Exhibit 10.1

Execution Version

CREDIT AGREEMENT

DATED AS OF MARCH 15, 2018

by and among

CITY OFFICE REIT OPERATING PARTNERSHIP, L.P.

AS BORROWER,

CITY OFFICE REIT, INC. AND CERTAIN OF ITS SUBSIDIARIES,

AS GUARANTORS

KEYBANK NATIONAL ASSOCIATION,

THE OTHER LENDERS WHICH ARE PARTIES TO THIS AGREEMENT

AND

OTHER LENDERS THAT MAY BECOME

PARTIES TO THIS AGREEMENT,

KEYBANK NATIONAL ASSOCIATION,

AS AGENT AND SWING LOAN LENDER,

KEYBANC CAPITAL MARKETS,

AS SOLE LEAD ARRANGER AND SOLE BOOK MANAGER

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TABLE OF CONTENTS

 

§1.    DEFINITIONS AND RULES OF INTERPRETATION    1    §1.1    Definitions    1
   §1.2    Rules of Interpretation    28 §2.    THE CREDIT FACILITY    29   
§2.1    Revolving Credit Loans    29    §2.2    RESERVED    30    §2.3    Notes
   30    §2.4    Fees    30    §2.5    Reduction and Termination of the
Revolving Credit Commitments    31    §2.6    Swing Loan Commitment    31   
§2.7    Interest on Loans    33    §2.8    Requests for Revolving Credit Loans
   34    §2.9    Funds for Loans    34    §2.10    Use of Proceeds    35   
§2.11    Letters of Credit    35    §2.12    Increase in Total Commitment    39
   §2.13    Extension of Revolving Credit Maturity Date    41    §2.14    Pro
Rata Treatment    42 §3.    REPAYMENT OF THE LOANS    42    §3.1    Stated
Maturity    42    §3.2    Mandatory Prepayments    43    §3.3    Optional
Prepayments    43    §3.4    Partial Prepayments    43    §3.5    Effect of
Prepayments    43 §4.    CERTAIN GENERAL PROVISIONS    43    §4.1    Conversion
and Continuation Options    43    §4.2    Fees    44    §4.3    [Intentionally
Omitted.]    44    §4.4    Funds for Payments    44    §4.5    Computations   
49    §4.6    Suspension of LIBOR Rate Loans    49    §4.7    Illegality    49
   §4.8    Additional Interest    50    §4.9    Additional Costs, Etc.    50   
§4.10    Capital Adequacy    51    §4.11    Breakage Costs    51    §4.12   
Default Interest; Late Charge    51    §4.13    Certificate    51    §4.14   
Limitation on Interest    52    §4.15    Certain Provisions Relating to
Increased Costs and Non-Funding Lenders    52 §5.    POOL PROPERTIES AND
GUARANTIES    53

 

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   §5.1    Addition of Pool Properties    53    §5.2    Release of Pool Property
   54    §5.3    Additional Subsidiary Guarantors    55    §5.4    Release of
Certain Subsidiary Guarantors    55 §6.    REPRESENTATIONS AND WARRANTIES    55
   §6.1    Corporate Authority, Etc.    55    §6.2    Governmental Approvals   
56    §6.3    Title to Pool Properties    57    §6.4    Financial Statements   
57    §6.5    No Material Changes    57    §6.6    Franchises, Patents,
Copyrights, Etc.    57    §6.7    Litigation    57    §6.8    No Material
Adverse Contracts, Etc.    57    §6.9    Compliance with Other Instruments,
Laws, Etc.    58    §6.10    Tax Status    58    §6.11    No Event of Default   
58    §6.12    Investment Company Act; EEA Financial Institution    58    §6.13
   Absence of UCC Financing Statements, Etc.    58    §6.14    [Intentionally
Omitted]    58    §6.15    Certain Transactions    58    §6.16    Employee
Benefit Plans    59    §6.17    Disclosure    59    §6.18    Trade Name; Place
of Business    59    §6.19    Regulations T, U and X    59    §6.20   
Environmental Compliance    60    §6.21    Subsidiaries; Organizational
Structure    61    §6.22    Leases    61    §6.23    Property    61    §6.24   
Ground Lease    62    §6.25    Brokers    63    §6.26    Other Debt    63   
§6.27    Solvency    63    §6.28    No Bankruptcy Filing    63    §6.29    No
Fraudulent Intent    63    §6.30    Transaction in Best Interests of Borrower;
Consideration    64    §6.31    OFAC    64    §6.32    REIT Status    64 §7.   
AFFIRMATIVE COVENANTS    64    §7.1    Punctual Payment    64    §7.2   
Maintenance of Office    65    §7.3    Records and Accounts    65    §7.4   
Financial Statements, Certificates and Information    65    §7.5    Notices   
67    §7.6    Existence; Maintenance of Properties    69    §7.7    Insurance;
Condemnation    69

 

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   §7.8    Taxes; Liens    69    §7.9    Inspection of Pool Properties and Books
   70    §7.10    Compliance with Laws, Contracts, Licenses, and Permits    70
   §7.11    Further Assurances    70    §7.12    RESERVED    70    §7.13   
RESERVED    70    §7.14    Business Operations    70    §7.15    Registered
Servicemark    71    §7.16    Ownership of Real Estate    71    §7.17   
Distributions of Income to Borrower    71    §7.18    Plan Assets    71    §7.19
   REIT Guarantor Covenants    71    §7.20    Pool Properties    71    §7.21   
REIT Guarantor Status    72 §8.    NEGATIVE COVENANTS    72    §8.1   
Restrictions on Indebtedness    72    §8.2    Restrictions on Liens, Etc.    73
   §8.3    Restrictions on Investments    74    §8.4    Merger, Consolidation   
76    §8.5    Sanctions; Anti Corruption Laws    76    §8.6    Compliance with
Environmental Laws    77    §8.7    Distributions    78    §8.8    Asset Sales
   78    §8.9    Pool Properties    78    §8.10    Restriction on Prepayment of
Indebtedness    79    §8.11    Derivatives Contracts    79    §8.12   
Transactions with Affiliates    80    §8.13    Management Fees    80    §8.14   
Changes to Organizational Documents    80 §9.    FINANCIAL COVENANTS    80   
§9.1    Maximum Leverage Ratio    80    §9.2    Minimum Liquidity    80    §9.3
   Minimum Fixed Charge Coverage Ratio    80    §9.4    Minimum Tangible Net
Worth    80    §9.5    Maximum Secured Debt Ratio    81    §9.6    Maximum
Secured Recourse Debt Ratio    81    §9.7    Interest Rate Protection    81   
§9.8    Payout Ratio    81    §9.9    Pool Covenants    81 §10.    CLOSING
CONDITIONS    82    §10.1    Loan Documents    82    §10.2    Certified Copies
of Organizational Documents    82    §10.3    Resolutions    82    §10.4   
Incumbency Certificate; Authorized Signers    82

 

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   §10.5    Opinion of Counsel    82    §10.6    Payment of Fees    83    §10.7
   Insurance    83    §10.8    Performance; No Default    83    §10.9   
Representations and Warranties    83    §10.10    Proceedings and Documents   
83    §10.11    Eligible Real Estate Qualification Documents    83    §10.12   
Compliance Certificate    83    §10.13    Consents    83    §10.14    Repayment
of Existing Indebtedness    83    §10.15    Patriot Act; Anti-Money Laundering
Laws    83    §10.16    Other    83 §11.    CONDITIONS TO ALL BORROWINGS    84
   §11.1    Prior Conditions Satisfied    84    §11.2    Representations True;
No Default    84    §11.3    Borrowing Documents    84 §12.    EVENTS OF
DEFAULT; ACCELERATION; ETC.    84    §12.1    Events of Default and Acceleration
   84    §12.2    Certain Cure Periods    87    §12.3    Termination of
Commitments    87    §12.4    Remedies    87    §12.5    Distribution of
Proceeds    88    §12.6    Remedies in Respect of Hedge Obligations    88   
§12.7    Cash Collateral Account    89 §13.    SETOFF    90 §14.    THE AGENT   
90    §14.1    Authorization    90    §14.2    Employees and Agents    91   
§14.3    No Liability    91    §14.4    No Representations    91    §14.5   
Payments    92    §14.6    Holders of Notes    92    §14.7    Indemnity    92   
§14.8    Agent as Lender    92    §14.9    Resignation    92    §14.10    Duties
in the Case of Enforcement    93    §14.11    Bankruptcy    94    §14.12   
Request for Agent Action    94    §14.13    Reliance by Agent    94    §14.14   
Approvals    94    §14.15    Borrower Not Beneficiary    95    §14.16   
Defaulting Lenders    95    §14.17    Reliance on Hedge Provider    97

 

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§15.    EXPENSES    98 §16.    INDEMNIFICATION    98 §17.    SURVIVAL OF
COVENANTS, ETC.    99 §18.    ASSIGNMENT AND PARTICIPATION    99    §18.1   
Conditions to Assignment by Lenders    99    §18.2    Register    100    §18.3
   New Notes    100    §18.4    Participations    100    §18.5    Pledge by
Lender    101    §18.6    No Assignment by Credit Parties    101    §18.7   
Disclosure    101    §18.8    Titled Agents    102    §18.9    Amendments to
Loan Documents    102 §19.    NOTICES    102 §20.    RELATIONSHIP    103 §21.   
GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE    103 §22.    HEADINGS   
103 §23.    COUNTERPARTS    103 §24.    ENTIRE AGREEMENT, ETC.    104 §25.   
WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS    104 §26.    DEALINGS WITH THE
BORROWER    104 §27.    CONSENTS, AMENDMENTS, WAIVERS, ETC.    105    §27.1   
Amendments Generally    105    §27.2    Additional Lender Consents    105   
§27.3    Amendment of Agent’s Duties, Etc.    105    §27.4    Defaulting Lender
Votes    106    §27.5    Technical Amendments    106 §28.    SEVERABILITY    106
§29.    TIME OF THE ESSENCE    106 §30.    NO UNWRITTEN AGREEMENTS    106 §31.
   REPLACEMENT NOTES    106 §32.    NO THIRD PARTIES BENEFITED    107 §33.   
PATRIOT ACT    107 §34.    ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA
FINANCIAL INSTITUTIONS    107 §35.    JOINT AND SEVERAL LIABILITY    107

 

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§36.    ADDITIONAL AGREEMENTS CONCERNING OBLIGATIONS OF THE CREDIT PARTIES   
108    §36.1    Attorney-in-Fact    108    §36.2    Accommodation    108   
§36.3    Waiver of Automatic or Supplemental Stay    108    §36.4    Waiver of
Defenses    108    §36.5    Waiver    110    §36.6    Subordination    111   
§36.7    Waiver of Rights Under Anti-Deficiency Rules    111    §36.8    Further
Waivers    111 §37.    ACKNOWLEDGMENT OF BENEFITS; EFFECT OF AVOIDANCE
PROVISIONS    112

 

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EXHIBITS AND SCHEDULES

 

Exhibit A-1

     FORM OF REVOLVING CREDIT NOTE

Exhibit A-2

     FORM OF TERM LOAN NOTE

Exhibit B

     FORM OF SWING LOAN NOTE

Exhibit C

     FORM OF JOINDER AGREEMENT

Exhibit D

     FORM OF REQUEST FOR REVOLVING CREDIT LOAN

Exhibit E

     FORM OF LETTER OF CREDIT REQUEST

Exhibit F

     FORM OF BORROWING BASE AVAILABILITY CERTIFICATE

Exhibit G

     FORM OF COMPLIANCE CERTIFICATE

Exhibit H

     FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

Exhibit I

     FORM OF LETTER OF CREDIT APPLICATION

Exhibit J-1 to J-4

     FORMS OF TAX CERTIFICATE

Schedule 1.1

     LENDERS AND COMMITMENTS

Schedule 1.4

     COMPETITORS

Schedule 6.3

     LIST OF ALL ENCUMBRANCES ON ASSETS

Schedule 6.5

     NO MATERIAL CHANGES

Schedule 6.7

     PENDING LITIGATION

Schedule 6.15

     CERTAIN TRANSACTIONS

Schedule 6.20(d)

     REQUIRED ENVIRONMENTAL ACTIONS

Schedule 6.21

     SUBSIDIARIES

Schedule 6.22

     EXCEPTIONS TO RENT ROLL

Schedule 6.23

     PROPERTY

Schedule 6.26

     MATERIAL LOAN AGREEMENTS

Schedule 8.8

     ASSET SALES

Schedule 19

     NOTICE ADDRESSES

Schedule PP

     INITIAL POOL PROPERTIES

 

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CREDIT AGREEMENT

THIS CREDIT AGREEMENT is made as of March 15, 2018, by and among CITY OFFICE
REIT OPERATING PARTNERSHIP, L.P., a Maryland limited partnership (“Borrower”),
CITY OFFICE REIT, INC. and certain of its Subsidiaries party hereto from time to
time, as Guarantors, KEYBANK NATIONAL ASSOCIATION (“KeyBank”), the other lending
institutions which are parties to this Agreement as “Lenders”, and the other
lending institutions that may become parties hereto pursuant to §18, KEYBANK
NATIONAL ASSOCIATION, as administrative agent for the Lenders (the “Agent”) and
Swing Loan Lender, and KEYBANC CAPITAL MARKETS, as Sole Lead Arranger and Sole
Book Manager.

R E C I T A L S

WHEREAS, Borrower has requested that the Lenders provide a revolving facility to
Borrower to provide funding for the acquisition of and working capital related
to certain real properties, the refinancing of certain indebtedness and for
general working capital purposes; and

WHEREAS, the Agent and the Lenders are willing to provide such revolving
facility to Borrower on and subject to the terms and conditions set forth
herein;

NOW, THEREFORE, in consideration of the recitals herein and mutual covenants and
agreements contained herein, the parties hereto hereby covenant and agree as
follows:

§1.        DEFINITIONS AND RULES OF INTERPRETATION.

§1.1    Definitions.    The following terms shall have the meanings set forth in
this §1 or elsewhere in the provisions of this Agreement referred to below:

Additional Commitment Request Notice. See §2.12(a)

Additional Subsidiary Guarantor. Each additional Subsidiary of Borrower which
becomes a Subsidiary Guarantor pursuant to §5.3

Adjusted EBITDA.  On any date of determination, (1) the EBITDA for the prior
fiscal quarter most recently ended, multiplied by four (4), less (b) the Capital
Reserve.

Affiliate.    An Affiliate, as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling”, “controlled by”
and “under common control with”), as applied to any Person, means (a) the
possession, directly or indirectly, of the power to vote more than fifty percent
(50%) of the stock, shares, voting trust certificates, beneficial interest,
partnership interests, member interests or other interests having voting power
for the election of directors of such Person or otherwise to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise, or (b) the ownership
of (i) a general partnership interest, (ii) a managing member’s or manager’s
interest in a limited liability company or (iii) a limited partnership interest
or preferred stock (or other ownership interest) representing more than fifty
percent (50%) of the outstanding limited partnership interests, preferred stock
or other ownership interests of such Person.

Agent.    KeyBank National Association, acting as administrative agent for the
Lenders, and its successors and assigns.

 

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Agent’s Head Office.    The Agent’s head office located at 127 Public Square,
Cleveland, Ohio 44114-1306, or at such other location as the Agent may designate
from time to time by notice to the Borrower and the Lenders.

Agent’s Special Counsel.    Riemer & Braunstein LLP or such other counsel as
selected by Agent.

Agreement.    This Credit Agreement, as the same may be amended, modified,
supplemented and/or extended from time to time, including the Schedules and
Exhibits hereto.

Agreement Regarding Fees.    See §4.2.

Anti-Corruption Laws.    All Legal Requirements of any jurisdiction applicable
to the Credit Parties concerning or relating to bribery or corruption, including
without limitation, the Foreign Corrupt Practices Act of 1977.

Anti-Money Laundering Laws.    All Legal Requirements related to the financing
of terrorism or money laundering, including without limitation, any applicable
provision of the Patriot Act and The Currency and Foreign Transactions Reporting
Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330 and 12U.S.C.
§§ 1818(s), 1820(b) and 1951-1959).

Applicable Margin.    The Applicable Margin for LIBOR Rate Loans and Base Rate
Loans shall be a rate per annum equal to:

(a)        at all times prior to the Investment Grade Pricing Date, the
percentage rate as set forth in the immediately following table corresponding to
the Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate pursuant to §7.4(c):

 

Pricing Level   

Consolidated Leverage

Ratio

   Revolving
Credit
LIBOR
Rate Loans    Revolving
Credit Base
Rate Loans    Term
LIBOR Rate
Loans    Term Base Rate
Loans

Pricing Level 1

   Less than or equal to 45%    1.400%    0.400%    1.350%    0.350%

Pricing Level 2

   Greater than 45% but less than or equal to 50%    1.500%    0.500%    1.450%
   0.450%

Pricing Level 3

   Greater than 50% but less than or equal to 55%    1.600%    0.600%    1.550%
   0.550%

Pricing Level 4

   Greater than 55% but less than or equal to 60%    1.900%    0.900%    1.850%
   0.850%

Pricing Level 5

   Greater than 60%    2.250%    1.250%    2.200%    1.200%

The Applicable Margin shall not be adjusted based upon such Consolidated
Leverage Ratio, if at all, until the third (3rd) Business Day following receipt
of any updated Compliance Certificate. In the event that Borrower shall fail to
deliver to the Agent a quarterly Compliance Certificate on or before the date
required by §7.4(c), then without limiting any other rights of the Agent and the
Lenders under this Agreement, the Applicable Margin for Revolving Credit Loans
shall be at Pricing Level 5 commencing

 

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on the first (1st) Business Day following the date on which such Compliance
Certificate was required to have been delivered and shall remain in effect until
such failure is cured, in which event the Applicable Margin shall adjust, if
necessary, on the first (1st) day of the first (1st) month following receipt of
such Compliance Certificate. The Applicable Margin in effect from the date
hereof through the date of the next change in the Applicable Margin pursuant to
the provisions hereof shall be determined based upon Pricing Level 1. The
provisions of clause (a) this definition shall be subject to §2.7(e); and

(b)        from and after the Investment Grade Pricing Date, the percentage rate
set forth in the immediately following table corresponding to the level into
which the Borrower’s or REIT’s Debt Rating then falls, notwithstanding any
failure of Borrower or REIT to maintain an Investment Grade Rating or any
failure of Borrower or REIT to maintain a Debt Rating. Any subsequent change in
or loss of any of the Borrower’s or REIT’s Credit Ratings which would cause a
different level to be applicable shall be effective as of five (5) Business Days
following the date when the Agent receives written notice from the Borrower that
such change in or loss of a Credit Rating has occurred; provided, however, if
the Borrower has not delivered the notice required but the Agent becomes aware
that any of the Borrower’s or REIT’s Credit Ratings have changed or that the
Borrower or REIT ceases to have a Credit Rating, then the Agent shall adjust the
level effective as of five (5) Business Days following the date of effectiveness
of such change in or loss of the Borrower’s or REIT’s Credit Ratings:

 

Senior  

Unsecured  

Rating  

  

Revolving  

Credit LIBOR  

Rate Loans  

  Facility Fee    

Revolving  

Credit Base  

Rate Loans  

 

Term  

LIBOR  

Rate Loans  

 

Term Base  

Rate Loans  

³ A-/A3  

 

   0.825%  

 

  0.125%  

 

  0.000%  

 

  0.900%  

 

  0.000%  

 

BBB+/Baa1  

 

   0.875%  

 

  0.150%  

 

  0.025%  

 

  0.950%  

 

  0.000%  

 

BBB/Baa2  

 

   1.000%  

 

  0.200%  

 

  0.200%  

 

  1.100%  

 

  0.100%  

 

BBB-/Baa3  

 

   1.200%  

 

  0.250%  

 

  0.450%  

 

  1.350%  

 

  0.350%  

 

< BBB-/Baa3  

 

   1.550%  

 

  0.300%  

 

  0.850%  

 

  1.750%  

 

  0.750%  

 

During any period for which the Borrower or REIT has received three Debt Ratings
which are not equivalent, the Applicable Margin will be determined by (a) the
highest Debt Rating if they differ by only one level and (b) the average of the
two highest Debt Ratings if they differ by two or more levels (unless the
average is not a recognized level, in which case the Applicable Margin will be
based on the level corresponding to the second highest Debt Rating). During any
period for which the Borrower or REIT has received only two Debt Ratings and
such Debt Ratings are not equivalent, the Applicable Margin will be determined
by (i) the highest Debt Rating if they differ by only one level and (ii) the
median of the two Debt Ratings if they differ by two or more levels (unless the
median is not a recognized level, in which case the Applicable Margin will be
based on the Debt Rating one level below the level corresponding to the higher
Debt Rating). During any period for which the Borrower or REIT has received a
Debt Rating from only one rating agency, the Applicable Margin shall be
determined based on such Debt Rating so long as such Debt Rating is from either
S&P or Moody’s. During any period for which the Borrower or REIT does not have a
Debt Rating from any rating agency, or during any other period not otherwise
covered by this definition, the Applicable Margin shall be determined based on
the pricing level corresponding to a Debt Rating of “< BBB-/ Baa3” on the table
above.

 

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Applicable Percentage.  With respect to any Lender of any Class, such Lender’s
Revolving Credit Commitment Percentage or Term Loan Percentage, as applicable,
for such Class. If the Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the Commitments of each applicable
most recently in effect, giving effect to any assignments.

Approved Fund.  Any Fund that is administered or managed by (a) a Lender, or
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

Arranger.  KeyBanc Capital Markets or any successors thereto.

Assignment and Acceptance Agreement.  See §18.1.

Authorized Officer.  Any of the following Persons: Jamie Farrar, Tony Maretic,
Greg Tylee and such other Persons as Borrower shall designate in a written
notice to Agent.

Bail-In Action.  The exercise of any Write-Down and Conversion Powers by the
applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

Bail-In Legislation.  With respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

Balance Sheet Date.  December 31, 2017.

Bankruptcy Code.  Title 11, U.S.C.A., as amended from time to time or any
successor statute thereto.

Base Rate.  On any date, the greatest of (a) the fluctuating annual rate of
interest announced from time to time by the Agent at the Agent’s Head Office as
its “prime rate”, (b) LIBOR for an Interest Period of one (1) month plus one
percent (1%) per annum, or (c) one half of one percent (0.5%) above the Federal
Funds Effective Rate. The Base Rate is a reference rate and does not necessarily
represent the lowest or best rate being charged to any customer. Any change in
the rate of interest payable hereunder resulting from a change in the Base Rate
shall become effective as of the opening of business on the day on which such
change in the Base Rate becomes effective, without notice or demand of any kind.

Base Rate Loans.  Loans of any Class bearing interest calculated by reference to
the Base Rate including all Swing Loans.

Borrower.  As defined in the introduction hereto.

Borrowing Base Availability.  As of any time of determination, the lesser of
(A) a maximum Total Loan Exposure such that the Pool Leverage Ratio would not at
such time exceed the percentage required under §9.9(a), or (B) a maximum Total
Loan Exposure which would provide a Pool Debt Yield of no less than ten and
one-half percent (10.5%).

Breakage Costs.  The commercially reasonable cost to any Lender of re-employing
funds bearing interest at LIBOR incurred (or reasonably expected to be incurred
during such Interest Period) in connection with (i) any payment of any portion
of the Loans bearing interest at LIBOR prior to the termination of any
applicable Interest Period, (ii) the conversion of a LIBOR Rate Loan to any
other applicable interest rate on a date other than the last day of the relevant
Interest Period, or (iii) the failure

 

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of Borrower to draw down, on the first day of the applicable Interest Period,
any amount as to which such Borrower has elected a LIBOR Rate Loan.

Building.  With respect to each Pool Property or parcel of Real Estate, all of
the buildings, structures and improvements now or hereafter located thereon.

Business Day.   Any day on which banking institutions located in the same city
and State as the Agent’s Head Office are located are open for the transaction of
banking business and, in the case of LIBOR Rate Loans, which also is a LIBOR
Business Day.

Capital Lease Obligations.  With respect to the Borrower and its Subsidiaries
for any period, the obligations of the Borrower or any Subsidiary to pay rent or
other amounts under any lease of (or other arrangement conveying the right to
use) real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as liabilities on a balance sheet of
the Borrower and its Subsidiaries under GAAP and the amount of which obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

Capital Reserve.  On an annual basis, an amount equal to $0.25 per square foot.
The Capital Reserve shall be calculated based on the total rentable square
footage of the Buildings owned (or ground leased) at the end of each fiscal
quarter, less the square footage of unoccupied space held for development or
redevelopment.

Capital Stock.  All shares of capital stock (whether denominated as common or
preferred stock), equity interests, partnership, limited liability company, or
membership interests, joint venture interests or other ownership interests in or
equivalents of or in a Person (other than an individual), whether voting or
non-voting.

Capitalization Rate.  For any Real Estate, a percentage equal to (a) if such
Real Estate is a CBD Property, 6.75% or (b) otherwise, 7.50%.

Capitalized Lease.  A lease under which the discounted future rental payment
obligations of the lessee or the obligor are required to be capitalized on the
balance sheet of such Person in accordance with GAAP.

Cash Collateral Account.  A special deposit account established by the Agent
pursuant to §12.7 and under its sole dominion and control.

Cash Equivalents.  As of any date, (i) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof having maturities of not more than one year from such
date, (ii) time deposits and certificates of deposits having maturities of not
more than one year from such date and issued by any domestic commercial bank
having, (A) senior long term unsecured debt rated at least A or the equivalent
thereof by S&P or A2 or the equivalent thereof by Moody’s and (B) capital and
surplus in excess of $100,000,000; (iii) repurchase agreements for securities of
the type described in clause (a) above entered into only with commercial banks
having the qualifications described in clause (b) above, and (iv) shares of any
money market mutual fund rated at least AAA or the equivalent thereof by S&P or
at least AAA or the equivalent thereof by Moody’s.

CBD Properties.  Each parcel of Real Estate that is located in a Central
Business District, as determined by the Agent in its reasonable discretion and,
with respect to any Pool Property, as of the date such Real Estate is admitted
into the Pool. As of the Closing Date, the CBD Properties are the Park Tower
Property, the project known as Logan Tower in Denver, Colorado, the project
known as City

 

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Center located in Tampa, Florida, the project knows as Central Fairwinds located
in Orlando, Florida, and the Real Estate located at 2525 McKinnon Street,
Dallas, Texas.

CERCLA.  The Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. 9601 et seq.

Change in Law. The occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority;
provided, that, notwithstanding anything herein to the contrary, (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(ii) all requests, rules, guidelines or directives promulgated by the Bank for
International settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law”, regardless of the date enacted, adopted or issued.

Change of Control. A Change of Control shall exist upon the occurrence of any of
the following:

(a)        During any twelve month period on or after the date of this
Agreement, individuals who at the beginning of such period constituted the Board
of Directors or Trustees of the REIT Guarantor (the “Board”) (together with any
new directors whose election by the Board or whose nomination for election by
the shareholders of the REIT Guarantor was approved by a vote of at least a
majority of the members of the Board then in office who either were members of
the Board at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the members of the Board then in office;

(b)        Any Person (including a Person’s Affiliates and associates) or group
(as that term is understood under Section 13(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) and the rules and regulations
thereunder), shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act) of a percentage (based on voting power, in
the event different classes of stock or voting interests shall have different
voting powers) of the voting stock or voting interests of the REIT Guarantor
equal to at least twenty percent (20%) who did not hold such beneficial
ownership as of the date of this Agreement;

(c)        the REIT Guarantor shall fail to own at least fifty five percent
(55%) of the limited partner Equity Interests of the Borrower and own and
control the general partner of Borrower, shall fail to own such interests in
Borrower free of any lien, encumbrance or other adverse claim, or shall fail to
control (along with City Office Real Estate Management, Inc., through an
advisory agreement) the management and policies of Borrower;

(d)        Any Credit Party consolidates with, is acquired by, or merges into or
with any Person (other than a merger permitted by Section 8.4); or

(e)        Except as expressly permitted in this Agreement, Borrower fails to
own directly or indirectly, free of any lien, encumbrance or other adverse
claim, one hundred percent (100%) of the economic, voting and beneficial
interest of each Subsidiary Guarantor.

Class.    When used with respect to (a) a Commitment, refers to whether such
Commitment is a Revolving Credit Commitment, Swing Loan Commitment, or any
tranche of Term Loan Commitments,

 

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(b) when used with respect to any Loan, refers to whether such Loan is a
Revolving Credit Loan, Swing Loan, or Term Loan, and (c) when used with respect
to a Lender, refers to whether such Lender has a Loan or Commitment with respect
to a particular Class of Loans or Commitments. For the avoidance of doubt, each
tranche of Term Loans may, if agreed by the Borrower, the Agent, and the
applicable Term Lenders, be treated as a separate Class.

Closing Date. The date agreed to by the parties hereto on which all of the
conditions set forth in §10 and §11 have been satisfied.

Code. The Internal Revenue Code of 1986, as amended, and all regulations and
formal guidance issued thereunder.

Commitment. With respect to each Lender, the aggregate amount of such Lender’s
Revolving Credit Commitment and Term Loan Commitment, if any, as such commitment
may be reduced or increased from time to time pursuant to §2.5 or §2.12 or to
assignments by or to such Lender pursuant to §18. The initial amount of such
Lender’s Commitment is set forth on Schedule 1.1, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable.

Commitment Increase. An increase in the Total Commitment to not more than
$500,000,000 after giving effect to any such increase pursuant to §2.12.

Commitment Increase Date. See §2.12(a).

Commodity Exchange Act. The Commodity Exchange Act (7 U.S.C. § 1 et seq.), as
amended from time to time, and any successor statute.

Competitor. The parties listed on Schedule 1.4 annexed hereto.

Compliance Certificate. See §7.4(c).

Connection Income Taxes. Other Connection Taxes that are imposed on or measured
by net income (however denominated) or that are franchise Taxes or branch
profits Taxes.

Consolidated. With reference to any term defined herein, that term as applied to
the accounts of a Person and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP.

Consolidated Leverage Ratio. As of any date of calculation, the ratio expressed
as percentage of the REIT Guarantor’s Consolidated Indebtedness to Total Asset
Value.

Conversion/Continuation Request. A notice given by the Borrower to the Agent of
its election to convert or continue a Loan in accordance with §4.1.

Core Funds from Operations. For a given period, the REIT’s net income (or loss)
after any Preferred Dividends computed in accordance with GAAP (unless otherwise
indicated herein) determined on a consolidated basis for such period, excluding
gains or losses from extraordinary items (including from debt restructuring,
mark-to-market adjustments on interest rate swaps, and sales of property),
impairment and other non-cash charges and related expenses, plus real estate
depreciation and amortization (other than amortization of deferred financing
costs). Core Funds from Operations will be adjusted for (i) unconsolidated
entities to reflect funds from operations on the same basis, (ii) the impact of
straight-lining of rents, and (iii) the amortization of intangibles associated
with the amortization of

 

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above or below market rents, pursuant to ASC 805 (formerly FASB 141) and
calculation of interest expense in accordance with FBS APB 14-1.

Credit Party(ies).  Individually and collectively, the Borrower, the REIT
Guarantor, and each Subsidiary Guarantor.

Debt Rating.  As of any date of determination, the rating as determined by a
Rating Agency of a Person’s noncredit enhanced, senior unsecured long term debt.
The Debt Rating in effect at any date is the Debt Rating that is in effect at
the close of business on such date.

Debtor Relief Laws.    Any applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, insolvency, fraudulent conveyance, reorganization, or
similar laws affecting the rights, remedies, or recourse of creditors generally,
including without limitation the Bankruptcy Code and all amendments thereto, as
are in effect from time to time during the term of this Agreement.

Default.  See §12.1.

Default Rate.  See §4.12.

Defaulting Lender.  Subject to §14.16, any Lender that (a) has failed to
(i) fund all or any portion of its Loans within two Business Days of the date
such Loans were required to be funded hereunder unless such Lender notifies the
Agent and the Borrower in writing that such failure is the result of such
Lender’s determination that one or more conditions precedent to funding (each of
which conditions precedent, together with any applicable default, shall be
specifically identified in such writing) has not been satisfied, or (ii) pay to
the Agent, the Issuing Lender, the Swing Loan Lender or any other Lender any
other amount required to be paid by it hereunder (including in respect of its
participation in Letters of Credit or Swing Loans) within two Business Days of
the date when due, (b) has notified the Borrower, the Agent, the Issuing Lender
or the Swing Loan Lender in writing that it does not intend to comply with its
funding obligations hereunder, or has made a public statement to that effect
(unless such writing or public statement relates to such Lender’s obligation to
fund a Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
Business Days after written request by the Agent or the Borrower, to confirm in
writing to the Agent and the Borrower that it will comply with its prospective
funding obligations hereunder (provided that such Lender shall cease to be a
Defaulting Lender pursuant to this clause (c) upon receipt of such written
confirmation by the Agent and the Borrower), or (d) has, or has a direct or
indirect parent company that has, (i) become the subject of a proceeding under
any Debtor Relief Laws, (ii) had appointed for it a receiver, custodian,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
assets, including the Federal Deposit Insurance Corporation or any other state
or federal regulatory authority acting in such a capacity, or (iii) become the
subject of a Bail-In Action; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any Equity Interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by the Agent that a Lender is a Defaulting Lender
under any one or more of clauses (a) through (d) above, and of the effective
date of such status, shall be conclusive and binding absent manifest error, and
such Lender shall be deemed to be a Defaulting Lender (subject to §14.16) as of
the date established therefor by the Agent in a written notice of such
determination, which shall be delivered by the Agent to the

 

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Borrower, the Issuing Lender, the Swing Loan Lender and each other Lender
promptly following such determination.

Derivatives Contract.  Any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement. Not in limitation of the foregoing, the term “Derivatives
Contract” includes any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement, including any such obligations or
liabilities under any such master agreement.

Designated Jurisdiction.  At any time, a country, territory or region which is,
or whose government is, the subject or target of any Sanctions.

Distribution.  Any (a) dividend or other distribution, direct or indirect, on
account of any Equity Interest of a Credit Party, now or hereafter outstanding,
except a dividend or other distribution payable solely in Equity Interest to the
holders of that class; (b) redemption, conversion, buyback, exchange,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any Equity Interest of a Credit Party now or
hereafter outstanding; and (c) payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire any
Equity Interests of a Credit Party now or hereafter outstanding.

Dollars or $.  Dollars in lawful currency of the United States of America.

Domestic Lending Office.  Initially, the office of each Lender designated as
such on Schedule 1.1 hereto; thereafter, such other office of such Lender, if
any, located within the United States that will be making or maintaining Base
Rate Loans.

Drawdown Date.  The date on which any Loan is made or is to be made, and the
date on which any Loan which is made prior to the Maturity Date or Term Maturity
Date, as applicable, is converted in accordance with §4.1.

EBITDA.  An amount derived from the following during any given period (a) net
income, plus (b) to the extent included in the determination of net income,
depreciation, amortization, interest expense (including any Preferred Dividends)
and income taxes, plus or minus (c) to the extent included in the determination
of net income, any extraordinary losses or gains, such as those resulting from
sales or payment of Indebtedness but excluding straight-line rents and FAS 141
accruals or similar adjustments, minus (d) the Capital Reserve; in each case, as
determined on a Consolidated basis in accordance with GAAP (unless otherwise
indicated herein), and including (without duplication) the Equity Percentage of
EBITDA for the REIT Guarantor’s non wholly owned Affiliates.

EEA Financial Institution.  (a) Any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of

 

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an institution described in clauses (a) or (b) of this definition and is subject
to consolidated supervision with its parent.

EEA Member Country.  Any of the member states of the European Union, Iceland,
Liechtenstein, and Norway.

EEA Resolution Authority.   Any public administrative authority or any person
entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

Eligible Assignee.   (a) A Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund, and (d) any other Person (other than a natural person) approved by (i) the
Agent, and (ii) unless an Event of Default has occurred and is continuing, the
Borrower (each such approval not to be unreasonably withheld or delayed);
provided that notwithstanding the foregoing, “Eligible Assignee” shall not
include the Borrower or any of the Borrower’s or the REIT Guarantor’s Affiliates
or Subsidiaries, or unless an Event of Default is in existence, a Competitor;
and provided further that it shall not be unreasonable to withhold consent if an
assignee’s status would increase the costs to the Borrower or impose other
restrictions on Borrower.

Eligible Ground Lease.   A ground lease with respect to a Pool Property executed
or assumed by a Pool Property Owner as lessee, which must provide customary
protections for a potential leasehold mortgagee (“mortgagee”) such as (i) a
remaining term, including any optional extension terms exercisable unilaterally
by the tenant, of no less than 35 years as of the date the applicable Real
Property is admitted as a Pool Property, (ii) a provision that the ground lease
will not be terminated until the mortgagee has received notice of a default, has
had a reasonable opportunity to cure and has failed to do so, (iii) provision
for a new lease to the mortgagee as tenant on the same terms if the ground lease
is terminated for any reason, (iv) transferability of the tenant’s interest
under the ground lease by the mortgagee without any requirement for consent of
the ground lessor unless based on delivery of customary assignment and
assumption agreements from the transferor and transferee and other reasonably
restrictions, (v) the ability of the tenant to mortgage tenant’s interest under
the ground lease without any requirement for consent of the ground lessor and
(vi) provisions that the tenant under the ground lease (or the mortgagee) has
customary protections with respect to the application of insurance proceeds or
condemnation awards attributable to the tenant’s interest under the ground lease
and related improvements. It is acknowledged and agreed that, as of the Closing
Date, the Agent has approved the ground lease for the Pima Property, in the form
delivered to the Agent prior to the execution of this Agreement, as an Eligible
Ground Lease.

Eligible Real Estate. Real Estate:

(a)        which is 100% owned in fee (or leased under an Eligible Ground Lease
acceptable to the Agent in its sole discretion), with such easements,
rights-of-way, and other similar appurtenances required for the operation of the
fee or leasehold property, by Borrower or a Wholly Owned Subsidiary of Borrower;
provided, that, subject to satisfaction of all other requirements for Eligible
Real Estate under this Agreement, the Park Tower Property shall be deemed to
satisfy the requirements under this clause (a) so long as the Borrower, directly
or indirectly, continues to own more than 95% of such Real Estate and to have
control over all major decisions related to such Real Estate;

(b)        which is an existing income producing office or life sciences
property located within the fifty (50) States of the continental United States
or the District of Columbia;

(c)        which is not subject to any mortgage, negative pledge, or other Lien
other than Permitted Encumbrances and as to which all of the representations set
forth in §6 of this Agreement concerning Pool Property are true and correct in
all material respects;

 

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(d)        which consists of one or more separate tax parcels;

(e)        which satisfies the Occupancy Requirement; provided that the Park
Tower Property shall be deemed to satisfy the requirements of this clause (e) as
of the Closing Date so long as it satisfies the Occupancy Requirement no later
than 12 months after the Closing Date;

(f)        for which the weighted-average minimum lease term is five (5) years
or greater as calculated on the date of inclusion of such Eligible Real Estate
as a Pool Property, unless otherwise approved by the Agent;

(g)        which has been approved (which approval shall not be unreasonably
withheld) as a Pool Property by (i) if the Value of such Pool Property is
$50,000,000 or less and there will be no less than eight (8) Pool Properties
after giving effect to the inclusion of such Pool Property, the Agent, and
(ii) otherwise, the Agent and the Majority Lenders;

(h)        which otherwise meets all customary standards for commercial real
estate lending, as determined by the Agent in its reasonable discretion; and

(i)        as to which the Agent has received and approved all Eligible Real
Estate Qualification Documents, or will receive and approve them prior to
inclusion of such Real Estate as a Pool Property.

Eligible Real Estate Qualification Documents. Means, with respect to any
Potential Pool Property, the following:

(i)        a physical description of the Potential Pool Property;

(ii)        operating statements and Rent Roll for the Potential Pool Property;

(iii)        copies of the material Leases for such Potential Pool Property, as
reasonably requested by the Agent;

(iv)        if such Potential Pool Property is ground leased, a copy of the
applicable ground lease with all amendments thereto;

(v)         a copy of the Management Agreement, if any, relating to such Real
Estate;

(vi)        the Borrower’s and the applicable Pool Property Owner’s
certification that to its knowledge the Potential Pool Property presently
satisfies (or is anticipated to satisfy upon the approval of such Pool Property)
the criteria for Pool Properties; and

(vii)        Such other customary due diligence as the Agent may reasonably
request, which shall be delivered within five (5) Business Days after submission
of a request for inclusion as a Pool Property with respect to such Individual
Property.

Employee Benefit Plan. Any employee benefit plan within the meaning of §3(3) of
ERISA maintained or contributed to by Borrower or any ERISA Affiliate, other
than a Multiemployer Plan.

Environmental Engineer. Such firm or firms of independent professional engineers
or other scientists generally recognized as expert in the detection, analysis
and remediation of Hazardous Substances and related environmental matters and
acceptable to the Agent in its reasonable discretion.

 

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Environmental Laws.  As defined in the Indemnity Agreements.

Equity Interests.  With respect to any Person, all of the shares, interests,
rights, participations or other equivalents (however designated) of Capital
Stock of such Person, all of the warrants, options or other rights for the
purchase or acquisition from such Person of shares of Capital Stock of such
Person, all of the securities convertible into or exchangeable for shares of
Capital Stock of such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination, and whether or not such share,
warrant, option, right or other interest is authorized or otherwise existing on
any date of determination.

Equity Percentage.  The aggregate ownership percentage of the REIT Guarantor or
Borrower or their respective Subsidiaries in each Affiliate.

ERISA.  The Employee Retirement Income Security Act of 1974, as amended and in
effect from time to time.

ERISA Affiliate.  Any Person that is subject to ERISA and is treated as a single
employer with Borrower or its Subsidiaries under §414 of the Code.

ERISA Reportable Event.  A reportable event with respect to a Guaranteed Pension
Plan within the meaning of §4043 of ERISA and the regulations promulgated
thereunder as to which the requirement of notice has not been waived.

EU Bail-In Legislation Schedule.  The EU Bail-In Legislation Schedule published
by the Loan Market Association (or any successor person), as in effect from time
to time.

Event of Default.  See §12.1.

Excluded Swap Obligation.  With respect to any Credit Party, any Swap Obligation
if, and to the extent that, all or a portion of the guarantee of such Credit
Party of, or the grant by such Credit Party of a security interest to secure,
such Swap Obligation (or any guarantee thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Credit Party’s failure for any reason to constitute
an “eligible contract participant” as defined in the Commodity Exchange Act and
the regulations thereunder at the time the guarantee of such Credit Party or the
grant of such security interest becomes effective with respect to such Swap
Obligation. If a Swap Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to swaps for which such guarantee or security
interest is or becomes illegal.

Excluded Taxes.  Any of the following Taxes imposed on or with respect to a
Recipient or required to be withheld or deducted from a payment to a Recipient,
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Recipient being organized under the laws of, or having its principal office or,
in the case of any Lender, its applicable lending office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or its Commitment
pursuant to Legal Requirements in effect on the date on which (i) such Lender
acquires such interest in the Loan or its Commitment (other than pursuant

 

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to an assignment request by the Borrower under §4.15 as a result of costs sought
to be reimbursed pursuant to §4.4 or (ii) such Lender changes its lending
office, except in each case to the extent that, pursuant to §4.4, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with §4.4and (d) any U.S. federal withholding Taxes imposed under
FATCA.

FATCA.  Sections 1471 through 1474 of the Code, as of the date of this Agreement
(or any amended or successor version that is substantively comparable and not
materially more onerous to comply with), any current or future regulations or
official interpretations thereof and any agreements entered into pursuant to
Section 1471(b)(1) of the Code.

Federal Funds Effective Rate.  For any day, the rate per annum (rounded upward
to the nearest one-hundredth of one percent (1/100 of 1%)) announced by the
Federal Reserve Bank of Cleveland on such day as being the weighted average of
the rates on overnight federal funds transactions arranged by federal funds
brokers on the previous trading day, as computed and announced by such Federal
Reserve Bank in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the “Federal Funds
Effective Rate.” Notwithstanding the foregoing, if the Federal Funds Effective
Rate shall be less than zero, such rate shall be deemed zero for the purposes of
this Agreement.

Fitch.  Fitch, Inc. and its successors.

Fixed Charge Ratio.  The ratio of (a) Adjusted EBITDA to (b) all of the
principal due and payable on the Indebtedness (other than amounts paid in
connection with balloon maturities, refinancings, unscheduled principal payments
or principal payments on the Loans), plus all Interest Expense, plus the
aggregate of all cash dividends payable on any preferred stock, all based upon
the immediately preceding calendar quarter (annualized).

Foreign Lender.  If the Borrower is a U.S. Person, a Lender that is not a U.S.
Person, and if the Borrower is not a U.S. Person, a Lender that is resident or
organized under the laws of a jurisdiction other than that in which such
Borrower is resident for tax purposes.

Fronting Exposure.  At any time there is a Defaulting Lender, (a) with respect
to the Issuing Lender, such Defaulting Lender’s Revolving Credit Commitment
Percentage of the outstanding Letter of Credit Liabilities other than Letter of
Credit Liabilities as to which such Defaulting Lender’s participation obligation
has been reallocated to other Lenders or cash collateralized in accordance with
the terms hereof, and (b) with respect to the Swing Loan Lender, such Defaulting
Lender’s Revolving Credit Commitment Percentage of Swing Loans other than Swing
Loans as to which such Defaulting Lender’s participation obligation has been
reallocated to other Lenders or cash collateralized in accordance with the terms
hereof.

Fund.  Any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.

GAAP.  Generally accepted accounting principles consistently applied.

Governmental Authority.  The government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or

 

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administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

Ground Lease Default.  See §6.24(d).

Guaranteed Pension Plan.  Any employee pension benefit plan within the meaning
of §3(2) of ERISA maintained or contributed to by Borrower or any ERISA
Affiliate the benefits of which are guaranteed on termination in full or in part
by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Guarantor.  Each of REIT Guarantor and each Subsidiary Guarantor.

Guaranty.  That certain Guaranty dated as of the date hereof by the Guarantors
in favor of the Agent and the Lenders of certain of the Obligations of the
Borrower hereunder.

Hazardous Substances.  As defined in the Indemnity Agreements.

Hedge Obligations.  As may be applicable at any time, all obligations of the
Borrower to any Lender Hedge Provider to make any termination payments under any
Derivatives Contract with respect to an interest rate swap, collar, or floor or
a forward rate agreement or other agreement regarding the hedging of interest
rate risk exposure (other than any interest rate “cap”), and any confirming
letter executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified. Under no circumstances shall any of the Hedge Obligations
secured or guaranteed by any Loan Document as to a surety or guarantor thereof
include any obligation that constitutes an Excluded Swap Obligation of such
Person.

Increase Notice.  See §2.12(a).

Indebtedness.  As to any Person, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, including mandatorily redeemable preferred stock,
(c) all obligations of such Person upon which interest charges are customarily
paid, (d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding current accounts payable incurred in the ordinary course
of business, fees paid under advisory agreements and other reasonable fees paid
to affiliates), (f) all Indebtedness (excluding non-recourse carve-out
guarantees until such time as any Credit Party is called upon to make payments
under any of these guarantees, at which time such guarantees shall thereafter be
included in the definition of Indebtedness to the extent of the actual liability
thereunder) of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person in an amount equal to the lesser of
such Indebtedness or the value of the encumbered property, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others (excluding non-recourse carve-out guarantees until
such time as any Credit Party is called upon to make payments under any of these
guarantees, at which time such guarantees shall thereafter be included in the
definition of Indebtedness to the extent of the actual liability thereunder),
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, and (k) all
currently payable obligations of such Person with respect to any Hedge
Obligations (calculated on a mark-to-market basis as of the applicable reporting
date). The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such

 

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Person is a general partner) to the extent such Person is liable therefore as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor. Indebtedness shall be calculated on a
consolidated basis in accordance with GAAP (unless otherwise indicated herein),
and including (without duplication) the Equity Percentage of Indebtedness for
the REIT Guarantor’s non wholly owned Affiliates.

Indemnified Taxes.  (a) Taxes, other than Excluded Taxes, imposed on or with
respect to any payment made by or on account of any obligation of the Borrower
or any Guarantor under any Loan Document and (b) to the extent not otherwise
described in the immediately preceding clause (a), Other Taxes.

Indemnity Agreements.  The Environmental Indemnity regarding Hazardous
Substances made by the Borrower and each Subsidiary Guarantor in favor of the
Agent and the Lenders, as the same may be modified or amended.

Interest Expense.  All paid, accrued or capitalized interest expense on such
Person’s Indebtedness (whether direct, indirect or contingent, and including,
without limitation, interest on all convertible debt), and including (without
duplication) the Equity Percentage of Interest Expense for the REIT Guarantor’s
non wholly owned Affiliates.

Interest Payment Date.  As to each Loan, the first day of each calendar quarter.

Interest Period.  With respect to each LIBOR Rate Loan (a) initially, the period
commencing on the Drawdown Date of such LIBOR Rate Loan and ending one, two, or
three months thereafter and (b) thereafter, each period commencing on the day
following the last day of the next preceding Interest Period applicable to such
Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Loan Request or Conversion/Continuation Request;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:

(i)    if any Interest Period with respect to a LIBOR Rate Loan would otherwise
end on a day that is not a LIBOR Business Day, such Interest Period shall end on
the next succeeding LIBOR Business Day, unless such next succeeding LIBOR
Business Day occurs in the next calendar month, in which case such Interest
Period shall end on the next preceding LIBOR Business Day, as determined
conclusively by the Agent in accordance with the then current bank practice in
London, England;

(ii)    if the Borrower shall fail to give notice as provided in §4.1, the
Borrower shall be deemed to have requested a continuation of the affected LIBOR
Rate Loan as a LIBOR Rate Loan for an interest period of one month on the last
day of the then current Interest Period with respect thereto as provided in and
subject to the terms of §4.1(c);

(iii)    any Interest Period pertaining to a LIBOR Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the applicable calendar month; and

(iv)    no Interest Period relating to any LIBOR Rate Loan shall extend beyond
the applicable Maturity Date of such Loan, as applicable.

 

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Interpolated Rate.  At any time, for any Interest Period, the rate per annum
(rounded to the same number of decimal places as the LIBOR) determined by the
Agent (which determination shall be conclusive and binding absent manifest
error) to be equal to the rate that results from interpolating on a linear basis
between: (a) the LIBOR for the longest period for which the LIBOR is available
that is shorter than the Impacted Interest Period; and (b) the LIBOR for the
shortest period for which that LIBOR is available that exceeds the Impacted
Interest Period, in each case, at such time.

Investment Grade Rating.  A Debt Rating of BBB- or better from S&P or Fitch, or
Baa3 or better from Moody’s.

Investment Grade Pricing Date.  At any time after the Borrower or REIT Guarantor
has received an Investment Grade Rating from either S&P or Moody’s, the date
specified by the Borrower in a written notice to the Agent and the Lenders as
the date on which Borrower irrevocably elects to have the Applicable Margin
determined based on the Borrower’s or REIT Guarantor’s Credit Rating; provided
that no Event of Default shall exist on the date of such notice or the specified
Investment Grade Pricing Date.

Investments.  With respect to any Person, all shares of capital stock, evidences
of Indebtedness and other securities issued by any other Person and owned by
such Person, all loans, advances, or extensions of credit to, or contributions
to the capital of, any other Person, all purchases of the securities or business
or integral part of the business of any other Person and commitments and options
to make such purchases, all interests in real property, and all other
investments; provided, however, that the term “Investment” shall not include
(i) equipment, inventory and other tangible personal property acquired in the
ordinary course of business, or (ii) current trade and customer accounts
receivable for services rendered in the ordinary course of business and payable
in accordance with customary trade terms. In determining the aggregate amount of
Investments outstanding at any particular time: (a) there shall be included as
an Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (b) there shall be deducted
in respect of each Investment any amount received as a return of capital;
(c) there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends, interest or
otherwise, except that accrued interest included as provided in the foregoing
clause (a) may be deducted when paid; and (d) there shall not be deducted in
respect of any Investment any decrease in the value thereof.

Issuing Lender.  KeyBank, in its capacity as the Lender issuing the Letters of
Credit and any successor thereto.

Joinder Agreement.  The Joinder Agreement with respect to any applicable Loan
Documents to be executed and delivered pursuant to §5.3 by any Additional
Subsidiary Guarantor, such Joinder Agreement to be substantially in the form of
Exhibit C hereto.

KeyBank.  As defined in the preamble hereto.

Leases.  Leases, licenses and agreements, whether written or oral, relating to
the use or occupation of space in any Building or of any Real Estate.

Legal Requirements shall mean all applicable federal, state, county and local
laws, rules, regulations, codes and ordinances, and the requirements in each
case of any governmental agency or authority having or claiming jurisdiction
with respect thereto, including, but not limited to, those applicable to zoning,
subdivision, building, health, fire, safety, sanitation, the protection of the
handicapped, and environmental matters and shall also include all orders and
directives of any court, governmental agency or authority having or claiming
jurisdiction with respect thereto.

 

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Lenders.  KeyBank, the other lending institutions which are party hereto and any
other Person which becomes an assignee of any rights of a Lender pursuant to §18
(but not including any participant as described in §18); and collectively, the
Revolving Credit Lenders, the Term Lenders and the Swing Loan Lender. The
Issuing Lender shall be a Revolving Credit Lender, as applicable. The term
“Lender” shall exclude any Lender in its capacity as a “Lender Hedge Provider”.

Lender Hedge Provider.  As may be applicable at any time with respect to any
Hedge Obligations, any counterparty thereto that, at the time the applicable
hedge agreement was entered into, was the Agent, a Lender, or an Affiliate of
the Agent or a Lender.

Letter of Credit.  Any standby letter of credit issued at the request of the
Borrower and for the account of the Borrower or any Affiliate in accordance with
§2.11.

Letter of Credit Liabilities.  At any time and in respect of any Letter of
Credit, the sum of (a) the maximum undrawn face amount of such Letter of Credit
plus (b) the aggregate unpaid principal amount of all drawings made under such
Letter of Credit which have not been repaid (including repayment by a Revolving
Credit Loan). For purposes of this Agreement, a Revolving Credit Lender (other
than the Revolving Credit Lender acting as the Issuing Lender) shall be deemed
to hold a Letter of Credit Liability in an amount equal to its participation
interest in the related Letter of Credit under §2.11, and the Revolving Credit
Lender acting as the Issuing Lender shall be deemed to hold a Letter of Credit
Liability in an amount equal to its retained interest in the related Letter of
Credit after giving effect to the acquisition by the Revolving Credit Lenders
other than the Revolving Credit Lender acting as the Issuing Lender of their
participation interests under such Section.

Letter of Credit Request.  See §2.11(a).

Letter of Credit Sublimit.  The amount of $25,000,000. The Letter of Credit
Sublimit is part of and not in addition to the Total Revolving Credit
Commitment.

LIBOR.  For any LIBOR Rate Loan for any Interest Period, the London interbank
offered rate as administered by ICE Benchmark Administration (or any other
Person that takes over the administration of such rate for U.S. Dollars) for a
period equal in length to such Interest Period as displayed on pages LIBOR01 or
LIBOR02 of the Reuters screen that displays such rate (or, in the event such
rate does not appear on a Reuters page or screen, on any successor or substitute
page on such screen that displays such rate, or on the appropriate page of such
other information service that publishes such rate from time to time as selected
by the Agent in its reasonable discretion; in each case the “LIBOR Screen Rate”)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period; provided that (i) if the LIBOR Screen Rate
shall be less than zero, such rate shall be deemed to be zero for the purposes
of this Agreement; provided further that if the LIBOR Screen Rate shall not be
available at such time for such Interest Period (an “Impacted Interest Period”)
then the LIBOR shall be the Interpolated Rate; provided that if any Interpolated
Rate shall be less than zero, such rate shall be deemed to be zero for purposes
of this Agreement, and (ii) if no such rate administered by ICE Benchmark
Administration (or by such other Person that has taken over the administration
of such rate for U.S. Dollars) is available to the Agent, the applicable LIBOR
for the relevant Interest Period shall instead be the rate determined by the
Agent to be the rate at which KeyBank or one of its Affiliate banks offers to
place deposits in U.S. dollars with first class banks in the London interbank
market at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period, in the approximate amount of the relevant
LIBOR Rate Loan and having a maturity equal to such Interest Period. For any
period during which a Reserve Percentage shall apply, LIBOR with respect to
LIBOR Rate Loans shall be equal to the amount determined above divided by an
amount equal to 1 minus the Reserve Percentage.

 

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LIBOR Business Day.  Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London,
England.

LIBOR Lending Office.  Initially, the office of each Lender designated as such
on Schedule 1.1 hereto; thereafter, such other office of such Lender, if any,
that shall be making or maintaining LIBOR Rate Loans.

LIBOR Rate Loans.  Loans of any Class bearing interest calculated by reference
to LIBOR.

Lien.  See §8.2.

Liquidity.  As of any date of calculation, the aggregate of (i) Unrestricted
Cash and Cash Equivalents and (ii) the Revolving Availability, in each case, as
of such date.

Loan Documents.  This Agreement, the Notes, the Guaranty, the Indemnity
Agreements, and all other documents, instruments or agreements now or hereafter
executed or delivered by or on behalf of Borrower or any Guarantor in connection
with the Loans and intended to constitute a Loan Document. For the avoidance of
doubt, “Loan Documents” shall exclude any Derivatives Contract.

Loan Request.  See §2.7.

Loan and Loans.  An individual loan or the aggregate loans (including each
Revolving Credit Loan, Term Loan, and Swing Loan (or Loans)), as the case may
be, to be made by the Lenders hereunder. All Loans shall be made in Dollars.
Amounts drawn under a Letter of Credit shall also be considered Revolving Credit
Loans as provided in §2.11(f).

Majority Class Lenders.  Means, with respect to any Class of Lenders on any date
of determination, Lender or Lenders whose aggregate Applicable Percentage is
greater than fifty percent (50%) of the aggregate Commitments of all Lenders of
such Class; provided that in determining said percentage at any given time, all
then existing Defaulting Lenders will be disregarded and excluded and the
Applicable Percentages of the Lenders shall be redetermined for voting purposes
only to exclude the Applicable Percentages of such Defaulting Lenders; provided
further that any time there are two (2) or more non-Defaulting Lenders of such
Class hereunder, Majority Class Lenders shall mean at least two
(2) non-Defaulting Lenders of such Class.

Majority Lenders.  As of any date, any Lender or collection of Lenders having
more than 50% of the Total Commitment or, if the Commitment of each Lender to
make Loans, the commitment of the Swing Loan Lender to make Swing Loans, and the
obligation of the Issuing Bank to issue Letters of Credit have been terminated
pursuant to the terms hereof, Lenders holding in the aggregate more than 50% of
the Obligations (including the aggregate amount of each Revolving Credit
Lender’s risk participation and funded participation in Letter of Credit
Liabilities and Swing Loans); provided that in determining said percentage at
any given time, all the existing Lenders that are Defaulting Lenders will be
disregarded and excluded and the Applicable Percentages of the Lenders shall be
re-determined for voting purposes only to exclude the Applicable Percentages of
such Defaulting Lenders; provided further that any time there are two (2) or
more non-Defaulting Lenders hereunder, Majority Lenders shall mean at least two
(2) non-Defaulting Lenders.

Management Agreements.  Written property management agreements providing for the
management of the Pool Properties or any of them.

 

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Mandatorily Redeemable Stock.  With respect to any Person, any Equity Interest
of such Person which by the terms of such Equity Interest (or by the terms of
any security into which it is convertible or for which it is exchangeable or
exercisable), or pursuant to any other written agreement, upon the happening of
any event or otherwise (a) matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise (other than an Equity Interest to the
extent redeemable in exchange for common stock or other equivalent common Equity
Interests), (b) is convertible into or exchangeable or exercisable for
Indebtedness or Mandatorily Redeemable Stock, or (c) is redeemable at the option
of the holder thereof, in whole or in part (other than an Equity Interest which
is redeemable solely in exchange for common stock or other equivalent common
Equity Interests).

Material Adverse Effect.  A material adverse effect on (a) the business,
properties, assets, financial condition or results of operations of the Credit
Parties and their Subsidiaries in each case considered as a whole; (b) the
ability of the Credit Parties (taken as a whole) to perform its material
obligations under the Loan Documents; or (c) the validity or enforceability of
any of the material Loan Documents or the material rights or remedies of Agent
or the Lenders thereunder.

Material Acquisition.  A single transaction, or series of related transactions,
for the purpose of or resulting, directly or indirectly, in the acquisition
(including, without limitation, a merger or consolidation or any other
combination with another Person) by one or more of the Borrower and its
Subsidiaries of properties or assets of a Person for an aggregate gross purchase
price equal to or in excess of the greater of (i) 20% of Total Asset Value
(without giving effect to such acquisition(s)) and (ii) $100,000,000.

Maturity Date.  As applicable, the Revolving Credit Maturity Date and/or the
Term Loan Maturity Date.

Moody’s.  Moody’s Investor Service, Inc.

Multiemployer Plan.  Any multiemployer plan within the meaning of §3(37) of
ERISA maintained or contributed to by Borrower or any ERISA Affiliate.

Net Income (or Loss).  With respect to any Person (or any asset of any Person)
for any period, the net income (or loss) of such Person (or attributable to such
asset), determined in accordance with GAAP.

Net Operating Income.  For any income producing Real Estate and for a given
period, the difference between (a) any rentals, proceeds and other income
received from such property during the determination period plus the regularly
scheduled amortized portion of early lease termination penalties during the
determination period, less (b) an amount equal to all costs and expenses
(excluding Interest Expense, depreciation and amortization expense, and any
expenditures that are capitalized in accordance with GAAP) incurred as a result
of, or in connection with, or properly allocated to, the operation or leasing of
such property during the determination period (other than asset management
fees); less (c) the Capital Reserve. Net Operating Income shall be calculated
based on the immediately preceding calendar quarter, annualized, unless the Real
Property is being simultaneously acquired by the Borrower or a subsidiary and
added as a Pool Property, in which event annualized Net Operating Income shall
be calculated based upon the historical data provided by the Borrower, subject
to adjustment by the Agent in its reasonable discretion and thereafter until
such Real Property has been owned by the Borrower or its subsidiaries for the
entirety of a calendar quarter, Net Operating Income shall be grossed up for
such ownership period. Net Operating Income shall be calculated on a
consolidated basis in accordance with GAAP but adjusted for non-cash operating
items such as straight line rents and the amortization of above and below market
lease assets and liabilities and other non-cash items and including (without
duplication) the Equity Percentage of Net Operating Income for the Borrower’s
non wholly owned Affiliates. For leases subject to rent abatement periods not
exceeding twelve (12) months from the calculation date, Net

 

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Operating Income shall include the first three months of rent scheduled to be
paid under the lease upon termination of such rent abatement period.

Non-Recourse Exclusions.  With respect to any Non-Recourse Indebtedness of any
Person, any industry standard exclusions from the non-recourse limitations
governing such Indebtedness, including, without limitation, exclusions for
claims that (i) are based on fraud, intentional misrepresentation,
misapplication or misappropriation of funds, gross negligence or willful
misconduct (ii) result from intentional mismanagement of or physical waste at
the Real Estate securing such Non-Recourse Indebtedness, or (iii) arise from the
presence of Hazardous Substances on the Real Estate securing such Non-Recourse
Indebtedness (whether contained in a loan agreement, promissory note, indemnity
agreement or other document), (iv) are the result of any unpaid real estate
taxes and assessments if sufficient cash flow from the Real Estate exists
(whether contained in a loan agreement, promissory note, indemnity agreement or
other document), or (v) result from the borrowing Subsidiary and/or its assets
becoming the subject of a voluntary or involuntary bankruptcy, insolvency or
similar proceeding.

Non-Recourse Indebtedness.  Indebtedness of the REIT Guarantor, Borrower, their
respective Subsidiaries, or an Unconsolidated Affiliate of any such Person,
which is secured by one or more parcels of Real Estate (other than a Pool
Property) or interests therein or equipment and which is not a general
obligation of the REIT Guarantor, Borrower or such Subsidiary or Unconsolidated
Affiliate, the holder of such Indebtedness having recourse solely to the parcels
of Real Estate, or interests therein, securing such Indebtedness or the direct
owner of such real estate, the leases thereon and the rents, profits and equity
thereof or equipment, as applicable (except for recourse against the general
credit of the Person obligated thereon for any Non-Recourse Exclusions),
provided that in calculating the amount of Non-Recourse Indebtedness at any
time, the Borrower’s reasonable estimate of the amount of any Non-Recourse
Exclusions which are the subject of a claim and action shall not be included in
the Non-Recourse Indebtedness but shall constitute Recourse Indebtedness.
Non-Recourse Indebtedness shall also include Indebtedness of a Subsidiary of the
REIT Guarantor or Borrower that is not a Subsidiary Guarantor or of an
Unconsolidated Affiliate which is a special purpose entity that is recourse
solely to such Subsidiary or Unconsolidated Affiliate, which is not
cross-defaulted to other Indebtedness of the Borrower and which does not
constitute Indebtedness of any other Person (other than such Subsidiary or
Unconsolidated Affiliate which is the borrower thereunder).

Note.  A promissory note in the form attached hereto as Exhibit A-1, A-2, or B
payable to a Lender evidencing certain of the Obligations of a Class of the
Borrower to such Lender and executed by Borrower, as the same may be amended,
supplemented, modified or restated from time to time; “Notes” means,
collectively, all of such Notes outstanding at any given time.

Notice.  See §19.

Obligations.  The term “Obligations” shall mean and include:

A.        The payment of the principal sum, interest at variable rates, charges
and indebtedness with respect to the Loans (whether or not evidenced by the
Notes) and any disbursements under a Letter of Credit, including any extensions,
renewals, replacements, increases, modifications and amendments thereof, given
by Borrower to the order of the respective Lenders;

B.        The payment, performance, discharge and satisfaction of each covenant,
warranty, representation, undertaking and condition to be paid, performed,
satisfied and complied with by Borrower under and pursuant to this Credit
Agreement or the other Loan Documents;

 

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C.        The payment of all costs, expenses, legal fees and liabilities
incurred by Agent and the Lenders in connection with the enforcement of any of
Agent’s or any Lender’s rights or remedies under this Credit Agreement or the
other Loan Documents, or any other instrument, agreement or document which
evidences or secures any other obligations or collateral therefor, whether now
in effect or hereafter executed; and

D.        The payment, performance, discharge and satisfaction of all other
liabilities and obligations of Borrower to Agent or any Lender, whether now
existing or hereafter arising, direct or indirect, absolute or contingent, and
including, without limitation express or implied upon the generality of the
foregoing, each liability and obligation of Borrower under any one or more of
the Loan Documents and any amendment, extension, modification, replacement or
recasting of any one or more of the instruments, agreements and documents
referred to in this Credit Agreement or any other Loan Document or executed in
connection with the transactions contemplated by this Credit Agreement or any
other Loan Document; provided however that notwithstanding anything to the
contrary set forth in the definition of Obligations, with respect to any
indemnification, contingent or other similar obligations, such matters shall be
considered “Obligations” only to the extent a reasonable good faith claim has
been made on such indemnification, contingent or similar obligation on or before
the date that all other Obligations are satisfied in full. For the avoidance of
doubt, “Obligations” shall not include any indebtedness, liabilities,
obligations, covenants or duties in respect of Hedge Obligations.

Occupancy Requirement. With respect to any Real Estate, that such Real Estate is
at least 80% leased and occupied as of the date it becomes a Pool Property;
provided that vacant Real Estate will be deemed to be occupied as of any date to
the extent (i) a tenant under an executed Lease will take occupancy within 12
months of such date, subject only to completion of tenant buildout work or
(ii) a replacement tenant will take occupancy within 12 months of prior tenant
vacating the premises pursuant to an executed Lease, subject only to completion
of tenant buildout work.

OFAC.   Office of Foreign Asset Control of the Department of the Treasury of the
United States of America.

Other Connection Taxes.  With respect to any Recipient, Taxes imposed as a
result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising solely from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

Other Taxes.  All present or future stamp, court or documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
§4.15 as a result of costs sought to be reimbursed pursuant to §4.4).

Outstanding.  With respect to (i) the Loans, the aggregate unpaid principal
thereof as of any date of determination and (ii) any Letter of Credit
Liabilities on any date of determination, the amount of such Letter of Credit
Liabilities on such date after giving effect to any issuance, amendment,
extension, or renewal thereof occurring on such date and any other changes in
the aggregate amount of the Letter of Credit Liabilities as of such date.

 

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Park Tower Property. That certain Real Estate known as Park Tower, located at
400 North Tampa Street, Tampa, Florida.

Participant Register. See §18.4.

Partnership Agreement. The Amended and Restated Limited Partnership Agreement of
the Borrower dated October 28, 2015.

Patriot Act. The Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, as the same may
be amended from time to time, and corresponding provisions of future laws.

Payout Ratio. As of any date of calculation, for the most recently ended
twelve-month period, the ratio of (i) cash dividends or distributions to common
equity holders of the REIT Guarantor paid or payable during such period to
(ii) Core Funds from Operations for such period.

PBGC. The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any
successor entity or entities having similar responsibilities.

Permitted Liens. Liens, security interests and other encumbrances permitted by
§8.2.

Person. Any individual, corporation, limited liability company, partnership,
trust, unincorporated association, or other legal entity, and any government or
any governmental agency or political subdivision thereof.

Pima Property. That certain Real Estate know as Pima Center, and located at 9000
and 9200 E Pima Center Parkway, Scottsdale, Arizona.

Plan Assets. Assets of any employee benefit plan subject to Part 4, Subtitle B,
Title I of ERISA.

Pool. The collectively reference to all Pool Properties as of any date.

Pool Debt Yield. As of any date of calculation, the ratio expressed as a
percentage of (i) the Pool NOI, divided by (ii) the aggregate Unsecured Debt, in
each case, as of such date.

Pool Leverage Ratio. As of any date of calculation, the ratio expressed as a
percentage of (i) the aggregate Unsecured Debt to (ii) Total Pool Value.

Pool NOI. As of any date of calculation, subject to §9.9(e), Net Operating
Income from all Pool Properties as of the last day of the most recently ended
calendar month.

Pool Property(ies). Eligible Real Estate that has been approved as a Pool
Property hereunder and as to which all documents and due diligence required
hereunder has been submitted, and as applicable, executed and approved in
accordance with §5.1; provided, that the Eligible Real Estate of any Pool
Property Owner released pursuant to §5.2 hereof shall automatically cease to be
a Pool Property. Schedule PP set forth all of the Pool Properties admitted to
the Pool as of the Closing Date.

Pool Property Owner. From time to time with respect to any Pool Property, a
Wholly Owned Subsidiary of the Borrower which is the owner of the fee simple
interest in, or the approved ground or tax increment lessee or master lessee of,
such Pool Property.

 

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Pool Value. As of any date of calculation for any Pool Property, subject to
§9.9(e), the Value of such Pool Property as of such date.

Potential Pool Property. Any Real Estate of Borrower or a Pool Property Owner
which is not at the time included in the Pool and which consists of (i) Eligible
Real Estate, or (ii) Real Estate which is capable of becoming Eligible Real
Estate through the completion and delivery of Eligible Real Estate Qualification
Documents.

Preferred Dividends. For any period and without duplication, all Distributions
paid, declared but not yet paid or otherwise due and payable during such period
on Preferred Securities issued by any Credit Party. Preferred Dividends shall
not include dividends or distributions (a) paid or payable solely in Equity
Interests (other than Mandatorily Redeemable Stock) of identical class payable
to holders of such class of Equity Interests; (b) payable to any Credit Party;
or (c) constituting or resulting in the redemption of Preferred Securities,
other than scheduled redemptions not constituting balloon, bullet or similar
redemptions in full.

Preferred Securities. With respect to any Person, Equity Interests in such
Person, which are entitled to preference or priority over any other Equity
Interest in such Person in respect of the payment of dividends or distribution
of assets upon liquidation or both.

Pricing Level. Such term shall have the meaning established within the
definition of Applicable Margin.

Rating Agency. Any of S&P, Moody’s, or Fitch.

Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by Borrower or any of its respective Subsidiaries or Unconsolidated
Affiliates, including, without limitation, the Pool Properties.

Recipient. The Agent, the Issuing Lender and any Lender.

Recourse Indebtedness. As of any date of determination, any Indebtedness
(whether secured or unsecured) of a Person other than Non-Recourse Indebtedness.

Register. See §18.2.

REIT Guarantor. City Office REIT, Inc.

Release. See §6.20(c)(iii).

Rent Roll. A report prepared by the Borrower showing for each Pool Property
owned or leased by Borrower or another Pool Property Owner, its occupancy,
tenants, lease expiration dates, lease rent and other information in
substantially the form presented to Agent on or prior to the date hereof.

Required Lenders. As of any date, the Lender or Lenders having equal to or
greater than sixty-six and 2/3 percent (66.67%) of the Total Commitment or, if
the Commitment of each Lender to make Loans, the commitment of the Swing Loan
Lender to make Swing Loans, and the obligation of the Issuing Bank to issue
Letters of Credit have been terminated pursuant to the terms hereof, Lenders
holding in the aggregate equal to or greater than sixty-six and 2/3 percent
(66.67%) of the Obligations (including the aggregate amount of each Revolving
Credit Lender’s risk participation and funded participation in Letter of Credit
Liabilities and Swing Loans); provided that in determining said percentage at
any given time, all

 

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then existing Defaulting Lenders will be disregarded and excluded and the
Applicable Percentages of the Lenders shall be redetermined for voting purposes
only to exclude the Applicable Percentages of such Defaulting Lenders; provided
further that any time there are two (2) or more non-Defaulting Lenders
hereunder, Required Lenders shall mean at least two (2) non-Defaulting Lenders
holding such Applicable Percentage.

Reserve Percentage.  For any Interest Period, that percentage which is specified
three (3) Business Days before the first day of such Interest Period by the
Board of Governors of the Federal Reserve System (or any successor) or any other
governmental or quasi-governmental authority with jurisdiction over Agent or any
Lender for determining the maximum reserve requirement (including, but not
limited to, any marginal reserve requirement) for Agent or any Lender with
respect to liabilities constituting of or including (among other liabilities)
Eurocurrency liabilities in an amount equal to that portion of the Loan affected
by such Interest Period and with a maturity equal to such Interest Period.

Revolving Availability.  From time to time, an amount equal to the lesser of
(a) the Revolving Credit Commitments of all the Lenders minus the Revolving
Credit Exposure then Outstanding, or (b) (i) the maximum amount of Total Loan
Exposure which could be outstanding for the Borrower to remain in compliance
with §9.9(a) and §9.9(b) below, less (ii) the Total Loan Exposure then
Outstanding.

Revolving Credit Base Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to the Base Rate.

Revolving Credit Commitment. With respect to each Revolving Credit Lender, the
amount set forth on Schedule 1.1 hereto as the amount of such Revolving Credit
Lender’s Revolving Credit Commitment to make or maintain Revolving Credit Loans
(other than Swing Loans) to the Borrower, (ii) to participate in Letters of
Credit for the account of the Borrower, and (iii) to participate in Swing Loans
to the Borrower, as the same may be changed from time to time in accordance with
the terms of this Agreement.

Revolving Credit Commitment Percentage. With respect to each Revolving Credit
Lender, the percentage set forth on Schedule 1.1 hereto as such Revolving Credit
Lender’s percentage of the Revolving Credit Commitments of all Revolving Credit
Lenders, as the same may be changed from time to time in accordance with the
terms of this Agreement; provided that if the Revolving Credit Commitments of
the Revolving Credit Lenders have been terminated as provided in this Agreement,
then the Revolving Credit Commitment of each Revolving Credit Lender shall be
determined based on the Revolving Credit Commitment Percentage of such Revolving
Credit Lender immediately prior to such termination and after giving effect to
any subsequent assignments made pursuant to the terms hereof.

Revolving Credit Exposure. Collectively, as of any date of calculation, the
aggregate Revolving Credit Loans, Swing Loans and Letter of Credit Liabilities
Outstanding on such date.

Revolving Credit Lender(s).    Collectively, the Lenders which have a Revolving
Credit Commitment, the initial Revolving Credit Lenders being identified on
Schedule 1.1 hereto.

Revolving Credit LIBOR Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to LIBOR.

Revolving Credit Loan or Loans. An individual Revolving Credit Loan or the
aggregate Revolving Credit Loans, as the case may be, in the maximum principal
amount of $250,000,000 (subject to increase as provided in §2.12 and decrease as
provided in §2.5) to be made by the Revolving Credit

 

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Lenders hereunder as more particularly described in §2.1. Without limiting the
foregoing, Revolving Credit Loans shall also include Revolving Credit Loans made
pursuant to §2.11(f).

Revolving Credit Maturity Date. March 15, 2022, as such date may be extended as
provided in §2.13, or such earlier date on which the Revolving Credit Loans
shall become due and payable pursuant to the terms hereof.

S&P. Standard & Poor’s Ratings Group.

Sanctioned Person. Any Person that is (i) any Person listed in any
Sanctions-related list of designated Persons maintained by any Governmental
Authority of the United States of America, including without limitation, OFAC or
the U.S. Department of State, or by the United Nations Security Council, Her
Majesty’s Treasury, the European Union or any other Governmental Authority,
(ii) any Person located, operating, organized or resident in a Designated
Jurisdiction, (iii) an agency of the government of a Designated Jurisdiction, or
(iv) any Person owned or controlled by any Person or agency described in any of
the preceding clauses (i) through (iii).

Sanction(s). Any sanction administered or enforced by the United States
Government (including without limitation, OFAC), the United Nations Security
Council, the European Union, Her Majesty’s Treasury or other relevant sanctions
authority, in each case, solely to the extent applicable to the REIT Guarantor
or any of its Subsidiaries.

SEC. The federal Securities and Exchange Commission.

Secured Debt. Collectively, all Indebtedness of Borrower, the REIT Guarantor or
their direct or indirect Subsidiaries which is secured by a lien on real
property, an ownership interest in any Person or any other asset. Secured Debt
shall include Borrower’s and REIT Guarantor’s pro rata share of Secured Debt of
any non-wholly-owned direct or indirect Subsidiary or Affiliate, but shall not
include the Obligations.

Secured Debt Ratio. As of any date of calculation, the ratio expressed as a
percentage of (i) Secured Debt to (ii) Total Asset Value, in each case, as of
such date.

Secured Recourse Debt. Collectively, all Secured Debt of Borrower, the REIT
Guarantor or their direct or indirect Subsidiaries that is Recourse
Indebtedness.

Secured Recourse Debt Ratio. As of any date of calculation, the ratio expressed
as a percentage of (i) all Secured Recourse Debt to (ii) Total Asset Value, in
each case, as of such date.

State. A state of the United States of America and the District of Columbia.

Subsidiary. For any Person, any corporation, partnership, limited liability
company or other entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
of such corporation, partnership, limited liability company or other entity
(without regard to the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person, and
shall include all Persons the accounts of which are consolidated with those of
such Person pursuant to GAAP.

 

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Subsidiary Guarantor(s). Collectively, each Person which is a Subsidiary
Guarantor as of the Closing Date and each Additional Subsidiary Guarantor that
is the direct or indirect owner, or the ground or master lessee of, a Pool
Property.

Swap Obligation. With respect to any Credit Party, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act.

Swing Loan. See §2.6(a).

Swing Loan Lender. KeyBank, in its capacity as Swing Loan Lender and any
successor thereof.

Swing Loan Commitment. The sum of $25,000,000.00, as the same may be changed
from time to time in accordance with the terms of this Agreement. The Swing Loan
Commitment is part of, and not in addition to, the Revolving Credit Commitment.

Swing Loan Note. See §2.6(b).

Taking. The taking or appropriation (including by deed in lieu of condemnation)
of any Pool Property, or any part thereof or interest therein, whether
permanently or temporarily, for public or quasi-public use under the power of
eminent domain, by reason of any public improvement or condemnation proceeding,
or in any other manner or any customarily recognized and compensated damage or
injury or diminution in value through condemnation, inverse condemnation or
other exercise of the power of eminent domain.

Tangible Net Worth. The difference between (a) Total Asset Value less (b) all
Indebtedness of the REIT Guarantor and its Subsidiaries.

Taxes. All present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
(other than the Other Charges) imposed by any Governmental Authority, including
any interest, additions to tax or penalties applicable thereto.

Term Lender. Each Lender that has a Term Loan Commitment or holds Term Loans.

Term Loan. See §2.12.

Term Loan Commitment. See §2.12.

Term Loan Commitment Percentage. With respect to each Term Lender, the
percentage set forth on Schedule 1.1 hereto as such Term Lender’s percentage of
the Term Loan Commitments, as the same may be changed from time to time in
accordance with the terms of this Agreement; provided that if the Term Loan
Commitments of the Term Lenders have been terminated as provided in this
Agreement, then the Term Loan Commitment of each Term Lender shall be determined
based on the Term Loan Commitment Percentage of such Term Lender immediately
prior to such termination and after giving effect to any subsequent assignments
made pursuant to the terms hereof.

Term Loan Maturity Date. Five (5) years from the date of advance of each Term
Loan, or such earlier date on which the Term Loans shall become due and payable
pursuant to the terms hereof.

Titled Agents.  The Arranger the Syndication Agent, and any co-syndication
agents or documentation agent.

 

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Total Asset Value. The sum of (without duplication) (a) the aggregate Value of
all of Borrower’s, REIT Guarantor’s and their Subsidiaries’ Real Estate, plus
(b) the Value of their mortgage loan investments of the REIT Guarantor and its
Subsidiaries, plus (c) the amount of any Unrestricted Cash and Cash Equivalents
of the REIT Guarantor and its Subsidiaries, excluding tenant security and other
restricted deposits, plus (d) the amount of any restricted cash that is being
reserved and earmarked to pay the cost of tenant improvements, leasing
commissions, and capital improvements for the Real Estate of the REIT Guarantor
and its Subsidiaries. For any non-Wholly Owned Subsidiary, Total Asset Value
shall be adjusted for Borrower’s, REIT Guarantor’s and their Subsidiaries’ pro
rata ownership percentage.

Total Commitment. The sum of the Commitments of the Lenders. As of the date of
this Agreement, the Total Commitment is Two Hundred Fifty Million and No/100
Dollars ($250,000,000.00). The Total Commitment may increase in accordance with
§2.12 or decreased in accordance with §2.5.

Total Loan Exposure. At any time, the aggregate of the Revolving Credit Exposure
and Term Loans then Outstanding.

Total Pool Value. As of any date of calculation, subject to §9.9(e), the sum of
the Pool Value of each Pool Property on such date.

Total Revolving Credit Commitment. The sum of the Revolving Credit Commitments
of the Revolving Credit Lenders. As of the date of this Agreement, the Total
Revolving Credit Commitment is Two Hundred Fifty Million and No/100 Dollars
($250,000,000.00). The Total Revolving Credit Commitment may increase in
accordance with §2.12 or decreased in accordance with §2.5.

Transaction Party(ies). Individually and collectively, without duplication, each
Credit Party and each Pool Property Owner.

Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

U.S. Person. Any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

U.S. Tax Compliance Certificate. See §4.4(g)(ii)(B)(III).

Unconsolidated Affiliate. In respect of any Person, any other Person in whom
such Person holds an Investment, (a) whose financial results would not be
consolidated under GAAP with the financial results of such first Person on the
consolidated financial statements of such first Person, and (b) which is not a
Subsidiary of such first Person.

Unconsolidated Subsidiary. In respect of any Person, any other Person in whom
such Person holds an Investment, whose financial results would not be
consolidated under GAAP with the financial results of such first Person on the
consolidated financial statements of such first Person.

Unhedged Variable Rate Debt. Indebtedness of the REIT Guarantor, the Borrower
and their Subsidiaries which has a floating rate of interest and which interest
rate is not fixed, capped or otherwise limited by an interest rate protection
product.

Unrestricted Cash and Cash Equivalents. As of any date of determination, the sum
of (a) the aggregate amount of Unrestricted cash and (b) the aggregate amount of
Unrestricted Cash Equivalents (valued at fair market value). As used in this
definition, “Unrestricted” means the specified asset is not

 

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subject to any escrow, reserves or Liens or similar claims of any kind in favor
of any Person (other than any statutory right of set off) and is readily
available for use by such first Person in its discretion.

Unsecured Debt. Collectively, all Indebtedness of Borrower, REIT Guarantor or
their direct or indirect Subsidiaries, which is not Secured Debt, including,
without limitation, the Obligations.

Unused Fee Rate. A per annum rate equal to (a) 0.25% per annum on the actual
daily unused amount of the Total Revolving Credit Commitment of such Lender if
usage is less than or equal to 50%, and (b) at 0.15% per annum on the actual
daily unused amount of the Total Revolving Credit Commitment of such Lender if
usage is greater than 50%.

Value. As of any date of calculation:

(a) For each operating Real Estate (including any Pool Property) (i) if such
Real Estate has been owned by the Borrower or its Subsidiaries for less than
eighteen (18) months as of such date, undepreciated cost basis of such Real
Estate as of such date and (ii) otherwise, the Net Operating Income from such
Real Estate for the immediately preceding quarter, annualized, then divided by
the Capitalization Rate applicable to such Real Estate; or

(b)        For Real Estate that is under construction or development for which
no certificate of occupancy has been issued, the undepreciated cost basis
thereof;

(c)        For each unimproved land parcel, the undepreciated cost basis
thereof; and

(d)        For each mortgage loan investment, the lower of cost basis or face
value thereof.

Wholly Owned Subsidiary. As to Borrower, any Subsidiary of Borrower that is
directly or indirectly owned 100% by Borrower.

Withholding Agent. Any Credit Party and the Agent.

Write-Down and Conversion Powers. With respect to any EEA Resolution Authority,
the write-down and conversion powers of such EEA Resolution Authority from time
to time under the Bail-In Legislation for the applicable EEA Member Country,
which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

§1.2    Rules of Interpretation.

(a)        A reference to any document or agreement shall include such document
or agreement as amended, restated, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.

(b)        The singular includes the plural and the plural includes the
singular.

(c)        A reference to any law includes any amendment or modification of such
law.

(d)        A reference to any Person includes its permitted successors and
permitted assigns.

(e)        Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a consistent basis by the accounting entity
to which they refer.

 

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(f)        The words “include”, “includes” and “including” are not limiting.

(g)        The words “approval” and “approved”, as the context requires, means
an approval in writing given to the party seeking approval.

(h)        All terms not specifically defined herein or by GAAP, which terms are
defined in the Uniform Commercial Code as in effect in the State of New York,
have the meanings assigned to them therein.

(i)        Reference to a particular “§”, refers to that section of this
Agreement unless otherwise indicated.

(j)        The words “herein”, “hereof”, “hereunder” and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.

(k)        The words “the date hereof” or words of like import shall mean the
date that this Agreement is fully executed by all parties.

(l)        In the event of any change in generally accepted accounting
principles after the date hereof or any other change in accounting procedures
pursuant to §7.3 which would affect the computation of any financial covenant,
ratio or other requirement set forth in any Loan Document, then upon the request
of Borrower or Agent, the Borrower and the Agent shall negotiate promptly,
diligently and in good faith in order to amend the provisions of the Loan
Documents such that such financial covenant, ratio or other requirement shall
continue to provide substantially the same financial tests or restrictions of
the Borrower as in effect prior to such accounting change, as determined by the
Agent in its good faith judgment. Until such time as such amendment shall have
been executed and delivered by the Borrower and the Agent, such financial
covenants, ratio and other requirements, and all financial statements and other
documents required to be delivered under the Loan Documents, shall be calculated
and reported as if such change had not occurred.

(m)        To the extent that any of the representations and warranties
contained in this Agreement or any other Loan Document is qualified by “Material
Adverse Effect” or any other materiality qualifier, then any further qualifier
as to representations and warranties being true and correct “in all material
respects” contained elsewhere in the Loan Documents shall not apply with respect
to any such representations and warranties.

§2.        THE CREDIT FACILITY.

§2.1        Revolving Credit Loans. Subject to the terms and conditions set
forth in this Agreement, each of the Revolving Credit Lenders severally agrees
to lend to the Borrower, and the Borrower may borrow (and repay and reborrow)
from time to time between the Closing Date and the Revolving Credit Maturity
Date upon notice by the Borrower to the Agent given in accordance with §2.8,
revolving loans in such amounts as are requested by the Borrower for the
purposes set forth in §2.10 up to a maximum aggregate principal amount
outstanding such that (after giving effect to all amounts requested) (i) such
Revolving Credit Lender’s Revolving Credit Commitment Percentage of the
aggregate Revolving Credit Exposure shall not exceed such Revolving Credit
Lender’s Revolving Credit Commitment, (ii) the aggregate Revolving Credit
Exposure shall not exceed the Total Revolving Credit Commitment or the Borrowing
Base Availability minus the Outstanding Term Loans, and (iii) the Total Loan
Exposure shall not exceed the Total Commitment or the Borrowing Base
Availability; provided, that, in all events no Default or Event of Default shall
have occurred and be continuing; and provided, further, that the outstanding
principal amount of the Revolving Credit Exposure (after giving effect to all
amounts

 

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requested) shall not at any time cause a violation of the covenants set forth in
§9. The Revolving Credit Loans shall be made pro rata in accordance with each
Revolving Credit Lender’s Revolving Credit Commitment Percentage. Each request
for a Revolving Credit Loan hereunder shall constitute a representation and
warranty by the Borrower that all of the conditions required of Borrower set
forth in §10 and §11 have been satisfied on the date of such request (or if such
condition is required to have been satisfied only as of the initial Closing
Date, that such condition was satisfied as of the Closing Date), or to the
extent all of the conditions required of Borrower set forth in §10 and §11 are
not satisfied or deemed satisfied as of the date of such request, such shall not
result in any Material Adverse Effect. The Agent may assume that the conditions
in §10 and §11 have been satisfied unless it receives prior written notice from
a Revolving Credit Lender that such conditions have not been satisfied. No
Revolving Credit Lender shall have any obligation to make Revolving Credit Loans
to Borrower in the maximum aggregate principal outstanding balance of more than
the principal face amount of its Revolving Credit Commitment, as applicable.

§2.2    RESERVED.

§2.3    Notes. The Loans owed to any Lender shall, if requested by such Lender,
be evidenced by separate Notes, dated of even date with this Agreement (except
as otherwise provided in §18.3) and completed with appropriate insertions. One
Note shall be payable to the order of each Lender which so requests the issuance
of a Note in the principal amount equal to such Lender’s Commitment or, if less,
the outstanding amount of all Loans made by such Lender, plus interest accrued
thereon, as set forth below.

§2.4    Fees.

(a)        The Borrower agrees to pay to the Agent for the account of the
Revolving Credit Lenders (other than any Defaulting Lender) in accordance with
their respective Revolving Credit Commitment Percentages a facility unused fee,
which shall accrue during the period from and including the Closing Date to, but
excluding, the Investment Grade Pricing Date, calculated at the Unused Fee Rate
on the actual daily amount by which the Total Revolving Credit Commitment
exceeds the outstanding principal amount of Revolving Credit Exposure during
each calendar quarter or portion thereof commencing on the Closing Date and
ending on the Revolving Credit Maturity Date, in all cases subject to
§14.16(a)(iii). The facility unused fee shall be calculated by Agent for each
quarter based on the ratio (expressed as a percentage) of (a) the actual daily
amount of the outstanding principal amount of the Revolving Credit Exposure
during such quarter to (b) the Total Revolving Credit Commitment.    The
facility unused fee shall be payable quarterly in arrears on the fifth (5th) day
of each calendar quarter for the immediately preceding calendar quarter or
portion thereof, and on any earlier date on which the Revolving Credit
Commitments shall be reduced or shall terminate as provided in §2.5, with a
final payment on the Revolving Credit Maturity Date.

(b)        From and after the Investment Grade Pricing Date, the Borrower agrees
to pay to the Agent for the account of the Revolving Credit Lenders (other than
any Defaulting Lender) in accordance with their respective Revolving Credit
Commitment Percentages a facility fee (the “Facility Fee”) which shall accrue at
the per annum rate referenced in the grid set forth in clause (b) of the
definition of Applicable Margin, times the Total Revolving Credit Commitment.
Such fee shall be payable quarterly in arrears on the fifth (5th) day of each
calendar quarter for the immediately preceding calendar quarter or portion
thereof, and on any earlier date on which the Revolving Credit Commitments shall
be reduced or shall terminate as provided in §2.5, with a final payment on the
Revolving Credit Maturity Date.

 

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(c)        The Borrower acknowledges that the fees payable hereunder are bona
fide commitment fees and are intended as reasonable compensation to the
Revolving Lenders for committing to make funds available to the Borrower as
described herein and for no other purposes.

§2.5    Reduction and Termination of the Revolving Credit Commitments. The
Borrower shall have the right at any time and from time to time upon five
(5) Business Days’ prior written notice to the Agent to reduce by $50,000,000 or
an integral multiple of $25,000,000 in excess thereof (provided that, in no
event shall the Total Revolving Credit Commitment be reduced in such manner to
an amount less than $100,000,000) or to terminate entirely the Revolving Credit
Commitments, whereupon the Revolving Credit Commitments of the Revolving Credit
Lenders shall be reduced pro rata in accordance with their respective Revolving
Credit Commitment Percentages of the amount specified in such notice or, as the
case may be, terminated, any such termination or reduction to be without penalty
except as otherwise set forth in §4.8; provided, however, that no such
termination or reduction shall be permitted if, after giving effect thereto, the
Revolving Credit Exposure then Outstanding would exceed the Total Revolving
Credit Commitment or the Total Loan Exposure then Outstanding would exceed the
Total Commitment, in each case, as so terminated or reduced. Promptly after
receiving any notice from the Borrower delivered pursuant to this §2.5, the
Agent will notify the Revolving Credit Lenders of the substance thereof. Any
reduction of the Revolving Credit Commitment shall also result in a
proportionate reduction (rounded to the next lowest integral multiple of
$100,000) in the maximum amount of Swing Loans and Letters of Credit. Upon the
effective date of any such reduction or termination, the Borrower shall pay to
the Agent for the respective accounts of the Revolving Credit Lenders the full
amount of any unused facility unused fee or facility fee under §2.4 then accrued
on the amount of the reduction. No reduction or termination of the Revolving
Credit Commitments may be reinstated. After any reduction in the Total
Commitment under this §2.5, the Borrower’s option to increase the Total
Commitment provided in §2.12 shall terminate.

§2.6    Swing Loan Commitment.

(a)        Subject to the terms and conditions set forth in this Agreement,
Swing Loan Lender agrees to lend to the Borrower (the “Swing Loans”), and the
Borrower may borrow (and repay and reborrow) from time to time between the
Closing Date and the date which is ten (10) Business Days prior to the Revolving
Credit Maturity Date upon notice by the Borrower to the Swing Loan Lender given
in accordance with this §2.6, such sums as are requested by the Borrower for the
purposes set forth in §2.10 in an aggregate principal amount at any one time
outstanding not exceeding the Swing Loan Commitment; provided, that, in all
events, after giving effect to such Swing Loan (i) no Default or Event of
Default shall have occurred and be continuing; (ii) the aggregate Outstanding
Revolving Credit Exposure shall not exceed the Total Revolving Credit Commitment
or the Borrowing Base Availability minus the Outstanding Term Loans, (iii) the
aggregate Outstanding Total Loan Exposure shall not exceed the Total Commitment
or the Borrowing Base Availability, (iv) such Swing Loan would not cause a
violation of the financial covenants set forth in §9 (calculated on a pro forma
basis after giving effect to the proposed Swing Loan and the application of the
proceeds in connection with any permitted transaction undertaken in connection
therewith), (v) the Outstanding Swing Loans shall not be in excess of the Swing
Loan Commitment, (vi) no Revolving Credit Lender is a Defaulting Lender, unless
the Swing Loan Lender has entered into arrangements, including the delivery of
cash collateral, satisfactory to the Swing Loan Lender (in its sole discretion)
with the Borrowers or such Defaulting Lender to eliminate the Swing Loan
Lender’s actual or potential Fronting Exposure with respect to the Defaulting
Lender arising from either the Swing Loan then proposed to be made or that Swing
Loan and all other Swing Loans as to which the Swing Loan Lender has actual or
potential Fronting Exposure, as it may elect in its sole discretion and
(vii) the conditions set forth in §10 and §11 have been satisfied both on the
date of the request and at the time that the Advance is to be made. The funding
of a Swing Loan hereunder shall constitute a representation and warranty by the
Borrower that all of the conditions set

 

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forth in §10 and §11 have been satisfied on the date of such funding (or if such
condition is required to have been satisfied only as of the Closing Date, that
such condition was satisfied as of the Closing Date). The Swing Loan Lender may
assume that the conditions in §10 and §11 have been satisfied unless Swing Loan
Lender has received written notice from a Revolving Credit Lender that such
conditions have not been satisfied. Each Swing Loan shall be due and payable
upon the earlier of demand by the Agent or within ten (10) Business Days of the
date such Swing Loan was provided and Borrower hereby agrees to the extent not
repaid as contemplated by §2.6(d) below) to repay each Swing Loan on or before
the earlier of the date that is ten (10) Business Days from the date such Swing
Loan was provided or demand for such repayment by the Agent. The proceeds of any
Swing Loan may not be utilized to repay another Swing Loan

(b)        The Swing Loans shall be evidenced by a separate promissory note of
the Borrower in substantially the form of Exhibit B hereto (the “Swing Note”),
dated the date of this Agreement and completed with appropriate insertions. The
Swing Loan Note shall be payable to the order of the Swing Loan Lender in the
principal face amount equal to the Swing Loan Commitment and shall be payable as
set forth below.

(c)        Borrower shall request a Swing Loan by delivering to the Swing Loan
Lender a Loan Request executed by an Authorized Officer no later than 1:00 p.m.
(Eastern time) on the requested Drawdown Date specifying the amount of the
requested Swing Loan (which shall be in the minimum amount of $1,000,000) and
providing the wire instructions for the delivery of the Swing Loan proceeds.
Each such Loan Request shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept such Swing Loan on the Drawdown Date.
Notwithstanding anything herein to the contrary, each Swing Loan shall be a Base
Rate Loan and shall bear interest at the Base Rate plus the Applicable Margin
for Revolving Credit Base Rate Loans. The proceeds of the Swing Loan will be
disbursed by wire by the Swing Loan Lender to the Borrower no later than 3:00
p.m. (Eastern time) on the requested Drawdown Date.

(d)        The Swing Loan Lender shall, within two (2) Business Days after the
Drawdown Date with respect to such Swing Loan, request each Revolving Credit
Lender, including the Swing Loan Lender, to make a Revolving Credit Loan
pursuant to §2.1 in an amount equal to such Revolving Credit Lender’s Revolving
Credit Commitment Percentage of the amount of the Swing Loan outstanding on the
date such notice is given. In the event that the Borrower does not notify the
Agent in writing otherwise on or before noon (Eastern time) of the Drawdown Date
with respect to such Swing Loan, Agent shall notify the Revolving Credit Lenders
that such Revolving Credit Loan shall be a Revolving Credit LIBOR Rate Loan with
an Interest Period of one (1) month, provided that the making of such Revolving
Credit LIBOR Rate Loan will not be in contravention of any other provision of
this Agreement, or if the making of a Revolving Credit LIBOR Rate Loan would be
in contravention of this Agreement, then such notice shall indicate that such
loan shall be a Revolving Credit Base Rate Loan. Borrower hereby irrevocably
authorizes and directs the Swing Loan Lender to so act on its behalf, and agrees
that any amount advanced to the Agent for the benefit of the Swing Loan Lender
pursuant to this §2.6(d) shall be considered a Revolving Credit Loan pursuant to
§2.1. Unless any of the events described in §12.1(g), §12.1(h) or §12.1(i) shall
have occurred (in which event the procedures of §2.6(e) shall apply), each
Revolving Credit Lender shall make the proceeds of its Revolving Credit Loan
available to the Swing Loan Lender for the account of the Swing Loan Lender at
the Agent’s Head Office prior to 12:00 noon (Eastern time) in funds immediately
available no later than the third (3rd) Business Day after the date such notice
is given just as if the Revolving Credit Lenders were funding directly to the
Borrower, so that thereafter such Obligations shall constitute Revolving Credit
Loans and be evidenced by the Notes of the Revolving Credit Lenders. The
proceeds of such Revolving Credit Loan shall be immediately applied to repay the
Swing Loans.

 

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(e)        If for any reason a Swing Loan cannot be refinanced by a Revolving
Credit Loan pursuant to §2.6(d) (including due to a Defaulting Lender’s failure
to fund), each Revolving Credit Lender will, on the date such Revolving Credit
Loan pursuant to §2.6(d) was to have been made, purchase an undivided
participation interest in the Swing Loan in an amount equal to its Revolving
Credit Commitment Percentage of such Swing Loan (or portion thereof). Each
Revolving Credit Lender will immediately transfer to the Swing Loan Lender in
immediately available funds the amount of its participation and upon receipt
thereof the Swing Loan Lender will deliver to such Revolving Credit Lender a
Swing Loan participation certificate dated the date of receipt of such funds and
in such amount.

(f)        Whenever at any time after the Swing Loan Lender has received from
any Revolving Credit Lender funds in respect of such Revolving Credit Lender’s
participation interest in a Swing Loan, or the Swing Loan Lender receives any
payment on account thereof, the Swing Loan Lender will distribute to such
Revolving Credit Lender its participation interest in such amount (appropriately
adjusted in the case of interest payments to reflect the period of time during
which such Revolving Credit Lender’s participating interest was outstanding and
funded); provided, however, that in the event that such payment received by the
Swing Loan Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Loan Lender any portion thereof previously distributed by
the Swing Loan Lender to it.

(g)        Each Revolving Credit Lender’s obligation to fund a Revolving Credit
Loan as provided in §2.6(d) or to purchase participation interests pursuant to
§2.6(e) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Revolving Credit Lender or the
Borrower may have against the Swing Loan Lender, the Borrower or anyone else for
any reason whatsoever; (ii) the occurrence or continuance of a Default or an
Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of the Borrower or any of their respective Subsidiaries; (iv) any
breach of this Agreement or any of the other Loan Documents by the Borrower or
any Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. Any portions of a Swing Loan not
so purchased or converted may be treated by the Agent and Swing Loan Lender as
against such Revolving Credit Lender as a Revolving Credit Loan which was not
funded by the non-purchasing Revolving Credit Lender as contemplated by §2.8 and
§12.5, and shall have such rights and remedies against such Revolving Credit
Lender as are set forth in §§2.8, 12.5 and 14.5. Each Swing Loan, once so sold
or converted, shall cease to be a Swing Loan for the purposes of this Agreement,
but shall be a Revolving Credit Loan made by each Revolving Credit Lender under
its Revolving Credit Commitment.

§2.7  Interest on Loans.

(a)        Each Revolving Credit Base Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the date on which
such Revolving Credit Base Rate Loan is repaid or converted to a Revolving
Credit LIBOR Rate Loan at the rate per annum equal to the sum of the Base Rate
plus the Applicable Margin for Revolving Credit Base Rate Loans.

(b)        Each Revolving Credit LIBOR Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last day of
each Interest Period with respect thereto at the rate per annum equal to the sum
of LIBOR determined for such Interest Period plus the Applicable Margin for
Revolving Credit LIBOR Rate Loans.

(c)        The Borrower promises to pay interest on each Loan in arrears on each
Interest Payment Date with respect thereto.

 

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(d)        Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the
same Class of the other Type as provided in §4.1.

(e)        The parties understand that, prior to the Investment Grade Pricing
Date, the applicable interest rate for the Loans and certain fees set forth
herein may be determined and/or adjusted from time to time based upon certain
financial ratios and/or other information to be provided or certified to the
Lenders by Borrower (the “Borrower Information”). If it is subsequently
determined that any such Borrower Information was incorrect (for whatever
reason, including without limitation because of a subsequent restatement of
earnings by the Borrower) at the time it was delivered to the Agent, and if the
applicable interest rate or fees calculated for any period were different than
they should have been had the correct information been timely provided, then,
such interest rate and such fees for such period shall be automatically
recalculated using correct Borrower Information. The Agent shall promptly notify
Borrower in writing of any additional interest and fees due because of such
recalculation, and the Borrower shall pay such additional interest or fees due
to the Agent, for the account of each Lender, within five (5) Business Days of
receipt of such written notice. Borrower shall receive a credit or refund of any
overpayment promptly after such determination. Any recalculation of interest or
fees required by this provision shall survive the termination of this Agreement
for a period of 180 days, and this provision shall not in any way limit any of
the Agent’s, the Issuing Lender’s or any Lender’s other rights under this
Agreement.

§2.8    Requests for Revolving Credit Loans. The Borrower shall give to the
Agent written notice executed by an Authorized Officer in the form of Exhibit D
hereto (or telephonic notice confirmed in writing in the form of Exhibit D
hereto) of each Revolving Credit Loan requested hereunder (a “Loan Request”) by
1:00 p.m. (Eastern time) one (1) Business Day prior to the proposed Drawdown
Date with respect to Revolving Credit Base Rate Loans and two (2) Business Days
prior to the proposed Drawdown Date with respect to Revolving Credit LIBOR Rate
Loans, together with an executed Borrowing Base Availability Certificate in the
form of Exhibit F. Each such notice shall specify with respect to the requested
Revolving Credit Loan the proposed principal amount of such Revolving Credit
Loan, the Type of Revolving Credit Loan, the initial Interest Period (if
applicable) for such Revolving Credit Loan and the Drawdown Date. Promptly upon
receipt of any such notice, the Agent shall notify each of the Revolving Credit
Lenders thereof. Each such Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Revolving Credit Loan
requested from the Revolving Credit Lenders on the proposed Drawdown Date.
Nothing herein shall prevent the Borrower from seeking recourse against any
Revolving Credit Lender that fails to advance its proportionate share of a
requested Revolving Credit Loan as required by this Agreement. Each Loan Request
shall be (a) for a Revolving Credit Base Rate Loan in a minimum aggregate amount
of $100,000; or (b) for a Revolving Credit LIBOR Rate Loan in a minimum
aggregate amount of $500,000; provided, however, that there shall be no more
than four (4) Revolving Credit LIBOR Rate Loans outstanding at any one time.

§2.9    Funds for Loans.

(a)        Not later than noon (Eastern time) on the proposed Drawdown Date of
any Revolving Credit Loans, each of the Revolving Credit Lenders will make
available to the Agent, at the Agent’s Head Office, in immediately available
funds, the amount of such Lender’s Revolving Credit Commitment Percentage of the
amount of the requested Loans which may be disbursed pursuant to §2.1. Upon
receipt from each such Revolving Credit Lender of such amount, and upon receipt
of the documents required by §10 and §11 and the satisfaction of the other
conditions set forth therein to the extent applicable, the Agent will make
available to the Borrower the aggregate amount of such Revolving Credit Loans
made available to the Agent by the Revolving Credit Lenders by crediting such
amount to the account of the Borrower maintained at the Agent’s Head Office or
wiring such funds in accordance with

 

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Borrower’s written instructions. The failure or refusal of any Revolving Credit
Lender to make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Revolving Credit Commitment Percentage of the
requested Loans shall not relieve any other Revolving Credit Lender from its
several obligation hereunder to make available to the Agent the amount of such
other Lender’s Revolving Credit Commitment Percentage of any requested Loans,
including any additional Revolving Credit Loans that may be requested subject to
the terms and conditions hereof to provide funds to replace those not advanced
by the Lender so failing or refusing. In the event of any such failure or
refusal, the Revolving Credit Lenders not so failing or refusing shall be
entitled to a priority secured position as against the Revolving Credit Lender
or Revolving Credit Lenders so failing or refusing to make available to the
Borrower the amount of its or their Revolving Credit Commitment Percentage for
such Loans as provided in §12.5.

(b)        Unless the Agent shall have been notified by any Lender prior to the
applicable Drawdown Date that such Lender will not make available to Agent such
Lender’s Applicable Percentage of a proposed Loan that it is required to make
hereunder, Agent may in its discretion assume that such Lender has made such
Loan available to Agent in accordance with the provisions of this Agreement and
the Agent may, if it chooses, in reliance upon such assumption make such Loan
available to the Borrower, and such Lender shall be liable to the Agent for the
amount of such advance. If such Lender does not pay such corresponding amount
upon the Agent’s demand therefor, the Agent will promptly notify the Borrower,
and the Borrower shall promptly pay such corresponding amount to the Agent, with
Agent agreeing to provide Borrower with at least thirty (30) days to make such
repayment, unless Borrower has requested that Agent provide such funds on behalf
of the subject Lender, in which event such repayment shall be due within two
(2) Business Days. The Agent shall also be entitled to recover from such Lender
or the Borrower (without duplication), as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent at a per annum rate equal to
(i) from the Borrower at the applicable rate for such Loan or (ii) from a Lender
at the Federal Funds Effective Rate.

§2.10    Use of Proceeds. The Borrower and its Subsidiaries will use the
proceeds of the Loans and Letters of Credit solely to (a) pay closing costs in
connection with this Agreement; (b) repay existing loans, (c) fund acquisitions
of Eligible Real Estate and redevelopment and/or development projects, (d) fund
capital and construction expenditures, tenant improvements, leasing commissions
and property and equipment acquisitions; and (e) for general working capital
purposes (including without limitation to finance direct and indirect
acquisitions and other investments in real estate, interest shortfalls, for the
buyback, redemption, retirement or other acquisition of shares of the REIT
Guarantor’s Equity Interests, and for other general operating expenses,
including without limitation taxes, insurance and other expenses) but excluding
direct advances for the payment of any interest due hereunder.

§2.11    Letters of Credit.

(a)        Subject to the terms and conditions set forth in this Agreement, at
any time and from time to time from the Closing Date through the day that is
thirty (30) days prior to the Revolving Credit Maturity Date, the Issuing Lender
shall issue such Letters of Credit denominated in Dollars as the Borrower may
request upon the delivery of a written request in the form of Exhibit E hereto
(a “Letter of Credit Request”) to the Issuing Lender, provided that, , after
giving effect thereto (i) no Default or Event of Default shall have occurred and
be continuing, (ii) upon issuance of such Letter of Credit, the Outstanding
Amount of Letter of Credit Liabilities shall not exceed the Letter of Credit
Sublimit, (iii) in no event shall the Total Loan Exposure exceed the Total
Commitment or the Borrowing Base Availability, (iv) in no event shall the
Outstanding principal amount of the Revolving Credit Exposure exceed the Total
Revolving Credit Commitment or the Borrowing Base Availability minus the

 

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Outstanding Term Loans or cause a violation of the covenant set forth in §9.1,
(v) the conditions set forth in §§10 and 11 shall have been satisfied (or if
such condition is required to have been satisfied only as of the Closing Date,
that such condition was satisfied as of the Closing Date) or waived by Agent,
(vi) no Revolving Credit Lender is a Defaulting Lender (provided Issuing Lender
may, in its sole discretion, be entitled to waive this condition), unless the
Issuing Lender has entered into arrangements, including the delivery of cash
collateral, satisfactory to the Issuing Lender (in its sole discretion) with the
Borrower or such Defaulting Lender to eliminate the Issuing Lender’s actual or
potential Fronting Exposure with respect to the Defaulting Lender arising from
either the Letter of Credit then proposed to be issued or that Letter of Credit
and all other Letter of Credit Liabilities as to which the Issuing Lender has
actual or potential Fronting Exposure, as it may elect in its sole discretion,
and (vii) in no event shall any amount drawn under a Letter of Credit be
available for reinstatement or a subsequent drawing under such Letter of Credit.
Notwithstanding anything to the contrary contained in this §2.11, the Issuing
Lender shall not be obligated to issue, amend, extend, renew or increase any
Letter of Credit at a time when any other Revolving Credit Lender is a
Defaulting Lender, unless the Issuing Lender is satisfied that the participation
therein will otherwise be fully allocated to the Lenders that are not Defaulting
Lenders consistent with §14.16 and the Defaulting Lender shall have no
participation therein, except to the extent the Issuing Lender has entered into
arrangements with the Borrowers or such Defaulting Lender which are satisfactory
to the Issuing Lender in its good faith determination to eliminate the Issuing
Lender’s Fronting Exposure with respect to any such Defaulting Lender, including
the delivery of cash collateral. The Issuing Lender may assume that the
conditions in §10 and §11 have been satisfied unless it receives written notice
from a Revolving Credit Lender that such conditions have not been satisfied.
Each Letter of Credit Request shall be executed by an Authorized Officer of
Borrower. The Issuing Lender shall be entitled to conclusively rely on such
Person’s authority to request a Letter of Credit on behalf of Borrower. The
Issuing Lender shall have no duty to verify the authenticity of any signature
appearing on a Letter of Credit Request. The Borrower assumes all risks with
respect to the use of the Letters of Credit. Unless the Issuing Lender and the
Majority Lenders otherwise consent, the term of any Letter of Credit shall not
exceed a period of time commencing on the issuance of the Letter of Credit and
ending one year after the date of issuance thereof (provided that the consent of
the Required Lenders shall be required if such period would exceed two years
after the issuance date of such Letter of Credit), subject to extension pursuant
to an “evergreen” clause reasonably acceptable to Agent and Issuing Lender (but
in any event the term shall not extend beyond thirty (30) days prior to the
Revolving Credit Maturity Date) unless the Borrower has provided to Agent cash
collateral reasonably acceptable to the Agent in an amount equal to the Letter
of Credit Liability with respect to any Letter of Credit which extends beyond
thirty (30) days prior to the Revolving Credit Maturity Date). The amount
available to be drawn under any Letter of Credit shall reduce on a
dollar-for-dollar basis the amount available to be drawn under the Total
Revolving Credit Commitment as a Revolving Credit Loan.

(b)        Each Letter of Credit Request shall be submitted to the Issuing
Lender at least three (3) Business Days (or such shorter period as the Issuing
Lender may approve) prior to the date upon which the requested Letter of Credit
is to be issued. Each such Letter of Credit Request shall contain (i) a
statement as to the purpose for which such Letter of Credit shall be used (which
purpose shall be in accordance with the terms of this Agreement), and (ii) a
certification by an Authorized Officer or the chief financial or chief
accounting officer of Borrower that the Borrower is and will be in compliance
with all covenants under the Loan Documents after giving effect to the issuance
of such Letter of Credit. The Borrower shall further deliver to the Issuing
Lender such additional applications (which application as of the date hereof is
in the form of Exhibit I attached hereto) and documents as the Issuing Lender
may reasonably require, in conformity with the then standard practices of its
letter of credit department applicable to all or substantially all similarly
situated Borrower, in connection with the issuance of such Letter of Credit;
provided that in the event of any conflict, the terms of this Agreement shall
control.

 

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(c)        The Issuing Lender shall, subject to the conditions set forth in this
Agreement, issue the Letter of Credit on or before three (3) Business Days
following receipt of the documents last due pursuant to §2.11(b). Each Letter of
Credit shall be in form and substance reasonably satisfactory to the Issuing
Lender in its reasonable discretion.

(d)        Upon the issuance of a Letter of Credit, each Revolving Credit Lender
shall be deemed to have purchased a participation therein from Issuing Lender in
an amount equal to its respective Revolving Credit Commitment Percentage of the
amount of such Letter of Credit. No Revolving Credit Lender’s obligation to
participate in a Letter of Credit shall be affected by any other Revolving
Credit Lender’s failure to perform as required herein with respect to such
Letter of Credit or any other Letter of Credit.

(e)        Upon the issuance of each Letter of Credit and on each anniversary of
such date of issuance until the final expiration or termination of such Letter
of Credit, the Borrower shall pay to the Issuing Lender for its own account, a
Letter of Credit fronting fee with respect to each Letter of Credit, at a rate
equal to the greater of (a) a fee of 0.125%, computed on the face amount
available to be drawn under such Letter of Credit, or (b) $500.00. In addition,
the Borrowers shall pay to the Agent, for the account of the Revolving Credit
Lenders (including the Issuing Lender) in accordance with their respective
percentage shares of participation in such Letter of Credit, a Letter of Credit
fee calculated at the rate per annum equal to the Applicable Margin then
applicable to Revolving Credit LIBOR Rate Loans on the amount available to be
drawn under such Letter of Credit. Such Letter of Credit fees shall be payable
in quarterly installments in arrears with respect to each Letter of Credit on
the fifth day of each calendar quarter following the date of issuance and
continuing on each quarter or portion thereof thereafter, as applicable, or on
any earlier date on which the Commitments shall terminate and on the expiration
or return of any Letter of Credit (if such letter of credit is outstanding less
than a full quarter, such fee shall be pro rated for the period of time
outstanding). In addition, the Borrower shall pay to Issuing Lender for its own
account within ten (10) Business Days of demand of Issuing Lender the standard
issuance, documentation and service charges applicable to all or substantially
all similarly situated Borrower for Letters of Credit issued from time to time
by Issuing Lender.

(f)        In the event that any amount is drawn under a Letter of Credit by the
beneficiary thereof, unless the amount of such draw is otherwise immediately
repaid by the Borrower, the Borrower shall reimburse the Issuing Lender by
having such amount drawn treated as an outstanding Revolving Credit Base Rate
Loan under this Agreement (Borrower being deemed to have requested a Revolving
Credit Base Rate Loan on such date in an amount equal to the amount of such
drawing and such amount drawn shall be treated as an outstanding Revolving
Credit Base Rate Loan under this Agreement) and the Agent shall promptly notify
each Revolving Credit Lender by telex, telecopy, telegram, telephone (confirmed
in writing) or other similar means of transmission, and each Revolving Credit
Lender shall promptly and unconditionally pay to the Agent, for the Issuing
Lender’s own account, an amount equal to such Revolving Credit Lender’s
Revolving Credit Commitment Percentage of such Letter of Credit (to the extent
of the amount drawn). Borrower further hereby irrevocably authorize and direct
Agent to notify the Revolving Credit Lenders of Borrower’s intent to convert
such Revolving Credit Base Rate Loan to a Revolving Credit LIBOR Rate Loan with
an Interest Period of one (1) month on the third (3rd) Business Day following
the funding by the Revolving Credit Lenders of their advance under this
§2.11(f), provided that the making of such Revolving Credit LIBOR Rate Loan
shall not be a contravention of any provision of this Agreement. If and to the
extent any Revolving Credit Lender shall not make such amount available on the
Business Day on which such draw is funded, such Revolving Credit Lender agrees
to pay such amount to the Agent forthwith on demand, together with interest
thereon, for each day from the date on which such draw was funded until the date
on which such amount is paid to the Agent, at the Federal Funds Effective Rate
until three (3) days after the date on which the Agent gives notice of such draw
and at the Federal Funds Effective Rate plus one percent (1.0%) for each day
thereafter.

 

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Further, such Revolving Credit Lender shall be deemed to have assigned any and
all payments made of principal and interest on its Revolving Credit Loans,
amounts due with respect to its participations in Letters of Credit and any
other amounts due to it hereunder to the Agent to fund the amount of any drawn
Letter of Credit which such Revolving Credit Lender was required to fund
pursuant to this §2.11(f) until such amount has been funded (as a result of such
assignment or otherwise). In the event of any such failure or refusal, the
Revolving Credit Lenders not so failing or refusing shall be entitled to a
priority secured position for such amounts as provided in §12.5. The failure of
any Revolving Credit Lender to make funds available to the Agent in such amount
shall not relieve any other Revolving Credit Lender of its obligation hereunder
to make funds available to the Agent pursuant to this §2.11(f). Nothing herein
shall limit the Borrower’s obligation to reimburse the Issuing Lender for any
draws and disbursements made in respect of any Letter of Credit on the same
Business Day when any such draw or disbursement is made. If a draw or
disbursement with respect to a Letter of Credit is reimbursed by the making of
Loans hereunder, the Borrower’s obligation to pay the amount of such draw or
disbursement to the Issuing Lender shall be automatically converted into an
obligation to pay the resulting Loans.

(g)        If after the issuance of a Letter of Credit pursuant to §2.11(c) by
the Issuing Lender, but prior to the funding of any portion thereof by a
Revolving Credit Lender, for any reason a drawing under a Letter of Credit
cannot be refinanced as a Revolving Credit Loan, each Revolving Credit Lender
will, on the date such Revolving Credit Loan pursuant to §2.11(f) was to have
been made, purchase an undivided participation interest in the Letter of Credit
in an amount equal to its Revolving Credit Commitment Percentage of the amount
of such Letter of Credit. Each Revolving Credit Lender will immediately transfer
to the Issuing Lender in immediately available funds the amount of its
participation and upon receipt thereof the Issuing Lender will deliver to such
Revolving Credit Lender a Letter of Credit participation certificate dated the
date of receipt of such funds and in such amount.

(h)        Whenever at any time after the Issuing Lender has received from any
Revolving Credit Lender any such Revolving Credit Lender’s payment of funds
under a Letter of Credit and thereafter the Issuing Lender receives any payment
on account thereof, then the Issuing Lender will distribute to such Revolving
Credit Lender its participation interest in such amount (appropriately adjusted
in the case of interest payments to reflect the period of time during which such
Revolving Credit Lender’s participation interest was outstanding and funded);
provided, however, that in the event that such payment received by the Issuing
Lender is required to be returned, such Revolving Credit Lender will return to
the Issuing Lender any portion thereof previously distributed by the Issuing
Lender to it.

(i)        The issuance of any supplement, modification, amendment, renewal or
extension to or of any Letter of Credit shall be treated in all respects the
same as the issuance of a new Letter of Credit.

(j)        Borrower assumes all risks of the acts, omissions, or misuse of any
Letter of Credit by the beneficiary thereof. Neither Agent, Issuing Lender nor
any Lender will be responsible for (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any Letter of Credit or any document
submitted by any party in connection with the issuance of any Letter of Credit,
even if such document should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) failure
of any beneficiary of any Letter of Credit to comply fully with the conditions
required in order to demand payment under a Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document or draft required by or from a beneficiary in order to make a
disbursement under a Letter of Credit or the

 

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proceeds thereof; (vii) for the misapplication by the beneficiary of any Letter
of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of Agent or
any Lender, none of the foregoing will affect, impair or prevent the vesting of
any of the rights or powers granted to Agent, Issuing Lender or the Lenders
hereunder. In furtherance and extension and not in limitation or derogation of
any of the foregoing, any act taken or omitted to be taken by Agent, Issuing
Lender or the other Lenders in good faith will be binding on Borrower and will
not put Agent, Issuing Lender or the other Lenders under any resulting liability
to Borrower; provided nothing contained herein shall relieve Issuing Lender,
Agent or any Lender for liability to Borrower arising as a result of the gross
negligence or willful misconduct of Issuing Lender, Agent or any Lender as
determined by a court of competent jurisdiction after the exhaustion of all
applicable appeal periods.

§2.12    Increase in Total Commitment.

(a)        Provided that no Default or Event of Default has occurred and is
continuing, subject to the terms and conditions set forth in this §2.12, the
Borrower shall have the option at any time and from time to time before at least
three (3) months prior to the applicable Maturity Date to request an increase in
the Total Commitment to not more than $500,000,000 (after giving effect to each
such increase), which increase shall be allocated at the Borrower’s request to
the Revolving Credit Commitments or one or more tranches of term loan
commitments (the “Term Loan Commitments”) by giving written notice to the Agent
(an “Increase Notice”; and the amount of such requested increase is the
“Commitment Increase”), provided that any such individual increase must be in a
minimum amount of $25,000,000. Upon receipt of any Increase Notice, the Agent
shall consult with Arrangers and within ten (10) days shall notify the Borrower
of the amount of facility fees to be paid to any Lenders who provide an
additional Revolving Credit Commitment or Term Loan Commitment in connection
with such increase in the Total Commitment (which shall be in addition to the
fees to be paid to Agent or Arrangers pursuant to the Agreement Regarding Fees).
If the Borrower agrees to pay the facility fees so determined, then the Agent
promptly shall send a notice to all Lenders (the “Additional Commitment Request
Notice”) informing them of the Borrower’s request to increase the Total
Commitment and of the facility fees to be paid with respect thereto. Each Lender
who desires to provide an additional Revolving Credit Commitment or Term Loan
Commitment upon such terms shall provide Agent with a written commitment letter
specifying the amount of the additional Commitment which it is willing to
provide prior to such deadline as may be specified in the Additional Commitment
Request Notice not to exceed ten (10) days. If the requested increase is
oversubscribed then the Agent and the Arrangers shall allocate the Commitment
Increase among the Lenders who provide such commitment letters on such basis
mutually acceptable to each of the Borrower, Agent and Arrangers. If the
additional Commitments so provided are not sufficient to provide the full amount
of the Commitment Increase requested by the Borrower, then the Agent and the
Arrangers shall use best effort to, and Borrower may, but shall not be obligated
to, invite one or more banks or lending institutions (which banks or lending
institutions shall be reasonably acceptable to Agent, Arrangers and Borrower) to
become a Lender and provide an additional Commitment. The Agent shall provide
all Lenders with a notice setting forth the amount, if any, of the additional
Commitment to be provided by each Lender and the revised Applicable Percentages
which shall be applicable after the effective date of the Commitment Increase
specified therein (the “Commitment Increase Date”). In no event shall any Lender
be obligated to provide an additional Commitment.

(b)        The Borrower may elect to effect any increase in the Total Commitment
by requesting one more tranches of Term Loan Commitments and Term Loans. The
Term Loan Commitments may, if determined necessary or desirable by the Agent and
the Lender, be effected pursuant to one or more Term Loan Amendments executed
and delivered by the Borrower, the Term Lenders, as applicable, and the Agent.
All Term Loan Commitments and Term Loans shall (A) mature on the Term Loan
Maturity Date (including any extensions thereof) with respect thereto, (B) bear
interest at

 

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such rates as are agreed upon by the Borrower and the Term Lenders providing
such additional Term Loans, (C) not require scheduled amortization prior to the
Term Loan Maturity Date but may permit voluntary prepayment (subject to
sub-clause (D) hereof), and (D) not rank higher than pari passu in right of
payment and with respect to security with all Revolving Credit Loans and any
other existing Term Loans or have different borrower or guarantors as the
Borrower and Guarantors with respect to all other Obligations. Each Term Loan
Amendment may, without the consent of any other Lenders, effect such amendments
to this Agreement and the other Loan Documents as are consistent with this §2.12
and may be necessary or appropriate, in the opinion of the Agent, to effect the
provisions of this §2.12 with respect thereto. On any Commitment Increase Date
on which any Term Loan Commitments are effected, subject to the satisfaction of
the foregoing terms and conditions, (i) each applicable Term Lender shall make a
Loan to the Borrower (a “Term Loan”) in an amount equal to its Term Loan
Commitment as of such date, and (ii) each Term Lender shall become a Lender
hereunder with respect to the Term Loan Commitment and the Term Loans made
pursuant thereto.

(c)        On any Commitment Increase Date which results in an increase in the
Revolving Credit Commitments, the outstanding principal balance of the Revolving
Credit Loans shall be reallocated among the Revolving Credit Lenders such that
after the applicable Commitment Increase Date the outstanding principal amount
of Revolving Credit Loans owed to each Revolving Credit Lender shall be equal to
such Revolving Credit Lender’s Revolving Credit Commitment Percentage (as in
effect after the applicable Commitment Increase Date) of the outstanding
principal amount of all Revolving Credit Loans. The participation interests of
the Revolving Credit Lenders in Swing Loans and Letters of Credit shall be
similarly adjusted. On any Commitment Increase Date those Revolving Credit
Lenders whose Revolving Credit Commitment Percentage is increasing shall advance
the funds to the Agent and the funds so advanced shall be distributed among the
Revolving Credit Lenders whose Revolving Credit Commitment Percentage is
decreasing as necessary to accomplish the required reallocation of the
outstanding Revolving Credit Loans. The funds so advanced shall be Revolving
Credit Base Rate Loans until converted to Revolving Credit LIBOR Rate Loans
which are allocated among all Revolving Credit Lenders based on their Revolving
Credit Commitment Percentages.

(d)        Upon the effective date of each increase in the Total Commitment
pursuant to this §2.12 the Agent may unilaterally revise Schedule 1.1 and the
Borrower shall, if requested by such Lender, execute and deliver to the Agent
new Notes for each Lender whose Commitment has changed or who has provided a new
Commitment so that the principal amount of such Lender’s Note shall equal its
aggregate Commitment as increased thereby. The Agent shall deliver such
replacement Notes to the respective Lenders in exchange for the Notes replaced
thereby which shall be surrendered by such Lenders and delivered to Borrower.
Such new Notes shall provide that they are replacements for the surrendered
Notes and that they do not constitute a novation, shall be dated as of the
Commitment Increase Date and shall otherwise be in substantially the form of the
replaced Notes.

(e)        Notwithstanding anything to the contrary contained herein, any
increase in the Total Commitment pursuant to this §2.12 shall be conditioned
upon satisfaction or waiver of the following conditions precedent which must be
satisfied or waived prior to the effectiveness of any increase of the Total
Commitment:

(i)        Payment of Activation Fee. The Borrower shall pay (A) to the Agent
those fees described in and contemplated by the Agreement Regarding Fees with
respect to the applicable Commitment Increase, and (B) to the Arranger such
facility fees as the Lenders who are providing an additional Commitment may
require to increase the aggregate Commitment, which fees shall be due and
payable upon the effectiveness of such Commitment increase and which shall, when
paid, be fully earned and non-refundable under any circumstances. The Arranger
shall pay to the Lenders acquiring the increased Commitment certain fees
pursuant to their separate agreement; and

 

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(ii)    No Default. On the date any Increase Notice is given and on the date
such increase becomes effective, both immediately before and after the Total
Commitment is increased, there shall exist no Default or Event of Default; and

(iii)        Representations True. The representations and warranties made by
the Credit Parties in the Loan Documents or otherwise made by or on behalf of
the Borrower in connection therewith or after the date thereof shall have been
true and correct in all material respects when made and shall also be true and
correct in all material respects on the date of such Increase Notice and on the
date the Total Commitment is increased (unless such representations are limited
by their terms to a specific date in which case they shall be required to be
true and correct only as of such specified date), both immediately before and
after the Total Commitment is increased, other than for changes in the ordinary
course of business permitted by this Agreement; and

(iv)        Additional Documents and Expenses. The Borrower shall execute and
deliver to Agent and the Lenders such additional documents, instruments,
certifications and opinions as the Agent may reasonably require, including,
without limitation, a Compliance Certificate, demonstrating compliance with all
covenants set forth in the Loan Documents after giving effect to the increase,
and the Borrower shall pay the cost of any updated UCC searches, and any and all
intangible taxes, assessments or charges or any similar reasonable fees, taxes
or expenses which are reasonably requested in connection with such increase.

§2.13    Extension of Revolving Credit Maturity Date. The Borrower shall have
the right and option to extend the Revolving Credit Maturity Date to March 15,
2023, upon satisfaction or waiver of the following conditions precedent, which
must be satisfied prior to the effectiveness of any extension of the Revolving
Credit Maturity Date:

(a)        Extension Request. The Borrower shall deliver written notice of such
request (the “Extension Request”) to the Agent not earlier than the date which
is ninety (90) days and not later than the date which is thirty (30) days prior
to the then applicable Revolving Credit Maturity Date (as determined without
regard to such extension). Any such Extension Request shall be irrevocable and
binding on the Borrower unless otherwise agreed to by the Agent in its
reasonable discretion.

(b)        Payment of Extension Fee. The Borrower shall pay to the Agent for the
pro rata accounts of the Revolving Credit Lenders in accordance with their
respective Revolving Credit Commitments an extension fee in an amount equal to
0.20% of the Total Revolving Credit Commitment in effect on the then applicable
Revolving Credit Maturity Date, after taking into consideration any reduction in
the Revolving Credit Commitments as of such date (as determined without regard
to such extension), which fee shall, when paid, be fully earned and
non-refundable under any circumstances.

(c)        No Default. On the date the Extension Request is given there shall
exist no Event of Default and on the then applicable Revolving Credit Maturity
Date (as determined without regard to such extension) there shall exist no
Default or Event of Default.

(d)        Representations and Warranties. The representations and warranties
made by the Credit Parties in the Loan Documents or otherwise made by or on
behalf of the Borrower in connection therewith or after the date thereof shall
have been true and correct in all material respects when made and shall also be
true and correct in all material respects on the date the Extension Request is
given and on the then applicable Revolving Credit Maturity Date (as determined
without regard to such extension), unless such representations and warranties
are by their terms limited to a specific date (in which case they shall be
required to be true and correct only as of such specified date) other than for
changes in the ordinary course of business permitted by this Agreement.

 

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§2.14    Pro Rata Treatment.

(a)        As provided elsewhere herein, all Revolving Credit Lenders’ interests
in the Revolving Credit Loans, all interests of the Term Lenders in the Term
Loans, and all Lenders’ interests in the Loan Documents shall be ratable
undivided interests and none of such Lenders’ interests shall have priority over
the others. Each payment delivered to the Agent for the account of any Lender or
amount to be applied or paid by the Agent to any Lender shall be paid promptly
by the Agent to such Lender in the same type of funds that the Agent received at
such Lender’s address specified pursuant to §19.

(b)        Except to the extent otherwise explicitly provided in this Agreement:
(a) each borrowing from the Revolving Credit Lenders under §2.1, §2.6(d), or
§2.11(f) shall be made from the Revolving Credit Lenders, each payment of the
fees under §2.4 or §2.11(e) shall be made for the account of the Revolving
Credit Lenders, and each termination or reduction of the amount of the Revolving
Credit Commitments under §2.5 shall be applied to the respective Revolving
Credit Commitments of the Revolving Credit Lenders, pro rata according to the
amounts of their respective Revolving Credit Commitment Percentages; (b) each
payment or prepayment of principal of Revolving Credit Loans shall be made for
the account of the Revolving Credit Lenders pro rata in accordance with their
respective Revolving Credit Commitment Percentages, provided that, subject to
§14.16, if immediately prior to giving effect to any such payment in respect of
any Revolving Credit Loans the outstanding principal amount of the Revolving
Credit Loans shall not be held by the Revolving Credit Lenders pro rata in
accordance with their respective Revolving Credit Percentages in effect at the
time such Revolving Credit Loans were made, then such payment shall be applied
to the Revolving Credit Loans in such manner as shall result, as nearly as is
practicable, in the outstanding principal amount of the Revolving Credit Loans
being held by the Revolving Credit Lenders pro rata in accordance with such
respective Revolving Credit Commitment Percentages; (c) the making of any Term
Loans under §2.12 shall be made from the applicable Term Lenders, pro rata
according to the amounts of their respective commitments for such Term Loans;
(d) each payment or prepayment of principal of Term Loans shall be made for the
account of the Term Lenders pro rata in accordance with the respective unpaid
principal amounts of the Term Loans held by them; (e) the Conversion and
Continuation of Loans of a particular Class and Type shall be made pro rata
among the Lenders of such Class according to the amounts of their respective
Loans of such Class, and the then current Interest Period for each Lender’s
portion of each such Loan of such Type shall be coterminous; (f) the Revolving
Credit Lenders’ participation in, and payment obligations in respect of, Swing
Loans under §2.6, shall be in accordance with their respective Revolving Credit
CommitmentPercentages and (g) the Revolving Credit Lenders’ participation in,
and payment obligations in respect of, Letters of Credit under §2.11, shall be
in accordance with their respective Revolving Credit Commitment Percentages.

§3.        REPAYMENT OF THE LOANS.

§3.1    Stated Maturity. The Borrower promises to pay on the Revolving Credit
Maturity Date and there shall become absolutely due and payable on the Revolving
Credit Maturity Date all of the Revolving Credit Loans and other Letters of
Credit Liabilities outstanding on such date (other than Letters of Credit whose
expiration date is beyond the Revolving Credit Maturity Date as set forth in
§2.11(a), together with any and all accrued and unpaid interest thereon. The
Borrower promises to pay on the Term Maturity Date and there shall become
absolutely due and payable on the Term Maturity Date all of the Term Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon. The Borrower promises to pay each Swing Loan on the earlier of (i) ten
(10) Business Days of the date such Swing Loan was provided and (ii) the
Revolving Credit Maturity Date, together with any and all accrued and unpaid
interest thereon.

 

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§3.2    Mandatory Prepayments. If at any time (a) the aggregate Revolving Credit
Exposure exceeds (i) the Total Revolving Credit Commitment or (ii) the sum of
the Borrowing Base Availability minus the Outstanding Term Loans, or (b) the
Total Loan Exposure exceeds (i) the Total Commitment or (ii) the Borrowing Base
Availability, then the Borrower shall, within ten (10) Business Days after
receipt of notice from Agent of such occurrence pay the amount of such excess to
the Agent for the respective accounts of the Lenders, as applicable, together
with any additional amounts payable pursuant to §4.8, for application to the
Revolving Credit Exposure as provided in §3.4 and then ratably to the Term Loans
in accordance with the provisions hereof (as amended by any applicable Term Loan
Amendment).

§3.3    Optional Prepayments.

(a)    Borrower shall have the right, at its election, to prepay the outstanding
amount of the Loans of any Class and Swing Loans, as a whole or in part, at any
time without penalty or premium; provided, that if any prepayment of the
outstanding amount of any LIBOR Rate Loans pursuant to this §3.3 is made on a
date that is not the last day of the Interest Period relating thereto, such
prepayment shall be accompanied by the payment of any amounts due pursuant to
§4.8.

(b)    The Borrower shall give the Agent, no later than 1:00 p.m. (Eastern time)
at least three (3) Business Days prior written notice of any prepayment pursuant
to this §3.3, in each case specifying the proposed date of prepayment of the
Loans, the Class of Loans to be prepaid, and the principal amount to be prepaid
(provided that (i) any such notice may be revoked or modified upon one (1) day’s
prior notice to the Agent) and/or (ii) any such notice or repayment may be
conditioned upon the consummation of a transaction. Notwithstanding the
foregoing, no prior notice shall be required for the prepayment of any Swing
Loan.

§3.4    Partial Prepayments. Each partial prepayment of the Loans under §3.3
shall be in a minimum amount of $1,000,000.00 or an integral multiple of
$100,000.00 in excess thereof and, shall be accompanied by the payment of
accrued interest on the principal prepaid to the date of payment. Each partial
payment under §3.2 and §3.3 shall be applied first to the principal of any
Outstanding Swing Loans until paid in full, second, in the absence of
instruction by the Borrower with respect to prepayments under §3.3 only, to the
principal of the Revolving Credit Loans (and with respect to each category of
Revolving Credit Loans, first to the principal of Base Rate Loans, and then to
the principal of LIBOR Rate Loans) until paid in full, third, to be held as cash
collateral for the Letter of Credit Liabilities, and, last, to the Term Loans in
accordance with the provisions hereof (as amended by any the applicable Term
Loan Amendment).

§3.5    Effect of Prepayments. Amounts of the Revolving Credit Loans prepaid
under §3.2 and §3.3 prior to the Revolving Credit Maturity Date may be
reborrowed as provided in §2. Amounts of any Term Loans prepaid under §3.2 and
§3.3 may not be reborrowed.

§4.        CERTAIN GENERAL PROVISIONS.

§4.1    Conversion and Continuation Options.

(a)        The Borrower may elect from time to time to convert any of its
outstanding Loans (other than a Swing Loan) to a Loan of the same Class but of
another Type and such Loans shall thereafter bear interest as a Base Rate Loan
or a LIBOR Rate Loan, as applicable; provided that (i) with respect to any such
conversion of a LIBOR Rate Loan to a Base Rate Loan, the Borrower shall give the
Agent at least one (1) Business Day’s prior written notice of such election, and
such conversion shall only be made on the last day of the Interest Period with
respect to such LIBOR Rate Loan unless the Borrower pays Breakage Costs as
required under this Agreement; (ii) with respect to any such conversion of a
Base

 

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Rate Loan to a LIBOR Rate Loan or any continuation of a LIBOR Rate Loan, the
Borrower shall give the Agent at least three (3) LIBOR Business Days’ prior
written notice of such election and the Interest Period requested for such Loan,
the principal amount of the Loan so converted shall be in a minimum aggregate
amount of $100,000 and, after giving effect to the making of such Loan, there
shall be no more than six (6) Revolving Credit LIBOR Rate Loans outstanding at
any one time; (iii) no Loan may be converted into a LIBOR Rate Loan when any
Default or Event of Default has occurred and is continuing ; and (iv) unless
otherwise specified herein, no conversion from a LIBOR Rate Loan to a Base Rate
Loan may be made other than at the end of the applicable Interest Period. All or
any part of the outstanding Loans of any Type may be converted as provided
herein, provided that no partial conversion shall result in a Base Rate Loan in
a principal amount of less than $ 1,000,000 or an integral multiple of $100,000
or a LIBOR Rate Loan in a principal amount of less than $ 1,000,000 or an
integral multiple of $250,000. On the date on which such conversion is being
made, each Lender shall take such action as is necessary to transfer its
Applicable Percentage of such Loans to its Domestic Lending Office or its LIBOR
Lending Office, as the case may be. Each Conversion/Continuation Request
relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan or a
continuation of a LIBOR Rate Loan shall be irrevocable by the Borrower.

(b)        Any LIBOR Rate Loan may be continued as such Type upon the expiration
of an Interest Period with respect thereto by compliance by the Borrower with
the terms of §4.1; provided that no LIBOR Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing, but shall
be automatically converted to a Base Rate Loan on the last day of the Interest
Period relating thereto ending during the continuance of any Default or Event of
Default.

(c)        In the event that the Borrower does not notify the Agent of their
election hereunder with respect to any LIBOR Rate Loan, such Loan shall be
automatically continued at the end of the applicable Interest Period as a LIBOR
Rate Loan for an Interest Period of one month unless such Interest Period shall
be greater than the time remaining until the Revolving Credit Maturity Date or
Term Maturity Date, as applicable to such Loan, or if an Event of Default has
occurred and is continuing, in which case such Loan shall be automatically
converted to a Base Rate Loan at the end of the applicable Interest Period.

§4.2    Fees. In addition to all fees specified herein, the Borrower agrees to
pay to KeyBank and the Arranger for their own account certain fees for services
rendered or to be rendered in connection with the Loans as provided pursuant to
a fee letter dated December 20, 2017 between the Borrower, KeyBank and the
Arranger(the “Agreement Regarding Fees”).

§4.3    [Intentionally Omitted.]

§4.4    Funds for Payments.

(a)        All payments of principal, interest, facility fees, closing fees and
any other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Lenders and the Agent,
as the case may be, at the Agent’s Head Office, not later than 3:00 p.m.
(Eastern time) on the day when due (or such later time as is acceptable to the
Agent in the event of a payment in full of all Loans and a termination of
Commitments hereunder), in each case in lawful money of the United States in
immediately available funds. To the extent not already paid pursuant to the
preceding sentence, the Agent is hereby authorized to charge the accounts of the
Borrower with KeyBank, on the dates when the amount thereof shall become due and
payable, with the amounts of the principal of and interest on the Loans and all
fees, charges, expenses and other amounts owing to the Agent and/or the Lenders
(including Swing Loan Lender) under the Loan Documents. Subject to the
foregoing, all payments made to Agent on behalf of the Lenders, and actually
received by Agent, shall be

 

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deemed received by the Lenders on the date actually received by Agent.    The
Agent will promptly distribute to each Lender its Applicable Percentage (or
other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such in accordance with §2.14. If and to the extent
Agent shall not make such payments to a Lender when due as set forth in the
preceding sentence, then such unpaid amounts shall accrue interest, payable by
Agent, at the Federal Funds Rate from the due date until (but not including) the
date on which Agent makes such payments to such Lender.

(b)        All payments by any Credit Party hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim, and free and clear
of and without deduction or withholding for any Taxes, except as required by
Legal Requirements. If any Legal Requirement (as determined in the good faith
discretion of an applicable Withholding Agent) requires the deduction or
withholding of any Tax from any such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with Legal Requirements and, if
such Tax is an Indemnified Tax, then the sum payable by the Borrower or other
applicable Guarantor shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this §4.4) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(c)        The Credit Parties shall timely pay to the relevant Governmental
Authority in accordance with Legal Requirements, or at the option of the Agent
timely reimburse it for the payment of, any Other Taxes.

(d)        The Credit Parties shall jointly and severally indemnify each
Recipient, within ten (10) days after demand therefor, for the full amount of
any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this §4.4) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Agent), or by the Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error; provided that the determinations in such
statement are made on a reasonable basis and in good faith.

(e)        Each Lender shall severally indemnify the Agent, within ten (10) days
after demand therefor, for (i) any Indemnified Taxes attributable to such Lender
(but only to the extent that the Borrower or a Guarantor has not already
indemnified the Agent for such Indemnified Taxes and without limiting the
obligation of the Borrower and the Guarantors to do so), (ii) any Taxes
attributable to such Lender’s failure to comply with the provisions of §18.4
relating to the maintenance of a Participant Register and (iii) any Excluded
Taxes attributable to such Lender, in each case, that are payable or paid by the
Agent in connection with any Loan Document, and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to any
Lender by the Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Agent to set off and apply any and all amounts at any time
owing to such Lender under any Loan Document or otherwise payable by the Agent
to the Lender from any other source against any amount due to the Agent under
this subsection.

(f)        As soon as practicable after any payment of Taxes by the Borrower or
any Guarantor to a Governmental Authority pursuant to this §4.4, such Borrower
or such Guarantor shall deliver to the Agent the original or a certified copy of
a receipt issued by such Governmental Authority

 

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evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Agent.

(g)        (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Agent, at the time or times reasonably requested
by the Borrower or the Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Agent as will permit such payments
to be made without withholding or at a reduced rate of withholding. In addition,
any Lender, if reasonably requested by the Borrower or the Agent, shall deliver
such other documentation prescribed by Legal Requirements or reasonably
requested by the Borrower or the Agent as will enable the Borrower or the Agent
to determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in the immediately
following clauses (ii)(A), (ii)(B) and (ii)(D)) shall not be required if in the
Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

(ii)        Without limiting the generality of the foregoing, in the event that
the Borrower is a U.S. Person:

(A)        any Lender that is a U.S. Person shall deliver to the Borrower and
the Agent on or prior to the date on which such Lender becomes a Lender under
this Agreement (and from time to time thereafter upon the reasonable request of
the Borrower or the Agent), an electronic copy (or an original if requested by
the Borrower or the Agent) of an executed IRS Form W-9 (or any successor form)
certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)        any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), whichever of the following is
applicable:

(I)        in the case of a Foreign Lender claiming the benefits of an income
tax treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, an electronic copy (or an original if
requested by the Borrower or the Agent) of an executed IRS Form W-8BEN or
W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and
(y) with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “business profits” or “other income”
article of such tax treaty;

(II)        an electronic copy (or an original if requested by the Borrower or
the Agent) of an executed IRS Form W-8ECI;

(III)        in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit J-1 to the effect that such

 

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Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E; or

(IV)        to the extent a Foreign Lender is not the beneficial owner, an
electronic copy (or an original if requested by the Borrower or the Agent) of an
executed IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or
W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit
J-2 or Exhibit J-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit J-4 on
behalf of each such direct and indirect partner;

(C)        any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), an electronic copy (or an
original if requested by the Borrower or the Agent) of any other form prescribed
by Legal Requirements as a basis for claiming exemption from or a reduction in
U.S. federal withholding Tax, duly completed, together with such supplementary
documentation as may be prescribed by Legal Requirements to permit the Borrower
or the Agent to determine the withholding or deduction required to be made; and

(D)        if a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Agent at the time or times
prescribed by Legal Requirements and at such time or times reasonably requested
by the Borrower or the Agent such documentation prescribed by Legal Requirements
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the Agent as
may be necessary for the Borrower and the Agent to comply with their obligations
under FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment. Solely for purposes of this clause (D), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Agent in writing
of its legal inability to do so.

(h)        If any party determines, in its sole discretion exercised in good
faith, that it has received a refund of any Taxes as to which it has been
indemnified pursuant to this §4.4 (including by the payment of additional
amounts pursuant to this §4.4), it shall pay to the indemnifying party an amount
equal to such refund (but only to the extent of indemnity payments made under
this §4.4with respect to the Taxes giving rise to such refund), net of all
reasonable third party out-of-pocket expenses (including

 

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Taxes) of such indemnified party actually incurred and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund). Such indemnifying party, upon the request of such indemnified
party, shall repay to such indemnified party the amount paid over pursuant to
this subsection (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event that such indemnified party is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this subsection, in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this
subsection the payment of which would place the indemnified party in a less
favorable net after-Tax position than the indemnified party would have been in
if the Tax subject to indemnification and giving rise to such refund has not
been deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid. This subsection
shall not be construed to require any indemnified party to make available its
Tax returns (or any other information relating to its Taxes that it reasonably
deems confidential) to the indemnifying party or any other Person.

(i)        Each party’s obligations under this §4.4 shall survive the
resignation or replacement of the Agent or any assignment of rights by, or the
replacement of, a Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all obligations under any Loan Document.

(j)        The obligations of the Borrower to the Lenders under this Agreement
(and of the Revolving Credit Lenders to make payments to the Issuing Lender with
respect to Letters of Credit and to the Swing Loan Lender with respect to Swing
Loans) shall be absolute, unconditional and irrevocable, and shall be paid and
performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including, without limitation, the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit; (ii) any improper use which may be made of any Letter of Credit or any
improper acts or omissions of any beneficiary or transferee of any Letter of
Credit in connection therewith; (iii) the existence of any claim, set-off,
defense or any right which the Credit Parties or any of their Subsidiaries or
Affiliates may have at any time against any beneficiary or any transferee of any
Letter of Credit (or persons or entities for whom any such beneficiary or any
such transferee may be acting) or the Lenders (other than the defense of payment
to the Lenders in accordance with the terms of this Agreement) or any other
person, whether in connection with any Letter of Credit, this Agreement, any
other Loan Document, or any unrelated transaction; (iv) any draft, demand,
certificate, statement or any other documents presented under any Letter of
Credit proving to be insufficient, forged, fraudulent or invalid in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;
(v) any breach of any agreement between Borrower or any of its Subsidiaries or
Affiliates and any beneficiary or transferee of any Letter of Credit; (vi) any
irregularity in the transaction with respect to which any Letter of Credit is
issued, including any fraud by the beneficiary or any transferee of such Letter
of Credit; (vii) payment by the Issuing Lender under any Letter of Credit
against presentation of a sight draft, demand, certificate or other document
which does not comply with the terms of such Letter of Credit, provided that
such payment shall not have constituted gross negligence or willful misconduct
on the part of the Issuing Lender as determined by a court of competent
jurisdiction in a final non-appealable judgment; (viii) any non-application or
misapplication by the beneficiary of a Letter of Credit of the proceeds of such
Letter of Credit; (ix) the legality, validity, form, regularity or
enforceability of the Letter of Credit; (x) the failure of any payment by
Issuing Lender to conform to the terms of a Letter of Credit (if, in Issuing
Lender’s good faith judgment, such payment is determined to be appropriate);
(xi) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; (xii) the
occurrence of any Default or Event of Default; and (xiii) any other circumstance
or happening whatsoever, whether or not similar to any of the foregoing,
provided that nothing contained herein shall relieve Issuing Lender, Agent or
any Lender for liability to Borrower arising as a result of gross negligence or
willful misconduct on the part of the Issuing Lender,

 

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Agent, any Lender or the Swing Loan Lender, as applicable as determined by a
court of competent jurisdiction in a final non-appealable judgment.

§4.5    Computations. All computations of interest on the Loans and of other
fees to the extent applicable shall be based on a 360-day year and paid for the
actual number of days elapsed. Except as otherwise provided in the definition of
the term “Interest Period” with respect to LIBOR Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
Outstanding Loans and Letter of Credit Liabilities as reflected on the records
of the Agent from time to time shall be considered prima facie evidence of such
amount.

§4.6    Suspension of LIBOR Rate Loans.

(a)    In the event that, prior to the commencement of any Interest Period
relating to any LIBOR Rate Loan, the Agent shall determine that adequate and
reasonable methods do not exist for ascertaining LIBOR for such Interest Period,
or the Agent shall reasonably determine that LIBOR will not accurately and
fairly reflect the cost of the Lenders making or maintaining LIBOR Rate Loans
for such Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Lenders absent manifest error) to the Borrower and the Lenders. In such event
(a) any Loan Request with respect to a LIBOR Rate Loan shall be automatically
withdrawn and shall be deemed a request for a Base Rate Loan and (b) each LIBOR
Rate Loan will automatically, on the last day of the then current Interest
Period applicable thereto, become a Base Rate Loan, and the obligations of the
Lenders to make LIBOR Rate Loans shall be suspended until the Agent determines
that the circumstances giving rise to such suspension no longer exist, whereupon
the Agent shall so notify the Borrower and the Lenders.

(b)    If at any time the Agent determines (which determination shall be
conclusive absent manifest error) that (i) the circumstances set forth in clause
(a) have arisen and such circumstances are unlikely to be temporary or (ii) the
circumstances set forth in clause (a) have not arisen but the supervisor for the
administrator of the LIBOR Screen Rate or a Governmental Authority having
jurisdiction over the Agent has made a public statement identifying a specific
date after which LIBOR Screen Rate shall no longer be used for determining
interest rates for loans, then the Agent and the Borrower shall endeavor to
establish an alternate rate of interest to LIBOR that gives due consideration to
the then prevailing market convention for determining a rate of interest for
syndicated loans in the United States at such time, and shall enter into an
amendment to this Agreement to reflect such alternate rate of interest and such
other related changes to this Agreement as may be applicable. Notwithstanding
anything to the contrary in §27, such amendment shall become effective without
any further action or consent of any other party to this Agreement so long as
the Agent shall not have received, within five (5) Business Days of the date
notice of such alternate rate of interest is provided to the Lenders, a written
notice from the Majority Lenders stating that such Majority Lenders object to
such amendment. Until an alternate rate of interest shall be determined in
accordance with this clause (b) (but, in the case of the circumstances described
in clause (ii) of the first sentence of this §4.6(b), only to the extent LIBOR
Screen Rate for such Interest Period is not available or published at such time
on a current basis), (1) any notice of conversion/continuation that requests the
conversion of any Loan to, or continuation of any Loan as, a LIBOR Rate Loan
shall be ineffective and any such Loan shall be converted to a Base Rate Loan on
the last day of the then current Interest Period applicable thereto and (2) if
any Notice of Borrowing requests a LIBOR Rate Loan, such Loan shall be made as
Base Rate Loan.

§4.7    Illegality. Notwithstanding any other provisions herein, if any Change
in Law shall make it unlawful, or any central bank or other Governmental
Authority having jurisdiction over a Lender

 

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or its LIBOR Lending Office shall assert that it is unlawful, for any Lender to
make or maintain LIBOR Rate Loans, such Lender shall forthwith give notice of
such circumstances to the Agent and the Borrower thereupon (a) the commitment of
the Lenders to make LIBOR Rate Loans shall forthwith be suspended and (b) the
LIBOR Rate Loans then outstanding shall be converted automatically to Base Rate
Loans on the last day of each Interest Period applicable to such LIBOR Rate
Loans or within such earlier period as may be required by law. Notwithstanding
the foregoing, upon request by the Borrowers, the Lender shall use commercially
reasonable efforts to designate a different lending office if such designation
will void the need for giving such notice and will not, in the reasonable
judgment of Lender, subject such Lender to any unreimbursed cost or expense or
be otherwise disadvantageous to Lender or increase any costs payable by Borrower
hereunder.

§4.8        Additional Interest. If any LIBOR Rate Loan or any portion thereof
is repaid or is converted to a Base Rate Loan for any reason on a date which is
prior to the last day of the Interest Period applicable to such LIBOR Rate Loan,
or if repayment of the Loans has been accelerated as provided in §12.1, the
Borrower will pay to the Agent upon demand for the account of the applicable
Lenders in accordance with their respective Applicable Percentages (or to the
Swing Loan Lender with respect to a Swing Loan), in addition to any amounts of
interest otherwise payable hereunder, the Breakage Costs. Borrower understands,
agrees and acknowledges the following: (i) no Lender has any obligation to
purchase, sell and/or match funds in connection with the use of LIBOR as a basis
for calculating the rate of interest on a LIBOR Rate Loan; (ii) LIBOR is used
merely as a reference in determining such rate; and (iii) Borrower has accepted
LIBOR as a reasonable and fair basis for calculating such rate and any Breakage
Costs. Borrower further agrees to pay the Breakage Costs, if any, whether or not
a Lender elects to purchase, sell and/or match funds.

§4.9    Additional Costs, Etc. Notwithstanding anything herein to the contrary,
if any Change in Law, shall:

(a)        subject any Lender or the Agent to any Taxes or withholding of any
nature with respect to this Agreement, the other Loan Documents, such Lender’s
Commitment, a Letter of Credit or the Loans (other than for Indemnified Taxes,
Taxes described in clauses (b) through (d) of the definition of Excluded Taxes,
and Connection Income Taxes), or

(b)        materially change the basis of taxation (except for changes in taxes
on gross receipts, income or profits or its franchise tax) of payments to any
Lender of the principal of or the interest on any Loans or any other amounts
payable to any Lender under this Agreement or the other Loan Documents, or

(c)        impose or increase or render applicable any special deposit,
compulsory loan, insurance charge, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not having the force of law
and which are not already reflected in any amounts payable by Borrower
hereunder) against assets held by, or deposits in or for the account of, or
loans by, or commitments of an office of any Lender, or

(d)        impose on any Lender or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Lender’s Commitment, a Letter of Credit or any class of loans or
commitments of which any of the Loans or such Lender’s Commitment forms a part;
and the result of any of the foregoing is:

(i)        to increase the cost to any Lender of making, funding, issuing,
renewing, extending or maintaining any of the Loans, the Letters of Credit or
such Lender’s Commitment, or

 

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(ii)        to reduce the amount of principal, interest or other amount payable
to any Lender or any other Recipient hereunder on account of any of the Loans or
the Letters of Credit or the Commitment, or

(iii)        to require any Lender or the Agent or any other Recipient to make
any payment or to forego any interest or other sum payable hereunder, the amount
of which payment or foregone interest or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Lender or the
Agent from the Borrower hereunder, then, and in each such case, the Borrower
will (and as to clauses (a) and (b) above, subject to the provisions of Section
§4.4), within thirty (30) days of demand made by such Lender or (as the case may
be) the Agent at any time and from time to time and as often as the occasion
therefor may arise, pay to such Lender or the Agent such additional amounts as
such Lender or the Agent shall reasonably determine in good faith to be
sufficient to compensate such Lender or the Agent for such additional cost,
reduction, payment or foregone interest or other sum.

§4.10    Capital Adequacy. If after the date hereof any Lender determines that
(a) as a result of a Change in Law, or (b) compliance by such Lender or its
parent bank holding company with any directive of any such entity regarding
liquidity or capital adequacy, has the effect of reducing the return on such
Lender’s or such holding company’s capital as a consequence of such Lender’s
commitment to make Loans or participate in Letters of Credit hereunder to a
level below that which such Lender or holding company could have achieved but
for such adoption, change or compliance (taking into consideration such Lender’s
or such holding company’s then existing policies with respect to capital
adequacy and assuming the full utilization of such entity’s capital) by any
amount deemed by such Lender to be material, then such Lender may notify the
Borrower thereof. The Borrower agrees to pay to such Lender the amount of such
reduction in the return on capital as and when such reduction is reasonably
determined, upon presentation by such Lender of a statement of the amount
setting forth the Lender’s calculation thereof. In determining such amount, such
Lender may use any reasonable averaging and attribution methods generally
applied by such Lender.

§4.11    Breakage Costs. Borrower shall pay all Breakage Costs required to be
paid by them pursuant to this Agreement and incurred from time to time by any
Lender within fifteen (15) days from receipt of written notice from Agent, or
such earlier date as may be required by this Agreement.

§4.12    Default Interest; Late Charge. Following the occurrence and during the
continuance of any Event of Default, and regardless of whether or not the Agent
or the Lenders shall have accelerated the maturity of the Loans, all Loans shall
bear interest payable on demand at a rate per annum equal to four percent (4.0%)
above the interest rate that would otherwise be in effect hereunder (the
“Default Rate”), until such amount shall be paid in full (after as well as
before judgment). In addition, the Borrower shall pay a late charge equal to
four percent (4.0%) of any amount of interest and/or principal payable on the
Loans (other than amounts due on the applicable Maturity Date of such Loan or as
a result of acceleration), which is not paid by the Borrower within ten
(10) days of the date when due.

§4.13    Certificate. A certificate setting forth any amounts payable pursuant
to §4.8, §4.9, §4.10, §4.11 or §4.12 and a reasonably detailed explanation of
such amounts which are due, submitted by any Lender or the Agent to the
Borrower, shall be prima facie evidence of the amount due. A Lender shall be
entitled to reimbursement under §4.9, or §4.10 from and after notice to Borrower
that such amounts are due given in accordance with §4.9 or §4.10 and for a
period of six (6) months prior to receipt of such notice if such Change in Law
was effective during such six (6) month period (except that, if the Change in
Law or other circumstance giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to
include the period of retroactive effect thereof).

 

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§4.14    Limitation on Interest. Notwithstanding anything in this Agreement or
the other Loan Documents to the contrary, all agreements between or among the
Borrower, the Lenders and the Agent, whether now existing or hereafter arising
and whether written or oral, are hereby limited so that in no contingency,
whether by reason of acceleration of the maturity of any of the Obligations or
otherwise, shall the interest contracted for, charged or received by the Lenders
exceed the maximum amount permissible under applicable law. If, from any
circumstance whatsoever, interest would otherwise be payable to the Lenders in
excess of the maximum lawful amount, the interest payable to the Lenders shall
be reduced to the maximum amount permitted under applicable law; and if from any
circumstance the Lenders shall ever receive anything of value deemed interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive interest shall be applied to the reduction of the principal balance of
the Obligations and to the payment of interest or, if such excessive interest
exceeds the unpaid balance of principal of the Obligations, such excess shall be
refunded to the Borrower. All interest paid or agreed to be paid to the Lenders
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full period until payment in full of the
principal of the Obligations (including the period of any renewal or extension
thereof) so that the interest thereon for such full period shall not exceed the
maximum amount permitted by applicable law. This Section shall control all
agreements between or among the Borrower, the Lenders and the Agent. The parties
hereto hereby agree and stipulate that the only charge imposed upon the Borrower
for the use of money in connection with this Agreement is and shall be the
interest specifically described in §2.7. Notwithstanding the foregoing, the
parties hereto further agree and stipulate that all agency fees, syndication
fees, arrangement fees, amendment fees, extension fees, up front fees,
commitment fees, facility fees, closing fees, letter of credit fees,
underwriting fees, prepayment fees, default charges, late charges, funding or
“breakage” charges, increased cost charges, attorneys’ fees and reimbursement
for costs and expenses paid by the Agent or any Lender to third parties or for
damages incurred by the Agent or any Lender, or any other similar amounts are
charges made to compensate the Agent or any such Lender for underwriting or
administrative services and costs or losses performed or incurred, and to be
performed or incurred, by the Agent and the Lenders in connection with this
Agreement and shall under no circumstances be deemed to be charges for the use
of money. All charges other than charges for the use of money shall be fully
earned and nonrefundable when due. This Section shall control all agreements
between or among the Borrowers, the Lenders and the Agent

§4.15    Certain Provisions Relating to Increased Costs and Non-Funding Lenders.
If a Lender gives notice of the existence of the circumstances set forth in §4.7
or any Lender requests compensation for any losses or costs to be reimbursed
pursuant to any one or more of the provisions of §4.4(b) (as a result of the
imposition of U.S. withholding taxes on amounts paid to such Lender under this
Agreement), §4.9 or §4.10, then, upon the request of the Borrower, such Lender,
as applicable, shall use reasonable efforts in a manner consistent with such
institution’s practice in connection with loans like the Loan of such Lender to
eliminate, mitigate or reduce amounts that would otherwise be payable by
Borrower under the foregoing provisions, provided that such action would not be
otherwise prejudicial to such Lender, including, without limitation, by
designating another of such Lender’s offices, branches or affiliates; the
Borrower agreeing to pay all reasonable and necessary costs and expenses
incurred by such Lender in connection with any such action. Notwithstanding
anything to the contrary contained herein, if no Default or Event of Default
shall have occurred and be continuing, and if any Lender (a) has given notice of
the existence of the circumstances set forth in §4.7 or has requested payment or
compensation for any losses or costs to be reimbursed pursuant to any one or
more of the provisions of §4.4(b) (as a result of the imposition of U.S.
withholding taxes on amounts paid to such Lender under this Agreement), §4.9 or
§4.10 and following the request of Borrower has been unable to take the steps
described above to mitigate such amounts (each, an “Affected Lender”) or (b) has
failed to make available to Agent its pro rata share of any Loan or its
participation in a Letter of Credit or Swing Loan and such failure has not been
cured (a “Non-Funding Lender”), then, within ninety (90) days after such notice
or request for payment or compensation or failure to fund, as applicable,
Borrower shall have the

 

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right as to such Affected Lender or Non-Funding Lender, as applicable, to be
exercised by delivery of written notice delivered to the Agent and the Affected
Lender or Non-Funding Lender, within ninety (90) days of receipt of such notice
or failure to fund, as applicable, to elect to cause the Affected Lender or
Non-Funding Lender, as applicable, to transfer its Commitment. The Agent shall
promptly notify the remaining Lenders that each of such Lenders shall have the
right, but not the obligation, to acquire a portion of the Commitment, pro rata
based upon their relevant Applicable Percentages, of the Affected Lender or
Non-Funding Lender, as applicable (or if any of such Lenders does not elect to
purchase its pro rata share, then to such remaining Lenders in such proportion
as approved by the Agent). In the event that the Lenders do not elect to acquire
all of the Affected Lender’s or Non-Funding Lender’s Commitment, then the Agent
shall endeavor to obtain a new Lender to acquire such remaining Commitment. Upon
any such purchase of the Commitment of the Affected Lender or Non-Funding
Lender, as applicable, the Affected Lender’s or Non-Funding Lender’s interest in
the Obligations and its rights hereunder and under the Loan Documents shall
terminate at the date of purchase, and the Affected Lender or Non-Funding
Lender, as applicable, shall promptly execute all documents reasonably requested
to surrender and transfer such interest. The purchase price for the Affected
Lender’s or Non-Funding Lender’s Commitment shall equal any and all amounts
outstanding and owed by Borrower to the Affected Lender or Non-Funding Lender,
as applicable, including principal, prepayment premium or fee, and all accrued
and unpaid interest or fees.

§5.        POOL PROPERTIES AND GUARANTIES.

§5.1    Addition of Pool Properties.

(a)        After the Closing Date, Borrower shall have the right, subject to the
consent of the Agent or the Majority Lenders (as provided in clause (g) of the
definition of Eligible Real Estate) or the Required Lenders (as provided in the
last sentence of this §5.1), and the satisfaction by Borrower of the conditions
set forth in this §5.1, to add any Potential Pool Property to the Pool. In the
event Borrower desires to add additional Potential Pool Property as aforesaid,
Borrower shall provide written notice to the Agent of such request (which the
Agent shall promptly furnish to the Lenders), together with all documentation
and other information reasonably required to permit the Agent to determine
whether such Real Estate is Eligible Real Estate. Thereafter, the Agent shall
use its best efforts within (10) Business Days from the date of the receipt of
such documentation and other information to advise Borrower whether the
necessary Agent, Majority Lender or Required Lender (as applicable) consent to
the acceptance of such Potential Pool Property has been received. No Potential
Pool Property shall be included in the Pool unless and until the following
conditions precedent shall have been satisfied:

(i)        the Potential Pool Property shall be Eligible Real Estate;

(ii)        subject to §5.4, the owner of the Potential Pool Property shall have
executed a Joinder Agreement and satisfied the conditions of §5.3;

(iii)        Borrower or the owner of the Potential Pool Property shall have
executed and delivered to the Agent all Eligible Real Estate Qualification
Documents, all of which instruments, documents or agreements shall be in form
and substance reasonably satisfactory to the Agent and the Lenders together with
an executed Borrowing Base Availability Certificate in the form of Exhibit F;

(iv)        after giving effect to the inclusion of such Potential Pool Property
in connection with each requested Advance, each of the representations and
warranties made by or on behalf of the Borrower or any of their respective
Subsidiaries contained in this Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with this
Agreement shall be true in all material respects both as of the date as of which
it was made and shall also be true as of

 

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the time of the addition (or any replacement) of Pool Properties, with the same
effect as if made at and as of that time (it being understood and agreed that
any representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct only as of such specified date), and no
Default or Event of Default shall have occurred and be continuing, and the Agent
shall have received a certificate of Borrower to such effect; and

(v)        the Borrower shall have delivered to the Agent a certification that,
to Borrower’s knowledge (A) the Potential Pool Property is free of any material
environmental, structural, architectural, mechanical or title defects and
otherwise meets all the requirements of a Pool Property, (B) the Potential
Property is insured in a manner that complies with §7.7 below, and (C) the owner
of such Potential Pool Property has no Indebtedness or liabilities other than
trade payables incurred in the ordinary course of business.

Notwithstanding the foregoing, in the event such Pool Property or Potential Pool
Property does not qualify as Eligible Real Estate (other than clause (f) of the
definition of Eligible Real Estate which must be satisfied for all Pool
Properties), so long as the conditions set forth in clauses (ii) and (iv) of
this §5.1 have been satisfied, such Potential Pool Property shall be included in
the Pool and constitute Eligible Real Estate so long as the Agent shall have
received the prior written consent of Required Lenders in their sole discretion
to the inclusion of such Real Estate as a Pool Property.

§5.2        Release of Pool Property. Provided no Default or Event of Default
shall have occurred hereunder and be continuing (or would exist immediately
after giving effect to the transactions contemplated by this §5.2 including any
paydown of the Loans in connection with the transactions contemplated by this
§5.2), the Agent shall release a Pool Property from the Pool upon the request of
Borrower subject to and upon the following terms and conditions:

(a)        The Borrower shall have provided the Agent with written notice of its
intention to remove any specified Pool Property from the Pool at least ten
(10) days prior to the requested release (which notice may be revoked by
Borrower at any time);

(b)        Borrower shall submit to the Agent with such request an executed
Borrowing Base Availability Certificate in the form of Exhibit F, adjusted in
the best good faith estimate of Borrower solely to give effect to the proposed
release and demonstrating that no Default or Event of Default with respect to
the covenants referred to therein shall exist after giving effect to such
release and if the Borrower would not be in compliance, then any reduction in
the outstanding amount of the Loans in connection with such release;

(c)        all release documents to be executed by the Agent shall be in form
and substance reasonably satisfactory to the Agent;

(d)        Borrower shall pay all reasonable costs and expenses of the Agent in
connection with such release, including without limitation, reasonable
attorney’s fees;

(e)        Borrower shall pay to the Agent for the account of the Lenders any
payment required to comply with §3.2, which payment shall be applied to reduce
the outstanding principal balance of the Loans as provided in §3.2; and

(f)        without limiting or affecting any other provision hereof, any release
of a Pool Property will not cause the Borrower to be in violation of the
covenants set forth in §§9.1 through 9.7.

 

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§5.3        Additional Subsidiary Guarantors. As and to the extent that Borrower
shall request that certain Real Estate owned directly or indirectly by a
Subsidiary of Borrower be included as a Pool Property in connection with the
request of any Loan as contemplated by §5.1 and such Real Estate is approved for
inclusion as a Pool Property in accordance with the terms hereof, subject to
§5.4 below, the Borrower shall cause each such Subsidiary to execute and deliver
to Agent a Joinder Agreement wherein, as approved by the Agent, such Subsidiary
shall become a Subsidiary Guarantor hereunder. Each such Subsidiary shall be
authorized, in accordance with its respective organizational documents, to be a
Subsidiary Guarantor hereunder and to executed such Loan Documents as Agent may
require. Borrower shall further cause all representations, covenants and
agreements in the Loan Documents with respect to the Subsidiary Guarantors to be
true and correct with respect to each such Subsidiary from and after the date
such Subsidiary executes and delivers a Joinder Agreement. In connection with
the delivery of such Joinder Agreement, Borrower shall deliver to the Agent such
organizational agreements, resolutions, consents, opinions and other documents
and instruments as the Agent may reasonably require.

§5.4        Release of Certain Subsidiary Guarantors.

(a)        In the event that all Pool Properties owned by a Subsidiary Guarantor
shall have been released from the Pool in accordance with the terms of this
Agreement, then such Subsidiary Guarantor shall be deemed to be fully released
of all Obligations and all Hedge Obligations without the need of any further
actions from Agent or any Lender.

(b)        Notwithstanding anything herein to the contrary, upon the Investment
Grade Pricing Date, no Subsidiary of the Borrower shall be required to become a
Subsidiary Guarantor unless (i) such Subsidiary creates, incurs, acquires,
assumes, suffers to exist or otherwise is or becomes liable (whether as a
borrower, co-borrower, guarantor or otherwise) with respect to any Indebtedness
that is Recourse Indebtedness or Unsecured Indebtedness or (ii) the REIT
Guarantor or the Borrower cease to have an Investment Grade Rating. Upon the
occurrence of the Investment Grade Pricing Date, and provided that no Default or
Event of Default exists, the Agent shall promptly release any Pool Property
Owner from the Guaranty upon receipt by the Agent of a certificate from an
officer of the Borrower certifying that such Pool Property Owner has not
created, incurred, acquired, assumed, suffered to exist and is not otherwise
liable (whether as a borrower, co-borrower, guarantor or otherwise) with respect
to any Indebtedness that is Recourse Indebtedness or Unsecured Indebtedness (or
simultaneously with the release hereunder will be released from liability with
respect to such Indebtedness). In the event that at any time after the
Subsidiary Guarantors have been released from the Guaranty or from their
obligation to become a Subsidiary Guarantor pursuant to this Section, such Pool
Property Owner becomes obligated on any Unsecured Indebtedness or other Recourse
Indebtedness or the REIT Guarantor or Borrower cease to have an Investment Grade
Rating, the Borrower shall within ten (10) Business Days (or such later date as
agreed by the Agent) after such occurrence cause such Pool Property Owner
required to become a Subsidiary Guarantor under §5.3 of this Agreement to
execute and deliver the documents required in said §5.3. Notwithstanding the
foregoing, the foregoing provisions shall not apply to the REIT Guarantor, which
may only be released upon the written approval of the Agent and all of the
Lenders.

§6.        REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Agent and the Lenders as follows, each as of the Closing Date hereof, and
as of the date of a request for a funding of any Loan hereunder:

§6.1    Corporate Authority, Etc.

(a)        Incorporation; Good Standing. Borrower is a Maryland limited
partnership duly organized pursuant to its certificate of limited partnership
filed with the Maryland Secretary of State, and

 

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is validly existing and in good standing under the laws of Maryland. Borrower
(i) has all requisite power to own its property and conduct its business as now
conducted and as presently contemplated, and (ii) is in good standing and is
duly authorized to do business in each other jurisdiction where a failure to be
so qualified in such other jurisdiction could have a Material Adverse Effect.

(b)        Other Credit Parties. Each of the other Transaction Parties (i) is a
corporation, limited partnership, general partnership, limited liability company
or trust duly organized under the laws of its State of organization and is
validly existing and in good standing under the laws thereof, (ii) has all
requisite power to own its property and conduct its business as now conducted
and as presently contemplated and (iii) is in good standing and is duly
authorized to do business in each jurisdiction where a Pool Property owned or
leased by it is located to the extent required to do so under applicable law and
in each other jurisdiction where a failure to be so qualified could have a
Material Adverse Effect.

(c)        Other Subsidiaries. Except where a failure to satisfy such
representation would not have a Material Adverse Effect, each of the
Subsidiaries of the Borrower (other than the Pool Property Owners) (i) is a
corporation, limited partnership, general partnership, limited liability company
or trust duly organized under the laws of its State of organization and is
validly existing and in good standing under the laws thereof, (ii) has all
requisite power to own its property and conduct its business as now conducted
and as presently contemplated and (iii) is in good standing and is duly
authorized to do business in each jurisdiction where Real Estate owned or leased
by it is located.

(d)        Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents to which any Credit Party is a party and
the transactions contemplated hereby and thereby (i) are within the authority of
the Credit Parties, (ii) have been duly authorized by all necessary actions on
the part of the Credit Parties, (iii) do not and will not conflict with or
result in any breach or contravention of any provision of law, statute, rule or
regulation to which any Credit Party is subject or any judgment, order, writ,
injunction, license or permit applicable to any Credit Party, except as would
not reasonably be expected to result in a Material Adverse Effect, (iv) do not
and will not conflict with or constitute a default (whether with the passage of
time or the giving of notice, or both) under any provision of the partnership
agreement, articles of incorporation or other charter documents or bylaws of, or
any agreement or other instrument binding upon, any Credit Party or or any of
its properties where, in the case of any agreement or other instrument binding
upon any Credit Party or any of its properties, any conflict or default would
not reasonably be expected to have a Material Adverse Effect, (v) do not and
will not result in or require the imposition of any lien or other encumbrance on
any of the properties, assets or rights of any Credit Party other than the liens
and encumbrances in favor of Agent contemplated by this Agreement and the other
Loan Documents, and (vi) do not require the approval or consent of any Person
other than those already obtained and delivered to Agent or except as would not
reasonably be expected to result in a Material Adverse Effect.

(e)        Enforceability. The execution and delivery of this Agreement and the
other Loan Documents to which any of the Credit Parties is a party are valid and
legally binding obligations of the Credit Parties enforceable in accordance with
the respective terms and provisions hereof and thereof, except as enforceability
is limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors’ rights and
general principles of equity.

§6.2        Governmental Approvals. The execution, delivery and performance of
this Agreement and the other Loan Documents to which any Credit Party is a party
and the transactions contemplated hereby and thereby do not require the approval
or consent of, or filing or registration with, or the giving of any notice to,
any court, department, board, governmental agency or authority other than those
already obtained, in each case, except as would not reasonably be expected to
result in a Material Adverse Effect.

 

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§6.3        Title to Pool Properties. Except as indicated on Schedule 6.3 hereto
or other adjustments that are not material in amount, the Pool Property Owners
own or lease each Pool Property subject to no rights of others, including any
mortgages, leases pursuant to which the Pool Property Owners or any of their
Affiliates is the lessee, conditional sales agreements, title retention
agreements, liens or other monetary encumbrances except Permitted Liens.

§6.4        Financial Statements. REIT Guarantor has furnished to Agent: (a) the
consolidated balance sheet of REIT Guarantor and its Subsidiaries as of the
Balance Sheet Date and the related consolidated statement of income and cash
flow for the most recent period then ended (and available) certified by an
Authorized Officer or the chief financial or accounting officer of REIT
Guarantor, (b) as of the Closing Date, an unaudited statement of Net Operating
Income for each of the Pool Properties (if any) for the most recent period then
ended (and available) certified by the chief financial or accounting officer of
Borrower as fairly presenting in all material respects the Net Operating Income
for such parcels for such periods, and (c) certain other financial information
relating to the Borrower and the Real Estate (including, without limitation, the
Pool Properties). Such balance sheet and statements have been prepared in
accordance with generally accepted accounting principles and fairly present in
all material respects the consolidated financial condition of the REIT Guarantor
and its Subsidiaries as of such dates and the consolidated results of the
operations of the REIT Guarantor and its Subsidiaries for such periods.

§6.5        No Material Changes. Since the later of Balance Sheet Date or the
date of the most recent financial statements delivered pursuant to §7.4, as
applicable, except as otherwise disclosed to Agent, there has occurred no
materially adverse change in the financial condition, management, or business of
the Borrower, and their respective Subsidiaries taken as a whole as shown on or
reflected in the consolidated balance sheet of the REIT Guarantor as of the
Balance Sheet Date, or its consolidated statement of income or cash flows for
the calendar year then ended, other than changes that have not and could not
reasonably be expected to have a Material Adverse Effect. As of the date hereof,
except as set forth on Schedule 6.5 hereto, there has occurred no materially
adverse change in the financial condition, prospects, operations or business
activities of any of the Pool Properties from the condition shown on the
statements of income delivered to the Agent pursuant to §6.4 other than changes
in the ordinary course of business that have not had a Material Adverse Effect.

§6.6        Franchises, Patents, Copyrights, Etc. The Transaction Parties
possess all franchises, patents, copyrights, trademarks, trade names, service
marks, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of their business substantially as now conducted without known
conflict with any rights of others. None of the Pool Properties is owned or
operated under or by reference to any registered or protected trademark, trade
name, service mark or logo, except where such failure or conflict would not
reasonably be expected to have a Material Adverse Effect.

§6.7        Litigation. As of the date hereof, except as stated on Schedule 6.7,
there are no actions, suits, proceedings or investigations of any kind pending
or to the knowledge of the Borrower or the Subsidiary Guarantors threatened
against any Transaction Party before any court, tribunal, arbitrator, mediator
or administrative agency or board which question the validity of this Agreement
or any of the other Loan Documents, any action taken or to be taken pursuant
hereto or thereto or any lien, security title or security interest created or
intended to be created pursuant hereto or thereto. As of the date hereof, except
as set forth on Schedule 6.7, there are no judgments, final orders or awards
outstanding against or affecting any Transaction Party or any Pool Property
individually or in the aggregate in excess of $1,000,000.

§6.8        No Material Adverse Contracts, Etc. None of the Transaction Parties
is subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation that has or

 

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is expected in the future to have a Material Adverse Effect, with the Lenders
agreeing the exercise of the redemption rights granted under the Partnership
Agreement shall not be deemed to have a Material Adverse Effect. None of the
Transaction Parties is a party to any contract or agreement that has or could
reasonably be expected to have a Material Adverse Effect.

§6.9    Compliance with Other Instruments, Laws, Etc. None of the Transaction
Parties is in violation of any provision of its charter or other organizational
documents, bylaws, or any agreement or instrument to which it is subject or by
which it or any of its properties is bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that has had or could reasonably be expected to have a Material Adverse Effect.

§6.10    Tax Status. Except as would not reasonably be expected to result in a
Material Adverse Effect, each of the Transaction Parties (a) has made or filed
all federal and state income and all other Tax returns, reports and declarations
required by any jurisdiction to which it is subject or has obtained an extension
for filing, (b) has paid prior to delinquency all Taxes and other governmental
assessments and charges shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and by appropriate
proceedings or for which any of the Borrower or their respective Subsidiaries,
as applicable has set aside on its books provisions reasonably adequate for the
payment of such Taxes, and (c) has made provisions reasonably adequate for the
payment of all accrued Taxes not yet due and payable. Except as would not
reasonably be expected to result in a Material Adverse Effect, there are no
unpaid Taxes claimed by the taxing authority of any jurisdiction to be due by
the Borrower of their respective Subsidiaries, the officers or partners of such
Person know of no basis for any such claim, and as of the Closing Date, there
are no audits pending or to the knowledge of Borrower threatened with respect to
any Tax returns filed by Borrower or its respective Subsidiaries. The taxpayer
identification number for Borrower is 46-4654279.

§6.11    No Event of Default. No Default or Event of Default has occurred and is
continuing.

§6.12    Investment Company Act; EEA Financial Institution. None of the Borrower
or any of their respective Subsidiaries is an “investment company”, or an
“affiliated company” or a “principal underwriter” of an “investment company”, as
such terms are defined in the Investment Company Act of 1940. None of the Credit
Parties is an EEA Financial Institution.

§6.13    Absence of UCC Financing Statements, Etc. Except with respect to
Permitted Liens or as disclosed on the lien search reports delivered to and
approved by the Agent, there is no financing statement (but excluding any
financing statements that may be filed against any Transaction Party without the
consent or agreement of such Person), security agreement, chattel mortgage, real
estate mortgage or other document filed or recorded with any applicable filing
records, registry, or other public office, that purports to cover, affect or
give notice of any present or possible future lien on, or security interest or
security title in, any Pool Property.

§6.14    [Intentionally Omitted].

§6.15    Certain Transactions. Except as disclosed on Schedule 6.15 hereto, none
of the partners, officers, trustees, managers, members, directors, or employees
of any Transaction Party is, nor shall any such Person become, a party to any
transaction with any Transaction Party (other than for services as partners,
managers, members, employees, officers and directors), including any agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any partner, officer, trustee, director or such
employee or, to the knowledge of the Credit Parties, any corporation,
partnership, trust or other entity in which any partner, officer, trustee,
director, or any such employee has a substantial interest or is

 

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an officer, director, trustee or partner, which are on terms less favorable to
the Transaction Parties than those that would be obtained in a comparable
arms-length transaction.

§6.16    Employee Benefit Plans. Except as would not reasonably be expected to
have a Material Adverse Effect, Borrower and each ERISA Affiliate that is
subject to ERISA has fulfilled its obligation, if any, under the minimum funding
standards of ERISA and the Code with respect to each Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the Code
with respect to each Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan. Except as would not reasonably be expected to result in a Material
Adverse Effect, neither Borrower nor any ERISA Affiliate has (a) sought a waiver
of the minimum funding standard under §412 of the Code in respect of any
Multiemployer Plan or Guaranteed Pension Plan or (b) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
§4007 of ERISA. Neither Borrower nor any ERISA Affiliate has failed to make any
contribution or payment to any Multiemployer Plan or Guaranteed Pension Plan, or
made any amendment to any Multiemployer Plan or Guaranteed Pension Plan, which
has resulted or would reasonably be expected to result in the imposition of a
Lien. None of the Pool Properties constitutes a “plan asset” of any Employee
Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan in each case, that
is subject to ERISA.

§6.17    Disclosure. All of the representations and warranties made by the
Credit Parties in this Agreement and the other Loan Documents or any document or
instrument delivered to the Agent or the Lenders pursuant to or in connection
with any of such Loan Documents are true and correct in all material respects.
All information contained in this Agreement, the other Loan Documents or
otherwise furnished to or made available to the Agent or the Lenders by any
Credit Party, is and will be true and correct in all material respects and does
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein not materially
misleading when taken as a whole. The written information, reports and other
papers and data with respect to the Borrower, any Subsidiary or the Pool
Properties (other than projections and estimates) furnished to the Agent or the
Lenders by any Credit Party in connection with this Agreement or the obtaining
of the Commitments of the Lenders hereunder was, at the time so furnished,
correct in all material respects, or has been subsequently supplemented by other
written information, reports or other papers or data, to the extent necessary to
give in all material respects a true and accurate knowledge of the subject
matter in all material respects; provided that such representation shall not
apply to (a) the accuracy of any appraisal, title commitment, survey, or
engineering and environmental reports prepared by third parties or legal
conclusions or analysis provided by the Borrower’s counsel or (b) budgets,
projections and other forward-looking speculative information prepared in good
faith by the Borrower (except to the extent the related assumptions were when
made manifestly unreasonable) except to the extent that any of the foregoing
would not reasonably be expected to have a Material Adverse Effect.

§6.18    Trade Name; Place of Business. No Credit Party uses any trade name and
conducts business under any name other than its actual name set forth in the
Loan Documents. The principal place of business of the Borrower and the other
Credit Parties is c/o City Office REIT, Inc., 1075 West Georgia Street, Suite
2600, Vancouver, BC Canada V6E 3C9.

§6.19    Regulations T, U and X. No portion of any Loan is to be used for the
purpose of purchasing or carrying any “margin security” or “margin stock” as
such terms are used in Regulations T, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224. No Borrower or other
Credit Party is engaged, nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any “margin security” or “margin stock” as such terms are
used in Regulations T, U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 220, 221 and 224.

 

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§6.20        Environmental Compliance. Except as set forth on Schedule 6.20 or
as specifically set forth in the written environmental site assessment reports
of the Environmental Engineer provided to the Agent on or before the date
hereof, or in the case of Pool Property acquired after the date hereof, the
environmental site assessment reports with respect thereto provided to the
Agent:

(a)        None of the Pool Properties, nor to Borrower’s knowledge, any tenant
or operations thereon, is in violation, or alleged violation, of any
Environmental Law, which violation would reasonably be expected to have a
Material Adverse Effect.

(b)        No Transaction Party has received written notice from any third party
including, without limitation, any federal, state or local governmental
authority, (i) that it has been identified by the United States Environmental
Protection Agency (“EPA”) as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R. Part 300
Appendix B (1986); (ii) that any Hazardous Substance(s) which it has generated,
transported or disposed of have been found at any site at which a federal, state
or local agency or other third party has conducted, or has demanded that
Borrower conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a named party
to any claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party’s incurrence of costs, expenses, losses or damages in connection with the
release of Hazardous Substances in violation of applicable Environmental Law,
which in the case of clauses (i) through (iii) above which involves a Pool
Property and which would reasonably be expected to have a Material Adverse
Effect.

(c)        (i) No portion of the Pool Properties is used by a Transaction Party,
or to the knowledge of Borrower or Subsidiary Guarantors, by any tenant or
operator thereon for the handling, processing, storage or disposal of Hazardous
Substances except in compliance with applicable Environmental Laws, and no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Pool Properties except those which
are being operated and maintained, and, if required, remediated, in compliance
with Environmental Laws; (ii) in the course of any business activities conducted
by the Borrower, their respective Subsidiaries or, to the Borrower’s actual
knowledge, the tenants and operators of their properties, no Hazardous
Substances have been generated or are being used on the Pool Properties except
in the ordinary course of the Transaction Parties’ or their tenants’ and
operators’ business and in compliance with applicable Environmental Laws;
(iii) to Borrower’s actual knowledge, there has been no past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping (other than in reasonable quantities
to the extent necessary in the ordinary course of operation of the Transaction
Parties’, their tenants’ or operators’ business and, in any event, in compliance
with all Environmental Laws) (a “Release”) or threatened Release of Hazardous
Substances on, upon, into or from the Pool Properties, which Release would
reasonably be expected to have a Material Adverse Effect; (iv) to Borrower’s
knowledge, there have been no Releases on, upon, from or into any real property
in the vicinity of any of the Pool Properties which, through soil or groundwater
contamination, have come to be located on the Pool Properties, and which would
be reasonably anticipated to have a Material Adverse Effect; and (v) to
Borrower’s actual knowledge, any Hazardous Substances that have been generated
on any of the Pool Properties have been transported off-site in accordance with
all applicable Environmental Laws and in a manner that would not reasonably be
expected to have a Material Adverse Effect.

(d)        Except for such matters that shall be complied with as of the Closing
Date, by virtue of the transactions set forth herein and contemplated hereby, or
as a condition to the effectiveness of any other transactions contemplated
hereby, none of the Transaction Parties nor the Pool Properties will become
subject to any applicable Environmental Law requiring the performance of
environmental site assessments, or the removal or remediation of Hazardous
Substances, or the giving of notice to any

 

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governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement pursuant to applicable
Environmental Laws, which would reasonably be expected to have a Material
Adverse Effect.

(e)        There are no existing or closed sanitary waste landfills, or
hazardous waste treatment, storage or disposal facilities on the Pool Properties
except where such existence would not reasonably be expected to have a Material
Adverse Effect.

(f)        No Transaction Party has received any written notice from any party
that any use, operation, or condition of any Pool Properties has caused any
adverse condition on any other property that would reasonably be expected to
result in a claim under applicable Environmental Law that would have a Material
Adverse Effect, nor does any Transaction Party have actual knowledge of any
existing facts or circumstances that could reasonably be expected to form the
basis for such a claim.

§6.21    Subsidiaries; Organizational Structure. Schedule 6.21 sets forth, as of
the Closing Date, all of the Subsidiaries and Unconsolidated Subsidiaries of
Borrower, the form and jurisdiction of organization of each of the Subsidiaries
and Unconsolidated Subsidiaries, and the owners of the direct and indirect
ownership interests therein. No Person owns any legal, equitable or beneficial
interest in any of the Persons set forth on Schedule 6.21 except as set forth on
such Schedule.

§6.22    Leases. The Borrower has delivered to the Agent true and complete
copies of the Leases and any amendments thereto relating to each Pool Property
required to be delivered as a part of the Eligible Real Estate Qualification
Documents as of the date hereof. An accurate and complete Rent Roll in all
material respects as of the date of inclusion of each Pool Property in the Pool
with respect to all Leases of any portion of the Pool Property has been provided
to the Agent. The Leases previously delivered to Agent as described in the
preceding sentence constitute as of the date thereof the sole material
agreements relating to leasing or licensing of space at such Pool Property and
in the Building relating thereto. No tenant under any Lease is entitled to any
free rent, partial rent, rebate of rent payments, credit, offset or deduction in
rent, including, without limitation, lease support payments or lease buy-outs,
except as reflected in such Leases or such Rent Roll. Except as set forth in
Schedule 6.22, the Leases reflected therein are, as of the date of inclusion of
the applicable Pool Property in the Pool, in full force and effect in accordance
with their respective terms, without any payment default or any other material
default thereunder, nor are there any material defenses, counterclaims, offsets,
concessions or rebates available to any tenant thereunder, and except as
reflected in Schedule 6.22, no Borrower has given or made, any notice of any
payment or other material default, or any claim, which remains uncured or
unsatisfied, with respect to any of the Leases, and to the best of the knowledge
and belief of the Credit Parties, there is no basis for any such claim or notice
of default by any tenant except in the case of any of the foregoing, those
matters which would not result in a Material Adverse Effect. Borrower knows of
no condition which with the giving of notice or the passage of time or both
would constitute a default on the part of any tenant with respect to the
material terms under a Lease or of the respective Borrower as landlord under the
Lease, which would result in a Material Adverse Effect. No security deposit or
advance rental or fee payment (more than 2 months in advance) has been made by
any lessee or licensor under the Leases except as may be specifically designated
in the copies of the Leases furnished to the Agent or as otherwise disclosed to
Agent in writing. No property other than the Pool Property which is the subject
of the applicable Lease is necessary to comply with the requirements (including,
without limitation, parking requirements) contained in such Lease.

§6.23    Property. Except as set forth in Schedule 6.23 or as set forth in the
written engineer reports provided to Agent on or before the date hereof or on or
before the date when any Real Estate becomes Eligible Real Estate, (i), all of
the Pool Properties, and all major building systems located thereon, are
structurally sound, in good condition and working order and free from material
defects,

 

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subject to ordinary wear and tear, except for such portion of such Real Estate
which is not occupied by any tenant and which may not be in final working order
pending final build-out of such space except where such defects have not had and
could not reasonably be expected to have a Material Adverse Effect. Each of the
Pool Properties, and the use and operation thereof, is in material compliance
with all applicable federal and state law and governmental regulations and any
local ordinances, orders or regulations, including without limitation, laws,
regulations and ordinances relating to zoning, building codes, subdivision, fire
protection, health, safety, handicapped access, historic preservation and
protection, wetlands, tidelands, and Environmental Laws except in cases that
would not reasonably cause a Material Adverse Effect. All water, sewer,
electric, gas, telephone and other utilities necessary for the use and operation
of the Pool Property are installed to the property lines of the Pool Property
through dedicated public rights of way or through perpetual private easements
and, except in the case of drainage facilities, are connected to the Building
located thereon with valid permits and are adequate to service the Building in
compliance with applicable law, and except where the failure of any of the
foregoing could not reasonably be expected to have a Material Adverse Effect.
The streets abutting the Real Estate are dedicated and accepted public roads, to
which the Real Estate has direct access or are perpetual private ways (with
direct access to public roads) to which the Real Estate has direct access. There
are no material unpaid or outstanding real estate or other taxes or assessments
on or against any of the Pool Properties which are payable by the Borrower or
any Pool Property Owner (except only real estate or other taxes or assessments,
that are not yet delinquent or are being protested as permitted by this
Agreement). Except as otherwise disclosed to Agent in writing, there are no
pending, or to the knowledge of Borrower or Subsidiary Guarantors threatened or
contemplated, eminent domain proceedings against any of the Pool Properties.
Except as otherwise disclosed to Agent in writing, none of the Pool Properties
is now damaged as a result of any fire, explosion, accident, flood or other
casualty. Each Pool Property is insured in accordance with the provisions of
§7.7 and, except as otherwise disclosed to Agent in writing, none of the
Transaction Parties has received any outstanding notice from any insurer or its
agent requiring performance of any work with respect to any of the Pool
Properties or canceling or threatening to cancel any policy of insurance, and
each of the Pool Properties complies with the material requirements of all of
the Borrower’s and Pool Property Owners’ insurance carriers, except where any of
the foregoing would not reasonably be expected to have a Material Adverse
Effect. Except as otherwise disclosed to Agent, the Transaction Parties have no
Management Agreements for any of the Pool Properties. To the best knowledge of
the Borrower and the Subsidiary Guarantors, there are no materials claims or any
bases for material claims in respect of any Pool Property or its operation by
any party to any service agreement or Management Agreement, that would have a
Material Adverse Effect. No person or entity has any right or option to acquire
any Pool Property or any Building thereon or any portion thereof or interest
therein, except for certain tenants pursuant to the terms of their Leases with
the Pool Property Owners.

§6.24    Ground Lease.

(a)        Each Eligible Ground Lease contains the entire agreement of the
applicable Transaction Party and the applicable owner of the fee interest in
such real property (the “Fee Owner”), pertaining to the Real Estate covered
thereby. With respect to Real Estate subject to a Eligible Ground Lease, the
applicable Transaction Party has no estate, right, title or interest in or to
the Real Estate except under and pursuant to the Eligible Ground Lease or except
as may be otherwise approved in writing by Agent. The applicable Credit Party
has delivered a true and correct copy of the Eligible Ground Lease to the Agent
and the Eligible Ground Lease has not been modified, amended or assigned, with
the exception of written instruments that have been recorded in the applicable
Real Estate records for such Real Estate.

(b)        The applicable Fee Owner is the exclusive fee simple owner of the
Real Estate and of the lessor’s interest in the Eligible Ground Lease.

 

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(c)        There are no rights to terminate the Eligible Ground Lease other than
the applicable Fee Owner’s right to terminate by reason of default, casualty,
condemnation or other reasons, in each case as expressly set forth in the
Eligible Ground Lease.

(d)        Each Eligible Ground Lease is in full force and effect and, to the
Borrower’s knowledge, no breach or default or event that with the giving of
notice or passage of time would constitute a breach or default under any
Eligible Ground Lease (a “Ground Lease Default”) exists or has occurred on the
part of a Transaction Party or on the part of a Fee Owner under any Eligible
Ground Lease. All base rent and additional rent, if any, due and payable under
each Eligible Ground Lease has been paid through the date hereof and no
Transaction Party is required to pay any deferred or accrued rent after the date
hereof under any Eligible Ground Lease. No Transaction Party has received any
written notice that a Eligible Ground Lease Default has occurred or exists, or
that any Fee Owner or any third party alleges the same to have occurred or
exist.

(e)        The applicable Transaction Party is the exclusive owner of the ground
lessee’s interest under and pursuant to each Eligible Ground Lease and has not
assigned, transferred or encumbered its interest in, to, or under the Eligible
Ground Lease.

§6.25    Brokers. None of the Borrower nor any of their respective Subsidiaries
has engaged or otherwise dealt with any broker, finder or similar entity in
connection with this Agreement or the Loans contemplated hereunder.

§6.26    Other Debt. As of the Closing Date, no Credit Party or Subsidiary of
Borrower is in default of the payment of any Indebtedness in excess of $500,000
or the performance of any material obligation under any related agreement to
which any of them is a party. None of the Credit Parties is a party to or bound
by any agreement, instrument or indenture that may require the subordination in
right or time or payment of any of the Obligations to any other indebtedness or
obligation of Borrower. Schedule 6.26 hereto sets forth all agreements,
mortgages, deeds of trust, financing agreements or other material agreements
binding upon the Credit Parties or their respective properties and entered into
by any of the Credit Parties as of the date of this Agreement with respect to
any Indebtedness of the Credit Parties, and the Borrower has provided the Agent
with true, correct and complete copies thereof, with the redemption obligations
set forth under the Partnership Agreement not being deemed Indebtedness for the
purposes of this §6.26.

§6.27    Solvency. As of the Closing Date and after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents,
including all Loans made or to be made hereunder, and, including, without
limitation the provisions of §37 hereof, no Credit Party is insolvent on a
balance sheet basis such that the sum of such Person’s assets exceeds the sum of
such Person’s liabilities, each Credit Party is able to pay its debts as they
become due, and each Credit Party has sufficient capital to carry on its
business.

§6.28    No Bankruptcy Filing. No Credit Party has made an assignment for the
benefit of creditors or taken advantage of any insolvency act for the benefit of
debtors. No Credit Party is contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation of
its assets or property, and the Borrower and the Subsidiary Guarantors have no
knowledge of any Person contemplating the filing of any such petition against
it.

§6.29    No Fraudulent Intent. Neither the execution and delivery of this
Agreement or any of the other Loan Documents nor the incurrence of indebtedness
or the performance of any actions required hereunder or thereunder is being
undertaken by Borrower with or as a result of any actual intent by any

 

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of such Persons to hinder, delay or defraud any entity to which any of such
Persons is now or will hereafter become indebted. No transfer of property has
been or will be made by any Credit Party in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of any Credit
Party.

§6.30    Transaction in Best Interests of Borrower; Consideration. The
transaction evidenced by this Agreement and the other Loan Documents is in the
best interests of each Credit Party. The direct and indirect benefits to inure
to the Credit Parties pursuant to this Agreement and the other Loan Documents
constitute substantially more than “reasonably equivalent value” (as such term
is used in §548 of the Bankruptcy Code) and “valuable consideration,” “fair
value,” and “fair consideration,” (as such terms are used in any applicable
state fraudulent conveyance law), in exchange for the benefits to be provided to
the Credit Parties pursuant to this Agreement and the other Loan Documents, and
but for the willingness of each Guarantor to be a guarantor of the Loans, the
Borrower would be unable to obtain the financing contemplated hereunder which
financing will enable the Borrower and its Subsidiaries to have available
financing to conduct and expand their business. The Credit Parties further
acknowledge and agree that Credit Parties constitute a single integrated and
common enterprise and that each receives a benefit from the availability of
credit under this Agreement.

§6.31    OFAC. Neither the REIT Guarantor, nor any of its Subsidiaries, nor, to
the knowledge of the Borrower, any director, officer or employee thereof, is an
individual or entity that is, or is owned or controlled directly by any
individual or entity that is (or will be) (i) a Sanctioned Person, (ii) located,
organized or resident, or has its assets located, in a Designated Jurisdiction,
(iii) engaged in any transaction with any Sanctioned Person or any Person who is
located, organized or resident in any Designated Jurisdiction to the extent that
such transactions would violate Sanctions, or (iv) has violated any Anti-Money
Laundering Law in any material respect. No Loan or Letter of Credit, nor the
proceeds from any Loan or Letter of Credit, has been used, directly or
indirectly, or has otherwise been made available to fund any activity or
business in any Designated Jurisdiction or to fund any activity or business with
any Sanctioned Person, or in any other manner that will result in a violation by
any Credit Party or Subsidiary thereof, or any Lender, the Agent, the Issuing
Lender, of Sanctions. Each of the Credit Parties and its Subsidiaries, and to
the knowledge of the Credit Parties, each director, officer, employee, agent and
Affiliate of the Credit Parties and each such Subsidiary, is in compliance with
the Anti-Corruption Laws in all material respects. The Credit Parties have
implemented and maintain in effect policies and procedures designed to promote
and achieve compliance with the Anti-Corruption Laws and applicable Sanctions.
In addition, Credit Parties hereby agree to provide to the Lenders any
additional information that a Lender reasonably deems necessary from time to
time in order to ensure compliance with all applicable laws concerning money
laundering and similar activities.

§6.32    REIT Status. The REIT Guarantor is qualified to elect or has elected
status as a real estate investment trust under Section 856 of the Code and
currently is in compliance in all material respects with all provisions of the
Code applicable to the qualification of the REIT Guarantor as a real estate
investment trust.

§7.        AFFIRMATIVE COVENANTS. The Borrower covenants and agrees that, so
long as any Loan or Note is outstanding or any Lender has any obligation to make
any Loans:

§7.1    Punctual Payment. The Borrower will duly and punctually pay or cause to
be paid the principal and interest on the Loans and all interest and fees
provided for in this Agreement, all in accordance with the terms of this
Agreement and the Notes, as well as all other sums owing pursuant to the Loan
Documents in accordance with the terms hereof.

 

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§7.2    Maintenance of Office. Each Credit Party will maintain its respective
chief executive office at 1075 West Georgia Street, Suite 2600, Vancouver, BC
Canada V6E 3C9, or at such other as the Borrower shall designate upon prompt
written notice to the Agent and the Lenders, where notices, presentations and
demands to or upon the Borrower in respect of the Loan Documents may be given or
made.

§7.3    Records and Accounts. The Credit Parties will (a) keep, and cause each
of their respective Subsidiaries to keep true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
GAAP (in each case, in all material respects) and (b) make adequate provision
for the payment of all Taxes (including income taxes). Neither Borrower nor any
of their respective Subsidiaries shall, without the prior written consent of the
Agent (x) make any material change to the accounting policies/principles used by
such Person in preparing the financial statements and other information
described in §6.4 or §7.4 (unless required by GAAP or other applicable
accounting standards), or (y) change its fiscal year.

§7.4    Financial Statements, Certificates and Information. Borrower will
deliver or cause to be delivered to the Agent:

(a)        not later than one hundred twenty (120) days after the end of each
calendar year, the audited Consolidated balance sheet of the REIT Guarantor at
the end of such year, and the related audited consolidated statements of income,
changes in capital and cash flows for such year, setting forth in comparative
form the figures for the previous fiscal year and all such statements to be in
reasonable detail, prepared in accordance with GAAP, together with a
certification by an Authorized Officer or the chief financial officer or
accounting officer of the REIT Guarantor that the information contained in such
financial statements fairly presents in all material respects the financial
position of the REIT Guarantor and its Subsidiaries, and accompanied by an
auditor’s report prepared without qualification as to the scope of the audit by
a member firm of KPMG, LLP or another nationally recognized accounting firm, and
any other information the Agent may reasonably request to complete a financial
analysis of Borrower and its Subsidiaries;

(b)        not later than sixty (60) days after the end of the first three
calendar quarters of each year, copies of the unaudited consolidated balance
sheet of the REIT Guarantor and the Borrower and its Subsidiaries as at the end
of such quarter, and the related unaudited consolidated statements of income and
cash flows for the portion of the REIT Guarantor’s fiscal year then elapsed, all
in reasonable detail and prepared in accordance with GAAP, together with a
certification by an Authorized Officer or the chief financial officer or
accounting officer of REIT Guarantor that the information contained in such
financial statements fairly presents in all material respects the financial
position of the REIT Guarantor and its Subsidiaries on the date thereof (subject
to year-end adjustments);

(c)        simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above an executed Borrowing Base Availability
Certificate in the form of Exhibit F and a statement (a “Compliance
Certificate”) certified by an Authorized Officer or the chief financial officer
or chief accounting officer of REIT Guarantor in the form of Exhibit G hereto
(or in such other form as the Agent may reasonably approve from time to time)
setting forth in reasonable detail computations evidencing compliance or
non-compliance (as the case may be) with the covenants contained in §9. The REIT
Guarantor shall submit with the Compliance Certificate a Borrowing Base
Certificate in the form of Exhibit F attached hereto pursuant to which the REIT
Guarantor shall calculate the amount of the Borrowing Base Availability as of
the end of the immediately preceding calendar quarter. All income, expense, debt
and value associated with Real Estate or other Investments disposed of during
any quarter will be eliminated from calculations, where applicable. The
Compliance Certificate shall be accompanied by copies of the statements of Net
Operating Income for such calendar quarter for

 

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each of the Pool Properties, prepared on a basis consistent with the statements
furnished to the Agent prior to the date hereof and otherwise in form and
substance reasonably satisfactory to the Agent, together with a certification by
an Authorized Officer or the chief financial officer or chief accounting officer
of REIT Guarantor that the information contained in such statement fairly
presents in all material respects Net Operating Income of the Pool Properties
for such periods;

(d)        simultaneously with the delivery of the financial statements referred
to in clause (a) above, the statement of all contingent liabilities involving
amounts of $1,000,000 or more of the Credit Parties which are not reflected in
such financial statements or referred to in the notes thereto (including,
without limitation, all guaranties, endorsements and other contingent
obligations in respect of the indebtedness of others, and obligations to
reimburse the issuer in respect of any letters of credit);

(e)        simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above, (i) a Rent Roll for each of the Pool
Properties and a summary thereof in form reasonably satisfactory to Agent as of
the end of each calendar quarter (including the fourth calendar quarter in each
year), and (ii) an operating statement for each of the Pool Properties for each
such calendar quarter and year to date and a consolidated operating statement
for the Pool Properties for each such calendar quarter and year to date (such
statements and reports to be in form reasonably satisfactory to Agent),
including (if requested by Agent) a receivables aging;

(f)        simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above, upon request by Agent, a statement
(i) listing the Real Estate owned by the Borrower and its Subsidiaries (or in
which the Borrower or its Subsidiaries owns an interest) and stating the
location thereof, the date acquired and the acquisition cost, (ii) listing the
Indebtedness (excluding, for the purposes hereof, the redemption obligations
under the Partnership Agreement) of the Borrower and its Subsidiaries, which
statement shall include, without limitation, a statement of the original
principal amount of such Indebtedness and the current amount outstanding, the
holder thereof, the maturity date and any extension options, the interest rate,
the collateral provided for such Indebtedness and whether such Indebtedness is
recourse or non-recourse, and (iii) listing the properties of the Borrower and
its Subsidiaries which are Development Properties and providing a brief summary
of the status of such development;

(g)        if requested by Agent, promptly after they are filed with the
Internal Revenue Service, copies of all annual federal income tax returns and
amendments thereto of the Borrower;

(h)        if requested by the Agent, not later than December 15 of each year, a
budget and business plan for the Transaction Parties and each Pool Property for
the next calendar year;

(i)        to the extent requested by Agent, evidence reasonably satisfactory to
Agent of the timely payment of all real estate taxes for the Pool Properties;

(j)        concurrently with the date shareholders are presented such materials,
copies of all reports and notices reported to shareholders of the REIT Guarantor
or Borrower; provided that any item that is filed via Form 8K or otherwise
publicly available through the SEC shall be treated as being delivered to the
Agent; and

(k)        from time to time such other financial data and information in the
possession of the Borrower or its respective Subsidiaries (including without
limitation auditors’ management letters, status of litigation or investigations
against the Transaction Parties and any settlement discussions relating thereto
(unless the Borrower in good faith believes that such disclosure could result in
a waiver or loss of attorney work product, attorney-client or any other
applicable privilege), property inspection and

 

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environmental reports and information as to zoning and other legal and
regulatory changes affecting the Transaction Parties) as the Agent may
reasonably request.

Any material to be delivered pursuant to this §7.4 (collectively, “Information
Materials”) may be delivered electronically directly to Agent or made available
to Agent pursuant to an accessible website and the Lenders provided that such
material is in a format reasonably acceptable to Agent, and such material shall
be deemed to have been delivered to Agent and the Lenders upon Agent’s receipt
thereof or access to the website containing such material.    The Agent shall
distribute any such information to the other Lenders after receipt thereof, and
may do so by electronic form in the same manner as provided in this §7.4. Upon
the request of Agent, Borrower shall deliver paper copies thereof to Agent and
the Lenders. Borrower authorizes Agent and Arranger to disseminate any such
materials through the use of Intralinks, SyndTrak or any other electronic
information dissemination system provided that system is secure and access
thereto is protected by a password that is only disclosed to the Lenders (an
“Electronic System”). Any such Electronic System is provided “as is” and “as
available.” The Agent and each Arranger do not warrant the adequacy of any
Electronic System and expressly disclaim liability for errors or omissions in
any notice, demand, communication, information or other material provided by or
on behalf of Borrower that is distributed over or by any such Electronic System
(“Communications”). No warranty of any kind, express, implied or statutory,
including, without limitation, any warranty of merchantability, fitness for a
particular purpose, non-infringement of third-party rights or freedom from
viruses or other code defects, is made by Agent or any Arranger in connection
with the Communications or the Electronic System. In no event shall the Agent,
any Arranger or any of their directors, officers, employees, agents or attorneys
have any liability to the Borrower or any Guarantor, any Lender or any other
Person for damages of any kind, including, without limitation, direct or
indirect, special, incidental or consequential damages, losses or expenses
(whether in tort, contract or otherwise) arising out of any Credit Party’s, the
Agent’s or any Arranger’s transmission of Communications through the Electronic
System, and the Credit Parties release Agent, the Arrangers and the Lenders from
any liability in connection therewith. Certain of the Lenders (each, a “Public
Lender”) may have personnel who do not wish to receive material non-public
information with respect to the Credit Parties, their Subsidiaries or its
Affiliates, or the respective securities of any of the foregoing, and who may be
engaged in investment and other market related activities with respect to such
Persons’ securities. The Borrower hereby agrees that it will identify that
portion of the Information Materials that may be distributed to the Public
Lenders and that (i) all such Information Materials shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (ii) by marking
Information Materials “PUBLIC,” the Borrower shall be deemed to have authorized
the Agent, the Lenders and the Arrangers to treat such Information Materials as
not containing any material non-public information with respect to the Credit
Parties, their Subsidiaries, their Affiliates or their respective securities for
purposes of United States Federal and state securities laws (provided, however,
that to the extent such Information Materials constitute confidential
information, they shall be treated as provided in §18.7); (iii) all Information
Materials marked “PUBLIC” are permitted to be made available through a portion
of any electronic dissemination system designated “Public Investor” or a similar
designation; and (iv) the Agent and the Arrangers shall be entitled to treat any
Information Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of any electronic dissemination system not designated
“Public Investor” or a similar designation.

§7.5    Notices.

(a)        Defaults. The Credit Parties will promptly upon becoming aware of
same notify the Agent in writing of the occurrence of any Default or Event of
Default, which notice shall describe such occurrence with reasonable specificity
and shall state that such notice is a “notice of default”. If any Person shall
give any written notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or under
any note, evidence of indebtedness,

 

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indenture or other obligation to which or with respect to which Borrower is a
party or obligor, whether as principal or surety, and such default would permit
the holder of such note or obligation or other evidence of indebtedness to
accelerate the maturity thereof, which acceleration would either cause a Default
or have a Material Adverse Effect, the Credit Parties shall forthwith give
written notice thereof to the Agent and each of the Lenders, describing the
notice or action and the nature of the claimed default.

(b)        Environmental Events. The Credit Parties will give notice to the
Agent within five (5) Business Days of becoming aware of (i) any known Release,
or threat of Release, of any Hazardous Substances in violation of any applicable
Environmental Law; (ii) any violation of any Environmental Law that Borrower
reports in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal, state or
local environmental agency or (iii) any written inquiry, proceeding, or
investigation, including a written notice from any agency of potential
environmental liability, of any federal, state or local environmental agency or
board, that in the case of either clauses (i) – (iii) above involves any Pool
Property and would reasonably be expected to have a Material Adverse Effect.

(c)        Notification of Claims Against Collateral. The Credit Parties will
give notice to the Agent in writing within five (5) Business Days of becoming
aware of any material setoff, claims (including, with respect to the Pool
Property, environmental claims), withholdings or other defenses to which any of
the Pool Properties are subject, which could have a Material Adverse Effect.

(d)        Notice of Litigation and Judgments. The Credit Parties will give
notice to the Agent in writing within five (5) Business Days of becoming aware
of any pending litigation, investigation or proceedings affecting Credit Parties
or to which a Credit Party is a party involving an uninsured claim against a
Credit Party that could either cause a Default or could reasonably be expected
to have a Material Adverse Effect and stating the nature and status of such
litigation or proceedings. The Credit Parties will give notice to the Agent, in
writing, within ten (10) days of any judgment not covered by insurance, whether
final or otherwise, against a Credit Party or any of their respective
Subsidiaries in an amount in excess of $5,000,000.

(e)        ERISA. The Credit Parties will give notice to the Agent within ten
(10) Business Days after the Borrower or any ERISA Affiliate (i) gives or is
required to give notice to the PBGC of any “reportable event” (as defined in
§4043 of ERISA) with respect to any Guaranteed Pension Plan, Multiemployer Plan
or Employee Benefit Plan, or knows that the plan administrator of any such plan
has given or is required to give notice of any such reportable event; (ii) gives
a copy of any notice (including any received from the trustee of a Multiemployer
Plan) of complete or partial withdrawal liability under Title IV of ERISA; or
(iii) receives any notice from the PBGC under Title IV or ERISA of an intent to
terminate or appoint a trustee to administer any such plan, in each case if such
event or occurrence would reasonably be expected to have a Material Adverse
Effect.

(f)        Debt Rating. The Credit Parties will give notice to the Agent in
writing promptly (and at any time after the Investment Pricing Date, within
three (3) Business Days) after becoming aware thereof, notice of a change in the
Debt Rating of Borrower or REIT Guarantor or any announcement that any Debt
Rating of Borrower is “under review” or that such Debt Rating has been placed on
a watch list or that any similar action has been taken by a Rating Agency.

(g)        Ground Leases. The Credit Parties will give notice to the Agent
promptly after obtaining knowledge of any default in the performance or
observance of any of the terms, covenants and conditions under an Eligible
Ground Lease. The Borrower will promptly deliver to the Agent copies of all
material notices, certificates, requests, demands and other instruments received
from or given to any Transaction Party under an Eligible Ground Lease.

 

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(h)        Notification of Lenders. Within five (5) Business Days after
receiving any notice under this §7.5, the Agent will forward a copy thereof to
each of the Lenders, together with copies of any certificates or other written
information that accompanied such notice.

§7.6    Existence; Maintenance of Properties.

(a)        The Credit Parties will, and will cause the other Transaction Parties
to, preserve and keep in full force and effect their legal existence in the
jurisdiction of its incorporation or formation. The Credit Parties will, and
will cause the other Transaction Parties to, preserve and keep in full force all
of their rights and franchises, the preservation of which is necessary to the
conduct of their business, to the extent that the failure to do so could
reasonably be expected to result in a Material Adverse Effect.

(b)        The Credit Parties (i) will cause all of the Pool Properties and its
assets used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
(ordinary wear and tear excepted) and supplied with all necessary equipment, and
(ii) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof in each case under (i) or (ii) above in
which the failure to do so would cause a Material Adverse Effect. Without
limitation of the obligations of the Credit Parties under this Agreement with
respect to the maintenance of the Pool Properties, the Credit Parties will, and
will cause the other Transaction Parties to, promptly and diligently comply with
the reasonably and necessary recommendations of the Environmental Engineer
concerning the maintenance, operation or upkeep of the Pool Properties contained
in the building inspection and environmental reports delivered to the Agent or
otherwise obtained by any Transaction Party with respect to the Pool Property,
that are required by Environmental Laws.

§7.7    Insurance; Condemnation. The Borrower will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies against such risks (including flood insurance) and in such
amounts as is customarily maintained by similar businesses or as may be required
by Legal Requirements. The Borrower shall from time to time deliver to the Agent
upon request a detailed list, together with copies of all policies of the
insurance then in effect, stating the names of the insurance companies, the
amounts and rates of the insurance, the dates of the expiration thereof and the
properties and risks covered thereby.

§7.8    Taxes; Liens. The Credit Parties will, and will cause their respective
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become delinquent, all taxes, assessments and other
governmental charges imposed upon them or upon the Pool Properties or the other
Real Estate, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials or supplies, that
if unpaid might by law become a lien or charge upon any of its property or other
Liens affecting any of the Pool Properties or other property of the Credit
Parties, or, with respect to their respective Subsidiaries that in case of any
of the foregoing could reasonably be expected to have a Material Adverse Effect,
provided that any such tax, assessment, charge or levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings which shall suspend the collection thereof with respect
to such property, neither such property nor any portion thereof or interest
therein would be in any danger of sale, forfeiture or loss by reason of such
proceeding and such Borrower or any such Subsidiary shall have set aside on its
books adequate reserves in accordance with GAAP; and provided, further, that
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor, such Borrower or any such Subsidiary either
(i) will provide a bond issued by a surety reasonably acceptable to the Agent
and sufficient to stay all such proceedings or (ii) if no such bond is provided,
will pay each such tax, assessment, charge or levy.

 

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§7.9    Inspection of Pool Properties and Books. The Credit Parties will, and
will cause their respective Subsidiaries to, permit the Agent and the Lenders,
at the Borrower’s expense (subject to the limitation set forth below) and upon
reasonable prior notice, to visit and inspect any of the Pool Properties during
normal business hours, to examine the books of account of the Transaction
Parties (and to make copies thereof and extracts therefrom) and to discuss the
affairs, finances and accounts of the Transaction Parties with, and to be
advised as to the same by, their respective officers, partners or members, all
at such reasonable times and intervals as the Agent or any Lender may reasonably
request, provided that so long as no Default or Event of Default shall have
occurred and be continuing, the Credit Parties shall not be required to pay for
such visits and inspections more than once in any twelve (12) month period. The
Agent and the Lenders shall use good faith efforts to coordinate such visits and
inspections so as to minimize the interference with and disruption to the normal
business operations of the Credit Parties and their respective Subsidiaries.

§7.10    Compliance with Laws, Contracts, Licenses, and Permits. The Credit
Parties will, and will cause the other Transaction Parties to, comply in all
respects with (i) all Legal Requirements now or hereafter in effect wherever its
business is conducted, (ii) the provisions of its corporate charter, partnership
agreement, limited liability company agreement or declaration of trust, as the
case may be, and other charter documents and bylaws, (iii) all agreements and
instruments to which it is a party or by which it or any of its properties may
be bound, (iv) all applicable decrees, orders, and judgments, and (v) all
licenses and permits required by Legal Requirements for the conduct of its
business or the ownership, use or operation of its properties, except where a
failure to so comply with any of clauses (i) through (v) could not reasonably be
expected to have a Material Adverse Effect. If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that the Borrower or its
respective Subsidiaries may fulfill any of its obligations hereunder, the
Borrower or such Subsidiary will immediately take or cause to be taken all steps
necessary to obtain such authorization, consent, approval, permit or license and
furnish the Agent and the Lenders with evidence thereof, except where the
failure to obtain the foregoing could not reasonably be expected to have a
Material Adverse Effect. The Credit Parties shall develop and implement such
programs, policies and procedures reasonably designed to promote and achieve
compliance with the Anti-Corruption Laws and applicable Sanctions by the Credit
Parties, their Subsidiaries, their respective directors, officers, employees,
Affiliates and agents and representatives that will act in any capacity in
connection with or benefit from this Agreement.

§7.11    Further Assurances. The Credit Parties will cooperate with the Agent
and the Lenders and execute such further instruments and documents as the
Lenders or the Agent shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Agreement and the other Loan Documents
provided that such instrument and documents are consistent with the terms of the
Loan Documents and do not impose any additional material obligations or expenses
on the Credit Parties.

§7.12    RESERVED.

§7.13    RESERVED.

§7.14    Business Operations. The Credit Parties will not and will not permit
any of their respective Subsidiaries to engage in any business other than to
acquire, own, use, operate, manage, finance, sell, lease, sublease, exchange or
otherwise dispose of office and life sciences-type properties in the United
States, directly or indirectly, and engage in any other activities related or
incidental thereto or permitted pursuant to the terms hereof.

 

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§7.15    Registered Servicemark. Without prior written notice to the Agent, none
of the Pool Properties shall be owned or operated by the Transaction Parties
under any registered or protected trademark, tradename, servicemark or logo.

§7.16    Ownership of Real Estate. Without the prior written consent of Agent,
all Real Estate and all interests (whether direct or indirect) of any Credit
Party in any real estate assets now owned or leased or acquired or leased after
the date hereof shall be owned or leased directly by Borrower or a Wholly Owned
Subsidiary of Borrower; provided, however that Borrower shall be permitted to
own or lease interests in Real Estate through non-Wholly Owned Subsidiaries and
Unconsolidated Affiliates as permitted by §8.3.

§7.17    Distributions of Income to Borrower. Borrower shall cause all
Transaction Parties to promptly distribute to Borrower (but not less frequently
than once each calendar quarter, unless otherwise approved by the Agent),
whether in the form of dividends, distributions or otherwise, all profits,
proceeds or other income relating to or arising from such Subsidiaries’ use,
operation, financing, refinancing, sale or other disposition of their respective
assets and properties after (a) the payment by such Subsidiary of its debt
service, operating expenses, capital improvements and leasing commissions for
such quarter and (b) the establishment of reasonable reserves for the payment of
operating expenses not paid on at least a quarterly basis and capital
improvements and tenant improvements to be made to such Subsidiary’s assets and
properties and other reasonable resources approved by such Subsidiary in the
course of its business.

§7.18    Plan Assets. The Credit Parties will do, or cause to be done, all
things necessary to ensure that none of the Pool Properties will be deemed to be
Plan Assets at any time.

§7.19    REIT Guarantor Covenants. Borrower shall cause the REIT Guarantor to
comply with the following covenants:

(a)        the REIT Guarantor will not make or permit to be made, by voluntary
or involuntary means, any transfer or encumbrance of its interest in Borrower,
or any dilution of its interest in Borrower, that would result in a Change of
Control; and

(b)        the REIT Guarantor shall not dissolve, liquidate or otherwise wind-up
its business, affairs or assets.

Nothing contained in this Agreement or the other Loan Documents shall prohibit,
limit or restrict the REIT Guarantor, as the general partner of the Borrower,
from performing its obligations under the Partnership Agreement (including,
without limitation, its obligations under Section 15.1 of the Partnership
Agreement), provided that such obligations do not result in a Change of Control
and no payment shall be made in cash (other than from proceeds of equity raised
by the REIT Guarantor) in connection with any redemption obligations if an Event
of Default shall be in existence.

§7.20    Pool Properties. At all times the Credit Parties shall use commercially
reasonable efforts to cause each other Transaction Party or the applicable
tenant, to:

(a)        pay all real estate and personal property taxes, assessments, water
rates or sewer rents, ground rents, maintenance charges, impositions, and any
other charges, including vault charges and license fees for the use of vaults,
chutes and similar areas adjoining any Pool Property, now or hereafter levied or
assessed or imposed against any Pool Property or any part thereof (except those
which are being contested in good faith by appropriate proceedings diligently
conducted where the failure to pay any of the foregoing could reasonably be
expected to have a Material Adverse Effect).

 

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(b)        promptly pay (or cause to be paid) when due all bills and costs for
labor, materials, and specifically fabricated materials incurred in connection
with any Pool Property (except those which are being contested in good faith by
appropriate proceedings diligently conducted where the failure to pay any of the
foregoing could reasonably be expected to have a Material Adverse Effect), and
in any event never permit to be created or exist in respect of any Pool Property
or any part thereof any other or additional Lien or security interest other than
Liens permitted hereunder.

(c)        operate the Pool Properties in a good and workmanlike manner and in
all material respects in accordance with all Legal Requirements in accordance
with such Borrower’s or Subsidiary’s prudent business judgment, except where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.

§7.21    REIT Guarantor Status. The Equity Interests of the REIT Guarantor shall
at all times be publicly traded on the New York Stock Exchange, or some other
comparable stock exchange approved by Agent. The REIT Guarantor shall at all
times comply with all requirements of applicable laws necessary to maintain its
status as a real estate investment trust under the Code, shall elect to be
treated as a real estate investment trust and shall operate its business in
compliance with the terms and conditions of this Agreement applicable to the
REIT Guarantor and the other Loan Documents to which it is a party.

§8.        NEGATIVE COVENANTS. The Borrower covenants and agrees that, so long
as any Loan or Note is outstanding or any of the Lenders has any obligation to
make any Loans:

§8.1    Restrictions on Indebtedness. The Credit Parties will not, and will not
permit their Subsidiaries to, create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:

(i)          Indebtedness to the Lenders arising under any of the Loan Documents
and Hedge Obligations to a Lender Hedge Provider;

(ii)        current liabilities of the Borrower or its Subsidiaries incurred in
the ordinary course of business but not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for credit on an open account
basis customarily extended and in fact extended in connection with normal
purchases of goods and services;

(iii)        Indebtedness in respect of taxes, assessments, governmental charges
or levies and claims for labor, materials and supplies to the extent that
payment therefor shall not at the time be required to be made in accordance with
the provisions of §7.8;

(iv)        Indebtedness in respect of judgments only to the extent, for the
period and for an amount not resulting in an Event of Default;

(v)        endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of business;

(vi)        Indebtedness incurred to any other landowners, government or
quasi-government or entity or similar entity in the ordinary course of business
in connection with the construction or development of any Real Estate,
including, without limitation, subdivision improvement agreements, development
agreements, reimbursement agreements, infrastructure development agreements,
agreements to construct or pay for on-site or off-site improvements and similar
agreements

 

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incurred in the ordinary course of business in connection with the development
of Real Estate or construction of infrastructure in connection therewith;

(vii)      To the extent constituting Indebtedness, the redemption obligations
set forth in the Partnership Agreement;

(viii)     Indebtedness of the Borrower under carve-out guaranties and
environmental indemnifications on first mortgage or other property related loans
of its Subsidiaries that are otherwise permitted hereunder, provided the
Borrower shall use commercially reasonably efforts to have any such guaranties
or environmental indemnifications be provided by the REIT Guarantor before being
provided by the Borrower;

(ix)      Unsecured Debt (other than the Obligations) of the REIT Guarantor and
its Subsidiaries provided (i) the Borrower remains in compliance with covenants
set forth in §9 and no payment of the Obligations is required under §3.2 after
giving effect to such Unsecured Debt, and (ii) no such Indebtedness shall be
incurred by a Pool Property Owner prior to the Investment Grade Pricing Date;

(x)      Non-Recourse Indebtedness of a Subsidiary (but not any Pool Property
Owner or parent thereof) of the Borrower which is secured only by the assets of
such Subsidiary, with recourse to the Borrower or the REIT Guarantor limited to
customary carve-outs and environmental indemnifications, in each case in
compliance with covenants set forth in §9; and

(xi)     Secured Recourse Indebtedness of the REIT Guarantor or its Subsidiaries
(so long as such Indebtedness is not incurred by any Pool Property Owner or
secured by any direct or indirect Equity Interests thereof) in an aggregate
amount not to exceed the amount permitted under §9.6.

Notwithstanding anything in this Agreement to the contrary, none of the
Indebtedness described in §8.1 above shall have any of the Pool Properties or
any interest therein or any direct ownership interest in any Pool Property Owner
as collateral, a borrowing base, asset pool or any similar form of credit
support for such Indebtedness (provided that the foregoing shall not preclude
Subsidiaries of the REIT Guarantor (other than Borrower or a Pool Property
Owner) to incur Indebtedness which would be prohibited by the terms of this §8.1
subject to compliance with the financial covenants set forth in §9).

§8.2    Restrictions on Liens, Etc. The Credit Parties will not, and will not
permit the other Transaction Parties to, (a) create or incur or suffer to be
created or incurred or to exist any lien, security title, encumbrance, mortgage,
pledge, negative pledge, charge, or other security interest of any kind upon the
Pool Properties, the Equity Interests in the Borrower or any Pool Property
Owner, or any of the Transaction Parties’ material respective property or assets
of any character whether now owned or hereafter acquired, or upon the income or
profits therefrom; (b) transfer any of their material property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against any of them that if unpaid
could by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever as to the Pool Properties over any of their general
creditors; (e) sell, assign, pledge or otherwise transfer any accounts, contract
rights, general intangibles, chattel paper or instruments, with or without
recourse; or (f) incur or maintain any obligation to any holder of Indebtedness
of any of such Persons which prohibits the creation or maintenance of any lien
securing the Obligations (collectively, “Liens”); provided that notwithstanding
anything to the contrary contained herein, the Credit Parties may create or
incur or suffer to be created or incurred or to exist:

 

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(i)        Liens to secure taxes, assessments and other governmental charges
(excluding any Lien imposed pursuant to any of the provisions of ERISA) to the
extent not required to be paid under §7.8 or claims for labor, material or
supplies incurred in the ordinary course of business in respect of obligations
not overdue by more than 60 days or are being contested in good faith and by
appropriate proceedings diligently conducted with adequate reserves being
maintained by Borrower in accordance with GAAP or not otherwise required to be
paid or discharged under the terms of this Agreement or any of the other Loan
Documents;

(ii)     deposits or pledges made in connection with, or to secure payment of,
workers’ compensation, unemployment insurance, old age pensions or other social
security obligations;

(iii)    deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(iv)    judgment liens and judgments that do not constitute an Event of Default;

(v)     Liens on assets other than Pool Properties or Equity Interests of
Borrower or a Pool Property Owner or the direct or indirect owner of an interest
in Borrower or a Pool Property Owner securing Indebtedness which is permitted by
§8.1(xi);

(vi)    encumbrances on a Pool Property consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord’s or lessor’s liens under leases
to which a Transaction Party is a party, purchase money security interests and
other liens or encumbrances, which do not individually or in the aggregate have
a Material Adverse Effect; and

(vii)    Liens in favor of the Agent and the Lenders under the Loan Documents,
if any, to secure the Obligations and the Hedge Obligations.

§8.3    Restrictions on Investments.

(a)        No Credit Party will make or permit to exist or to remain outstanding
any Investment except Investments in:

(i)           marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase by such
Credit Party;

(ii)          marketable direct obligations of any of the following: Federal
Home Loan Mortgage Corporation, Student Loan Marketing Association, Federal Home
Loan Banks, Federal National Mortgage Association, Government National Mortgage
Association, Bank for Cooperatives, Federal Intermediate Credit Banks, Federal
Financing Banks, Export-Import Bank of the United States, Federal Land Banks, or
any other agency or instrumentality of the United States of America;

(iii)        demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$100,000,000; provided, however, that the aggregate amount at any time so
invested with any single bank having total assets of less than $1,000,000,000
will not exceed $200,000;

(iv)        securities commonly known as “commercial paper” issued by a
corporation organized and existing under the laws of the United States of
America or any State which at

 

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the time of purchase are rated by Moody’s Investors Service, Inc. or by
Standard & Poor’s Corporation at not less than “P 1” if then rated by Moody’s
Investors Service, Inc., and not less than “A 1”, if then rated by Standard &
Poor’s Corporation;

(v)        repurchase agreements having a term not greater than ninety (90) days
and fully secured by securities described in the foregoing subsection (i), (iv)
and (vi) with banks described in the foregoing subsection (iii) or with
financial institutions or other corporations having total assets in excess of
$500,000,000;

(vi)      shares of so-called “money market funds” registered with the SEC under
the Investment Company Act of 1940 which maintain a level per-share value,
invest principally in investments described in the foregoing subsections
(i) through (iv) and have total assets in excess of $50,000,000;

(vii)     the acquisition of fee interests or long-term ground lease interests
by Borrower or any Pool Property Owner (directly or indirectly) in income
producing office and life sciences properties and investments incidental
thereto, any and all construction and development related thereto;

(viii)    Investments by Borrower (directly or indirectly) in Subsidiaries of
Borrower;

(ix)      Investments which constitute Indebtedness to the extent such
Indebtedness is permitted pursuant to §8.1;

(x)       Investments in preferred equity (including preferred limited
partnership interests) in entities owning income producing office and life
sciences properties;

(xi)      Investments in income producing office and life sciences properties
including the acquisition of entities (or interest therein) that are either
publicly traded or privately held that own, manage, develop or construct
commercial real estate including without limitation REITs and other real estate
related entities such as private real estate funds, real estate management
companies, real estate development companies and debt funds, acquisition of real
estate preferred securities or preferred equity investments and other equity
interests, including common stock in companies related directly or indirectly to
real estate; and

(xii)     real estate debt of any kind or nature whatsoever, either directly or
indirectly, including but not limited to origination of and participation in
commercial real estate loans, mortgage notes, collateralized mortgage notes,
collateralized mortgage back securities and collateralized debt obligations
(including any subordinated promissory notes secured by real estate), and
mezzanine loans.

(b)        The Borrower shall not permit Investments by the Credit Parties or
their Subsidiaries to be outstanding at any one time which exceed the following:

(i)        Investments in unimproved land to exceed five percent (5%) of Total
Asset Value;

(ii)        Investments in “ground up” construction and “ground up” development
projects to exceed ten percent (10%) of Total Asset Value;

 

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(iii)        Investments in Real Estate consisting of mortgage loans to exceed
five percent (5%) of Total Asset Value; and

(iv)        investments in non-wholly owned direct and indirect Subsidiaries and
Unconsolidated Affiliates so long as the aggregate amount of such investments
described in this clause (iv) does not exceed ten percent (10%) of the Total
Asset Value;

Notwithstanding the foregoing, in no event shall the aggregate value of the
Investments described in §8.3(b)(i) through (iv) exceed twenty percent (20%) of
Total Asset Value at any time.

For the purposes of this §8.3, the Investment of Borrower or Subsidiary thereof
in any non-Wholly Owned Subsidiaries and Unconsolidated Affiliates will equal
(without duplication) the sum of (i) such Person’s pro rata share of their
Unconsolidated Affiliate’s Investment or rata share of value in Real Estate;
plus (ii) such Person’s pro rata share of any other Investments valued at the
GAAP book value.

For the avoidance of doubt, to the extent the same constitutes an Investment,
this §8.3 shall not prohibit any buyback, redemption, retirement or other
acquisition of shares of the REIT Guarantor’s Equity Interests that is permitted
to be made as a Distribution pursuant to §8.7.

§8.4    Merger, Consolidation. No Transaction Party will become a party to any
dissolution, liquidation, disposition of all or substantially all of its assets
or business, merger, reorganization, consolidation or other business combination
or agree to effect any asset acquisition, stock acquisition or other acquisition
individually or in a series of transactions which may have a similar effect as
any of the foregoing, in each case without the prior written consent of the
Majority Lenders except for (i) the merger or consolidation of one or more of
the Subsidiaries of Borrower (other than any Subsidiary that is a Pool Property
Owner) with and into Borrower (it being understood and agreed that in any such
event Borrower will be the surviving Person), (ii) the merger or consolidation
of two or more Subsidiaries of Borrower (other than any Subsidiary that is a
Pool Property Owner), or (iii) in connection with the release of all Pool
Properties owned by such Pool Property Owner.

Notwithstanding anything to the contrary in this §8.4 or in §8.8, the Borrower
shall not, and shall not permit any other Credit Party or any of their
Subsidiaries to, consummate (i) any sale, merger, transfer, or any similar
transaction with respect to any Real Estate or Equity Interests in any Person if
the value or consideration of such transaction, together with the value or
consideration of all other similar transactions consummated in the immediately
preceding twelve months, would exceed fifteen percent (15%) of the Total Asset
Value on such date, unless the Borrower shall have delivered to the Agent, at
least five (5) Business Days prior to the expected consummation date for such
transaction, written notice of such transaction (with reasonable detail)
together with a Compliance Certificate evidencing that no Default or Event of
Default would exist after giving effect to such transaction or result therefrom,
or (ii) any proposed merger that would resulting in an increase of 25% or more
in Total Asset Value or that involves the Borrower or REIT Guarantor and
Borrower or REIT Guarantor will not be the surviving Person of such merger,
unless the Borrower shall have delivered to the Agent, at least five
(5) Business Days prior to the expected consummation date for such merger,
written notice of such transaction (with reasonable detail), and the Majority
Lenders shall have consent to such merger in writing prior to the consummation
thereof.

§8.5    Sanctions; Anti Corruption Laws. The Credit Parties will not, directly
or indirectly, knowingly (a) use the proceeds of any Loan or Letter of Credit,
or lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other individual or entity, to fund any activities of
or business with any individual or entity, or in any Designated Jurisdiction,
that, at the time of such funding, is the subject of Sanctions, or in any other
manner that will result in a violation by any

 

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individual or entity (including any individual or entity participating in the
transaction, whether as Lender, Arranger, Agent, Issuing Lender, Swing Loan
Lender, or otherwise) of Sanctions, or (b) use the proceeds of any Loan or
Letter of Credit in furtherance of an offer, payment, promise to pay, or
authorization of the payment or giving of money, or anything else of value, to
any Person in violation of any Anti-Corruption Laws.

§8.6    Compliance with Environmental Laws. None of the Credit Parties will, nor
will they permit any other Transaction Party to, do any of the following:
(a) use any of the Pool Properties or any portion thereof as a facility for the
handling, processing, storage or disposal of Hazardous Substances, except for
quantities of Hazardous Substances used in the ordinary course of Borrower’s, a
Pool Property Owner’s or its tenants’ business and in material compliance with
all applicable Environmental Laws, (b) cause or permit to be located on any of
the Pool Properties any underground tank or other underground storage receptacle
for Hazardous Substances except in material compliance with Environmental Laws,
(c) generate any Hazardous Substances on any of the Pool Properties except in
material compliance with Environmental Laws, (d) conduct any activity at any
Pool Properties or use any Pool Properties in any manner that would reasonably
be expected to cause a Release of Hazardous Substances on, upon or into the Pool
Properties or any surrounding properties which would reasonably be expected to
give rise to liability under CERCLA or any other Environmental Law, or
(e) directly or indirectly transport or arrange for the transport of any
Hazardous Substances (except in compliance with all Environmental Laws), except,
any such use, generation, conduct or other activity described in clauses (a) to
(e) of this §8.6 would not reasonably be expected to have a Material Adverse
Effect.

The Credit Parties shall, and shall cause the other Pool Property Owners to:

(i)        in the event of any change in applicable Environmental Laws governing
the assessment, release or removal of Hazardous Substances, take all reasonable
action as required by such Laws, and

(ii)        if any Release or disposal of Hazardous Substances which the
Transaction Parties are legally obligated to contain, correct or otherwise
remediate or which may otherwise expose such Borrower or a Subsidiary to
liability shall occur or shall have occurred on any Pool Property (including
without limitation any such Release or disposal occurring prior to the
acquisition or leasing of such Pool Property by the Borrower or the applicable
Pool Property Owner), the relevant Credit Party shall, after obtaining knowledge
thereof, cause the performance of actions required by applicable Environmental
Laws at the Pool Property in material compliance with all applicable
Environmental Laws; provided, that each of the Transaction Parties shall be
deemed to be in compliance with Environmental Laws for the purpose of this
clause (ii) so long as it or a responsible third party with sufficient financial
resources is taking reasonable action to remediate or manage such event to the
reasonable satisfaction of the Agent or has taken and is diligently pursuing a
challenge to any such alleged legal obligation through appropriate
administrative or judicial proceedings. The Agent may engage its own
Environmental Engineer to review the environmental assessments and the
compliance with the covenants contained herein.

At any time after an Event of Default shall have occurred hereunder, the Agent
may at its election (and will at the request of the Majority Lenders) obtain
such environmental assessments of any or all of the Pool Properties prepared by
an Environmental Engineer as may be reasonably necessary or advisable for the
purpose of evaluating or confirming (i) whether any Hazardous Substances are
present in the soil or water at any such Pool Property in a quantity or
condition that is required to be contained, corrected or otherwise remediated by
the owner or operator of the Pool Property pursuant to applicable Environmental
Laws and (ii) whether the use and operation of any such Pool Property complies
with all Environmental Laws to the extent required by the Loan Documents.
Additionally, at any time that the Agent or the

 

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Majority Lenders shall have reasonable and objective grounds to believe that a
Release or threatened Release of Hazardous Substances may have occurred at or
from any Pool Property which the owner or operator of such property would be
obligated to contain, correct or otherwise remediate pursuant to applicable
Environmental Laws or which otherwise may expose such Person to liability under
Environmental Laws, or that any of the Pool Property is not in compliance with
Environmental Laws to the extent required by the Loan Documents, Borrower or the
Pool Property Owner shall promptly upon the request of Agent obtain and deliver
to Agent such environmental assessments of such Pool Property prepared by an
Environmental Engineer as may be reasonably necessary or advisable for the
purpose of evaluating or confirming (i) whether any Hazardous Substances are
present in the soil or water at such Pool Property and (ii) whether the use and
operation of such Pool Property complies with all Environmental Laws to the
extent required by the Loan Documents. Environmental assessments may include
detailed visual inspections of such Pool Property including, without limitation,
any and all storage areas, storage tanks, drains, dry wells and leaching areas,
and the taking of soil samples, as well as such other investigations or analyses
as are reasonably necessary or appropriate for a complete determination of the
compliance of such Pool Property and the use and operation thereof with all
applicable Environmental Laws. All reasonable expenses of environmental
assessments contemplated by this §8.6 shall be at the sole cost and expense of
the Credit Parties.

§8.7    Distributions. No Credit Party shall pay any Distribution to its
partners, members or other owners or shareholders, except that (a) each of the
REIT Guarantor, Borrower and its Subsidiaries shall be permitted to make
Distributions in an amount not to exceed the minimum amount that would be
required to be distributed by the REIT Guarantor taking into account all other
sources of net income in order to maintain its qualification as a real estate
investment trust under the Code, to eliminate any U.S. federal income tax
liability, and to avoid the imposition of any excise tax for undistributed
income, (b) provided no Default or Event of Default is then in existence,
Distributions made by the REIT Guarantor to its equity holders, including in
connection with the existing redemption and dividend reinvestment plans, for
each quarter end for the preceding twelve month period, not to exceed (as
applicable) the Payout Ratio set forth in §9.8 for any applicable period, and
(c) the Borrower and its Subsidiaries may make Distributions declared and paid
ratably by Subsidiaries to the Borrower or REIT Guarantor with respect to their
capital stock or equity interest.

§8.8    Asset Sales. The Credit Parties will not sell, transfer or otherwise
dispose of any material asset other than pursuant to a bona fide arm’s length
transaction or if replaced with an asset of equal value, and subject in all
instances to §5.2 and the second paragraph of §8.4.

§8.9    Pool Properties. The Credit Parties shall not, nor shall they permit any
other Transaction Party or Subsidiary, directly or indirectly, to:

(a)        use or occupy or conduct any activity on, or knowingly permit the use
or occupancy of or the conduct of any activity on any Pool Properties by any
tenant, in any manner which violates any Legal Requirement or which constitutes
a public or private nuisance in any manner which would have a Material Adverse
Effect or which makes void, voidable, or cancelable any insurance then in force
with respect thereto or makes the maintenance of insurance in accordance with
§7.7 commercially unreasonable (including by way of increased premium). Without
limiting the foregoing, no Transaction Party shall, and shall not knowingly
suffer or permit a tenant under any Lease to, violate any Legal Requirements in
any material respect affecting a Pool Property, including the Controlled
Substances Act, and upon learning of any conduct contrary to this Section, such
Credit Party shall immediately take all actions reasonably expected under the
circumstances to terminate any such use of the Pool Property, including: (i) to
give timely notice to an appropriate law enforcement agency of information that
led such Transaction Party to know such conduct had occurred, and (ii) in a
timely fashion to revoke or make a good faith attempt to revoke permission for
those engaging in such conduct to use the Pool Property or to

 

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take reasonable actions in consultation with a law enforcement agency to
discourage or prevent the illegal use of the Pool Property;

(b)        without the prior written consent of Agent (which consent shall not
be unreasonably withheld, conditioned or delayed), except in connection with any
construction, development or redevelopment of any real estate, initiate or
permit any zoning reclassification of any Pool Property or seek any variance
under existing zoning ordinances applicable to any Pool Property or in any event
use or knowingly permit the use of any Pool Property in such a manner which
would result in such use becoming a nonconforming use under applicable zoning
ordinances or other Legal Requirements if such nonconforming use would
reasonably be expected to have a Material Adverse Effect;

(c)        without the prior written consent of Agent (which consent shall not
be unreasonably withheld, conditioned or delayed), except in connection with any
construction, development or redevelopment of any real estate, (i) impose any
material easement, restrictive covenant, or encumbrance upon any Pool Property,
other than the easements entered into the ordinary course of business and that
would customarily be agreed to by a reasonably prudent land owner, (ii) execute
or file any subdivision plat or condominium declaration affecting any Pool
Property, or (iii) consent to the annexation of any Pool Property to any
municipality;

(d)        do any act, by any Transaction Party which would reasonably be
expected to materially decrease the value of any Pool Property as reflected in
the most-recent Appraisal (including by way of negligent act);

(e)        without the prior written consent of all the Lenders (which consent
shall not be unreasonably withheld, conditioned or delayed), take any
affirmative action to permit any drilling or exploration for or extraction,
removal or production of any mineral, hydrocarbon, gas, natural element,
compound or substance (including sand and gravel) from the surface or subsurface
of any Pool Property regardless of the depth thereof or the method of mining or
extraction thereof; or

(f)        without the prior consent of the Lenders (which consent shall not be
unreasonably withheld, conditioned or delayed), surrender the leasehold estate
created by any applicable Eligible Ground Lease (accepted by the Agent and the
Lenders) respecting a Pool Property or terminate or cancel any such Eligible
Ground Lease or materially modify, change, supplement, alter, or amend any such
Eligible Ground Lease, either orally or in writing.

§8.10    Restriction on Prepayment of Indebtedness. The Credit Parties will not,
and will not permit the other Transaction Parties to (a) voluntarily prepay,
redeem, defease, purchase or otherwise retire the principal amount, in whole or
in part, of any material Indebtedness other than the Obligations and the Hedge
Obligations after the occurrence and continuance of any Event of Default;
provided, that the foregoing shall not prohibit (x) the prepayment of
Indebtedness which is financed primarily from the proceeds of a new loan or
external equity which would otherwise be permitted by the terms of §8.1; and
(y) the prepayment, redemption, defeasance or other retirement of the principal
of Indebtedness secured by Real Estate and permitted hereunder which is
satisfied primarily from the proceeds of a sale of the Real Estate securing such
Indebtedness or external equity; and (b) modify any document evidencing any
material Indebtedness (other than the Obligations) to accelerate the maturity
date of such Indebtedness after the occurrence and continuance of an Event of
Default.

§8.11    Derivatives Contracts. No Credit Party shall contract, create, incur,
assume or suffer to exist any Derivatives Contracts except for Derivative
Contracts made in the ordinary course of business and not prohibited pursuant to
§8.1 which are not secured by the Pool Properties or any portion of the security
granted to the Agent under any of the Loan Documents (other than Hedge
Obligations).

 

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§8.12    Transactions with Affiliates. No Credit Party shall, nor shall it
permit any other Transaction Party to, permit to exist or enter into any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate (but not including any
Subsidiary of Borrower), except (i) RESERVED, (ii) transactions set forth on
Schedule 6.15 attached hereto, (iii) transactions pursuant to the reasonable
requirements of the business of such Person and upon fair and reasonable terms
which are no less favorable to such Person than would be obtained in a
comparable arm’s length transaction with a Person that is not an Affiliate and
(iv) distributions permitted under §8.7.

§8.13    Management Fees. The Credit Parties shall not pay, and shall not permit
to be paid, any property management, advisory or acquisition fees or other
payments under any Management Agreement for any Pool Property to any Person that
is an Affiliate of the Credit Parties in the event that a Default or Event of
Default shall have occurred and be continuing; provided that such fees may
continue to accrue while such Default or Event of Default is in existence and be
paid at such time as no Default or Event of Default is in existence.

§8.14    Changes to Organizational Documents. The Borrower shall not amend or
modify, or permit the amendment or modification of, the limited liability
company agreements or other formation or organizational documents of any
Transaction Party or general partner thereof in a manner adverse to the Lenders,
without the prior written consent of Agent (such consent not to be unreasonably
withheld, conditioned, or delayed). Without limiting the foregoing, any
amendment to the provisions of any Preferred Securities of any Credit Party, or
to the rights or powers of the holders of the Preferred Securities shall be a
material amendment requiring the consent of Agent.

§9.        FINANCIAL COVENANTS. The Borrower and REIT Guarantor covenant and
agree that, so long as any Loan or Note is outstanding or any Lender has any
obligation to make any Loans or issue Letters of Credit, the Borrower and the
REIT Guarantor, as applicable, shall comply with the following covenants. The
Borrower’s and the REIT Guarantor’s compliance with the following covenants
shall be tested quarterly, as of the close of each fiscal quarter.

§9.1    Maximum Leverage Ratio. The Consolidated Leverage Ratio shall not exceed
sixty percent (60%); provided that, if the Consolidated Leverage Ratio is
greater than 60% during any applicable period, then the Borrower and REIT
Guarantor shall be deemed to be in compliance with this §9.1 so long as (a) the
Borrower completed a Material Acquisition during the quarter in which such ratio
first exceeded the applicable forgoing percentage, (b) such ratio does not
exceed 60% for a period of more than four consecutive fiscal quarters
immediately following the fiscal quarter in which such Material Acquisition was
completed, and (c) such ratio is not greater than sixty five percent (65%) at
any time.

§9.2    Minimum Liquidity. The REIT Guarantor’s Liquidity shall not be less than
$10,000,000; provided that the REIT Guarantor shall maintain Unrestricted Cash
and Cash Equivalents of not less than $5,000,000 at all times.

§9.3    Minimum Fixed Charge Coverage Ratio . The REIT Guarantor’s Fixed Charge
Ratio shall not be less than 1.50 to 1.0.

§9.4    Minimum Tangible Net Worth. Consolidated Tangible Net Worth of the REIT
Guarantor and its respective Subsidiaries shall not be less than the sum of (i)
$75% of the Consolidated Tangible Net Worth as of the Closing Date (as set forth
in the Compliance Certificate delivered by the Borrower as of the Closing Date
and approved by the Agent), plus (ii) an amount equal to 75% of the net proceeds
from any issuance of common or preferred Equity Interests in REIT Guarantor or
Borrower

 

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following the Closing Date, plus (iii) an amount equal to 75% of the equity in
any Real Estate contributed to the REIT Guarantor or Borrower following the
Closing Date, minus (iv) the aggregate amount paid by the REIT Guarantor with
respect to buybacks of shares of the REIT Guarantor’s Equity Interests made in
accordance with §8.7 since the Closing Date, in a maximum aggregate amount not
to exceed $40,000,000.00.

§9.5        Maximum Secured Debt Ratio. The Secured Debt Ratio shall not exceed
(i) at any time on or prior to December 31, 2021, forty five percent (45%) or
(ii) at any time thereafter, forty percent (40%); provided that, if the Secured
Debt Ratio is greater than the percentage set forth above during any applicable
period, then the Borrower and REIT Guarantor shall be deemed to be in compliance
with this §9.5 so long as (a) the Borrower completed a Material Acquisition
during the quarter in which such ratio first exceeded the applicable forgoing
percentage, (b) such ratio does not exceed the applicable percentage set forth
above for a period of more than four consecutive fiscal quarters immediately
following the fiscal quarter in which such Material Acquisition was completed,
and (c) such ratio does not exceed the applicable percentage set forth above for
any applicable period by more than 5% at any time.

§9.6        Maximum Secured Recourse Debt Ratio. The Secured Recourse Debt Ratio
(excluding, for the purposes of this covenant, Secured Recourse Debt in
connection with Hedging Obligations) shall not exceed ten percent (10%) of Total
Asset Value.

§9.7        Interest Rate Protection. Unhedged Variable Rate Debt shall not
exceed 30% of Total Asset Value.

§9.8        Payout Ratio. The Payout Ratio shall not exceed ninety five percent
(95%) at any time provided that, prior to March 15, 2021, if the REIT Guarantor
raises equity in a subject quarter, the Payout Ratio shall not exceed 110%
during such calendar quarter and the next two succeeding calendar quarters.

§9.9        Pool Covenants. The Borrower and REIT Guarantor shall comply with
the following covenants:

(a)        Maximum Pool Leverage. The Pool Leverage Ratio shall not exceed sixty
percent (60%) at any time; provided that, if the Pool Leverage Ratio is greater
than 60% during any applicable period, then the Borrower and REIT Guarantor
shall be deemed to be in compliance with this (a)so long as (a) the Borrower
completed a Material Acquisition that was financed principally with Unsecured
Debt during the quarter in which such ratio first exceeded the applicable
forgoing percentage, (b) such ratio does not exceed 60% for a period of more
than four consecutive fiscal quarters immediately following the fiscal quarter
in which such Material Acquisition was completed, and (c) such ratio is not
greater than sixty five percent (65%) at any time.

(b)        Minimum Pool Debt Yield. The Pool Debt Yield shall not be less than
ten and one-half percent (10.5%) at any time.

(c)        Minimum Occupancy: The aggregate Occupancy Ratio of the Pool
Properties must exceed 80%, based solely on tenants in place and paying rent.

(d)        Pool Composition. The Pool shall consist of no less than (x) six (6)
Pool Properties at any time on or prior to March 15, 2019; provided that, the
Pool may consist of five (5) Pool Properties until the date that is ninety
(90) days after the Closing Date pending the admittance of the Pima

 

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Property as a Pool Property in accordance with this Agreement; and (y) seven (7)
Pool Properties at any time thereafter.

(e)        Pool Concentration. At all times, the Pool will be subject to the
following concentration limits:

(i)        No single Pool Property shall comprise (i) at any time prior to
March 15, 2019, in excess of 40% of the Total Pool Value, or (iii) at any time
thereafter, in excess of 25% of the Total Pool Value, in each case, with any
excess being excluded from Total Pool Value.

(ii)        No single tenant’s revenues shall comprise in excess of 15% of the
aggregate rental revenue from the Pool, with any excess being excluded from Pool
NOI.

(iii)        Pool Properties that are subject to a ground lease shall not
comprise in excess of 15% of the Total Pool Value at any time, with any excess
being excluded from Total Pool Value.

§10.    CLOSING CONDITIONS. The obligation of the Lenders to make the initial
Loans or to initially include any Real Estate in the Pool Properties shall be
subject to the satisfaction of the following conditions precedent:

§10.1  Loan Documents. Each of the Loan Documents shall have been duly executed
and delivered by the respective parties thereto and shall be in full force and
effect. The Agent shall have received a fully executed counterpart of each such
document.

§10.2  Certified Copies of Organizational Documents. The Agent shall have
received from each Credit Party a copy, certified as of a recent date by the
appropriate officer of each State in which such Person is organized and in which
the Pool Properties are located and a duly authorized officer, partner or member
of such Person, as applicable, to be true and complete, of the partnership
agreement, corporate charter or operating agreement and/or other organizational
agreements of such Credit Party, as applicable, and its qualification to do
business, as applicable, as in effect on such date of certification.

§10.3  Resolutions. All action on the part of each Credit Party, as applicable,
necessary for the valid execution, delivery and performance by such Person of
this Agreement and the other Loan Documents to which such Person is or is to
become a party shall have been duly and effectively taken, and evidence thereof
reasonably satisfactory to the Agent shall have been provided to the Agent.

§10.4  Incumbency Certificate; Authorized Signers. The Agent shall have received
from each Credit Party an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of such Person and giving the name and
bearing a specimen signature of each individual who shall be authorized to sign,
in the name and on behalf of such Person, each of the Loan Documents to which
such Person is or is to become a party. The Agent shall have also received from
each Credit Party a certificate, dated as of the Closing Date, signed by a duly
authorized representative of such Credit Party and giving the name and specimen
signature of each Authorized Officer who shall be authorized to make Loan
Requests and Conversion/Continuation Requests and to give notices and to take
other action on behalf of such Credit Party under the Loan Documents.

§10.5  Opinion of Counsel. The Agent shall have received an opinion addressed to
the Lenders and the Agent and dated as of the Closing Date from counsel to each
Credit Party in form and substance reasonably satisfactory to the Agent.

 

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§10.6    Payment of Fees. The Borrower shall have paid to the Agent the fees
payable pursuant to §4.2.

§10.7    Insurance. If requested by the Agent, the Agent shall have received
certificates evidencing all policies of insurance as required by this Agreement
or the other Loan Documents.

§10.8    Performance; No Default. On the Closing Date there shall exist no
Default or Event of Default.

§10.9    Representations and Warranties. The representations and warranties made
by the Credit Parties in the Loan Documents or otherwise made by or on behalf of
the Credit Parties and their respective Subsidiaries in connection therewith or
after the date thereof shall have been true and correct in all material respects
when made and shall also be true and correct in all material respects on the
Closing Date (unless such representations and warranties are limited by their
terms to a specific date).

§10.10  Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory to the Agent and the Agent’s counsel in form and
substance, and the Agent shall have received all information and such
counterpart originals or certified copies of such documents and such other
certificates, opinions, assurances, consents, approvals or documents as the
Agent and the Agent’s counsel may reasonably require and are customarily
required in connection with similar transactions.

§10.11  Eligible Real Estate Qualification Documents. The Eligible Real Estate
Qualification Documents for each Pool Property included in the Pool as of the
Closing Date shall have been delivered to the Agent at the Borrower’s expense
and shall be in form and substance reasonably satisfactory to the Agent.

§10.12  Compliance Certificate. The Agent shall have received a Compliance
Certificate dated as of the date of the Closing Date demonstrating compliance
with each of the covenants calculated therein.

§10.13  Consents. The Agent shall have received evidence reasonably satisfactory
to the Agent that all necessary stockholder, partner, member or other consents
required in connection with the consummation of the transactions contemplated by
this Agreement and the other Loan Documents have been obtained.

§10.14  Repayment of Existing Indebtedness. The Agent shall have received
evidence satisfactory to it that, simultaneous with the initial Loan advance
hereunder, all amounts due under the Credit Parties’ existing revolving credit
facility with KeyBank shall be repaid in full and all liens on assets of the
Credit Parties securing such Indebtedness shall be irrevocably terminated and
discharged.

§10.15  Patriot Act; Anti-Money Laundering Laws. The Borrowers and each of the
Credit Parties shall have provided to the Agent and the Lenders the
documentation and other information requested by the Agent in order to comply
with the requirements of any Anti-Money Laundering Laws, including, without
limitation, the Patriot Act and any applicable “know your customer” rules and
regulations.

§10.16  Other. The Agent shall have reviewed such other documents, instruments,
certificates, opinions, assurances, consents and approvals as the Agent or the
Agent’s Special Counsel may reasonably have requested and are customarily
required in connection with similar transactions.

 

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§11.        CONDITIONS TO ALL BORROWINGS. The obligations of the Lenders to make
any Loan or issue or extend any Letter of Credit, whether on or after the
Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:

§11.1    Prior Conditions Satisfied. All conditions set forth in §10 and in §5.1
shall continue to be satisfied as of the date upon which any Loan is to be made
provided that this §11.1 any Credit Party to comply with the conditions set
forth in §§ 10.2, 10.3, 10.4, 10.5 with respect to any Real Estate which has
previously been included in the Pool.

§11.2    Representations True; No Default. Each of the representations and
warranties made by or on behalf of the Credit Parties or any of their respective
Subsidiaries contained in this Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with this
Agreement shall be true in all material respects both as of the date as of which
they were made and shall also be true in all material respects as of the time of
the making of such Loan, with the same effect as if made at and as of that time,
except to the extent of changes resulting from transactions permitted by the
Loan Documents (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct only as of such specified date), and no Default or Event of
Default shall have occurred and be continuing.

§11.3    Borrowing Documents. The Agent shall have received a fully completed
Loan Request for such Loan or a fully completed Letter of Credit Request
required by §2.11 in the form of Exhibit E hereto fully completed, as
applicable, and the other documents and information (including, without
limitation, a Compliance Certificate) as required by §2.8 and §5.1, with each
Loan Request being deemed a certification of Borrower that such Real Estate will
satisfy (or is anticipated to satisfy upon the acceptance of such Real Estate as
a Pool Property) each of the other conditions to the acceptance of Real Estate
as a Pool Property.

§12.      EVENTS OF DEFAULT; ACCELERATION; ETC.

§12.1  Events of Default and Acceleration . If any of the following events
(“Events of Default” or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, “Defaults”) shall occur:

(a)        the Borrower shall fail to pay any principal of the Loans or any
reimbursement obligations with respect to draws on the Letters of Credit when
the same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment;

(b)        the Borrower shall fail to pay any interest on the Loans within five
(5) days of the date that the same shall become due and payable, any other
reimbursement obligations with respect to the Letters of Credit or any fees or
other sums due hereunder (other than any voluntary prepayment) or under any of
the other Loan Documents within five (5) days after notice from Agent, whether
at the stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment;

(c)        any of the Borrower or the other Credit Parties or any of their
respective Subsidiaries shall fail to perform any other term, covenant or
agreement contained in (i) §7.6(a), (ii) §7.20, (iii) §8, or (iv) §9;

(d)        any of the Borrower or the other Credit Parties shall fail to perform
any other term, covenant or agreement contained herein or in any of the other
Loan Documents which they are required to perform (other than those specified in
the other subclauses of this §12 (including, without

 

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limitation, §12.2 below) or in the other Loan Documents), and such failure shall
continue for thirty (30) days after Borrower receives from Agent written notice
thereof, and in the case of a default that cannot be cured within such thirty
(30)-day period despite Borrower’s diligent efforts but is susceptible of being
cured within ninety (90) days of Borrower’s receipt of Agent’s original notice,
then Borrower shall have such additional time as is reasonably necessary to
effect such cure, but in no event in excess of ninety (90) days from Borrower’s
receipt of Agent’s original notice; provided that with respect to any defaults
under §7.4, §7.5, §7.7, or §7.9, the thirty (30) day cure period described above
shall be reduced to a period of ten (10) days and no additional cure period
shall be provided with respect to such defaults;

(e)        any material representation or warranty made by or on behalf of the
Credit Parties or any of their respective Subsidiaries in this Agreement or any
other Loan Document, or any report, certificate, financial statement, request
for a Loan, or in any other document or instrument delivered pursuant to or in
connection with this Agreement, any advance of a Loan, or any of the other Loan
Documents shall prove to have been false in any material respect upon the date
when made or deemed to have been made or repeated except to the extent it is not
reasonably expected to have a Material Adverse Effect;

(f)        Any (a) Credit Party defaults under any Recourse Indebtedness in an
aggregate amount equal to or greater than $25,000,000 with respect to all
uncured defaults at any time, or (b) Credit Party or Subsidiary thereof defaults
under any Non-Recourse Indebtedness in an aggregate amount equal to or greater
than $75,000,000 with respect to all uncured defaults at any time;

(g)        any of the Borrower or other Credit Party, (i) shall make an
assignment for the benefit of creditors, or admit in writing its general
inability to pay or generally fail to pay its debts as they mature or become
due, or shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver for it or any substantial part of its assets,
(ii) shall commence any case or other proceeding relating to it under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, or (iii) shall take any action to authorize any of the foregoing;

(h)        a petition or application shall be filed for the appointment of a
trustee or other custodian, liquidator or receiver of any of the Borrower or
other Credit Party or any substantial part of the assets of any thereof, or a
case or other proceeding shall be commenced against any such Person under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, and any such Person shall indicate its approval thereof, consent
thereto or acquiescence therein or such petition, application, case or
proceeding shall not have been dismissed within ninety (90) days following the
filing or commencement thereof;

(i)        a decree or order is entered appointing a trustee, custodian,
liquidator or receiver for any of the Borrower or other Credit Party or
adjudicating any such Person, bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is entered in
respect of any such Person in an involuntary case under federal bankruptcy laws
as now or hereafter constituted;

(j)        there shall remain in force, undischarged, unsatisfied and unstayed,
for more than sixty (60) days, whether or not consecutive, one or more uninsured
or unbonded final judgments against any Credit Party that, either individually
or in the aggregate, exceed in excess of $5,000,000.00 in the case of the REIT
Guarantor or the Borrower or $500,000.00 in the case of any Subsidiary
Guarantor;

(k)        any of the material Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or the
express prior written agreement,

 

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consent or approval of the Majority Lenders, or any action at law, suit in
equity or other legal proceeding to cancel, revoke or rescind any of the
material Loan Documents shall be commenced by or on behalf of any of the Credit
Parties, or any court or any other Governmental Authority or agency of competent
jurisdiction shall make a determination, or issue a judgment, order, decree or
ruling, to the effect that any one or more of the material Loan Documents is
illegal, invalid or unenforceable in accordance with the terms thereof;

(l)        the failure of any Credit Party or its Subsidiaries to remediate
within the time period permitted by applicable law or lawful governmental order
(or within a reasonable time given the nature of the problem if no specific time
period has been given) material environmental matter with respect to Hazardous
Substances related to (i) any Pool Properties or (ii) any other Real Estate
whose aggregate book values are in excess of Ten Million Dollars ($10,000,000)
after all administrative hearings and appeals have been concluded or waived;

(m)        with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and such event reasonably would be expected to result
in liability of any of the Credit Parties to pay money to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000 and one of
the following shall apply with respect to such event: (x) such event in the
circumstances occurring reasonably would be expected to result in the
termination of such Guaranteed Pension Plan by the PBGC or for the appointment
by the appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or (y) a trustee shall have been appointed by the
United States District Court to administer such Plan; or (z) the PBGC shall have
instituted proceedings to terminate such Guaranteed Pension Plan;

(n)        any Change of Control shall occur;

then, and upon any such Event of Default, the Agent may, and upon the request of
the Majority Lenders shall, by notice in writing to the Borrower declare all
amounts owing with respect to this Agreement, the Notes, the Letters of Credit,
and the other Loan Documents to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrower; provided
that in the event of any Event of Default specified in §12.1(g), §12.1(h) or
§12.1(i), all such amounts shall become immediately due and payable
automatically and without any requirement of presentment, demand, protest or
other notice of any kind from any of the Lenders or the Agent. If demanded by
Agent in its absolute and sole discretion after the occurrence and during the
continuance of an Event of Default, Borrower will deposit with and pledge to
Agent cash in an amount equal to the amount of all undrawn Letters of Credit.
Such amounts will be pledged to and held by Agent for the benefit of the Lenders
as security for any amounts that become payable under the Letters of Credit and
all other Obligations and Hedge Obligations. In the event the Borrower fails to
deliver such cash collateral, upon demand by Agent in its absolute and sole
discretion after the occurrence and during the continuance of an Event of
Default, and regardless of whether the conditions precedent in this Agreement
for a Revolving Credit Loan have been satisfied, the Revolving Credit Lenders
will cause a Revolving Credit Loan to be made in the undrawn amount of all
Letters of Credit. The proceeds of any such Revolving Credit Loan will be
pledged to and held by Agent as security for any amounts that become payable
under the Letters of Credit and all other Obligations. Upon any draws under
Letters of Credit, at Agent’s sole discretion, Agent may apply any such amounts
pledged or funded hereunder to the repayment of amounts drawn thereunder and
upon the expiration of the Letters of Credit any remaining amounts will be
applied to the payment of all other Obligations and Hedge Obligations or if
there are no outstanding Obligations and Hedge Obligations and Lenders have no
further obligation to make Revolving Credit Loans or issue Letters of Credit or
if such excess no longer exists, such proceeds deposited by Borrower will be
released to Borrower.

 

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§12.2    Certain Cure Periods. In the event that there shall occur any Default
that affects only certain Pool Property or the applicable Pool Property Owner or
the removal of certain Pool Property would cure the Default, then the Borrower
may elect to cure such Default (so long as no other Default or Event of Default
would arise as a result) by electing to have Agent remove such Pool Property
from the Pool (and the Borrower’s compliance with §3.2 as a result thereof), in
which event such removal and reduction shall be completed within thirty
(30) days after receipt of notice of such Default from the Agent or the Majority
Lenders.

§12.3    Termination of Commitments. If any one or more Events of Default
specified in §12.1(g), §12.1(h) or §12.1(i) shall occur, then immediately and
without any action on the part of the Agent or any Lender any unused portion of
the Commitment hereunder shall terminate and the Lenders shall be relieved of
all obligations to make Loans or issue or renew Letters of Credit to the
Borrower. If any other Event of Default shall have occurred, the Agent may, and
upon the election of the Majority Lenders shall, by notice to the Borrower
terminate the Commitments and the Lenders shall have no further obligation to
make Loans or issue or renew Letters of Credit to the Borrower. No termination
under this §12.3 shall relieve the Borrower of its obligations to the Lenders
arising under this Agreement or the other Loan Documents.

§12.4    Remedies. In case any one or more Events of Default shall have occurred
and be continuing, and whether or not the Lenders shall have accelerated the
maturity of the Loans pursuant to §12.1, the Agent on behalf of the Lenders may,
and upon the direction of the Majority Lenders shall, proceed to protect and
enforce their rights and remedies under this Agreement, the Notes and/or any of
the other Loan Documents by suit in equity, action at law or other appropriate
proceeding, including to the full extent permitted by applicable law the
specific performance of any covenant or agreement contained in this Agreement
and the other Loan Documents, the obtaining of the ex parte appointment of a
receiver, and, if any amount shall have become due, by declaration or otherwise,
the enforcement of the payment thereof. No remedy herein conferred upon the
Agent or any Lender or any Lender Hedge Provider is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law. Notwithstanding
the provisions of this Agreement providing that the Loans may be evidenced by
multiple Notes in favor of the Lenders, the Lenders acknowledge and agree that
only the Agent may exercise any remedies arising by reason of a Default or Event
of Default. If any Credit Party fails to perform any agreement or covenant
contained in this Agreement or any of the other Loan Documents beyond any
applicable period for notice and cure, Agent may itself perform, or cause to be
performed, any agreement or covenant of such Person contained in this Agreement
or any of the other Loan Documents which such Person shall fail to perform, and
the out-of-pocket costs of such performance, together with any reasonable
expenses, including reasonable attorneys’ fees actually incurred (including
attorneys’ fees incurred in any appeal) by Agent in connection therewith, shall
be payable by Borrower upon demand and shall constitute a part of the
Obligations and shall if not paid within five (5) days after demand bear
interest at the rate for overdue amounts as set forth in this Agreement. In the
event that all or any portion of the Obligations is collected by or through an
attorney-at-law, the Borrower shall pay all costs of collection including, but
not limited to, reasonable attorney’s fees.

§12.5    Distribution of Proceeds. In the event that, following the occurrence
and during the continuance of any Event of Default, any monies are received in
connection with the enforcement of any of the Loan Documents, such monies shall
be distributed for application as follows:

(a)        First, to the payment of, or (as the case may be) the reimbursement
of the Agent for or in respect of, all reasonable out-of-pocket costs, expenses,
disbursements and losses which shall have been paid, incurred or sustained by
the Agent in accordance with the terms of the Loan Documents

 

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in connection with the collection of such monies by the Agent, for the exercise,
protection or enforcement by the Agent of all or any of the rights, remedies,
powers and privileges of the Agent or the Lenders under this Agreement or any of
the other Loan Documents or in support of any provision of adequate indemnity to
the Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the Agent or the Lenders to such monies;

(b)        Second, to the payment of all other Obligations and Hedge Obligations
(including any Letter of Credit Liabilities and any interest, expenses or other
obligations incurred after the commencement of a bankruptcy) in the following
order; provided, that (i) in the event that any Lender is a Defaulting Lender,
payments to such Lender shall be governed by §14.16; (ii) Obligations owing to
the Lenders with respect to each type of Obligation such as interest, principal,
fees and expenses shall be made among the Lenders, pro rata; and
(iii) Obligations owing to the Lender Hedge Providers with respect to Lender
Hedge Obligations shall be made among the Lender Hedge Providers, pro rata; and
provided, further that the Majority Lenders may in their discretion make proper
allowance to take into account any Obligations not then due and payable:

(i)        To any other fees and expenses due to the Lenders or the Issuing
Lender until paid in full;

(ii)        to the payment of interest on all Swing Loans until paid in full;

(iii)        to payment of interest on all other Loans and Letter of Credit
Liabilities, for the ratable benefit of the Lenders and the Issuing Lender,
until paid in full;

(iv)        to the payment of all principal of Swing Loans until paid in full;

(v)        payments of principal of all other Loans and Letter of Credit
Liabilities, to be paid to the Lenders and the Issuing Lender equally and
ratably in accordance with the respective amounts thereof then due and owing to
such Persons until paid in full; provided, however, to the extent that any
amounts available for distribution pursuant to this subsection are attributable
to the issued but undrawn amount of an outstanding Letter of Credit, such
amounts shall be paid to the Agent to be held as cash collateral; and

(vi)        to any Hedge Obligations owed to the Lender Hedge Providers, pro
rata;

(vii)        to payment of all other amounts due under any of the Loan Documents
to be applied for the ratable benefit of the Agent, the Issuing Lender and/or
the Lenders until paid in full; and

(c)        Third, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.

§12.6    Remedies in Respect of Hedge Obligations. Notwithstanding any other
provision of this Agreement or other Loan Document, each Lender Hedge Provider
shall have the right, with prompt notice to the Agent, but without the approval
or consent of or other action by the Agent, the Issuing Lender or the Lenders,
and without limitation of other remedies available to such Lender Hedge Provider
under contract or other Legal Requirements, to undertake any of the following:
(a) to declare an event of default, termination event or other similar event
under any Hedge Obligation and to create an “Early Termination Date” (as defined
therein) in respect thereof, (b) to determine net termination amounts in respect
of any and all Derivatives Contracts to which it is a party in accordance with
the terms thereof, and to set off amounts among such contracts, (c) to set off
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securities account balances and other property and amounts held by such Lender
Hedge Provider and (d) to prosecute any legal action against the Borrower, any
Credit Party or other Subsidiary to enforce or collect net amounts owing to such
Lender Hedge Provider pursuant to any Derivatives Contract.

No Lender Hedge Provider that obtains the benefits of §12.5 by virtue of the
provisions hereof or of any Loan Document shall have any right to notice of any
action or to consent to, direct or object to any action hereunder or under any
other Loan Document or otherwise in respect of any Loan Document other than in
its capacity as a Lender and, in such case, only to the extent expressly
provided in the Loan Documents. Notwithstanding any other provision of this
Article to the contrary, the Agent shall not be required to verify the payment
of, or that other satisfactory arrangements have been made with respect to,
Derivative Contracts with respect to Hedge Obligations unless the Agent has
received written notice of such Derivatives Contracts, together with such
supporting documentation as the Agent may request, from the applicable Lender
Hedge Provider

§12.7    Cash Collateral Account.

(a)        As collateral security for the prompt payment in full when due of all
Letter of Credit Liabilities and the other Obligations and Hedge Obligations,
Borrower hereby pledges and grants to the Agent, for the ratable benefit of the
Agent, the Lenders, and the Lender Hedge Providers as provided herein, a
security interest in all of its right, title and interest in and to the Cash
Collateral Account and the balances from time to time in the Cash Collateral
Account (including the investments and reinvestments therein provided for
below). The balances from time to time in the Cash Collateral Account shall not
constitute payment of any Letter of Credit Liabilities until applied by the
Agent as provided herein. Anything in this Agreement to the contrary
notwithstanding, funds held in the Cash Collateral Account shall be subject to
withdrawal only as provided in this section.

(b)        Amounts on deposit in the Cash Collateral Account shall be invested
and reinvested by the Agent in such Cash Equivalents as the Agent shall
determine in its sole discretion. All such investments and reinvestments shall
be held in the name of and be under the sole dominion and control of the Agent
for the ratable benefit of the Lenders. The Agent shall exercise reasonable care
in the custody and preservation of any funds held in the Cash Collateral Account
and shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Agent accords other funds
deposited with the Agent, it being understood that the Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any funds held in the Cash Collateral Account.

(c)        If a drawing pursuant to any Letter of Credit occurs on or prior to
the expiration date of such Letter of Credit, the Borrower and the Lenders
authorize the Agent to use the monies deposited in the Cash Collateral Account
to make payment to the beneficiary with respect to such drawing or the payee
with respect to such presentment.

(d)        If an Event of Default exists, the Majority Lenders may, in their
discretion, at any time and from time to time, instruct the Agent to liquidate
any such investments and reinvestments and apply proceeds thereof to the
Obligations and Hedge Obligations in accordance with §12.5.

(e)        So long as no Default or Event of Default exists, and to the extent
amounts on deposit in the Cash Collateral Account exceed the aggregate amount of
the Letter of Credit Liabilities then due and owing and the pro rata share of
any Letter of Credit Obligations of any Defaulting Lender after giving effect to
§14.16, the Agent shall, from time to time, at the request of the Borrowers,
deliver to the Borrowers within 10 Business Days after the Agent’s receipt of
such request from the Borrowers, against receipt but without any recourse,
warranty or representation whatsoever, such of the balances in

 

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the Cash Collateral Account as exceed the aggregate amount of the Letter of
Credit Liabilities at such time.

(f)        The Borrowers shall pay to the Agent from time to time such fees as
the Agent normally charges for similar services in connection with the Agent’s
administration of the Cash Collateral Account and investments and reinvestments
of funds therein. Borrower authorizes Agent to file such financing statements as
Agent may reasonably require in order to perfect Agent’s security interest in
the Cash Collateral Account, and Borrowers shall promptly upon demand execute
and deliver to Agent such other documents as Agent may reasonably request to
evidence its security interest in the Cash Collateral Account.

§13.    SETOFF. Regardless of the adequacy of any security for the Obligations,
during the continuance of any Event of Default, any deposits (general or
specific, time or demand, provisional or final, regardless of currency,
maturity, or the branch where such deposits are held) or other sums credited by
or due from any Lender or any Affiliate thereof to the Credit Parties and any
securities or other property of the Credit Parties in the possession of such
Lender or any Affiliate may, without notice to any Credit Party (any such notice
being expressly waived by Credit Parties) but with the prior written approval of
Agent, be applied to or set off against the payment of Obligations and any and
all other liabilities, direct, or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of the Credit Parties to such
Lender. Each of the Lenders agrees with each other Lender that if such Lender
shall receive from the Borrower, whether by voluntary payment, exercise of the
right of setoff, or otherwise, and shall retain and apply to the payment of the
Note or Notes held by such Lender (but excluding the Swing Loan Note) any amount
in excess of its ratable portion of the payments received by all of the Lenders
with respect to the Notes held by all of the Lenders, such Lender will make such
disposition and arrangements with the other Lenders with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Lender receiving in respect of the Notes held
by it its proportionate payment as contemplated by this Agreement; provided that
if all or any part of such excess payment is thereafter recovered from such
Lender, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest. In the event that
any Defaulting Lender shall exercise any such right of setoff, (a) all amounts
so set off shall be paid over immediately to the Agent for further application
in accordance with the provisions of this Agreement and, pending such payment,
shall be segregated by such Defaulting Lender from its other funds and deemed
held in trust for the benefit of the Agent and the Lenders, and (b) the
Defaulting Lender shall provide promptly to the Agent a statement describing in
reasonable detail the Obligations owing to such Defaulting Lender as to which it
exercised such right of setoff.

§14.    THE AGENT.

§14.1  Authorization. Each of the Lenders hereby irrevocably appoints KeyBank as
the Agent and authorizes the Agent to take such action on behalf of each of the
Lenders and to exercise all such powers as are hereunder and under any of the
other Loan Documents and any related documents delegated to the Agent and all
other powers not specifically reserved to the Lenders, together with such powers
as are reasonably incident thereto, provided that no duties or responsibilities
not expressly assumed herein or therein shall be implied to have been assumed by
the Agent. The obligations of the Agent hereunder are primarily administrative
in nature, and nothing contained in this Agreement or any of the other Loan
Documents shall be construed to constitute the Agent as a trustee for any Lender
or to create an agency or fiduciary relationship. Agent shall act as the
contractual representative of the Lenders hereunder, and notwithstanding the use
of the term “Agent”, it is understood and agreed that Agent shall not have any
fiduciary duties or responsibilities to any Lender by reason of this Agreement
or any other Loan Document and is acting as an independent contractor, the
duties and responsibilities of which are limited to those expressly set forth in
this Agreement and the other Loan Documents. The

 

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Borrower and any other Person shall be entitled to conclusively rely on a
statement from the Agent that it has the authority to act for and bind the
Lenders pursuant to this Agreement and the other Loan Documents.

§14.2    Employees and Agents. The Agent may exercise its powers and execute its
duties by or through employees or agents and shall be entitled to take, and to
rely on, advice of counsel concerning all matters pertaining to its rights and
duties under this Agreement and the other Loan Documents. The Agent may utilize
the services of such Persons as the Agent may reasonably determine, and all
reasonable fees and expenses of any such Persons shall be paid by the Borrower.

§14.3    No Liability. Neither the Agent nor any of its shareholders, directors,
officers or employees nor any other Person assisting them in their duties nor
any agent, or employee thereof, shall be liable to the Lenders for (a) any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, shall be liable for losses due to its willful
misconduct or gross negligence as finally determined by a court of competent
jurisdiction after the expiration of all applicable appeal periods or (b) any
action taken or not taken by Agent with the consent or at the request of the
Majority Lenders, Required Lenders or the Majority Class Lenders (or such
greater number of Lenders as may be expressly required pursuant to §28.2), as
applicable. The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the Agent
for the account of the Lenders, unless the Agent has received notice from a
Lender or the Borrower referring to the Loan Documents and describing with
reasonable specificity such Default or Event of Default and stating that such
notice is a “notice of default”.

§14.4    No Representations. The Agent shall not be responsible for the
execution or validity or enforceability of this Agreement, the Notes, any of the
other Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein, or any agreement, instrument or
certificate delivered in connection therewith or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished to it by or on
behalf of the Borrower or any of its respective Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any of the other Loan
Documents. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any holder of any
of the Notes shall have been duly authorized or is true, accurate and complete.
The Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Lenders, with
respect to the creditworthiness or financial condition of the Borrower or any of
its respective Subsidiaries, or the value of the Collateral or any other assets
of the Borrower or any of its respective Subsidiaries. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent or any other Lender, based upon such information and
documents as it deems appropriate at the time, continue to make its own credit
analysis and decisions in taking or not taking action under this Agreement and
the other Loan Documents. Agent’s Special Counsel has only represented Agent and
KeyBank in connection with the Loan Documents and the only attorney client
relationship or duty of care is between Agent’s Special Counsel and Agent or
KeyBank. Each Lender has been independently represented by separate counsel on
all matters regarding the Loan Documents.

 

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§14.5    Payments.

(a)        A payment by the Borrower to the Agent hereunder or under any of the
other Loan Documents for the account of any Lender shall constitute a payment to
such Lender. The Agent agrees to distribute to each Lender not later than one
Business Day after the Agent’s receipt of good funds, determined in accordance
with the Agent’s customary practices, such Lender’s pro rata share of payments
received by the Agent for the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan Documents. In the event
that the Agent fails to distribute such amounts within one Business Day as
provided above, the Agent shall pay interest on such amount at a rate per annum
equal to the Federal Funds Effective Rate from time to time in effect.
Notwithstanding anything to the contrary contained in this Agreement, if any
Lender becomes a Defaulting Lender, then until such time as such Lender is no
longer a Defaulting Lender, each payment of the Borrower hereunder shall be
applied in accordance with §14.16.

(b)        If in the reasonable opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under any
of the other Loan Documents might involve it in liability, it may refrain from
making such distribution until its right to make such distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.

§14.6  Holders of Notes. Subject to the terms of §18, the Agent may deem and
treat the payee of any Note as the absolute owner or purchaser thereof for all
purposes hereof until it shall have been furnished in writing with a different
name by such payee or by a subsequent holder, assignee or transferee.

§14.7  Indemnity. The Lenders ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by §15), and liabilities of every nature and character arising out of
or related to this Agreement, the Notes, or any of the other Loan Documents or
the transactions contemplated or evidenced hereby or thereby, or the Agent’s
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Agent’s willful misconduct or gross negligence
as finally determined by a court of competent jurisdiction after the expiration
of all applicable appeal periods. The agreements in this §14.7 shall survive the
payment of all amounts payable under the Loan Documents.

§14.8  Agent as Lender. In its individual capacity, KeyBank shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes as it
would have were it not also the Agent.

§14.9  Resignation. The Agent may resign at any time by giving thirty
(30) calendar days’ prior written notice thereof to the Lenders and the
Borrower. The Majority Lenders may remove the Agent from its capacity as Agent
in the event of the Agent’s gross negligence or willful misconduct (with the
Commitment Percentage of the Lender which is acting as Agent shall not be taken
into account in the calculation of Majority Lenders for the purposes of removing
Agent in the event of the Agent’s willful misconduct or gross negligence). Any
such resignation or removal may at Agent’s option also constitute Agent’s
resignation as Issuing Lender and Swing Loan Lender. Upon any such resignation,
or removal, the Majority Lenders, subject to the terms of §18.1, shall have the
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successor Agent and, if applicable, Issuing Lender and Swing Loan Lender,
(i) any Lender or (ii) any bank whose senior debt obligations are rated not less
than “A” or its equivalent by Moody’s or not less than “A” or its equivalent by
S&P and which has a net worth of not less than $500,000,000. Unless a Default or
Event of Default shall have occurred and be continuing, such successor Agent
and, if applicable, Issuing Lender and Swing Loan Lender shall be reasonably
acceptable to the Borrower and shall have a minimum Commitment of at least
$5,000,000. If no successor Agent shall have been appointed and shall have
accepted such appointment within thirty (30) days after the retiring Agent’s
giving of notice of resignation or the Majority Lender’s removal of the Agent,
then the retiring or removed Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be (i) any Lender or (ii) any financial institution
whose senior debt obligations are rated not less than “A2” or its equivalent by
Moody’s or not less than “A” or its equivalent by S&P and which has a net worth
of not less than $500,000,000. Upon the acceptance of any appointment as Agent
and, if applicable, Issuing Lender and Swing Loan Lender, hereunder by a
successor Agent and, if applicable, Issuing Lender and Swing Loan Lender, such
successor Agent and, if applicable, Issuing Lender and Swing Loan Lender, shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent and, if applicable, Issuing Lender
and Swing Loan Lender, and the retiring or removed Agent and, if applicable,
Issuing Lender and Swing Loan Lender, shall be discharged from its duties and
obligations hereunder as Agent and, if applicable, Issuing Lender and Swing Loan
Lender. After any retiring Agent’s resignation or removal, the provisions of
this Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent, Issuing Lender and Swing Loan Lender. If the resigning or
removed Agent shall also resign as the Issuing Lender, such successor Agent
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or shall make other arrangements
satisfactory to the current Issuing Lender, in either case, to assume
effectively the obligations of the current Agent with respect to such Letters of
Credit. Upon any change in the Agent under this Agreement, the resigning or
removed Agent shall execute such assignments of and amendments to the Loan
Documents as may be necessary to substitute the successor Agent for the
resigning or removed Agent.

§14.10  Duties in the Case of Enforcement. In case one or more Events of Default
have occurred and shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Agent may and, if (a) so requested by the
Majority Lenders and (b) the Lenders have provided to the Agent such additional
indemnities and assurances in accordance with their respective Applicable
Percentages against expenses and liabilities as the Agent may reasonably
request, shall proceed to exercise all or any legal and equitable and other
rights or remedies as it may have; provided, however, that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem to be in the best interests
of the Lenders. Without limiting the generality of the foregoing, if Agent
reasonably determines payment is in the best interest of all the Lenders, Agent
may without the approval of the Lenders pay taxes and insurance premiums and
spend money for maintenance, repairs or other expenses which may be necessary to
be incurred, and Agent shall promptly thereafter notify the Lenders of such
action; provided that the Agent shall obtain the prior approval of the Majority
Lenders if such payments for amounts other than taxes and insurance shall exceed
$100,000 in any twelve (12) month period. Each Lender shall, within thirty
(30) days of request therefor, pay to the Agent its Applicable Percentage of the
reasonable costs incurred by the Agent in taking any such actions hereunder to
the extent that such costs shall not be promptly reimbursed to the Agent by the
Borrower within such period with respect to the Pool Properties. The Majority
Lenders may direct the Agent in writing as to the method and the extent of any
such exercise, the Lenders hereby agreeing to indemnify and hold the Agent
harmless in accordance with their respective Applicable Percentages from all
liabilities incurred in respect of all actions taken or omitted in accordance
with such directions, except to the extent that any of the same shall be
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negligence as finally determined by a court of competent jurisdiction after the
expiration of all applicable appeal periods, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent’s compliance with such direction to be unlawful in any applicable
jurisdiction or commercially unreasonable under the UCC as enacted in any
applicable jurisdiction.

§14.11  Bankruptcy. In the event a bankruptcy or other insolvency proceeding is
commenced by or against any Credit Party with respect to the Obligations, the
Agent shall have the sole and exclusive right to file and pursue a joint proof
claim on behalf of all Lenders. Any votes with respect to such claims or
otherwise with respect to such proceedings shall be subject to the vote of the
Majority Lenders or all of the Lenders as required by this Agreement. Each
Lender irrevocably waives its right to file or pursue a separate proof of claim
in any such proceedings unless Agent fails to file such claim within thirty
(30) days after receipt of written notice from the Lenders requesting that Agent
file such proof of claim.

§14.12  Request for Agent Action. Agent and the Lenders acknowledge that in the
ordinary course of business of the Credit Parties, (a) a Pool Property may be
subject to a Taking, or (b) a Pool Property Owner may desire to enter into
easements or other agreements affecting the Pool Properties, or take other
actions or enter into other agreements in the ordinary course of business which
similarly require the consent, approval or agreement of the Agent. In connection
with the foregoing, the Lenders hereby expressly authorize the Agent to
(x) execute consents or subordinations in form and substance satisfactory to
Agent in connection with any easements or agreements affecting the Pool
Property, or (y) execute consents, approvals, or other agreements in form and
substance satisfactory to the Agent in connection with such other actions or
agreements as may be necessary in the ordinary course of Borrower’s business.

§14.13  Reliance by Agent. The Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any
electronic message, Internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed, sent or otherwise
authenticated by an Authorized Officer. The Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan,
that by its terms must be fulfilled to the satisfaction of a Lender, the Agent
may presume that such condition is satisfactory to such Lender unless the Agent
shall have received notice to the contrary from such Lender prior to the making
of such Loan. The Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.

§14.14  Approvals. If consent is required for some action under this Agreement,
or except as otherwise provided herein an approval of the Lenders, the Majority
Lenders, the Required Lenders, or the Majority Class Lenders of any Class is
required or permitted under this Agreement, each Lender agrees to give the
Agent, within ten (10) days of receipt of the request for action together with
all reasonably requested information related thereto (or such lesser period of
time required by the terms of the Loan Documents), notice in writing of approval
or disapproval (collectively “Directions”) in respect of any action requested or
proposed in writing pursuant to the terms hereof. To the extent that any Lender
does not approve any recommendation of Agent, such Lender shall in such notice
to Agent describe the actions that would be acceptable to such Lender. If
consent is required for the requested action, any Lender’s failure to respond to
a request for Directions within the required time period shall be deemed to
constitute a Direction to take such requested action. In the event that any
recommendation is not approved by the requisite number of Lenders and a
subsequent approval on the same subject matter is requested by Agent, then for
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respond to a request for Directions within five (5) Business Days of receipt of
such request. Agent and each Lender shall be entitled to assume that any officer
of the other Lenders delivering any notice, consent, certificate or other
writing is authorized to give such notice, consent, certificate or other writing
unless Agent and such other Lenders have otherwise been notified in writing.
Notwithstanding the foregoing, no such deemed approval shall apply to any matter
requiring the consent of all Lenders or of any Lender adversely affected by the
subject request.

§14.15  Borrower Not Beneficiary. Except for the provisions of §14.9 relating to
the appointment of a successor Agent, the provisions of this §14 are solely for
the benefit of the Agent and the Lenders, may not be enforced by the Borrower,
and except for the provisions of §14.9, may be modified or waived without the
approval or consent of the Borrower.

§14.16  Defaulting Lenders.

(a)        Notwithstanding anything to the contrary contained in this Agreement,
if any Lender becomes a Defaulting Lender, then, until such time as that Lender
is no longer a Defaulting Lender, to the extent permitted by applicable Legal
Requirements:

(i)        That Defaulting Lender’s right to approve or disapprove any
amendment, waiver or consent with respect to this Agreement shall be restricted
as set forth in §27.

(ii)        Any payment of principal, interest, fees or other amounts received
by the Agent for the account of that Defaulting Lender (whether voluntary or
mandatory, at maturity, or otherwise, and including any amounts made available
to the Agent by that Defaulting Lender pursuant to §13), shall be applied at
such time or times as may be determined by the Agent as follows: first, to the
payment of any amounts owing by that Defaulting Lender to the Agent hereunder;
second, to the payment on a pro rata basis of any amounts owing by that
Defaulting Lender to the Issuing Lender or Swing Loan Lender hereunder; third,
if so determined by the Agent or requested by the Issuing Lender or Swing Loan
Lender, to be held as cash collateral for future funding obligations of that
Defaulting Lender of any participation in any Swing Loan or Letter of Credit;
fourth, as the Borrower may request (so long as no Default or Event of Default
exists), to the funding of any Loan in respect of which that Defaulting Lender
has failed to fund its portion thereof as required by this Agreement, as
determined by the Agent; fifth, if so determined by the Agent and the Borrower,
to be held in a non-interest bearing deposit account and released pro rata in
order to (x) satisfy obligations of such Defaulting Lender to fund Loans or
participations under this Agreement and (y) be held as cash collateral for
future funding obligations of such Defaulting Lender of any participation in any
Letter of Credit or Swing Loan; sixth, to the payment of any amounts owing to
the Lenders, the Issuing Lender or Swing Loan Lender as a result of any judgment
of a court of competent jurisdiction obtained by any Lender, the Issuing Lender
or Swing Loan Lender against that Defaulting Lender as a result of that
Defaulting Lender’s breach of its obligations under this Agreement; seventh, so
long as no Default or Event of Default exists or non-defaulting Lenders have
been paid in full all amounts then due, to the payment of any amounts owing to
the Borrower as a result of any judgment of a court of competent jurisdiction
obtained by the Borrower against that Defaulting Lender as a result of that
Defaulting Lender’s breach of its obligations under this Agreement; and eighth,
to that Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such payment is a payment of the principal
amount of any Loans or Letter of Credit Liabilities in respect of which that
Defaulting Lender has not fully funded its appropriate share and (y) such Loans
or Letter of Credit Liabilities were made at a time when the conditions set
forth in §11 were satisfied or waived, such payment shall be applied solely to
pay the Loans of, and Letter of Credit Liabilities owed to, all non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any Loans
of, or Letter of Credit Liabilities owed to, that Defaulting Lender. Any
payments, prepayments or other amounts paid or payable to a Defaulting Lender
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by a Defaulting Lender or to post Cash Collateral pursuant to this §14.16(a)(ii)
shall be deemed paid to and redirected by that Defaulting Lender, and each
Lender irrevocably consents hereto.

(iii)    That Defaulting Lender (x) shall not be entitled to receive any
facility fee or unused fee pursuant to §2.4 for any period during which that
Lender is a Defaulting Lender (and the Borrower shall not be required to pay any
such fee that otherwise would have been required to have been paid to that
Defaulting Lender) and (y) shall be limited in its right to receive Letter of
Credit Fees as provided in §2.11(e). With respect to any such Letter of Credit
fees not required to be paid to any Defaulting Lender, the Borrower shall
(x) pay to each non-Defaulting Lender that is a Revolving Credit Lender that
portion of any such fee otherwise payable to such Defaulting Lender with respect
to such Defaulting Lender’s participation in Letters of Credit that has been
reallocated to such non-Defaulting Lender pursuant to §14.16(a)(iv), (y) pay to
the Issuing Bank the amount of any such fee otherwise payable to such Defaulting
Lender to the extent allocable to such Defaulting Lender’s participation in
Letters of Credit that has not been reallocated to such non-Defaulting Lender
pursuant to §14.16(a)(iv), and (z) not be required to pay any remaining amount
of any such fee.

(iv)    During any period in which there is a Defaulting Lender, for purposes of
computing the amount of the obligation of each non-Defaulting Lender to acquire,
refinance or fund participations in Letters of Credit pursuant to §2.11, the
“Revolving Credit Commitment Percentage” of each non-Defaulting Lender shall be
computed without giving effect to the Commitment of that Defaulting Lender;
provided, that, (i) each such reallocation shall be given effect only if, at the
date the applicable Lender becomes a Defaulting Lender, no Default or Event of
Default exists; and (ii) the aggregate obligation of each non-Defaulting Lender
to acquire, refinance or fund participations in Letters of Credit shall not
exceed the positive difference, if any, of (1) the Revolving Credit Commitment
of that non-Defaulting Lender minus (2) such Lender’s Revolving Credit
Commitment Percentage of the Revolving Credit Exposure then Outstanding. Subject
to §34, no reallocation hereunder shall constitute a waiver or release of any
claim of any party hereunder against a Defaulting Lender arising from that
Lender having become a Defaulting Lender, including any claim of a
Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation.

(b)    During any period that a Lender is a Defaulting Lender, the Borrower may,
by giving written notice thereof to the Agent, such Defaulting Lender, and the
other Lenders, demand that such Defaulting Lender assign its Commitment to an
Eligible Assignee subject to and in accordance with the provisions of §18.1. No
party hereto shall have any obligation whatsoever to initiate any such
replacement or to assist in finding an Eligible Assignee. In addition, any
Lender who is not a Defaulting Lender may, but shall not be obligated, in its
sole discretion, to acquire the face amount of all or a portion of such
Defaulting Lender’s Commitment via an assignment subject to and in accordance
with the provisions of §18.1. No such assignment shall be effective unless and
until, in addition to the other conditions thereto set forth herein, the parties
to the assignment shall make such additional payments to the Agent in an
aggregate amount sufficient with any applicable amounts held pursuant to the
immediately preceding subsection (ii), upon distribution thereof as appropriate
(which may be outright payment, purchases by the assignee of participations or
subparticipations, or other compensating actions, including funding, with the
consent of the Borrower and the Agent, the applicable pro rata share of Loans
previously requested but not funded by the Defaulting Lender, to each of which
the applicable assignee and assignor hereby irrevocably consent), to (x) pay and
satisfy in full all payment liabilities then owed by such Defaulting Lender to
the Agent, the Issuing Lender or any Lender hereunder (and interest accrued
thereon), and (y) acquire (and fund as appropriate) such Defaulting Lender’s
full pro rata share of all Loans and participations in Letters of Credit.
Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under any
Legal Requirement without compliance with the provisions of this paragraph, then
the assignee of such interest shall be deemed to be a Defaulting Lender for all
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compliance occurs. Within five (5) Business Days of demand by the Issuing Lender
from time to time, the Borrower shall deliver to the Agent for the benefit of
the Issuing Lender cash collateral in an amount sufficient to cover all Fronting
Exposure with respect to the Issuing Lender (after giving effect to §2.10(a) and
§14.16(a)(ii) on terms satisfactory to the Issuing Lender in its good faith
determination (and such cash collateral shall be in Dollars). Any such cash
collateral shall be deposited in a cash collateral account as collateral (solely
for the benefit of the Issuing Lender) for the payment and performance of each
Defaulting Lender’s pro rata portion in accordance with their respective
Revolving Credit Commitment Percentages of outstanding Letter of Credit
Liabilities. Moneys in such cash collateral account deposited pursuant to this
section shall be applied by the Agent to reimburse the Issuing Lender
immediately for each Defaulting Lender’s pro rata portion in accordance with
their respective Revolving Credit Commitment Percentages of any funding
obligation with respect to a Letter of Credit which has not otherwise been
reimbursed by the Borrower or such Defaulting Lender.

(c)        If a Lender is a Defaulting Lender because it has failed to make
timely payment to the Agent of any amount required to be paid to the Agent
hereunder (without giving effect to any notice or cure periods), in addition to
other rights and remedies which the Agent or the Borrower may have under the
immediately preceding provisions or otherwise, the Agent shall be entitled
(i) to collect interest from such Defaulting Lender on such delinquent payment
for the period from the date on which the payment was due until the date on
which the payment is made at the Federal Funds Effective Rate, (ii) to withhold
or setoff and to apply in satisfaction of the defaulted payment and any related
interest, any amounts otherwise payable to such Defaulting Lender under this
Agreement or any other Loan Document and (iii) to bring an action or suit
against such Defaulting Lender in a court of competent jurisdiction to recover
the defaulted amount and any related interest. Any amounts received by the Agent
in respect of a Defaulting Lender’s Loans shall be applied as set forth
in§14.16(a)(ii).

(d)        Defaulting Lender Cure. If the Borrower, the Agent, Swing Loan Lender
and the Issuing Lender agree in writing in their sole discretion that a
Defaulting Lender should no longer be deemed to be a Defaulting Lender, the
Agent will so notify the parties hereto, whereupon as of the effective date
specified in such notice and subject to any conditions set forth therein (which
may include arrangements with respect to any Cash Collateral), that Lender will,
to the extent applicable, purchase that portion of outstanding Loans of the
other Lenders or take such other actions as the Agent may determine to be
necessary to cause the Loans and funded and unfunded participations in Letters
of Credit and Swing Loans to be held on a pro rata basis by the Lenders in
accordance with their Applicable Percentages (without giving effect to
§14.16(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender;
provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrower while that Lender was a
Defaulting Lender; and provided, further, that except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting
Lender to Lender will constitute a waiver or release of any claim of any party
hereunder arising from that Lender’s having been a Defaulting Lender.

§14.17  Reliance on Hedge Provider. For purposes of applying payments received
in accordance with §12.5, the Agent shall be entitled to rely upon the trustee,
paying agent or other similar representative (each, a “Representative”) or, in
the absence of such a Representative, upon the holder of the Hedge Obligations
for a determination (which each holder of the Hedge Obligations agrees (or shall
agree) to provide upon request of the Agent) of the outstanding Hedge
Obligations owed to the holder thereof. Unless it has actual knowledge
(including by way of written notice from such holder) to the contrary, the
Agent, in acting hereunder, shall be entitled to assume that no Hedge
Obligations are outstanding. Each Lender Hedge Provider not a party to this
Agreement that has given the notice contemplated by the preceding sentence
shall, by such notice, be deemed to have acknowledged and accepted the
appointment of the Agent pursuant to the terms of §14 for itself and its
Affiliates as if a “Lender” party hereto.

 

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§15.    EXPENSES. The Borrower agrees to pay (a) the reasonable out-of-pocket
costs incurred by the Agent of producing and reproducing this Agreement, the
other Loan Documents and the other agreements and instruments mentioned herein,
(b) any recording, mortgage, documentary or intangibles taxes in connection with
the Loan Documents, (c) all title insurance premiums, engineer’s fees incurred
by the Agent, third party environmental reviews incurred by the Agent and the
reasonable fees, expenses and disbursements of the outside counsel to the Agent
and any local counsel to the Agent incurred in connection with the preparation,
administration, or interpretation of the Loan Documents and other instruments
mentioned herein, and amendments, modifications, approvals, consents or waivers
hereto or hereunder, (d) all other reasonable out of pocket fees, expenses and
disbursements of the Agent incurred by the Agent in connection with the
preparation or interpretation of the Loan Documents and other instruments
mentioned herein, the addition or substitution of additional Pool Properties (in
connection with each Loan and/or otherwise), the review of leases and
Subordination, Attornment and Non-Disturbance Agreements, the making of each
Loan hereunder, the issuance of Letters of Credit, and the third party
out-of-pocket costs and expenses incurred in connection with the syndication of
the Commitments pursuant to §18 hereof, and (e) without duplication, all
out-of-pocket expenses (including reasonable attorneys’ fees and costs, and the
fees and costs of appraisers, engineers, investment bankers or other experts
retained by any Lender or the Agent) incurred by any Lender or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Credit Parties or the administration thereof
after the occurrence of a Default or Event of Default or in connection with the
Loans made hereunder, including all such reasonable and documented out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans, and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to the Agent’s or any of the Lenders’
relationship with the Borrower (provided that any attorneys’ fees and costs
pursuant to this clause (e) shall be limited to those incurred by the Agent and
one other counsel with respect to the Lenders as a group), (f) all reasonable
fees, expenses and disbursements of the Agent incurred in connection with UCC
searches, UCC filings, title rundowns, title searches or mortgage recordings,
(g) all reasonable out-of-pocket fees, expenses and disbursements (including
reasonable attorneys’ fees and costs) which may be incurred by Agent in
connection with the execution and delivery of this Agreement and the other Loan
Documents (without duplication of any of the items listed above), and (h) all
expenses relating to the use of Intralinks, SyndTrak or any other similar system
for the dissemination and sharing of documents and information in connection
with the Loans in accordance with the terms of this Agreement. The covenants of
this §15 shall survive the repayment of the Loans and the termination of the
obligations of the Lenders hereunder.

§16.    INDEMNIFICATION. The Credit Parties, jointly and severally, agree to
indemnify and hold harmless the Agent, the Lenders and the Arranger and each
director, officer, employee, agent and Affiliate thereof and Person who controls
the Agent or any Lender or the Arranger against any and all claims, actions and
suits, whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character arising
out of or relating to any claim, action, suit or litigation arising out of this
Agreement or any of the other Loan Documents or the transactions contemplated
hereby and thereby including, without limitation, (a) any and all claims for
brokerage, leasing, finders or similar fees which may be made relating to the
Real Estate or the Loans by parties claiming by or through Borrower, (b) any
condition of the Pool Properties or any other Real Estate, (c) any actual or
proposed use by the Borrower of the proceeds of any of the Loans or Letters of
Credit, (d) any actual or alleged infringement of any patent, copyright,
trademark, service mark or similar right of the Credit Parties, (e) the Credit
Parties entering into or performing this Agreement or any of the other Loan
Documents, (f) any actual or alleged violation of any law, ordinance, code,
order, rule, regulation, approval, consent, permit or license relating to the
Pool Properties or any other Real Estate, (g) with respect to the Credit Parties
and their respective properties and assets, subject to any limitations set forth
in the Indemnity Agreements, the violation of any Environmental Law, the Release
or threatened Release of any Hazardous Substances or any action, suit,
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respect to any Hazardous Substances (including, but not limited to, claims with
respect to wrongful death, personal injury, nuisance or damage to property), (h)
any use of Intralinks, SyndTrak or any other system for the dissemination and
sharing of documents and information, and (i) any actual or prospective claim,
litigation, investigation, or proceeding relating to any of the foregoing,
whether based in contract, tort or any other theory, whether brought by a third
party or by the Borrower or by any other Credit Party, and regardless of whether
any such Person is a party thereto, in each case including, without limitation,
the reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding; provided, however, that the
Credit Parties shall not be obligated under this §16 or otherwise to indemnify
any Person for liabilities arising from such Person’s own gross negligence or
willful misconduct as determined by a court of competent jurisdiction by final
and non-appealable judgment. In litigation, or the preparation therefor, the
Lenders and the Agent shall be entitled to select a single law firm (together
with such local counsel as the Agent may deem necessary) as their own counsel
and, if reasonably required by the Lenders, one separate law firm to represent
the Lenders, and, in addition to the foregoing indemnity, the Borrower agrees to
pay promptly the reasonable fees and expenses of all such counsel. No person
indemnified hereunder shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby. If, and to the extent that the
obligations of the Credit Parties under this §16 are unenforceable for any
reason, the Credit Parties hereby agree to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The provisions of this §16 shall survive the repayment of the
Loans and the termination of the obligations of the Lenders hereunder. The
provisions of this §16 shall not apply with respect to Taxes other than any
Taxes that represent losses, claims or damages, etc. arising from any non-Tax
claim.

§17.    SURVIVAL OF COVENANTS, ETC. All covenants, agreements, representations
and warranties made herein, in the Notes, in any of the other Loan Documents or
in any documents or other papers delivered by or on behalf of the Credit Parties
or any of their respective Subsidiaries pursuant hereto or thereto shall be
deemed to have been relied upon by the Lenders and the Agent, notwithstanding
any investigation heretofore or hereafter made by any of them, and shall survive
the making by the Lenders of any of the Loans, as herein contemplated, and shall
continue in full force and effect so long as any amount due under this Agreement
or the Notes or any of the other Loan Documents remains outstanding or any
Letters of Credit remain outstanding or any Lender has any obligation to make
any Loans or issue any Letters of Credit. The indemnification obligations of the
Credit Parties provided herein and in the other Loan Documents shall survive the
full repayment of amounts due and the termination of the obligations of the
Lenders hereunder and thereunder to the extent provided herein and therein for a
period of one year. All statements contained in any certificate delivered to any
Lender or the Agent at any time by or on behalf of the Credit Parties or any of
their respective Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by such Person hereunder.

§18.    ASSIGNMENT AND PARTICIPATION.

§18.1  Conditions to Assignment by Lenders. Except as provided herein, each
Lender may assign to one or more Eligible Assignee all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Applicable Percentage and Commitment of any Class and the same
portion of the Loans of such Class at the time owing to it and the Notes of such
Class held by it); provided that (a) the Agent and the Issuing Lender shall have
each given its prior written consent to such assignment, which consent shall not
be unreasonably withheld or delayed, (b) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Revolving Credit Commitment
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Revolving Credit Loans is assigned, (c) the parties to such assignment shall
execute and deliver to the Agent, for recording in the Register (as hereinafter
defined) an Assignment and Acceptance Agreement in the form of Exhibit H annexed
hereto, together with any Notes subject to such assignment, (d) in no event
shall any assignment be to any Person controlling, controlled by or under common
control with, or which is not otherwise free from influence or control by, any
Credit Party, and (e) such assignee shall acquire an interest in the Loans of
not less than $5,000,000 and integral multiples of $1,000,000 in excess thereof
(or if less, the remaining Loans of the assignor), unless waived by the Agent,
and so long as no Default or Event of Default exists hereunder, Borrower. Upon
execution, delivery, acceptance and recording of such Assignment and Acceptance
Agreement, (i) the assignee thereunder shall be a party hereto and all other
Loan Documents executed by the Lenders and, to the extent provided in such
Assignment and Acceptance Agreement, have the rights and obligations of a Lender
hereunder, (ii) the assigning Lender shall, upon payment to the Agent of the
registration fee referred to in §18.2, be released from its obligations under
this Agreement arising after the effective date of such assignment with respect
to the assigned portion of its interests, rights and obligations under this
Agreement, and (iii) the Agent may unilaterally amend Schedule 1.1 to reflect
such assignment. In connection with each assignment, the assignee shall
represent and warrant to the Agent, the assignor and each other Lender as to
whether such assignee is controlling, controlled by, under common control with
or is not otherwise free from influence or control by, the Credit Parties.

§18.2    Register. The Agent shall maintain on behalf of the Borrower a copy of
each assignment delivered to it and a register or similar list (the “Register”)
for the recordation of the names and addresses of the Lenders and the Applicable
Percentages of and principal amount of and interest on the Loans owing to the
Lenders from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and the Lenders at any reasonable time
and from time to time upon reasonable prior notice. Upon each such recordation,
the assigning Lender agrees to pay to the Agent a registration fee in the sum of
$3,500.

§18.3    New Notes. Upon its receipt of an Assignment and Acceptance Agreement
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall record the information contained therein in the
Register. Within five (5) Business Days after receipt of notice of such
assignment from Agent, the Borrower, at its own expense, shall execute and
deliver to the Agent, in exchange for each surrendered Note, a new Note (if
requested by the subject Lender) to the order of such assignee in an amount
equal to the amount assigned to such assignee pursuant to such Assignment and
Acceptance Agreement and, if the assigning Lender has retained some portion of
its obligations hereunder, a new Note to the order of the assigning Lender in an
amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance Agreement and shall otherwise be in substantially the form of the
assigned Notes. The surrendered Notes shall be canceled and returned to the
Borrower.

§18.4    Participations. Each Lender may sell participations to one or more
Lenders or other entities in all or a portion of such Lender’s rights and
obligations under this Agreement and the other Loan Documents; provided that
(a) any such sale or participation shall not affect the rights and duties of the
selling Lender hereunder, (b) such participation shall not entitle such
participant to any rights or privileges under this Agreement or any Loan
Documents, including without limitation, rights granted to the Lenders under
§4.8, §4.9 and §4.10, (c) such participation shall not entitle the participant
to the right to approve waivers, amendments or modifications, (d) such
participant shall have no direct rights against the Borrower, (e) such
participant shall be entitled to the benefits of §4.4(b)to the same extent as if
it

 

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were a Lender and had acquired its interest by assignment pursuant to §18.1, but
shall not be entitled to receive any greater payment under §4.4(b) than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, (f) such sale is effected in accordance
with all applicable laws, (g) such participant shall not be a Person
controlling, controlled by or under common control with, or which is not
otherwise free from influence or control by the Borrower and shall not be a
Defaulting Lender or an Affiliate of a Defaulting Lender or a natural Person (or
a holding company, investment vehicle or trust fund or owned and operated for
the primary benefit of, a natural Person), and (h) unless an Event of Default is
in existence, such participant is not a Competitor; provided, however, such
Lender may agree with the participant that it will not, without the consent of
the participant, agree to (i) increase, or extend the term or extend the time or
waive any requirement for the reduction or termination of, such Lender’s
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the Loans or portions thereof owing to such Lender (other than
pursuant to an extension of the Revolving Credit Maturity Date pursuant to
§2.13), (iii) reduce the amount of any such payment of principal, (iv) reduce
the rate at which interest is payable thereon or (v) release Borrower or
Guarantor (except as otherwise permitted under §5.2 or §5.4. Each Lender that
sells a participation shall, acting solely for this purpose as a non-fiduciary
agent of Borrower, maintain a register on which it enters the name and address
of each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that, in the case of a
Participant asserting any right of set-off pursuant to §13, no Lender shall have
any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person except to the extent that
such disclosure is necessary to establish that such commitment, loan, letter of
credit or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations. The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Credit Agreement notwithstanding any
notice to the contrary. For the avoidance of doubt, Agent (in its capacity as
Agent) shall have no responsibility for maintaining a Participant Register.

§18.5    Pledge by Lender. Any Lender may at any time pledge all or any portion
of its interest and rights under this Agreement (including all or any portion of
its Note) to any of the twelve Federal Reserve Banks organized under §4 of the
Federal Reserve Act, 12 U.S.C. §341 or any other central banking authority, or
to such other Person as the Agent elects and so long as no Default or Event of
Default has occurred and is continuing, the Borrower may approve the identity of
such other Person. No such pledge or the enforcement thereof shall release the
pledgor Lender from its obligations hereunder or under any of the other Loan
Documents.

§18.6    No Assignment by Credit Parties. The Credit Parties shall not assign or
transfer any of their rights or obligations under this Agreement without the
prior written consent of each of the Lenders.

§18.7    Disclosure. Borrower agrees to promptly and reasonably cooperate with
any Lender in connection with any proposed assignment or participation of all or
any portion of its Commitment. The Borrower agrees that, in addition to
disclosures made in accordance with standard banking practices, any Lender may
disclose information obtained by such Lender pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder, but
in all events subject to the terms hereof. Each Lender agrees for itself that it
shall use reasonable efforts in accordance with its customary procedures to hold
confidential all non-public information obtained from Credit Parties that has
been identified in writing as confidential by any of them, and shall use
reasonable efforts in accordance with its customary procedures to not disclose
such information to any other Person, it being understood and agreed that,
notwithstanding the foregoing, a Lender may make (a) disclosures to its
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(provided such Persons are advised of the provisions of this §18.7, and agree to
destroy or return all confidential information if it does not become an assignee
or participant), (b) disclosures to its directors, officers, employees,
Affiliates, accountants, appraisers, legal counsel and other professional
advisors of such Lender (provided that such Persons who are not employees of
such Lender are advised of the provision of this §18.7), (c), disclosures
customarily provided or reasonably required by any potential or actual bona fide
assignee, transferee or participant or their respective directors, officers,
employees, Affiliates, accountants, appraisers, legal counsel and other
professional advisors in connection with a potential or actual assignment or
transfer by such Lender of any Loans or any participations therein (provided
such Persons are advised of the provisions of this §18.7), (d) disclosures to
bank regulatory authorities or self-regulatory bodies with jurisdiction over
such Lender, or (e) disclosures required or requested by any other governmental
authority or representative thereof or pursuant to legal process; provided that,
unless specifically prohibited by applicable law or court order, each Lender
shall notify Borrower of any request by any governmental authority or
representative thereof prior to disclosure (other than any such request in
connection with any examination of such Lender by such government authority) for
disclosure of any such non-public information prior to disclosure of such
information and provide (if permitted under applicable Legal Requirements)
Borrower a reasonable opportunity to challenge the disclosure or require that
such disclosure be made under seal. In addition, each Lender may make disclosure
of such information to any contractual counterparty in swap agreements or such
contractual counterparty’s professional advisors (so long as such contractual
counterparty or professional advisors agree to be bound by the provisions of
this §18.7). In addition, the Agent and the Lenders may disclose the existence
of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry and service
providers to the Agent and the Lenders in connection with the administration of
this Agreement, the other Loan Documents, and the Commitments. Non-public
information shall not include any information which is or subsequently becomes
publicly available other than as a result of a disclosure of such information by
a Lender, or prior to the delivery to such Lender is within the possession of
such Lender if such information is not known by such Lender to be subject to
another confidentiality agreement with or other obligations of secrecy to the
Borrower, or is disclosed with the prior approval of Borrower. Nothing herein
shall prohibit the disclosure of non-public information to the extent necessary
to enforce the Loan Documents.

§18.8    Titled Agents. The Titled Agents shall not have any additional rights
or obligations under the Loan Documents, except for those rights, if any, as a
Lender.

§18.9    Amendments to Loan Documents. Upon any such assignment or
participation, the Borrower shall, upon the request of the Agent, enter into
such documents as may be reasonably required by the Agent to modify the Loan
Documents to reflect such assignment or participation.

§19.        NOTICES. Each notice, demand, election or request provided for or
permitted to be given pursuant to this Agreement (hereinafter in this §19
referred to as “Notice”) must be in writing and shall be deemed to have been
properly given or served by personal delivery or by telegraph or by sending same
by overnight courier or by depositing same in the United States Mail, postpaid
and registered or certified, return receipt requested, and addressed to the
parties at the address set forth on Schedule 19.

Each Notice shall be effective upon being personally delivered or upon being
sent by overnight courier or upon being deposited in the United States Mail as
aforesaid, or if transmitted by telegraph, telecopy, telefax or telex is
permitted, upon being sent and confirmation of receipt. The time period in which
a response to such Notice must be given or any action taken with respect thereto
(if any), however, shall commence to run from the date of receipt if personally
delivered or sent by overnight courier, or if so deposited in the United States
Mail, the earlier of three (3) Business Days following such deposit or the date
of receipt as disclosed on the return receipt. Rejection or other refusal to
accept or the inability to deliver because of changed address for which no
notice was given shall be deemed to be receipt of the

 

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Notice sent. By giving at least fifteen (15) days prior Notice thereof,
Borrower, a Lender or Agent shall have the right from time to time and at any
time during the term of this Agreement to change their respective addresses and
each shall have the right to specify as its address any other address within the
United States of America or Canada.

§20.        RELATIONSHIP. Neither the Agent nor any Lender has any fiduciary
relationship with or fiduciary duty to the Borrower, any other Credit Party, or
their respective Subsidiaries arising out of or in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereunder
and thereunder, and the relationship between each Lender and Agent, and the
Borrower is solely that of a lender and borrower, and nothing contained herein
or in any of the other Loan Documents shall in any manner be construed as making
the parties hereto partners, joint venturers or any other relationship other
than lender and borrower.

§21.        GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION, NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401. THE CREDIT PARTIES,
THE AGENT AND THE LENDERS AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
AGREEMENT MAY BE BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK (INCLUDING ANY FEDERAL COURT SITTING THEREIN). THE CREDIT PARTIES, THE
AGENT AND THE LENDERS FURTHER ACCEPT, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT AND
IRREVOCABLY (i) AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY WITH RESPECT
TO THIS AGREEMENT AND (ii) WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY OBJECTION ANY OF THEM MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH A COURT IS AN INCONVENIENT
FORUM. IN ADDITION TO THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT
SITTING THEREIN, THE AGENT OR ANY LENDER MAY BRING ACTION(S) FOR ENFORCEMENT ON
A NONEXCLUSIVE BASIS WHERE ANY ASSETS OF ANY CREDIT PARTY, EXIST AND THE CREDIT
PARTIES, CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND THE SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON ANY SUCH PERSON BY MAIL AT THE
ADDRESS SPECIFIED IN SECTION 19 HEREOF. THE CREDIT PARTIES, EXPRESSLY
ACKNOWLEDGE AND AGREE THAT THE FOREGOING CHOICE OF NEW YORK LAW WAS A MATERIAL
INDUCEMENT TO THE AGENT AND THE LENDERS IN ENTERING INTO THIS AGREEMENT AND IN
MAKING THE LOANS HEREUNDER.

§22.        HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.

§23.        COUNTERPARTS. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.

§24.        ENTIRE AGREEMENT, ETC. This Agreement and the Loan Documents are
intended by the parties as the final, complete and exclusive statement of the
transactions evidenced by this Agreement and the Loan Documents. All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superseded by this Agreement and the Loan Documents,
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relying on any promise, agreement or understanding not set forth in this
Agreement and the Loan Documents. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated, except as provided in §27.

§25.        WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. EACH OF THE CREDIT
PARTIES, THE AGENT AND THE LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. EACH PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES AND TO THE
EXTENT PERMITTED BY APPLICABLE LAW, PUNITIVE OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH
THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS §25. EACH PARTY ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO
REVIEW THIS §25 WITH LEGAL COUNSEL AND THAT EACH PARTY AGREES TO THE FOREGOING
AS ITS FREE, KNOWING AND VOLUNTARY ACT.

§26.        DEALINGS WITH THE BORROWER. The Agent, the Lenders and their
affiliates may accept deposits from, extend credit to, invest in, act as trustee
under indentures of, serve as financial advisor of, and generally engage in any
kind of banking, trust or other business with the Borrower and its respective
Subsidiaries or any of their Affiliates regardless of the capacity of the Agent
or the Lender hereunder. The Lenders acknowledge that, pursuant to such
activities, KeyBank or its Affiliates may receive information regarding such
Persons (including information that may be subject to confidentiality
obligations in favor of such Person) and acknowledge that the Agent shall be
under no obligation to provide such information to them. The Borrower
acknowledges, on behalf of itself and its Affiliates, that the Agent and each of
the Lenders and their respective Affiliates may be providing debt financing,
equity capital or other services (including financial advisory services) in
which the Borrower and its Affiliates may have conflicting interests regarding
the transactions described herein and otherwise. Neither the Agent nor any
Lender will use confidential information described in §18.7 obtained from the
Borrower by virtue of the transactions contemplated hereby or its other
relationships with such Borrower and its Affiliates in connection with the
performance by the Agent or such Lender or their respective Affiliates of
services for other companies, and neither the Agent nor any Lender nor their
Affiliates will furnish any such information to other companies. The Borrower,
on behalf of itself and its Affiliates, also acknowledges that neither the Agent
nor any Lender has any obligation to use in connection with the transactions
contemplated hereby, or to furnish to the Borrower, confidential information
obtained from other companies. The Borrower, on behalf of itself and its
Affiliates, further acknowledges that one or more of the Agent and Lenders and
their respective Affiliates may be a full service securities firm and may from
time to time effect transactions, for its own or its Affiliates’ account or the
account of customers, and hold positions in loans, securities or options on
loans or securities of such Borrower and its Affiliates.

§27.        CONSENTS, AMENDMENTS, WAIVERS, ETC.

 

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§27.1    Amendments Generally. Except as otherwise expressly provided in this
Agreement, any consent or approval required or permitted by this Agreement may
be given, and any material term of this Agreement or of any other instrument
related hereto or mentioned herein may be amended, and the performance or
observance by the Credit Parties of any terms of this Agreement or such other
instrument or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Majority Lenders
and, with respect to any amendment of any term of this Agreement or of any other
instrument related hereto or mentioned herein, the Borrower or the other Credit
Parties, as the case may be. Subject to the immediately following subsection
27.2, any term of this Agreement or of any other Loan Document relating to the
rights or obligations of the Lenders of a particular Class, and not Lenders of
any other Class, may be amended, and the performance or observance by the
Borrower or any other Credit Party or Subsidiary of any such terms may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, and only with, the written consent of the Majority
Class Lenders for such Class of Lenders (and, in the case of an amendment to any
Loan Document, the written consent of the Borrower).

§27.2    Additional Lender Consents. Notwithstanding the foregoing, none of the
following may occur without the written consent of each Lender adversely
affected thereby: (a) a reduction in the rate of interest on the Notes (other
than a reduction or waiver of default interest); (b) an increase in the amount
of the Commitments of the Lenders (except as provided in §2.12 or §18.1); (c) a
forgiveness, reduction or waiver of the principal of any unpaid Loan or any
interest thereon or fee payable under the Loan Documents; (d) a change in the
amount or date fixed for any payment of any fee payable to a Lender hereunder;
(e) the postponement of any date fixed for any payment of principal of or
interest on the Loan; (f) an extension of any applicable Maturity Date of any
Class of Loans (except an extension of the Revolving Credit Maturity Date as
provided in §2.13); (g) a change in the manner of distribution of any payments
to the Lenders or the Agent; (h) the release of any Credit Party, except as
otherwise provided in §5.2 or §5.4; (i) an amendment of the definition of
Majority Lenders, Required Lenders or of any requirement for consent by all of
the Lenders; (j) an amendment to the definition of the term “Majority
Class Lenders” as it relates to a Class of Lenders or modification in any other
manner the number or percentage of a Class of Lenders required to make any
determinations or waive any rights hereunder or to modify any provision hereof,
in each case, solely with respect to such Class of Lenders, without the written
consent of all of the Lenders in such Class; (k) any modification to require a
Lender to fund a pro rata share of a request for an advance of a Loan of any
Class made by the Borrower other than based on its Applicable Percentage of such
Class; (l) while any Term Loans remain outstanding (A) amend, modify or waive
any provision of this Agreement if the effect of such amendment, modification or
waiver is to require the Revolving Credit Lenders to make Revolving Credit Loans
when such Lenders would not otherwise be required to do so, (B) change the
amount of the Swing Loan Commitment, or (C) change the amount of the Letter of
Credit Sublimit, in each case, without the written consent of the Revolving
Credit Lenders constituting the Majority Class Lenders of the Revolving Credit
Lenders; (m) an amendment to the definition of Applicable Percentage, Revolving
Credit Commitment Percentage, or Term Loan Commitment Percentage, (n) an
amendment to this §27; (l) an amendment of any provision of this Agreement or
the Loan Documents which requires the approval of all of the Lenders, the
Majority Lenders or the Required Lenders to require a lesser number of Lenders
to approve such action; (m) any change in the definition of Eligible Real Estate
or Borrowing Base Availability or any constituent definitions related thereto;
or (n) any change in criteria for the admission of any Real Estate as a Pool
Property.

§27.3    Amendment of Agent’s Duties, Etc. There shall be no amendment,
modification or waiver of §14 or any other provision in the Loan Documents that
affects the rights or duties of the Agent under this Agreement or any of the
other Loan Documents without the written consent of the Agent. There shall be no
amendment, modification or waiver of any provision in the Loan Documents with

 

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respect to Swing Loans without the consent of the Swing Loan Lender, nor any
amendment, modification or waiver of any provision in the Loan Documents with
respect to Letters of Credit without the consent of the Issuing Lender. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon. No course of dealing or delay or omission on the
part of the Agent or any Lender in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto.

§27.4    Defaulting Lender Votes. Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder (and any amendment, waiver or consent
which by its terms requires the consent of all Lenders or each affected Lender
may be effected with the consent of the applicable Lenders other than Defaulting
Lenders), except that (x) the Commitment of any Defaulting Lender may not be
increased or extended without the consent of such Lender and (y) any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender more adversely than other
affected Lenders shall require the consent of such Defaulting Lender.

§27.5    Technical Amendments. Notwithstanding anything to the contrary in this
Agreement, including this §27, this Agreement may be amended by the Borrowers
and Agent to provide for any Commitment Increase in the manner contemplated by
§2.12 and the extension of the Revolving Credit Maturity Date as provided in
§2.13. Notwithstanding anything to the contrary in this §27, if the Agent and
the Borrower have jointly identified an ambiguity, omission, mistake or defect
in any provision of this Agreement or an inconsistency between provisions of
this Agreement, the Agent and the Borrower shall be permitted to amend such
provision or provisions to cure such ambiguity, omission, mistake, defect or
inconsistency so long as to do so would not materially adversely affect the
interests of the Lenders and the Issuing Lender. Any such amendment shall become
effective without any further action or consent of any of other party to this
Agreement. The Agent shall provide a copy of each such amendment to the Lenders
promptly after execution thereof.

§28.        SEVERABILITY. The provisions of this Agreement are severable, and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.

§29.        TIME OF THE ESSENCE. Time is of the essence with respect to each and
every covenant, agreement and obligation under this Agreement and the other Loan
Documents.

§30.        NO UNWRITTEN AGREEMENTS. THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. ANY ADDITIONAL TERMS OF THE
AGREEMENT BETWEEN THE PARTIES ARE SET FORTH BELOW.

§31.        REPLACEMENT NOTES. Upon receipt of evidence reasonably satisfactory
to Borrower of the loss, theft, destruction or mutilation of any Note, and in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory to Borrower or, in the case of any such
mutilation, upon surrender and cancellation of the applicable Note, Borrower
will execute and deliver, in lieu thereof, a replacement Note, identical in form
and substance to the applicable Note and dated as of the date of the applicable
Note and upon such execution and delivery all references in the Loan Documents
to such Note shall be deemed to refer to such replacement Note.

 

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§32.        NO THIRD PARTIES BENEFITED. This Agreement and the other Loan
Documents are made and entered into for the sole protection and legal benefit of
the Credit Parties, the Lenders, the Agent, the Lender Hedge Provider, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents. All
conditions to the performance of the obligations of the Agent and the Lenders
under this Agreement, including the obligation to make Loans and issue Letters
of Credit, are imposed solely and exclusively for the benefit of the Agent and
the Lenders, and their permitted successors and assigns, and no other Person
shall have standing to require satisfaction of such conditions in accordance
with their terms or be entitled to assume that the Agent and the Lenders will
refuse to make Loans or issue Letters of Credit in the absence of strict
compliance with any or all thereof and no other Person shall, under any
circumstances, be deemed to be a beneficiary of such conditions, any and all of
which may be freely waived in whole or in part by the Agent and the Lenders at
any time if in their sole discretion they deem it desirable to do so. In
particular, the Agent and the Lenders make no representations and assume no
obligations as to third parties concerning the quality of the construction by
the Borrower or any of its Subsidiaries of any development or the absence
therefrom of defects.

§33.        PATRIOT ACT. Each Lender and the Agent (for itself and not on behalf
of any Lender) hereby notifies Borrower that, pursuant to the requirements of
the Patriot Act, it is required to obtain, verify and record information that
identifies each Credit Party, which information includes names and addresses and
other information that will allow such Lender or the Agent, as applicable, to
identify the Credit Parties in accordance with the Patriot Act.

§34.        ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA FINANCIAL
INSTITUTIONS.

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the Write-Down and Conversion Powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(a)        the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(b)        the effects of any Bail-In Action on any such liability, including,
if applicable:

(i)         a reduction in full or in part or cancellation of any such
liability;

(ii)        a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii)        the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

§35.        JOINT AND SEVERAL LIABILITY. Each of the Credit Parties covenants
and agrees that it is obligated to repay the Obligations and Hedge Obligations
(provided that the Hedge Obligations shall not

 

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include any Excluded Swap Obligations) as joint and several obligors under this
Agreement and each applicable Derivatives Contract and that each and every
covenant and obligation of any Credit Party hereunder and under the other Loan
Documents shall be the joint and several obligations of each Credit Party.

§36.        ADDITIONAL AGREEMENTS CONCERNING OBLIGATIONS OF THE CREDIT PARTIES.

§36.1     Attorney-in-Fact. For the purpose of implementing the joint borrower
provisions of the Loan Documents, the Credit Parties hereby irrevocably appoint
Borrower as their agent and attorney-in-fact for all purposes of the Loan
Documents, including the giving and receiving of notices and other
communications.

§36.2    Accommodation. It is understood and agreed that the handling of this
credit facility on a joint borrowing basis as set forth in this Agreement is
solely as an accommodation to the Borrower and at its request. Accordingly, the
Agent and the Lenders are entitled to rely, and shall be exonerated from any
liability for relying upon, any Loan Request or any other request or
communication made by a purported officer of Borrower without the need for any
consent or other authorization of any other Borrower and upon any information or
certificate provided on behalf of Borrower by a purported officer of such
Borrower, and any such request or other action shall be fully binding on
Borrower as if made by it.

§36.3    Waiver of Automatic or Supplemental Stay. Each of the Credit Parties
represents, warrants and covenants to the Lenders and Agent that in the event of
the filing of any voluntary or involuntary petition in bankruptcy by or against
the other of the Credit Parties at any time following the execution and delivery
of this Agreement, none of the Credit Parties shall seek a supplemental stay or
any other relief, whether injunctive or otherwise, pursuant to Section 105 of
the Bankruptcy Code or any other provision of the Bankruptcy Code, to stay,
interdict, condition, reduce or inhibit the ability of the Lenders or Agent to
enforce any rights it has by virtue of this Agreement, the Loan Documents, or at
law or in equity, or any other rights the Lenders or Agent has, whether now or
hereafter acquired, against the other Credit Parties or against any property
owned by such other Credit Parties.

§36.4    Waiver of Defenses. To the extent permitted by applicable law, each of
the Credit Parties hereby waives and agrees not to assert or take advantage of
any defense based upon:

(a)        Any right to require Agent or the Lenders to proceed against the
Credit Parties or any other Person or to proceed against or exhaust any security
held by Agent or the Lenders at any time or to pursue any other remedy in
Agent’s or any Lender’s power or under any other agreement before proceeding
against a Credit Party hereunder or under any other Loan Document;

(b)        The defense of the statute of limitations in any action hereunder or
the payment or performance of any of the Obligations;

(c)        Any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any other Person or Persons or the failure of
Agent or any Lender to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any other Person or
Persons;

(d)        Any failure on the part of Agent or any Lender to ascertain the
extent or nature of any assets of the Credit Parties or insurance or other
rights with respect thereto, or the liability of any party liable under the Loan
Documents or the obligations evidenced or secured thereby;

 

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(e)        Demand, presentment for payment, notice of nonpayment, protest,
notice of protest and all other notices of any kind (except for such notices as
are specifically required to be provided to Credit Parties pursuant to the Loan
Documents), or the lack of any thereof, including, without limiting the
generality of the foregoing, notice of the existence, creation or incurring of
any new or additional indebtedness or obligation or of any action or non-action
on the part of any Credit Party, Agent, any Lender, any endorser or creditor of
Borrower or the Guarantors or on the part of any other Person whomsoever under
this or any other instrument in connection with any obligation or evidence of
indebtedness held by Agent or any Lender;

(f)        Any defense based upon an election of remedies by Agent or any
Lender, including any election to proceed by judicial or nonjudicial foreclosure
of any security, whether real property or personal property security, or by deed
in lieu thereof, and whether or not every aspect of any foreclosure sale is
commercially reasonable, or any election of remedies, including remedies
relating to real property or personal property security, which destroys or
otherwise impairs the subrogation rights of Borrower or a Guarantor or the
rights of Borrower or a Guarantor to proceed against the Borrower or the other
Guarantors for reimbursement, or both;

(g)        Any right or claim of right to cause a marshaling of the assets of
Borrower;

(h)        Any principle or provision of law, statutory or otherwise, which is
or might be in conflict with the terms and provisions of this Agreement;

(i)        Any duty on the part of Agent or any Lender to disclose to the Credit
Parties any facts Agent or any Lender may now or hereafter know about the Credit
Parties or their properties, regardless of whether Agent or any Lender has
reason to believe that any such facts materially increase the risk beyond that
which each Credit Party intends to assume or has reason to believe that such
facts are unknown to the Credit Parties or has a reasonable opportunity to
communicate such facts to Borrower, it being understood and agreed that each
Credit Party is fully responsible for being and keeping informed of the
financial condition of the other Credit Parties, of the condition of the Pool
Properties and of any and all circumstances bearing on the risk that liability
may be incurred by the Credit Parties hereunder and under the other Loan
Documents;

(j)        Any inaccuracy of any representation made by or on behalf of any
Credit Party contained in any Loan Document;

(k)        Subject to compliance with the provisions of this Agreement, any sale
or assignment of the Loan Documents, or any interest therein;

(l)        Subject to compliance with the provisions of this Agreement, any sale
or assignment by a Credit Party or any other Person of any assets, or any
portion thereof or interest therein, not consented to by Agent or any Lender;

(m)        Any invalidity, irregularity or unenforceability, in whole or in
part, of any one or more of the Loan Documents;

(n)        Any deficiencies in the ability of Agent or any Lender to collect or
to obtain performance from any Persons now or hereafter liable for the payment
and performance of any obligation hereby guaranteed;

(o)        An assertion or claim that the automatic stay provided by 11 U.S.C.
§362 (arising upon the voluntary or involuntary bankruptcy proceeding of the
other Credit Parties) or any other stay

 

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provided under any other Debtor Relief Laws (whether statutory, common law, case
law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect,
which may be or become applicable, shall operate or be interpreted to stay,
interdict, condition, reduce or inhibit the ability of Agent or any Lender to
enforce any of its rights, whether now or hereafter required, which Agent or any
Lender may have against any Credit Party;

(p)        Any modifications of the Loan Documents or any obligation of a Credit
Party relating to the Loan by operation of law or by action of any court,
whether pursuant to the Bankruptcy Code, or any other Debtor Relief Law (whether
statutory, common law, case law or otherwise) of any jurisdiction whatsoever,
now or hereafter in effect, or otherwise;

(q)        Any release of a Credit Party or of any other Person from performance
or observance of any of the agreements, covenants, terms or conditions contained
in any of the Loan Documents by operation of law, Agent’s or the Lenders’
voluntary act or otherwise;

(r)        Any action, occurrence, event or matter consented to by the Credit
Parties under any provision hereof, or otherwise;

(s)        The dissolution or termination of existence of any Credit Party;

(t)        Subject to compliance with the provisions of this Agreement, any
renewal, extension, modification, amendment or another changes in the
Obligations, including but not limited to any material alteration of the terms
of payment or performance of the Obligations;

(u)        Any defense of the Credit Parties, other than that of prior
performance, including without limitation, the invalidity, illegality or
unenforceability of any of the Obligations;

(v)        To the fullest extent permitted by law, any other legal, equitable or
surety defenses whatsoever to which the Credit Parties might otherwise be
entitled, it being the intention that the obligations of the Credit Parties
hereunder are absolute, unconditional and irrevocable; or

(w)        Subject to compliance with the provisions of this Agreement, any lack
of notice of disposition or manner of disposition of any security for the
Obligations except for notices required by law.

§36.5    Waiver. Each of the Credit Parties waives, to the fullest extent that
each may lawfully so do, the benefit of all appraisement, valuation, stay,
extension, homestead, exemption and redemption laws which such Person may claim
or seek to take advantage of in order to prevent or hinder the enforcement of
any of the Loan Documents or the exercise by Lenders or Agent of any of their
respective remedies under the Loan Documents. Each of the Credit Parties further
agrees that the Lenders and Agent shall be entitled to exercise their respective
rights and remedies under the Loan Documents or at law or in equity in such
order as they may elect. Without limiting the foregoing, each of the Credit
Parties further agrees that upon the occurrence of an Event of Default, the
Lenders and Agent may exercise any of such rights and remedies without notice to
either the Credit Parties except as required by law or the Loan Documents and
agrees that neither the Lenders nor Agent shall be required to proceed against
the other of the Credit Parties or any other Person or to proceed against or to
exhaust any other security held by the Lenders or Agent at any time or to pursue
any other remedy in Lender’s or Agent’s power or under any of the Loan Documents
before proceeding against a Credit Party or its assets under the Loan Document.

 

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§36.6    Subordination. So long as any Commitments have not been terminated or
any Loans or Letters of Credit are outstanding, each of the Credit Parties
hereby expressly defers and agrees (a) not to assert any right of contribution
from or indemnity against the other, whether at law or in equity, arising from
any payments made by such Person pursuant to the terms of this Agreement or the
Loan Documents, and (b) not to proceed against the other for reimbursement of
any such payments. In connection with the foregoing, each of the Credit Parties
expressly defers and agrees not to assert or take advantage of (i) any rights of
subrogation to the Lenders or Agent against the other of the Credit Parties,
(ii) any rights to enforce any remedy which the Lenders or Agent may have
against the other of the Credit Parties and any rights to participate in any
assets of the other Credit Parties. In addition to and without in any way
limiting the foregoing, each of the Credit Parties hereby subordinates any and
all indebtedness it may now or hereafter owe to such other Credit Parties to all
indebtedness of the Credit Parties to the Lenders and Agent, and agrees with the
Lenders and Agent that neither of the Credit Parties shall claim any offset or
other reduction of such Credit Party’s obligations hereunder because of any such
indebtedness and shall not take any action to obtain any of the assets of the
other Credit Parties so long as the Loans are outstanding.

§36.7    Waiver of Rights Under Anti-Deficiency Rules. Without limiting any
other provision of this §36, each Credit Party understands and acknowledges
that, if the Agent forecloses judicially or nonjudicially against any real
property that may be security for the Obligations, such foreclosure could impair
or destroy any right or ability that such Credit Party may have to seek
reimbursement, contribution, or indemnification for any amounts paid by such
Credit Party under this Agreement. Each Credit Party further understands and
acknowledges that in the absence of this waiver such potential impairment or
destruction of such Credit Party’s rights, if any, may entitle such Credit Party
to assert a defense to this Agreement based on California Code of Civil
Procedure §580d as interpreted in Union Bank v. Gradsky, (1968) 265 CA 2d 40, 71
CR 64, on the grounds, among others, that the Agent or the Lenders should be
estopped from pursuing such Credit Party because their election to foreclose may
have impaired or destroyed such subrogation, reimbursement, contribution, or
indemnification rights of such Credit Party. By execution of this Agreement,
each Credit Party intentionally, freely, irrevocably, and unconditionally:
(i) waives and relinquishes that defense and agrees that such Credit Party will
be liable under this Agreement even though the Agent has foreclosed judicially
or nonjudicially against any real or personal property that is security for the
Obligations; (ii) agrees that such Credit Party will not assert that defense in
any action or proceeding which the Agent or the Lenders may bring to enforce
this Agreement; and (iii) acknowledges and agrees that until the Obligations
have been indefeasibly paid in full, the rights and defenses waived by such
Credit Party in this Agreement include any right or defense that such Borrower
may have or be entitled to assert based on or arising out of California Civil
Code §2848, to the extent now or hereafter applicable.

§36.8    Further Waivers. Each Credit Party intentionally, freely, irrevocably
and unconditionally waives and relinquishes all rights which may be available to
it under any provision of California law or under any California judicial
decision, including, without limitation, Section 580a and 726(b) of the
California Code of Civil Procedure, to limit the amount of any deficiency
judgment or other judgment which may be obtained against such Credit Party under
this Agreement to not more than the amount by which the unpaid Obligations
exceeds the fair market value or fair value of any real or personal property of
such Credit Party securing the Obligations, including, without limitation, all
rights to an appraisement of, judicial or other hearing on, or other
determination of the value of said property. Each Credit Party acknowledges and
agrees that, as a result of the foregoing waiver, the Agent or the Lenders may
recover from such Credit Party an amount which, when combined with the value of
any real or personal property foreclosed upon by the Agent (or the proceeds of
the sale of which have been received by the Agent and the Lenders) and any sums
collected by the Agent and the Lenders from any other Credit Party, the other
guarantors or other Persons, might temporarily exceed the amount of the
Obligations.

 

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§37.        ACKNOWLEDGMENT OF BENEFITS; EFFECT OF AVOIDANCE PROVISIONS.

(a)        Without limiting any other provision of §36, each Credit Party
acknowledges that it has received, or will receive, significant financial and
other benefits, either directly or indirectly, from the proceeds of the Loans
made by the Lenders to the Borrowers pursuant to this Agreement; that the
benefits received by such Credit Party are reasonably equivalent consideration
for such Credit Party’s execution of this Agreement and the other Loan Documents
to which it is a party; and that such benefits include, without limitation, the
access to capital afforded to the Borrowers pursuant to this Agreement from
which the activities of such Credit Party will be supported, the refinancing of
certain existing indebtedness of such Credit Party secured by such Credit
Party’s Real Estate from the proceeds of the Loans, and the ability to refinance
that indebtedness at a lower interest rate and otherwise on more favorable terms
than would be available to it if the Real Estate owned by such Credit Party were
being financed on a stand-alone basis and not as part of a pool of assets
comprising the security for the Obligations. Each Credit Party is executing this
Agreement and the other Loan Documents in consideration of those benefits
received by it and each Credit Party desires to enter into an allocation and
contribution agreement with each other Credit Party as set forth in this §37 and
agrees to subordinate and subrogate any rights or claims it may have against
other Credit Parties as and to the extent set forth in §36.

(b)        Following an Event of Default, in the event any one or more Credit
Parties (any such Credit Party, a “Funding Credit Party”) is deemed to have paid
an amount in excess of the principal amount attributable to it (such principal
amount, the “Allocable Principal Balance”) (any deemed payment in excess of the
applicable Allocable Principal Balance, a “Contribution”) as a result of
(a) such Funding Credit Party’s payment of and/or performance on the Obligations
or Hedge Obligations and/or (b) Agent’s and/or any Lender’s realization on any
assets owned, directly or indirectly, by such Funding Credit Party (whether by
foreclosure, deed in lieu of foreclosure, private sale or other means), then
after payment in full of the Loans and the satisfaction of all of the Credit
Parties’ other Obligations under the Loan Documents or the Hedge Obligations,
such Funding Credit Party shall be entitled to contribution from each benefited
Credit Party for the amount of the Contribution so benefited (any such
contribution, a “Reimbursement Contribution”), up to such benefited Credit
Party’s then current Allocable Principal Balance. Any Reimbursement
Contributions required to be made hereunder shall, subject to §36, be made
within ten (10) days after demand therefor.

(c)        If a Credit Party (a “Defaulting Credit Party”) shall have failed to
make a Reimbursement Contribution as hereinabove provided, after the later to
occur of (a) payment of the Loan in full and the satisfaction of all of all the
Credit Parties’ other obligations to Lenders or (b) the date which is 366 days
after the payment in full of the Loans, the Funding Credit Party to whom such
Reimbursement Contribution is owed shall be subrogated to the rights of Lenders
against such Defaulting Credit Party, including the right to receive a portion
of such Defaulting Credit Party’s assets in an amount equal to the Reimbursement
Contribution payment required hereunder that such Defaulting Credit Party failed
to make; provided, however, if Agent returns any payments in connection with a
bankruptcy of a Credit Party, all other Credit Parties shall jointly and
severally pay to Agent and Lenders all such amounts returned, together with
interest at the Default Rate accruing from and after the date on which such
amounts were returned.

(d)        In the event that at any time there exists more than one Funding
Credit Party with respect to any Contribution (in any such case, the “Applicable
Contribution”), then Reimbursement Contributions from Defaulting Credit Parties
pursuant hereto shall be equitably allocated among such Funding Credit Parties.
In the event that at any time any Credit Party pays an amount hereunder in
excess of the amount calculated pursuant to this paragraph, that Credit Party
shall be deemed to be a Funding

 

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Credit Party to the extent of such excess and shall be entitled to a
Reimbursement Contribution from the other Credit Parties in accordance with the
provisions of this §37.

(e)        It is the intent of each Credit Party, the Agent and the Lenders that
in any proceeding under the Bankruptcy Code or any similar debtor relief laws,
such Credit Party’s maximum obligation hereunder shall equal, but not exceed,
the maximum amount which would not otherwise cause the obligations of such
Credit Party hereunder (or any other obligations of such Credit Party to the
Agent and the Lenders under the Loan Documents) to be avoidable or unenforceable
against such Credit Party in such proceeding as a result of Applicable Laws,
including, without limitation, (i) Section 548 of the Bankruptcy Code and
(ii) any state fraudulent transfer or fraudulent conveyance act or statute
applied in such proceeding, whether by virtue of Section 544 of the Bankruptcy
Code or otherwise. The Laws under which the possible avoidance or
unenforceability of the obligations of such Credit Party hereunder (or any other
obligations of such Credit Party to the Agent and the Lenders under the Loan
Documents) shall be determined in any such proceeding are referred to herein as
“Avoidance Provisions”. Accordingly, to the extent that the obligations of a
Credit Party hereunder would otherwise be subject to avoidance under the
Avoidance Provisions, the maximum Obligations for which such Credit Party shall
be liable hereunder shall be reduced to the greater of (A) the amount which, as
of the time any of the Obligations are deemed to have been incurred by such
Credit Party under the Avoidance Provisions, would not cause the obligations of
such Credit Party hereunder (or any other obligations of such Credit Party to
the Agent and the Lenders under the Loan Documents), to be subject to avoidance
under the Avoidance Provisions or (B) the amount which, as of the time demand is
made hereunder upon such Credit Party for payment on account of the Obligations,
would not cause the obligations of such Credit Party hereunder (or any other
obligations of such Credit Party to the Agent and the Lenders under the Loan
Documents), to be subject to avoidance under the Avoidance Provisions. The
provisions of this §37(e) are intended solely to preserve the rights of the
Agent and the Lenders hereunder to the maximum extent that would not cause the
obligations of any Credit Party hereunder to be subject to avoidance under the
Avoidance Provisions, and no Credit Party or any other Person shall have any
right or claim under this Section as against the Agent and the Lenders that
would not otherwise be available to such Person under the Avoidance Provisions.

[Signature Pages Follow]

 

113

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IN WITNESS WHEREOF, each of the undersigned have caused this Agreement to be
executed by its duly authorized representatives as of the date first set forth
above.

 

BORROWER: CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland limited
partnership, by its general partner, City Office REIT, Inc., a Maryland
corporation By:  

/s/ Greg Tylee

Name:  

Greg Tylee

Title:  

COO & President

REIT GUARANTOR: CITY OFFICE REIT, INC., a Maryland corporation

By:  

/s/ Greg Tylee

Name:  

Greg Tylee

Title:  

COO & President

[Signature Page – Credit Agreement]

--------------------------------------------------------------------------------

SUBSIDIARY GUARANTORS:

CIO SORRENTO MESA HOLDINGS, LLC, a Delaware limited liability company

By:

 

/s/ Greg Tylee

Name:

 

Greg Tylee

Title:

 

Vice President & Secretary

CIO LOGAN TOWER, LIMITED PARTNERSHIP, a Delaware limited partnership, by its
general partner, CIO Logan Tower GP, LLC, a Delaware limited liability company

By:

 

/s/ Greg Tylee

Name:

 

Greg Tylee

Title:

 

Vice President & Secretary

CIO PARK TOWER, LIMITED PARTNERSHIP, a Delaware limited partnership, by its
general partner, CIO Park Tower GP, LLC, a Delaware limited liability company

By:

 

/s/ Greg Tylee

Name:

 

Greg Tylee

Title:

 

Vice President & Secretary

CIO PAPAGO TECH HOLDINGS, LLC, a Delaware limited liability company

By:

 

/s/ Greg Tylee

Name:

 

Greg Tylee

Title:

 

Vice President & Secretary

 

1

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AGENT AND LENDERS: KEYBANK NATIONAL ASSOCIATION, as a Lender and as Agent

By:   /s/ Christopher T. Neil

Name:   Christopher T. Neil

Title:   Vice President

KeyBank National Association

225 Franklin Street

Boston, Massachusetts 02110

Attention: Mr. Christopher T. Neil

Telephone: 617 385 6202

Facsimile: 617 385 6293

 

2

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RAYMOND JAMES BANK, N.A., as a Lender

By:   /s/ Matt Stein

Name:   Matt Stein

Title:   Matt Stein

Raymond James Bank, N.A.

710 Carillon Parkway

St. Petersburg, FL 33716

Attention: Mr. Matt Stein

Telephone: 727-567-5118

Facsimile: 1-866-205-1396

[Signature Page – Credit Agreement]

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ROYAL BANK OF CANADA, as a Lender

By:   /s/ Sheena Lee

Name:   Sheena Lee

Title:   Authorized Signatory

Royal Bank of Canada

200 Vesey Street, 12th Floor

New York, NY 10281

Attention: Mr. Ryan Doody

Telephone: 416-842-7438

Facsimile: 416-842-4020

[Signature Page – Credit Agreement]

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BMO HARRIS BANK N.A., as a Lender

By:   /s/ Michael Perlberg

Name:   Michael Perlberg Title:   Relationship Manager

BMO Harris Bank N.A.

115 S. La Salle Street

Chicago, IL 60603

Attention: Mr. Michael Perlberg

Telephone: 312-461-5071

Facsimile: 312 768 8348

[Signature Page – Credit Agreement]

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FIFTH THIRD BANK, as a Lender

By:   /s/ Casey Ciccone

Name:   Casey Ciccone Title:   Vice President

Fifth Third Bank

222 S. Riverside Plaza,

MD: GRVR1B

Chicago, IL 60606

Attention: Ms. Casey Ciccone

Telephone: 312-704-6206

Facsimile: 312-704-7364

[Signature Page – Credit Agreement]

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EXHIBIT A-1

FORM OF REVOLVING CREDIT NOTE

 

$                                                    , 2018

FOR VALUE RECEIVED, the undersigned (“Maker”), hereby promises to pay to
________________ __________________ (“Payee”), or order, in accordance with the
terms of that certain Credit Agreement, dated as of March 15, 2018, as from time
to time in effect, among CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., CITY
OFFICE REIT, INC. and certain of its Subsidiaries, as guarantors, KeyBank
National Association, for itself and as Agent, and such other Lenders as may be
from time to time named therein (the “Credit Agreement”), to the extent not
sooner paid, on or before the Revolving Credit Maturity Date, the lesser of the
principal sum of _________________ ($__________), or such amount as may be
advanced by the Payee under the Credit Agreement as a Revolving Credit Loan with
daily interest from the date thereof, computed as provided in the Credit
Agreement, on the principal amount hereof from time to time unpaid, at a rate
per annum on each portion of the principal amount which shall at all times be
equal to the rate of interest applicable to such portion in accordance with the
Credit Agreement, and with interest on overdue principal and late charges at the
rates provided in the Credit Agreement. Interest shall be payable on the dates
specified in the Credit Agreement, except that all accrued interest shall be
paid at the stated or accelerated maturity hereof or upon the prepayment in full
hereof. Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth in the Credit Agreement.

Payments hereunder shall be made to the Agent for the Payee at 127 Public
Square, Cleveland, Ohio 44114-1306, or at such other address as Agent may
designate from time to time, or made by wire transfer in accordance with wiring
instructions provided by the Agent.

This Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Credit Agreement.
The principal of this Note may be due and payable in whole or in part prior to
the Revolving Credit Maturity Date and is subject to mandatory prepayment in the
amounts and under the circumstances set forth in the Credit Agreement, and may
be prepaid in whole or from time to time in part, all as set forth in the Credit
Agreement. Amounts prepaid under this Note may be reborrowed subject to the
terms and conditions of the Credit Agreement.

Notwithstanding anything in this Note to the contrary, all agreements between
the undersigned Maker and the Lenders and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Lenders exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Lenders in excess of the maximum lawful amount, the interest payable to the
Lenders shall be reduced to the maximum amount permitted under applicable law;
and if from any circumstance the Lenders shall ever receive anything of value
deemed interest by applicable law in excess of the maximum lawful amount, an
amount equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations of the undersigned Maker and to the payment
of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations of the undersigned Maker, such excess shall be
refunded to the undersigned Maker. All interest paid or agreed to be paid to the
Lenders shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal of the Obligations of the undersigned Maker (including the
period of any renewal or extension thereof) so that the interest thereon

 

A-1 -1

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for such full period shall not exceed the maximum amount permitted by applicable
law. This paragraph shall control all agreements between the undersigned Maker
and the Lenders and the Agent.

In case an Event of Default shall occur, the entire principal amount of this
Note may become or be declared due and payable in the manner and with the effect
provided in said Credit Agreement.

This Note shall be governed by the laws of the State of New York, including,
without limitation, New York General Obligations Law Section 5-1401.

The undersigned Maker and all guarantors and endorsers, to the extent permitted
by applicable law, hereby waive presentment, demand, notice, protest, notice of
intention to accelerate the indebtedness evidenced hereby, notice of
acceleration of the indebtedness evidenced hereby and all other demands and
notices in connection with the delivery, acceptance, performance and enforcement
of this Note, except as specifically otherwise provided in the Credit Agreement,
and assent to extensions of time of payment or forbearance or other indulgence
without notice.

 

A-1 -2

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IN WITNESS WHEREOF, the undersigned has by its duly authorized officer executed
this Note on the day and year first above written.

 

MAKER: CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland limited
partnership, by its general partner, City Office REIT, Inc., a Maryland
corporation

By:     Name:      Title:    

 

A-1 -3

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EXHIBIT A-2

FORM OF TERM NOTE

 

$                                                    , 2018

FOR VALUE RECEIVED, the undersigned ( “Maker”), hereby promises to pay to
________________ __________________ (“Payee”), or order, in accordance with the
terms of that certain Credit Agreement, dated as of March 15, 2018, as from time
to time in effect, among CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., CITY
OFFICE REIT, INC. and certain of its Subsidiaries, as guarantors, KeyBank
National Association, for itself and as Agent, and such other Lenders as may be
from time to time named therein (the “Credit Agreement”), to the extent not
sooner paid, on or before the Term Loan Maturity Date, the lesser of the
principal sum of _________________ ($__________), or such amount as may be
advanced by the Payee under the Credit Agreement as a Term Loan with daily
interest from the date thereof, computed as provided in the Credit Agreement, on
the principal amount hereof from time to time unpaid, at a rate per annum on
each portion of the principal amount which shall at all times be equal to the
rate of interest applicable to such portion in accordance with the Credit
Agreement, and with interest on overdue principal, and late charges at the rates
provided in the Credit Agreement. Interest shall be payable on the dates
specified in the Credit Agreement, except that all accrued interest shall be
paid at the stated or accelerated maturity hereof or upon the prepayment in full
hereof. Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth in the Credit Agreement.

Payments hereunder shall be made to the Agent for the Payee at 127 Public
Square, Cleveland, Ohio 44114-1306, or at such other address as Agent may
designate from time to time, or made by wire transfer in accordance with wiring
instructions provided by the Agent.

This Term Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Credit Agreement.
The principal of this Note may be due and payable in whole or in part prior to
the Term Loan Maturity Date and is subject to mandatory prepayment in the
amounts and under the circumstances set forth in the Credit Agreement, and may
be prepaid in whole or from time to time in part, all as set forth in the Credit
Agreement. Amounts prepaid under this Note may not be reborrowed.

Notwithstanding anything in this Note to the contrary, all agreements between
the undersigned Maker and the Lenders and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Lenders exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Lenders in excess of the maximum lawful amount, the interest payable to the
Lenders shall be reduced to the maximum amount permitted under applicable law;
and if from any circumstance the Lenders shall ever receive anything of value
deemed interest by applicable law in excess of the maximum lawful amount, an
amount equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations of the undersigned Maker and to the payment
of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations of the undersigned Maker, such excess shall be
refunded to the undersigned Maker. All interest paid or agreed to be paid to the
Lenders shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal of the Obligations of the undersigned Maker (including the
period of any renewal or extension thereof) so that the interest thereon for
such full period shall not exceed the maximum amount permitted by applicable
law. This paragraph shall control all agreements between the undersigned Maker
and the Lenders and the Agent.

 

A-2 -1

--------------------------------------------------------------------------------

In case an Event of Default shall occur, the entire principal amount of this
Note may become or be declared due and payable in the manner and with the effect
provided in said Credit Agreement.

This Note shall be governed by the laws of the State of New York, including,
without limitation, New York General Obligations Law Section 5-1401.

The undersigned Maker and all guarantors and endorsers, to the extent permitted
by applicable law, hereby waive presentment, demand, notice, protest, notice of
intention to accelerate the indebtedness evidenced hereby, notice of
acceleration of the indebtedness evidenced hereby and all other demands and
notices in connection with the delivery, acceptance, performance and enforcement
of this Note, except as specifically otherwise provided in the Credit Agreement,
and assent to extensions of time of payment or forbearance or other indulgence
without notice.

 

A-2 -2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has by its duly authorized officer executed
this Note on the day and year first above written.

 

MAKER: CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland limited
partnership, by its general partner, City Office REIT, Inc., a Maryland
corporation

By:     Name:      Title:    

 

A-2 -3

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EXHIBIT B

FORM OF SWING LOAN NOTE

 

$                                                    , 2018

FOR VALUE RECEIVED, the undersigned (“Maker”), hereby promises to pay to
________________ __________________ (“Payee”), or order, in accordance with the
terms of that certain Credit Agreement, dated as of March __, 2018, as from time
to time in effect, among CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., CITY
OFFICE REIT, INC. and certain of its Subsidiaries, as guarantors, KeyBank
National Association, for itself and as Agent, and such other Lenders as may be
from time to time named therein (the “Credit Agreement”), to the extent not
sooner paid, on or before the earlier of (x) 10 Business Days after the making
of such Swing Loan and (y) the Revolving Credit Maturity Date, the lesser of
(i) the principal sum of _________________ ($__________) and (ii) the aggregate
unpaid principal amount of all Swing Loans made by Payee to the Maker pursuant
to the Credit Agreement as a Swing Loan with daily interest from the date
thereof, computed as provided in the Credit Agreement, on the principal amount
hereof from time to time unpaid, at a rate per annum on each portion of the
principal amount which shall at all times be equal to the rate of interest
applicable to such portion in accordance with the Credit Agreement, and late
charges at the rates provided in the Credit Agreement. Interest shall be payable
on the dates specified in the Credit Agreement, except that all accrued interest
shall be paid at the stated or accelerated maturity hereof or upon the
prepayment in full hereof. Capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Credit Agreement.

Payments hereunder shall be made to the Agent for the Payee at 127 Public
Square, Cleveland, Ohio 44114-1306, or at such other address as Agent may
designate from time to time or made by wire transfer in accordance with wiring
instructions provided by the Agent.

This Note is one of one or more Swing Loan Notes evidencing borrowings under and
is entitled to the benefits and subject to the provisions of the Credit
Agreement. The principal of this Note may be due and payable in whole or in part
prior to the Revolving Credit Maturity Date and is subject to mandatory
prepayment in the amounts and under the circumstances set forth in the Credit
Agreement, and may be prepaid in whole or from time to time in part, all as set
forth in the Credit Agreement.

Notwithstanding anything in this Note to the contrary, all agreements between
the undersigned Maker and the Lenders and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Lenders exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Lenders in excess of the maximum lawful amount, the interest payable to the
Lenders shall be reduced to the maximum amount permitted under applicable law;
and if from any circumstance the Lenders shall ever receive anything of value
deemed interest by applicable law in excess of the maximum lawful amount, an
amount equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations of the undersigned Maker and to the payment
of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations of the undersigned Maker, such excess shall be
refunded to the undersigned Maker. All interest paid or agreed to be paid to the
Lenders shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal of the Obligations of the undersigned Maker (including the
period of any renewal or extension thereof) so that the interest thereon

 

B-1

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for such full period shall not exceed the maximum amount permitted by applicable
law. This paragraph shall control all agreements between the undersigned Maker
and the Lenders and the Agent.

In case an Event of Default shall occur, the entire principal amount of this
Note may become or be declared due and payable in the manner and with the effect
provided in said Credit Agreement.

This Note shall be governed by the laws of the State of New York, including,
without limitation, New York General Obligations Law Section 5-1401.

The undersigned Maker and all guarantors and endorsers, to the extent permitted
by applicable law, hereby waive presentment, demand, notice, protest, notice of
intention to accelerate the indebtedness evidenced hereby, notice of
acceleration of the indebtedness evidenced hereby and all other demands and
notices in connection with the delivery, acceptance, performance and enforcement
of this Note, except as specifically otherwise provided in the Credit Agreement,
and assent to extensions of time of payment or forbearance or other indulgence
without notice.

 

B-2

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IN WITNESS WHEREOF, the undersigned has by its duly authorized officer executed
this Note on the day and year first above written.

 

MAKER: CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland limited
partnership, by its general partner, City Office REIT, Inc., a Maryland
corporation

By:     Name:      Title:    

 

B-3

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EXHIBIT C

FORM OF JOINDER AGREEMENT

THIS JOINDER AGREEMENT (“Joinder Agreement”) is executed as of
__________________, 20__, by _______________________________, a
__________________________ (“Joining Party”), and delivered to KeyBank National
Association, as Agent, pursuant to §5.3 of the Credit Agreement dated as of
______________, 2018, as from time to time in effect (the “Credit Agreement”),
among CITY OFFICE REIT OPERATING PARTNERSHIP, L.P. (the “Borrower”), CITY OFFICE
REIT, INC. and certain of its Subsidiaries, as guarantors, KeyBank National
Association, for itself and as Agent, and the other Lenders from time to time
party thereto. Terms used but not defined in this Joinder Agreement shall have
the meanings defined for those terms in the Credit Agreement.

RECITALS

A.        Joining Party is required, pursuant to §5.3 of the Credit Agreement,
to become an additional Subsidiary Guarantor under the Credit Agreement, the
Guaranty, and the Indemnity Agreement.

B.        Joining Party expects to realize direct and indirect benefits as a
result of the availability to Borrower of the credit facilities under the Credit
Agreement.

NOW, THEREFORE, Joining Party agrees as follows:

AGREEMENT

Joinder. By this Joinder Agreement, Joining Party hereby becomes a Subsidiary
Guarantor, Credit Party, and Indemnitor, as applicable, under the Credit
Agreement, the Guaranty, the Indemnity Agreement, and the other Loan Documents
with respect to all the Obligations of Subsidiary Guarantors, Credit Parties, or
Indemnitors now or hereafter incurred under the Credit Agreement and the other
Loan Documents, with the same force and effect as if originally named therein as
a Subsidiary Guarantor, Credit Party, and Indemnitor, as applicable. Joining
Party agrees that Joining Party is and shall be bound by, and hereby assumes,
all representations, warranties, covenants, terms, conditions, duties and
waivers applicable to a Subsidiary Guarantor under the Credit Agreement, the
Guaranty, the Indemnity Agreement and the other Loan Documents from and after
the Effective Date.

Representations and Warranties of Joining Party. Joining Party represents and
warrants to Agent that, as of the Effective Date (as defined below), except as
disclosed in writing by Joining Party to Agent on or prior to the date hereof
and approved by the Agent in writing (which disclosures shall be deemed to amend
the Schedules and other disclosures delivered as contemplated in the Credit
Agreement), the representations and warranties contained in the Credit Agreement
and the other Loan Documents are true and correct in all material respects as
applied to Joining Party as a Subsidiary Guarantor on and as of the Effective
Date as though made on that date. As of the Effective Date, all covenants and
agreements in the Loan Documents of the Subsidiary Guarantors are true and
correct with respect to Joining Party and no Default or Event of Default shall
exist or might exist upon the Effective Date in the event that Joining Party
becomes a Subsidiary Guarantor.

Joint and Several. Joining Party hereby agrees that, as of the Effective Date,
the Credit Agreement, the Guaranty, the Indemnity Agreement and the other Loan
Documents heretofore delivered to the Agent and the Lenders shall be a joint and
several obligation of Joining Party to the same extent as if executed and
delivered by Joining Party, and upon request by Agent, will promptly become a
party to

 

C-1

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the Credit Agreement, the Notes, the Indemnity Agreement and the other Loan
Documents to confirm such obligation.

Further Assurances. Joining Party agrees to execute and deliver such other
instruments and documents and take such other action, as the Agent may
reasonably request, in connection with the transactions contemplated by this
Joinder Agreement.

GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION
UNDER, AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401,
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

Counterparts. This Agreement may be executed in any number of counterparts which
shall together constitute but one and the same agreement.

The effective date (the “Effective Date”) of this Joinder Agreement is
_________________, 20__.

IN WITNESS WHEREOF, Joining Party has executed this Joinder Agreement under seal
as of the day and year first above written.

 

“JOINING PARTY”                                     
                            , a                                            

By:    

Name:    

Title:       [SEAL]

 

ACKNOWLEDGED:

KEYBANK NATIONAL ASSOCIATION, as Agent

By:     Its:      

[Printed Name and Title]

 

C-2

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EXHIBIT D

FORM OF REQUEST FOR REVOLVING CREDIT LOAN

KeyBank National Association, as Agent

225 Franklin Street

Boston, Massachusetts 02110

Attention: Mr. Christopher T. Neil

Ladies and Gentlemen:

Pursuant to the provisions of §2.8 of the Credit Agreement dated as of
______________, 2018 (as the same may hereafter be amended, the “Credit
Agreement”), among City Office REIT Operating Partnership, L.P., a Maryland
limited partnership (the “Borrower”), CITY OFFICE REIT, Inc. and certain of its
Subsidiaries, as guarantors, KeyBank National Association for itself and as
Agent, and the other Lenders from time to time party thereto, the undersigned
Borrower hereby requests and certifies as follows:

1.            Loan. The undersigned Borrower hereby requests a [Revolving Credit
Loan under §2.8 of the Credit Agreement] [Swing Loan under §2.6 of the Credit
Agreement]:

Principal Amount: $__________

Type (LIBOR Rate, Base Rate)1:

Drawdown Date:

Interest Period for LIBOR Rate Loans:

by credit to the general account of the Borrower with the Agent at the Agent’s
Head Office.

[If the requested Loan is a Swing Loan and the Borrower desires for such Loan to
be a LIBOR Rate Loan following its conversion as provided in §2.6(d), specify
the Interest Period following conversion:_________________]

Use of Proceeds. Such Loan shall be used for purposes permitted by the Credit
Agreement.

No Default. The undersigned Authorized Officer or chief financial officer or
chief accounting officer of Borrower certifies that the Credit Parties are and
will be in compliance with all covenants under the Loan Documents after giving
effect to the making of the Loan requested hereby and no Default or Event of
Default has occurred and is continuing. Attached hereto is a Borrowing Base
Availability Certificate setting forth a calculation of the Borrowing Base
Availability after giving effect to the Loan requested hereby. Except as set
forth on Schedule 1 attached hereto, no condemnation proceedings are pending or,
to the undersigned knowledge, threatened against any Pool Property.

Representations True. The undersigned Authorized Officer or chief financial
officer or chief accounting officer of Borrower certifies, represents and agrees
that each of the representations and warranties made by or on behalf of the
Credit Parties or their respective Subsidiaries (if applicable), contained in
the Credit Agreement, in the other Loan Documents or in any document or
instrument

 

1 

NTD: All Swing Loans must be Base Rate Loans

 

D-1

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delivered pursuant to or in connection with the Credit Agreement was true in all
material respects as of the date on which it was made and, is true in all
material respects as of the date hereof and shall also be true at and as of the
Drawdown Date for the Loan requested hereby, with the same effect as if made at
and as of such Drawdown Date, except to the extent of changes resulting from
transactions permitted by the Loan Documents (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct only as of such specified date).

Other Conditions. The undersigned Authorized Officer or chief financial officer
or chief accounting officer of Borrower certifies, represents and agrees that
all other conditions to the making of the Loan requested hereby set forth in the
Credit Agreement have been satisfied.

Definitions. Terms defined in the Credit Agreement are used herein with the
meanings so defined.

The undersigned is providing the certifications and other statements set forth
herein solely in the undersigned’s representative capacity and not in the
undersigned’s personal capacity.

IN WITNESS WHEREOF, the undersigned has duly executed this request this _____
day of _____________, 20__.

 

CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland limited partnership, by
its general partner, City Office REIT, Inc., a Maryland corporation

By:     Name:      Title:    

 

D-2

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EXHIBIT E

FORM OF LETTER OF CREDIT REQUEST

[DATE]

KeyBank National Association, as Agent

225 Franklin Street, 18th Floor

Boston, Massachusetts

Attn: Christopher T. Neil

Re: Letter of Credit Request under Credit Agreement dated as of __________, 2018

Ladies and Gentlemen:

Pursuant to §2.11 of the Credit Agreement (the “Credit Agreement”) dated as of
_________, 2018, among you, certain other Lenders, City Office REIT Operating
Partnership, L.P., a Maryland limited partnership (“Borrower”), and CITY OFFICE
REIT, INC. and certain of its Subsidiaries, as guarantors, we hereby request
that you issue a Letter of Credit as follows:

(i)        Name and address of beneficiary:

(ii)        Face amount: $

(iii)        Proposed Issuance Date:

(iv)        Proposed Expiration Date:

(v)        Other terms and conditions as set forth in the proposed form of
Letter of Credit attached hereto.

(vi)        Purpose of Letter of Credit:

This Letter of Credit Request is submitted pursuant to, and shall be governed
by, and subject to satisfaction of, the terms, conditions and provisions set
forth in §2.11 of the Credit Agreement.

The undersigned Authorized Officer or chief financial officer or chief
accounting officer of Borrower certifies that the Borrower is and will be in
compliance with all covenants under the Loan Documents after giving effect to
the issuance of the Letter of Credit requested hereby and no Default or Event of
Default has occurred and is continuing. Attached hereto is a Borrowing Base
Availability Certificate setting forth a calculation of the Borrowing Base
Availability after giving effect to the Letter of Credit requested hereby.

We also understand that if you grant this request this request obligates us to
accept the requested Letter of Credit and pay the issuance fee and Letter of
Credit fee as required by §2.11(e). All capitalized terms defined in the Credit
Agreement and used herein without definition shall have the meanings set forth
in §1.1 of the Credit Agreement.

The undersigned Authorized Officer or chief financial officer or chief
accounting officer of Borrower certifies, represents and agrees that each of the
representations and warranties made by or on behalf of the Borrower or their
respective Subsidiaries (if applicable), contained in the Credit Agreement,

 

E-1

--------------------------------------------------------------------------------

in the other Loan Documents or in any document or instrument delivered pursuant
to or in connection with the Credit Agreement was true in all material respects
as of the date on which it was made, is true as of the date hereof and shall
also be true at and as of the proposed issuance date of the Letter of Credit
requested hereby, with the same effect as if made at and as of the proposed
issuance date, except to the extent of changes resulting from transactions
permitted by the Loan Documents or except to the extent it would not have a
Material Adverse Effect (it being understood and agreed that any representation
or warranty which by its terms is made as of a specified date shall be required
to be true and correct only as of such specified date).

The undersigned is providing the certifications and other statements set forth
herein solely in the undersigned’s representative capacity and not in the
undersigned’s personal capacity.

 

Very truly yours, CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland
limited partnership, by its general partner, City Office REIT, Inc., a Maryland
corporation

By:     Name:      Title:    

 

E-2

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EXHIBIT F

FORM OF BORROWING BASE AVAILABILITY CERTIFICATE

 

TO:

  

KeyBank National Association (“Agent”)

RE:

  

Credit Agreement dated as of March __, 2018 (as amended from time to time, the
“Credit Agreement”) between Agent, the lenders described therein, and CITY
OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland limited partnership (the
“Borrower”)

This Borrowing Base Certificate is submitted by Borrower to Agent pursuant to
the provisions of the Credit Agreement. Capitalized terms used herein which are
not otherwise specifically defined shall have the same meaning herein as in the
Credit Agreement.

Calculations of the Borrowing Base Availability are set forth on Schedule I
annexed hereto.

The Borrower hereby further certifies, warrants and represents to Agent and the
Lenders that: (i) to the best of the Borrower’s knowledge, the financial
information provided by the Borrower to the Agent herein is true and accurate in
all material respects; and (ii) to the best of the Borrower’s knowledge, an
Event of Default which is continuing has not occurred under the Credit Agreement
or any of the other Loan Documents.

(signature follows)

 

F-1

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Executed as an instrument under seal as of the _______ day of _____________,
20__.

 

CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland limited partnership, by
its general partner, City Office REIT, Inc., a Maryland corporation

By:     Name:      Title:    

 

F-2

--------------------------------------------------------------------------------

Schedule I

Borrowing Base Availability Calculation

Current Outstanding amounts (including requested amounts):

 

  (a)          Revolving Credit Loans   $   (b)          Letter of Credit
Liabilities   $   (c)          Swing Loans   $   (d)          Revolving Credit
Exposure (sum of (a), (b) and (c)):   $                  (e)          Term Loans
  $   (f)          Total Loan Exposure (sum of (d) and (e))   $                 
(g)          Other Unsecured Debt (other than the Obligations)   $   (h)      
   Total Unsecured Debt ((f) plus (g)):   $

Borrowing Base Availability: the lesser of (a) Total Loan Exposure such that
Pool Leverage Ratio would not exceed 60% (or 65% for four consecutive fiscal
quarters after a Material Acquisition that was financed principally with
Unsecured Debt), and (b) Total Loan Exposure such that Pool Debt Yield would
equal 10.5% or greater

 

Name of Pool

Property Owner

   Location of  
Pool Property      Ground  
Lease?     Rental revenue  
from single
tenant over 15%  
of aggregate
rental revenue  
from Pool   Net Operating  
Income  

Pool Value ((x) for  
first 18 months,
undepreciated costs  
basis, and (y)

thereafter

NOI/Capitalization  
Rate*)

                                               

TOTAL:

   N/A    N/A   $   $   $

*Capitalization Rate: for a CBD Property, 6.75%, for any other property, 7.50%

 

  (a)         

Pool Value of ground-leased Pool Properties in excess of 15% of Total Pool Value

 

[LIST EACH APPLICABLE POOL PROPERTY]

 

  $   (b)         

Excess Pool Value of single Pool Property (i) in excess of 40% of Total Pool
Value prior to February __, 2019, or (ii) in excess of 25% of Total Pool Value
thereafter

 

[LIST APPLICABLE POOL PROPERTY]

 

  $         

Adjusted Total Pool Value (Total Pool Value from table above less (a) and/or
(b)):

 

   

 

H-1

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  (c)         

Total Unsecured Debt such that Pool Leverage Ratio would not exceed 60% (or 65%
for four consecutive fiscal quarters after a Material Acquisition that was
financed principally with Unsecured Debt)

 

  $   (d)         

Total Unsecured Debt such that the Pool Debt Yield would equal 10.5%

 

  $   (e)         

Other Unsecured Debt (other than Obligations)

 

  $         

Borrowing Base Availability (lesser of (c) and (d) minus (e)):

 

  $

 

F-2

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EXHIBIT H

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Agreement”) dated
____________________, by and between ____________________________ (“Assignor”),
and ____________________________ (“Assignee”).

W I T N E S S E T H:

WHEREAS, Assignor is a party to that certain Credit Agreement dated as of
______________, 2018, by and among CITY OFFICE REIT OPERATING PARTNERSHIP, L.P.
(“Borrower”), the Guarantors, the other lenders that are or may become a party
thereto, and KEYBANK NATIONAL ASSOCIATION, individually and as Agent (the
“Credit Agreement”); and

WHEREAS, Assignor desires to transfer to Assignee the Assigned Interest (as
defined below) under the Credit Agreement and its rights with respect to the
Commitment assigned and its Outstanding Loans with respect thereto;

NOW, THEREFORE, for good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:

1.        Definitions. Terms defined in the Credit Agreement and used herein
without definition shall have the respective meanings assigned to such terms in
the Credit Agreement.

2.        Assignment.

(a)      Subject to the terms and conditions of this Agreement and in
consideration of the payment to be made by Assignee to Assignor pursuant to
Paragraph 5 of this Agreement, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Credit Agreement, as of the
Effective Date inserted by the Agent as contemplated below: (i) all of the
Assignor’s rights and obligations in its capacity as a Lender under the Credit
Agreement and any other documents or instruments delivered pursuant thereto to
the extent related to the amount and percentage interest identified below of its
Revolving Credit Commitment and/or Term Loan Commitment and outstanding
Revolving Credit Loans and/or Term Loans, as applicable, and a corresponding
interest in and to all other rights and obligations of the Assignor under the
respective facilities identified below (including without limitation any
guarantees included in such facilities); and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as the “Assigned Interest”).
Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by the Assignor.

 

F-3

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Assigned Interest:

 

Class

 

  

Aggregate Amount of Commitment for all Lenders of such Class2

 

  

Amount of Applicable Commitment of such Class Assigned

 

  

Percentage Assigned

of Commitment of

such Class3

 

  

Amounts of Outstanding Loans of such Class Assigned

 

[Revolving Credit

Commitment/Loans]

 

   $    $    %        $

[Term Loan

Commitment/Loans

 

   $    $    %        $

(b)      Assignee, subject to the terms and conditions hereof, hereby assumes
all obligations of Assignor with respect to the Assigned Interests from and
after the Effective Date as if Assignee were an original Lender under and
signatory to the Credit Agreement, which obligations shall include, but shall
not be limited to, the obligation to make Loans to the Borrower and purchase
participation interests in Swing Loans and Letters of Credit issued for the
account of the Borrowers with respect to the Assigned Interests and to indemnify
the Agent as provided therein (such obligations, together with all other
obligations set forth in the Credit Agreement and the other Loan Documents are
hereinafter collectively referred to as the “Assigned Obligations”). Assignor
shall have no further duties or obligations with respect to, and shall have no
further interest in, the Assigned Obligations or the Assigned Interests.

3.        Representations and Requests of Assignor.

(a)      The Assignor: (a) represents and warrants that: (i) it is the legal and
beneficial owner of the Assigned Interest; (ii) the Assigned Interest is free
and clear of any lien, encumbrance or other adverse claim; and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to: (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document; (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder; (iii) the financial condition of the Borrower, any
Borrower’s subsidiaries or Affiliates or any other Person obligated in respect
of any Loan Document; or (iv) the performance or observance by the Borrower, any
Borrower’s subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.

(b)      Assignor requests that the Agent obtain replacement notes for each of
Assignor and Assignee as provided in the Credit Agreement.

4.        Representations of Assignee. Assignee makes and confirms to the Agent,
Assignor and the other Lenders all of the representations, warranties and
covenants of a Lender under Articles 14 and 18 of the Credit Agreement. Without
limiting the foregoing, Assignee (a) represents and warrants that: (i)

 

2        Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.

3        Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.

 

F-4

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it has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement; (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement) and does not control, is not controlled by, is not under common
control with and is otherwise free from influence or control by, any Credit
Party; (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder;
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to §7.4 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Agent or any other Lender; and (v) attached to the Assignment and
Assumption is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee;
(b) appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers as are reasonably incidental thereto pursuant to the
terms of the Loan Documents; and (c) agrees that: (i) it will, independently and
without reliance on the Agent, the Assignor or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents; and (ii) it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

5.        Payments to Assignor. In consideration of the assignment made pursuant
to Paragraph 1 of this Agreement, Assignee agrees to pay to Assignor on the
Effective Date, an amount equal to the aggregate “Amount of Outstanding Loans of
such Class Assigned” of each Class of Loans set forth in the table describing
the Assigned Interest in such Paragraph 1.

6.        Payments by Assignor. Assignor agrees to pay the Agent on the
Assignment Date the registration fee required by §18.2 of the Credit Agreement.

7.        Effectiveness.

(a)      The effective date for this Agreement shall be _______________ (the
“Assignment Date”). Following the execution of this Agreement, each party hereto
shall deliver its duly executed counterpart hereof to the Agent for acceptance
and recording in the Register by the Agent.

(b)      Upon such acceptance and recording and from and after the Assignment
Date, (i) Assignee shall be a party to the Credit Agreement, to the extent of
the Assigned Interests, have the rights and obligations of a Lender thereunder,
and (ii) Assignor shall, with respect to the Assigned Interests, relinquish its
rights and be released from its obligations under the Credit Agreement.

(c)      Upon such acceptance and recording and from and after the Assignment
Date, the Agent shall make all payments in respect of the rights and interests
assigned hereby accruing after the Assignment Date (including payments of
principal, interest, fees and other amounts) to Assignee.

(d)      All outstanding LIBOR Rate Loans shall continue in effect for the
remainder of their applicable Interest Periods and Assignee shall accept the
currently effective interest rates on its Assigned Interest of each LIBOR Rate
Loan.

8.        Notices. Assignee specifies as its address for notices and its
applicable Lending Office for all assigned Loans, the offices set forth below:

 

F-5

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Notice Address:        

                          Attn:           Facsimile:      

Domestic Lending Office:         Same as above

LIBOR Lending Office: Same as above

9.        Payment Instructions. From and after the Effective Date, the Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts
which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date. All payments to
Assignee under the Credit Agreement shall be made as provided in the Credit
Agreement in accordance with the separate instructions delivered to Agent.

10.     Governing Law. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT FOR ALL PURPOSES AND TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS).

11.     Counterparts. This Agreement may be executed in any number of
counterparts which shall together constitute but one and the same agreement.

12.     Amendments. This Agreement may not be amended, modified or terminated
except by an agreement in writing signed by Assignor and Assignee, and consented
to by Agent.

13.     Successors. This Agreement shall inure to the benefit of the parties
hereto and their respective successors and assigns as permitted by the terms of
Credit Agreement.

[signatures on following page]

 

F-6

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IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned has
caused this Agreement to be executed on its behalf by its officers thereunto
duly authorized, as of the date first above written.

 

ASSIGNEE: By:               Title: ASSIGNOR: By:               Title:

 

RECEIPT ACKNOWLEDGED AND

ASSIGNMENT CONSENTED TO BY:

KEYBANK NATIONAL ASSOCIATION, as Agent

By:       Title:

 

F-7

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SCHEDULE 1.1

LENDERS AND COMMITMENTS

 

     

Name and Address

  

Revolving Credit

Commitment

  

Revolving Credit

Commitment Percentage

KeyBank National Association

225 Franklin Street

Boston, Massachusetts 02110

Attention: Christopher T. Neil

Telephone: 617 385 6202

Facsimile: 617 385 6293

 

LIBOR Lending Office:

Same as Above

 

Domestic Lending Office:

Same as Above

 

   $55,000,000.00    22.0000000%

BMO Harris Bank N.A.

111 W. Monroe/115 S. LaSalle 20-W

Chicago, IL 60603

Attention: Michael Perlberg

Telephone: 312 461 5071

Facsimile: 312 768 8348

 

LIBOR Lending office:

Same as Above

 

Domestic Lending Office:

Same as Above

   $47,500,000.00    19.0000000%

Royal Bank of Canada

Three World Financial Center

200 Vesey Street

New York, NY 10281-8098

Attention: Rina Kansagara

Telephone: 212 428 6950

Facsimile: 212 428 6459

 

LIBOR Lending office:

Same as Above

 

Domestic Lending Office:

Same as Above

   $52,500,000.00    21.0000000%

Raymond James Bank, N.A.

710 Carillon Parkway

St. Petersburg, FL 33716

Attention: Mr. Matt Stein

   $52,500,000.00    21.0000000%

 

Exhibit J-4 - 1

--------------------------------------------------------------------------------

      Name and Address   

Revolving Credit

Commitment

  

Revolving Credit

Commitment Percentage

Telephone: 727-567-5118

Facsimile: 1-866-205-1396

 

LIBOR Lending office:

Same as Above

 

Domestic Lending Office:

Same as Above

 

         

Fifth Third Bank

222 S. Riverside Plaza,

MD: GRVR1B

Chicago, IL 60606

Attention: Ms. Casey Ciccone

Telephone: 312-704-6206

Facsimile: 312-704-7364

 

LIBOR Lending office:

Same as Above

 

Domestic Lending Office:

Same as Above

 

   $42,500,000.00    17.0000000% TOTAL      $250,000,000.00    100%

 

Schedule PP – Page 2