opinion is expressed herein would be governed by any jurisdiction other than the State of Maryland, we do not express any opinion on such matter.
This opinion is being furnished to you solely for submission to the Commission as an exhibit to a Form 8-K (the Form 8-K) to be filed by the Company in connection with the offering of the Securities.
We hereby consent to the filing of this opinion as an exhibit to the Form 8-K. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
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Very truly yours, |
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/s/ Venable LLP |
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Exhibit 5.2
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650 Town Center Drive, 20th Floor |
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Costa Mesa, California 92626-1925 |
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Tel: +714.540.1235 Fax: +714.755.8290 |
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www.lw.com |
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FIRM / AFFILIATE OFFICES |
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Barcelona |
New Jersey |
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Brussels |
New York |
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Chicago |
Northern Virginia |
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Frankfurt |
Orange County |
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Hamburg |
Paris |
September 5, 2007 |
Hong Kong |
San Diego |
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London |
San Francisco |
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Los Angeles |
Shanghai |
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Madrid |
Silicon Valley |
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Milan |
Singapore |
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Moscow |
Tokyo |
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Munich |
Washington, D.C. |
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Realty Income Corporation |
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220 West Crest Street |
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Escondido, California 92025 |
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Re:
Registration
Statement No. 333-133241; $550,000,000
Aggregate Principal Amount of 6.750% Notes Due 2019
Ladies and Gentlemen:
We have acted as special counsel to Realty Income Corporation, a Maryland corporation (the Company ), in connection with the issuance of $550,000,000 aggregate principal amount of 6.750% Notes due 2019 (the Securities ) under the Indenture dated as of October 28, 1998 (the Indenture ), between the Company and The Bank of New York Trust Company, N.A., as successor trustee (the Trustee ), pursuant to (i) a registration statement on Form S-3 under the Securities Act of 1933, as amended (the 1933 Act ), filed with the Securities and Exchange Commission (the Commission ) on April 12, 2006 (File No. 333-133241) (the Registration Statement ), (ii) a prospectus supplement dated August 30, 2007 and a related base prospectus dated April 12, 2006 (collectively the Prospectus ) and (iii) a purchase agreement dated August 30, 2007 (the Purchase Agreement ) by and among Banc of America Securities LLC and Citigroup Global Markets Inc. as representatives of the several underwriters named in Schedule A thereto and the Company. This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the 1933 Act, and no opinion is expressed herein as to any matters pertaining to the contents of the Registration Statement or the Prospectus, other than as to the enforceability of the Securities.
As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon the foregoing and upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters.
We are opining herein as to the internal laws of the State of New York, and we express no opinion with respect to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction, or as to any matters of municipal law or the laws of any local agencies within any state. We understand that certain matters concerning the laws of the State of Maryland are
addressed in an opinion of Venable LLP, separately provided to you, and we express no opinion with respect to those matters.
Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof, when the Securities have been duly executed, issued, authenticated and delivered by or on behalf of the Company against delivery and payment therefor in accordance with the Indenture and in the circumstances contemplated by the form of the underwriting agreement filed as an exhibit to the Registration Statement, the Securities will be legally valid and binding obligations of the Company enforceable against it in accordance with their terms
The opinion rendered in the foregoing paragraph relating to the enforceability of the Securities is subject to the following exceptions, limitations and qualifications: (i) the effect of bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws relating to or affecting the rights and remedies of creditors; (ii) the effect of general principles of equity, whether enforcement is considered in a proceeding in equity or law (including the possible unavailability of specific performance or injunctive relief), concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of the court before which any proceeding therefor may be brought; (iii) the unenforceability under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy; (iv) restrictions upon non-written modifications and waivers; and (v) we express no opinion concerning the enforceability of (a) the waiver of rights or defenses contained in the Indenture; (b) any provision requiring payment of attorneys fees, where such payment is contrary to law or public policy; or (c) any provision permitting, upon acceleration of the Securities, collection of that portion of the stated principal amount thereof which might be determined to constitute unearned interest thereon.
With your consent, we have assumed for purposes of this opinion that (i) the Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Maryland, and has the corporate power and authority to enter into and consummate the transactions contemplated by the Purchase Agreement, the Indenture and the Securities (collectively, the Documents ); (ii) the Securities have been duly authorized for issuance by all necessary corporate action by the Company and the execution, delivery and performance of the Documents have been duly authorized by all necessary corporate action by the Company; (iii) the Documents have been duly authorized, executed and delivered by the parties thereto, including the Company; (iv) the Documents constitute legally valid and binding obligations of the parties thereto other than the Company, enforceable against each of them in accordance with their respective terms; and (v) the status of the Documents as legally valid and binding obligations of the parties is not affected by any (a) breaches of, or defaults under, agreements or instruments, (b) violations of statutes, rules, regulations or court or governmental orders, or (c) failures to obtain required consents, approvals or authorizations from, or make required registrations, declarations or filings with, governmental authorities.
This opinion is for your benefit in connection with the Registration Statement and the Prospectus and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of federal securities laws. We consent to your filing this opinion as an
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exhibit to a current report on Form 8-K and to the reference to our firm in the Prospectus Supplement under the heading Legal Matters. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the 1933 Act or the rule and regulations of the Commission thereunder.
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Very truly yours, |
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/s/ Latham & Watkins LLP |
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3
Exhibit 12.1
REALTY INCOME CORPORATION
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND COMPUTATION OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(dollars in thousands )
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Six months |
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ended |
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Juine 30, |
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Years ended December 31, |
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2007 |
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2006 |
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2005 |
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2004 |
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2003 |
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2002 |
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Net Income |
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$ |
73,260 |
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$ |
110,781 |
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$ |
99,119 |
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$ |
103,397 |
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$ |
86,435 |
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$ |
78,667 |
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Fixed Charges: |
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Interest |
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24,178 |
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48,893 |
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38,699 |
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31,993 |
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24,460 |
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21,072 |
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Interest, discontinued operations |
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3,877 |
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3,708 |
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1,139 |
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674 |
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561 |
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394 |
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Amortization of fees |
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1,271 |
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2,470 |
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2,250 |
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2,139 |
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1,953 |
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2,070 |
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Interest Capitalized |
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470 |
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2,184 |
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1,886 |
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531 |
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697 |
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511 |
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Fixed Charges |
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29,796 |
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57,255 |
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43,974 |
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35,337 |
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27,671 |
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24,047 |
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Net Income before Fixed Charges |
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102,586 |
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165,852 |
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141,207 |
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138,203 |
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113,409 |
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102,203 |
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Divided by Fixed Charges |
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29,796 |
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57,255 |
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43,974 |
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35,337 |
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27,671 |
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24,047 |
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Ratio of Earnings to Fixed Charges |
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3.4 |
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2.9 |
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3.2 |
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3.9 |
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4.1 |
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4.3 |
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Ratio of earnings to combined fixed charges and preferred stock dividends |
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2.4 |
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2.4 |
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2.6 |
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3.1 |
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3.0 |
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3.0 |
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Preferred stock dividends |
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$ |
12,127 |
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$ |
11,362 |
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$ |
9,403 |
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$ |
9,455 |
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$ |
9,713 |
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$ |
9,713 |
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