BOARDWALK REAL ESTATE INVESTMENT ... - Boardwalk REIT

- 49 -REIT substantially as an entirety is a corporation or unincorporated organization organized or existingunder the laws of Canada or any province or territory thereof and (except where such assumption isdeemed to have occurred solely by the operation of law) such entity assumes under a supplementalindenture all the obligations of Boardwalk REIT under the Debenture Indenture, any supplementalindenture and the Debt Securities and such transaction to the satisfaction of the Indenture Trustee andin the opinion of counsel will be on such terms to preserve and not impair any of the rights andpowers of the Indenture Trustee and the holders of Debt Securities;(b) immediately before and immediately after giving effect to such transaction, no Event of Default hasoccurred and is continuing; and(c) immediately after giving effect to such transaction, the surviving entity could incur at least $1.00 ofadditional Indebtedness.Consolidated EBITDA to Consolidated Interest Expense RatioFrom and as of July 30, 2008, Boardwalk REIT will maintain a ratio of Consolidated EBITDA toConsolidated Interest Expense of not less than 1.75 to 1;Restrictions on Additional IndebtednessBoardwalk REIT will not incur or assume, or permit any Subsidiary to incur or assume, any Indebtedness(other than the renewal or refinancing of Indebtedness outstanding from time to time) unless the quotient(expressed as a percentage) obtained by dividing the Adjusted Consolidated Indebtedness by Adjusted GrossBook Value, calculated on a pro forma basis as described below (the "Indebtedness Percentage"), would be:(a) prior to the date when the Trust elects or is required to report the fair value of its and its Subsidiaries‘assets on its publicly issued consolidated balance sheet in accordance with IFRS, less than or equal to70%; or(b) on or following the date on which the Trust elects or is required to report the fair value of its and itsSubsidiaries‘ assets on its publicly issued consolidated balance sheet in accordance with IFRS, lessthan or equal to 60%.The Debenture Indenture provides that the Indebtedness Percentage be calculated on a pro forma basis asat the date of Boardwalk REIT's most recently published balance sheet (the "Balance Sheet Date") giving effectto the incurrence of the Indebtedness to be incurred or assumed and the application of the proceeds therefrom andto any other event that has increased or decreased Adjusted Consolidated Indebtedness or Adjusted Gross BookValue since the Balance Sheet Date to the date of calculation; andEquity MaintenanceBoardwalk REIT will maintain at all times, an Adjusted Unitholders' Equity of at least $300 million.Events of DefaultThe Debenture Indenture provides that each of the following events will constitute an event of default(each, an "Event of Default") in respect of the Debentures:(a) default in payment of principal when due;(b) default in payment of amounts owing pursuant to a Change of Control when due;(c) default in payment of any interest when due where such default continues for a period of threebusiness days after the relevant interest payment date;