Exhibit 10.1

EXECUTION VERSION

 

 

 

TERRENO REALTY LLC

TERRENO REALTY CORPORATION

$100,000,000

3.14% Senior Guaranteed Notes due December 2, 2029

 

 

NOTE PURCHASE AGREEMENT

 

 

Dated September 12, 2019

 

 

 

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TABLE OF CONTENTS

 

SECTION   HEADING    PAGE   SECTION 1.   AUTHORIZATION OF NOTES      1   SECTION
2.   SALE AND PURCHASE OF NOTES; GUARANTIES      1  

Section 2.1.

 

Sale and Purchase of Notes

     1  

Section 2.2.

 

Guaranties

     2   SECTION 3.   CLOSING      2   SECTION 4.   CONDITIONS TO CLOSING      2
 

Section 4.1.

 

Representations and Warranties

     2  

Section 4.2.

 

Performance; No Default

     3  

Section 4.3.

 

Compliance Certificates

     3  

Section 4.4.

 

Opinions of Counsel

     4  

Section 4.5.

 

Purchase Permitted By Applicable Law, Etc.

     4  

Section 4.6.

 

Sale of Other Notes

     4  

Section 4.7.

 

Payment of Special Counsel Fees

     4  

Section 4.8.

 

Private Placement Number

     4  

Section 4.9.

 

Changes in Corporate Structure

     4  

Section 4.10.

 

Subsidiary Guaranties

     5  

Section 4.11.

 

Funding Instructions

     5  

Section 4.12.

 

Proceedings and Documents

     5   SECTION 5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
PARENT GUARANTOR      5  

Section 5.1.

 

Organization; Power and Authority

     5  

Section 5.2.

 

Authorization, Etc.

     5  

Section 5.3.

 

Disclosure

     6  

Section 5.4.

 

Organization and Ownership of Shares of Subsidiaries

     6  

Section 5.5.

 

Financial Statements; Material Liabilities

     7  

Section 5.6.

 

Compliance with Laws, Other Instruments, Etc.

     7  

Section 5.7.

 

Governmental Authorizations, Etc.

     8  

Section 5.8.

 

Litigation; Observance of Agreements, Statutes and Orders

     8  

Section 5.9.

 

Taxes

     8  

Section 5.10.

 

Title to Property; Leases

     9  

Section 5.11.

 

Licenses, Permits, Etc.

     9  

Section 5.12.

 

Compliance with ERISA

     9  

Section 5.13.

 

Private Offering by the Company

     10  

Section 5.14.

 

Use of Proceeds; Margin Regulations

     10  

Section 5.15.

 

Existing Indebtedness; Future Liens

     11  

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Section 5.16.

 

Foreign Assets Control Regulations, Etc.

     11  

Section 5.17.

 

Status under Certain Statutes

     13  

Section 5.18.

 

Environmental Matters

     13  

Section 5.19.

 

Solvency

     13  

Section 5.20.

 

REIT Status

     14   SECTION 6.   REPRESENTATIONS OF THE PURCHASERS      14  

Section 6.1.

 

Purchase for Investment

     14  

Section 6.2.

 

Source of Funds

     14   SECTION 7.   INFORMATION AS TO PARENT GUARANTOR AND COMPANY      16  

Section 7.1.

 

Financial and Business Information

     16  

Section 7.2.

 

Officer’s Certificate

     19  

Section 7.3.

 

Visitation

     20  

Section 7.4.

 

Electronic Delivery

     20   SECTION 8.   PAYMENT AND PREPAYMENT OF THE NOTES      21  

Section 8.1.

 

Maturity

     21  

Section 8.2.

 

Optional Prepayments with Make-Whole Amount

     21  

Section 8.3.

 

Allocation of Partial Prepayments

     22  

Section 8.4.

 

Maturity; Surrender, Etc.

     22  

Section 8.5.

 

Purchase of Notes

     22  

Section 8.6.

 

Make-Whole Amount

     23  

Section 8.7.

 

Payments Due on Non-Business Days

     24  

Section 8.8.

 

Change of Control Prepayment Offer

     24   SECTION 9.   AFFIRMATIVE COVENANTS      25  

Section 9.1.

 

Compliance with Law

     25  

Section 9.2.

 

Insurance

     25  

Section 9.3.

 

Maintenance of Properties

     26  

Section 9.4.

 

Payment of Taxes and Claims

     26  

Section 9.5.

 

Corporate Existence, Etc.

     26  

Section 9.6.

 

Books and Records

     26  

Section 9.7.

 

Subsidiary Guarantors

     27  

Section 9.8.

 

Maintenance of Status

     27  

Section 9.9.

 

Dividends

     27   SECTION 10.   NEGATIVE COVENANTS      28  

Section 10.1.

 

Transactions with Affiliates

     28  

Section 10.2.

 

Merger, Consolidation, Etc.

     28  

Section 10.3.

 

Line of Business

     29  

Section 10.4.

 

Terrorism Sanctions Regulations

     29  

Section 10.5.

 

Liens

     30  

Section 10.6.

 

Financial Covenants

     30  

 

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Section 10.7.

 

Permitted Investments

     31  

Section 10.8.

 

Unencumbered Properties

     32  

Section 10.9.

 

Notices

     32   SECTION 11.   EVENTS OF DEFAULT      33   SECTION 12.   REMEDIES ON
DEFAULT, ETC.      36  

Section 12.1.

 

Acceleration

     36  

Section 12.2.

 

Other Remedies

     36  

Section 12.3.

 

Rescission

     36  

Section 12.4.

 

No Waivers or Election of Remedies, Expenses, Etc.

     37   SECTION 13.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES      37  

Section 13.1.

 

Registration of Notes

     37  

Section 13.2.

 

Transfer and Exchange of Notes

     37  

Section 13.3.

 

Replacement of Notes

     38   SECTION 14.   PAYMENTS ON NOTES      38  

Section 14.1.

 

Place of Payment

     38  

Section 14.2.

 

Home Office Payment

     38  

Section 14.3.

 

Tax Forms

     39   SECTION 15.   EXPENSES, ETC.      40  

Section 15.1.

 

Transaction Expenses

     40  

Section 15.2.

 

Survival

     41   SECTION 16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT      41   SECTION 17.   AMENDMENT AND WAIVER      41  

Section 17.1.

 

Requirements

     41  

Section 17.2.

 

Solicitation of Holders of Notes

     41  

Section 17.3.

 

Binding Effect, etc.

     42  

Section 17.4.

 

Notes Held by Company, etc.

     42   SECTION 18.   NOTICES      43   SECTION 19.   REPRODUCTION OF
DOCUMENTS      43   SECTION 20.   CONFIDENTIAL INFORMATION      43   SECTION 21.
  SUBSTITUTION OF PURCHASER      45  

 

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SECTION 22.   MISCELLANEOUS      45  

Section 22.1.

 

Successors and Assigns

     45  

Section 22.2.

 

Accounting Terms

     45  

Section 22.3.

 

Severability

     45  

Section 22.4.

 

Construction, etc.

     45  

Section 22.5.

 

Counterparts

     46  

Section 22.6.

 

Governing Law

     46  

Section 22.7.

 

Jurisdiction and Process; Waiver of Jury Trial

     46   SECTION 23.   PARENT GUARANTY      47  

Section 23.1.

 

Guaranty

     47  

Section 23.2.

 

Obligations Absolute and Unconditional

     48  

Section 23.3.

 

Enforcement Costs

     49  

Section 23.4.

 

Subrogation

     49  

Section 23.5.

 

Preference

     50  

Section 23.6.

 

Marshalling and Accounts

     50   Signature        51  

 

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SCHEDULE A   —    DEFINED TERMS SCHEDULE 1   —    FORM OF 3.14% SENIOR
GUARANTEED NOTE DUE 2029 SCHEDULE 2   —    FORM OF SUBSIDIARY GUARANTY
SCHEDULE 4.4(a)   —    FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY,
PARENT GUARANTOR AND SUBSIDIARY GUARANTORS SCHEDULE 4.4(b)   —    FORM OF
OPINION OF SPECIAL COUNSEL FOR THE PURCHASERS SCHEDULE 5.3   —    DISCLOSURE
MATERIALS SCHEDULE 5.4   —    SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF
SUBSIDIARY STOCK SCHEDULE 5.5   —    FINANCIAL STATEMENTS SCHEDULE 5.15   —   
EXISTING INDEBTEDNESS EXHIBIT 14.3   —    FORM OF U.S. TAX COMPLIANCE
CERTIFICATE SCHEDULE B   —    INFORMATION RELATING TO PURCHASERS

 

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TERRENO REALTY LLC

101 Montgomery Street, Suite 200

San Francisco, CA 94104

TERRENO REALTY CORPORATION

101 Montgomery Street, Suite 200

San Francisco, CA 94104

3.14% Senior Guaranteed Notes due December 2, 2029

SEPTEMBER 12, 2019

TO EACH OF THE PURCHASERS LISTED IN

    SCHEDULE B HERETO:

Ladies and Gentlemen:

Terreno Realty LLC, a Delaware limited liability company (together with any
successor thereto that becomes a party hereto pursuant to Section 10.2, the
“Company”) and Terreno Realty Corporation, a Maryland corporation (together with
any successor thereto that becomes a party hereto pursuant to Section 10.2, the
“Parent Guarantor”) agree with each of the Purchasers as follows:

SECTION 1.    AUTHORIZATION OF NOTES.

The Company will authorize the issue and sale of $100,000,000 aggregate
principal amount of its 3.14% Senior Guaranteed Notes due December 2, 2029 (the
“Notes,” such term to include any such notes as amended, restated or otherwise
modified from time to time pursuant to Section 17 and including any such notes
issued in substitution therefor pursuant to Section 13). The Notes shall be
substantially in the form set out in Schedule 1. Certain capitalized and other
terms used in this Agreement are defined in Schedule A. References to a
“Schedule” are references to a Schedule attached to this Agreement unless
otherwise specified. References to a “Section” are references to a Section of
this Agreement unless otherwise specified.

SECTION 2.    SALE AND PURCHASE OF NOTES; GUARANTIES.

Section 2.1.    Sale and Purchase of Notes. Subject to the terms and conditions
of this Agreement, the Company will issue and sell to each Purchaser and each
Purchaser will purchase from the Company, at the Closing as provided for in
Section 3, Notes in the principal amount specified opposite such Purchaser’s
name in Schedule B at the purchase price of 100% of the principal amount
thereof. The Purchasers’ obligations hereunder are several and not joint
obligations and no Purchaser shall have any liability to any Person for the
performance or nonperformance of any obligation by any other Purchaser
hereunder.

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Terreno Realty LLC   Note Purchase Agreement

 

Section 2.2.    Guaranties. The payment by the Company of all amounts due with
respect to the Notes and the performance by the Company of its obligations under
this Agreement will be absolutely and unconditionally guaranteed by the Parent
Guarantor and certain of its Subsidiaries pursuant to (i) the guarantee of the
Parent Guarantor contained in Section 23 herein and (ii) the guaranty agreement
of certain Subsidiaries substantially in the form of Schedule 2 attached hereto
and made a part hereof (the “Subsidiary Guaranty”).

SECTION 3.    CLOSING.

The sale and purchase of the Notes to be purchased by each Purchaser shall occur
at the offices of Greenberg Traurig, LLP, 77 West Wacker Drive, Suite 3100,
Chicago, Illinois 60601, at 9:00 a.m., Chicago time, at a closing on December 2,
2019 (the “Closing”). At the Closing the Company will deliver to each Purchaser
the Notes to be purchased by such Purchaser in the form of a single Note (or
such greater number of Notes in denominations of at least $100,000 as such
Purchaser may request) dated the date of such Closing and registered in such
Purchaser’s name (or in the name of its nominee), against delivery by such
Purchaser to the Company or its order of immediately available funds in the
amount of the purchase price therefor by wire transfer of immediately available
funds for the account of the Company to account number 359681280095 at KeyBank,
127 Public Sq., Cleveland, OH 44114, ABA#041001039, Account Name: Terreno Realty
Corporation. If at the Closing the Company shall fail to tender such Notes to
any Purchaser as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to such Purchaser’s
satisfaction, such Purchaser shall, at its election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights such
Purchaser may have by reason of any of the conditions specified in Section 4 not
having been fulfilled to such Purchaser’s satisfaction or such failure by the
Company to tender such Notes.

SECTION 4.    CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at such Closing, of the following conditions:

Section 4.1.    Representations and Warranties.

(a)    Representations and Warranties of the Company. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the Closing.

(b)    Representations and Warranties of the Parent Guarantor. The
representations and warranties of the Parent Guarantor in this Agreement shall
be correct when made and at the Closing.

 

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Terreno Realty LLC   Note Purchase Agreement

 

(c)    Representations and Warranties of the Subsidiary Guarantors. The
representations and warranties of the Subsidiary Guarantors in the Subsidiary
Guaranty shall be correct when made and at the Closing.

Section 4.2.    Performance; No Default. The Company, the Parent Guarantor and
each Subsidiary Guarantor shall have performed and complied with all agreements
and conditions contained in this Agreement and the Subsidiary Guaranty, as
applicable, required to be performed or complied with by it prior to or at the
Closing and from the date of this Agreement to the Closing assuming that
Sections 9 and 10 are applicable from the date of this Agreement. From the date
of this Agreement until the Closing, before and after giving effect to the issue
and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14), no Default or Event of Default shall have
occurred and be continuing. None of the Company, the Parent Guarantor or any
Subsidiary shall have entered into any transaction since August 22, 2019 that
would have been prohibited by Section 10 had such Section applied since such
date.

Section 4.3.    Compliance Certificates.

(a)    Officer’s Certificate of the Company. The Company shall have delivered to
such Purchaser an Officer’s Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1(a), 4.2 and 4.9 have
been fulfilled.

(b)    Secretary’s Certificate of the Company. The Company shall have delivered
to such Purchaser a certificate of its Secretary or Assistant Secretary, dated
the date of the Closing, certifying as to (i) the resolutions attached thereto
and other corporate proceedings relating to the authorization, execution and
delivery of the Notes and this Agreement and (ii) the Company’s organizational
documents as then in effect.

(c)    Officer’s Certificate of the Parent Guarantor. The Parent Guarantor shall
have delivered to such Purchaser an Officer’s Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1(b), 4.2 and
4.9 have been fulfilled.

(d)    Secretary’s Certificate of the Parent Guarantor. The Parent Guarantor
shall have delivered to such Purchaser a certificate of its Secretary or
Assistant Secretary, dated the date of the Closing, certifying as to (i) the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of this Agreement and (ii) the Parent
Guarantor’s organizational documents as then in effect.

(e)    Officer’s Certificate of the Subsidiary Guarantors. Each Subsidiary
Guarantor shall have delivered to such Purchaser an Officer’s Certificate, dated
the date of the Closing, certifying that the conditions specified in Sections
4.1(c) and 4.2 have been fulfilled.

(f)    Secretary’s Certificate of the Subsidiary Guarantors. Each Subsidiary
Guarantor shall have delivered to such Purchaser a certificate of its Secretary
or Assistant Secretary, dated the date of the Closing, certifying as to (i) the
resolutions attached thereto and other corporate, limited liability company or
partnership (as the case may be) proceedings relating to the authorization,
execution and delivery of the Subsidiary Guaranty and (ii) such Subsidiary
Guarantor’s organizational documents as then in effect.

 

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Terreno Realty LLC   Note Purchase Agreement

 

Section 4.4.    Opinions of Counsel. Such Purchaser shall have received opinions
in form and substance satisfactory to such Purchaser, dated the date of the
Closing (a) from Goodwin Procter LLP, counsel for the Company, the Parent
Guarantor and Subsidiary Guarantors, covering the matters set forth in Schedule
4.4(a) and covering such other matters incident to the transactions contemplated
hereby as such Purchaser or its counsel may reasonably request (and the Company
and Parent Guarantor hereby instructs its counsel to deliver such opinion to the
Purchasers) and (b) from Greenberg Traurig, LLP, the Purchasers’ special counsel
in connection with such transactions, substantially in the form set forth in
Schedule 4.4(b) and covering such other matters incident to such transactions as
such Purchaser may reasonably request.

Section 4.5.    Purchase Permitted By Applicable Law, Etc. On the date of the
Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which such Purchaser is subject, without
recourse to provisions (such as section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject such
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by such Purchaser, such Purchaser shall have received an Officer’s
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.

Section 4.6.    Sale of Other Notes. Contemporaneously with the Closing the
Company shall sell to each other Purchaser and each other Purchaser shall
purchase the Notes to be purchased by it at the Closing as specified in Schedule
B.

Section 4.7.    Payment of Special Counsel Fees. Without limiting Section 15.1,
the Company shall have paid on or before the Closing the fees, charges and
disbursements of the Purchasers’ special counsel referred to in Section 4.4 to
the extent reflected in a statement of such counsel rendered to the Company at
least one Business Day prior to the Closing.

Section 4.8.    Private Placement Number. A Private Placement Number issued by
Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have
been obtained for the Notes.

Section 4.9.    Changes in Corporate Structure. Neither the Company, the Parent
Guarantor nor any Subsidiary Guarantor shall have changed its jurisdiction of
incorporation or organization, as applicable, or been a party to any merger or
consolidation or succeeded to all or any substantial part of the liabilities of
any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.

 

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Terreno Realty LLC   Note Purchase Agreement

 

Section 4.10.    Subsidiary Guaranties . As to each Subsidiary which on the date
hereof is a guarantor of, or is a borrower under, the Primary Credit Facility,
the Company will cause each such Subsidiary to enter into the Subsidiary
Guaranty and deliver an executed copy thereof to such Purchaser. The Subsidiary
Guaranty shall be in full force and effect.

Section 4.11.    Funding Instructions. At least three Business Days prior to the
date of the Closing, each Purchaser shall have received written instructions
signed by a Responsible Officer on letterhead of the Company confirming the
information specified in Section 3 including (i) the name and address of the
transferee bank, (ii) such transferee bank’s ABA number and (iii) the account
name and number into which the purchase price for the Notes is to be deposited.

Section 4.12.    Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be satisfactory to
such Purchaser and its special counsel, and such Purchaser and its special
counsel shall have received all such counterpart originals or certified or other
copies of such documents as such Purchaser or such special counsel may
reasonably request.

SECTION 5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PARENT
GUARANTOR.

As of the date of this Agreement and as of the date of Closing, each of the
Company and Parent Guarantor represents and warrants to each Purchaser that:

Section 5.1.    Organization; Power and Authority. The Company is a limited
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
limited liability company and is in good standing in each jurisdiction in which
such qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Parent Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each of the Company and the Parent Guarantor has the corporate
or limited liability company power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement and,
with respect to the Company only, the Notes, and to perform the provisions
hereof and thereof.

Section 5.2.    Authorization, Etc. This Agreement and, with respect to the
Company only, the Notes, have been duly authorized by all necessary corporate or
limited liability company action on the part of the Company and the Parent
Guarantor, and this Agreement constitutes, and upon execution and delivery
thereof each Note will constitute, a legal, valid and binding obligation of the
Company and the Parent Guarantor, as applicable, enforceable against

 

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Terreno Realty LLC   Note Purchase Agreement

 

the Company and the Parent Guarantor in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

Section 5.3.    Disclosure. The Company, through its agents, KeyBanc Capital
Markets Inc. and MUFG Securities Americas Inc., has delivered to each Purchaser
a copy of a Private Placement Investor Presentation, dated August 2019 (the
“Presentation”), relating to the transactions contemplated hereby. The
Presentation fairly describes, in all material respects, the general nature of
the business and principal properties of the Parent Guarantor, the Company and
its Subsidiaries. This Agreement, the Presentation, the financial statements
listed in Schedule 5.5, the documents, certificates or other writings delivered
to the Purchasers by or on behalf of the Company and the Parent Guarantor prior
to August 22, 2019 in connection with the transactions contemplated hereby and
identified in Schedule 5.3, the Parent Guarantor’s Annual Report on Form 10-K
for the year ended December 31, 2018 and the Parent Guarantor’s Quarterly Report
on Form 10-Q for the quarter ended June 30, 2019 (this Agreement, the
Presentation, such documents, certificates or other writings and such financial
statements delivered to each Purchaser pursuant to this Agreement, the Parent
Guarantor’s Annual Report on Form 10-K for the year ended December 31, 2018 and
the Parent Guarantor’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2019 being referred to, collectively, as the “Disclosure Documents”),
taken as a whole, do not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made; provided,
that, with respect to any projected financial information, the Company and the
Parent Guarantor represent only that such information was prepared in good faith
based on assumptions the Company and Parent Guarantor believed to be reasonable
at the time. Except as disclosed in the Disclosure Documents, since December 31,
2018, there has been no change in the financial condition, operations, business,
properties or prospects of the Parent Guarantor, the Company or any Subsidiary
except changes that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. There is no fact known to the
Company that could reasonably be expected to have a Material Adverse Effect that
has not been set forth herein or in the Disclosure Documents.

Section 5.4.    Organization and Ownership of Shares of Subsidiaries.
(a) Schedule 5.4 contains (except as noted therein) complete and correct lists
of (i) the Parent Guarantor’s Subsidiaries, showing, as to each Subsidiary, the
name thereof, the jurisdiction of its organization, and the percentage of shares
of each class of its capital stock or similar equity interests outstanding owned
by the Parent Guarantor and each other Subsidiary, (ii) the Investment
Affiliates of the Consolidated Group, other than Subsidiaries, including the
correct legal name of such Investment Affiliate, the type of legal entity which
each such Investment Affiliate is and the type and amount of all equity
interests in such Investment Affiliate held directly or indirectly by members of
the Consolidated Group and (iii) the Parent Guarantor’s and Company’s directors
and senior officers.

 

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Terreno Realty LLC   Note Purchase Agreement

 

(b)    All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Parent
Guarantor or another member of the Consolidated Group, as applicable, have been
validly issued, are fully paid and nonassessable and are owned by the Parent
Guarantor or another member of the Consolidated Group free and clear of any Lien
that is prohibited by this Agreement.

(c)    Each Subsidiary is a corporation or other legal entity duly organized,
validly existing and, where applicable, in good standing under the laws of its
jurisdiction of organization, and is duly qualified as a foreign corporation or
other legal entity and, where applicable, is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact, except where the failure or non-compliance of the same could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

(d)    No Subsidiary is subject to any legal, regulatory, contractual or other
restriction (other than the agreements listed on Schedule 5.4, customary
limitations imposed by corporate law or similar statutes or any Non-Recourse
Indebtedness) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Parent
Guarantor or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.

Section 5.5.    Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser copies of the financial statements of the
Consolidated Group listed on Schedule 5.5. All of such financial statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Consolidated Group
as of the respective dates specified in such Schedule and the consolidated
results of the Consolidated Group’s operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments). The Parent Guarantor, the Company and its Subsidiaries do not have
any Material liabilities that are not disclosed in the Disclosure Documents.

Section 5.6.    Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company and the Parent Guarantor of this
Agreement and, with respect to the Company only, the Notes, will not
(i) contravene, result in any breach of, or constitute a default under any
(a) indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease or any other agreement or instrument to which the Parent Guarantor, the
Company or any Subsidiary is bound or by which the Parent Guarantor, the Company
or any Subsidiary or any of their respective properties may be bound or affected
or (b) limited liability company or corporate charter, operating agreement or
by-laws or any other legal entity organizational documents or members or
shareholders agreement or similar agreement, or (ii) result in the creation of
any Lien in respect of any property of the Parent Guarantor, the Company or any
Subsidiary under

 

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any of the agreements, instruments or documents described in the foregoing
clause (i), or (iii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority applicable to the Parent Guarantor, the
Company or any Subsidiary or (iv) violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to the Parent
Guarantor, the Company or any Subsidiary, except in each case (excluding clauses
(i)(b) and (ii) herein) that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

Section 5.7.    Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company or the Parent Guarantor of this Agreement or, with respect to the
Company only, the Notes.

Section 5.8.    Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits, investigations or proceedings pending or, to
the best knowledge of the Company or the Parent Guarantor, threatened against
the Parent Guarantor, the Company or any Subsidiary or any property of the
Parent Guarantor, the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(b)    None of the Parent Guarantor, the Company nor any Subsidiary is (i) in
default under any agreement or instrument to which it is a party or by which it
is bound, (ii) in violation of any order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority or (iii) in violation of any
applicable law, ordinance, rule or regulation of any Governmental Authority
(including, without limitation, Environmental Laws, the USA PATRIOT Act or any
of the other laws and regulations that are referred to in Section 5.16), in the
case of each of clauses (i), (ii) and (iii), which default or violation could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

Section 5.9.    Taxes. The Parent Guarantor, the Company and its Subsidiaries
have filed all tax returns that are required to have been filed in any
jurisdiction, and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
except for any taxes and assessments (i) the amount of which, individually or in
the aggregate, is not Material or (ii) the amount, applicability or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which the Parent Guarantor, the Company or a Subsidiary, as the
case may be, has established adequate reserves in accordance with GAAP. Neither
the Company nor the Parent Guarantor knows of any basis for any other tax or
assessment that could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. The charges, accruals and reserves on the
books of the Parent Guarantor, the Company and its Subsidiaries in respect of
U.S. federal, state or other taxes for all fiscal periods are adequate. The U.S.
federal income tax liabilities of the Parent Guarantor and its Subsidiaries have
been finally determined (whether by reason of completed audits or the statute of
limitations having run) for all fiscal years up to and including the fiscal year
ended December 31, 2014.

 

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Section 5.10.    Title to Property; Leases. The Parent Guarantor, the Company
and its Subsidiaries have good and sufficient title to their respective
properties that individually or in the aggregate are Material, including all
such properties reflected in the most recent audited balance sheet referred to
in Section 5.5 or purported to have been acquired by the Parent Guarantor, the
Company or any Subsidiary after such date (except as sold or otherwise disposed
of in the ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement. All leases are valid and subsisting and are in
full force and effect, except where such failure to be in full force or effect
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

Section 5.11.    Licenses, Permits, Etc. (a) The Parent Guarantor, the Company
and its Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, proprietary software, service marks,
trademarks and trade names, or rights thereto without known conflict with the
rights of others, except where the failure to own or possess could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(b)    To the best knowledge of the Parent Guarantor and the Company, no product
or service of the Parent Guarantor, the Company or any of its Subsidiaries
infringes in any respect any license, permit, franchise, authorization, patent,
copyright, proprietary software, service mark, trademark, trade name or other
right owned by any other Person, except where such infringement could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

Section 5.12.    Compliance with ERISA. (a) The Company, the Parent Guarantor
and each ERISA Affiliate have operated and administered each Plan in compliance
with all applicable laws except for such instances of noncompliance as have not
resulted in and could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. None of the Company, the Parent
Guarantor nor any ERISA Affiliate has incurred any liability pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could, individually or in
the aggregate, reasonably be expected to result in the incurrence of any such
liability by the Company, the Parent Guarantor or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of the
Company, Parent Guarantor or any ERISA Affiliate, in either case pursuant to
Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty
or excise tax provisions under the Code or federal law or section 4068 of ERISA
or by the granting of a security interest in connection with the amendment of a
Plan, other than such liabilities or Liens as would not be individually or in
the aggregate Material.

(b)    The present value of the aggregate benefit liabilities under each of the
Plans (other than Multiemployer Plans), determined as of the end of such Plan’s
most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such

 

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Plan allocable to such benefit liabilities. The term “benefit liabilities” has
the meaning specified in section 4001 of ERISA and the terms “current value” and
“present value” have the meaning specified in section 3 of ERISA.

(c)    The Parent Guarantor, the Company and its ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.

(d)    The expected postretirement benefit obligation (determined as of the last
day of the Parent Guarantor’s most recently ended fiscal year in accordance with
Financial Accounting Standards Board Accounting Standards Codification Topic
715-60, without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Parent Guarantor, the Company and
its Subsidiaries is not Material.

(e)    The execution and delivery of this Agreement and the issuance and sale of
the Notes hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)- (D) of the Code. The representation
by the Company and the Parent Guarantor to each Purchaser in the first sentence
of this Section 5.12(e) is made in reliance upon and subject to the accuracy of
such Purchaser’s representation in Section 6.2 as to the sources of the funds to
be used to pay the purchase price of the Notes to be purchased by such
Purchaser.

Section 5.13.    Private Offering by the Company. None of the Company, the
Parent Guarantor nor anyone acting on their behalf has offered the Notes or any
similar Securities for sale to, or solicited any offer to buy the Notes or any
similar Securities from, or otherwise approached or negotiated in respect
thereof with, any Person other than the Purchasers and not more than 9 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. None of the Company, the Parent Guarantor nor anyone acting
on their behalf has taken, or will take, any action that would subject the
issuance or sale of the Notes to the registration requirements of section 5 of
the Securities Act or to the registration requirements of any Securities or blue
sky laws of any applicable jurisdiction.

Section 5.14.    Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of the Notes hereunder for general corporate purposes and
the repayment of Indebtedness. No part of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, for the purpose of buying
or carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any Securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 5% of the value of the
consolidated assets of the Consolidated Group and neither the Company nor the
Parent Guarantor has any present intention that margin stock will constitute
more than 5% of the value of such assets. As used in this Section, the terms
“margin stock” and “purpose of buying or carrying” shall have the meanings
assigned to them in said Regulation U.

 

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Section 5.15.    Existing Indebtedness; Future Liens . (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all outstanding
Indebtedness of the Parent Guarantor, the Company and its Subsidiaries as of
June 30, 2019 (including descriptions of the obligors and obligees, principal
amounts outstanding, any collateral therefor and any Guaranties thereof), since
which date there has been no Material change in the amounts, interest rates,
sinking funds, installment payments or maturities of the Indebtedness of the
Parent Guarantor, the Company or its Subsidiaries. Neither the Parent Guarantor,
the Company nor any Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Parent Guarantor, the Company or such Subsidiary and no
event or condition exists with respect to any Indebtedness of the Parent
Guarantor, the Company or any Subsidiary that would permit (or that with notice
or the lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.

(b)    Except as disclosed in Schedule 5.15, neither the Parent Guarantor, the
Company nor any Subsidiary has agreed or consented to cause or permit any of its
property, whether now owned or hereafter acquired, to be subject to a Lien that
secures Indebtedness or to cause or permit in the future (upon the happening of
a contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien that secures Indebtedness other than Permitted
Liens.

Section 5.16.    Foreign Assets Control Regulations, Etc. (a) Neither the Parent
Guarantor, the Company nor any Controlled Entity is (i) a Person whose name
appears on the list of Specially Designated Nationals and Blocked Persons
published by the Office of Foreign Assets Control, United States Department of
the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) a Person subject to or the
target of U.K. Economic Sanctions, (iii) an agent, department, or
instrumentality of, or is otherwise beneficially owned by, controlled by or
acting on behalf of, directly or indirectly, (x) any OFAC Listed Person, (y) any
Person, entity, organization, foreign country or regime that is subject to any
OFAC Sanctions Program or (z) any Person, entity, organization, foreign country
or regime that is subject to any U.K. Economic Sanctions, or (iv) otherwise
blocked, subject to sanctions under or engaged in any activity in violation of
other United States economic sanctions, including but not limited to, the
Trading with the Enemy Act, the International Emergency Economic Powers Act, the
Comprehensive Iran Sanctions, Accountability and Divestment Act (“CISADA”) or
any similar law or regulation with respect to Iran or any other country, the
Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any
economic sanctions regulations administered and enforced by the United States or
any enabling legislation or executive order relating to any of the foregoing
(collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each
other Person, entity, organization and government of a country described in
clauses (i) through (iv), a “Blocked Person”). Neither the Company nor any
Controlled Entity has been notified that its name appears or may in the future
appear on a state list of Persons that engage in investment or other commercial
activities in Iran or any other country that is subject to U.S. Economic
Sanctions or U.K. Economic Sanctions.

 

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(b)    No part of the proceeds from the sale of the Notes hereunder constitutes
or will constitute funds obtained on behalf of any Blocked Person or will
otherwise be used by the Parent Guarantor, the Company or any Controlled Entity,
directly or indirectly, (i) in connection with any investment in, or any
transactions or dealings with, any Blocked Person, or (ii) otherwise in
violation of U.S. Economic Sanctions or U.K. Economic Sanctions.

(c)    Neither the Parent Guarantor, the Company nor any Controlled Entity
(i) has been found in violation of, charged with, or convicted of, money
laundering, drug trafficking, terrorist-related activities or other money
laundering predicate crimes under the Currency and Foreign Transactions
Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT
Act or any other United States law or regulation governing such activities, the
UK Criminal Justice Act 1977, the Drug Trafficking Act 1994 and the Terrorism
Act 2000 (collectively, “Anti-Money Laundering Laws”) or any U.S. Economic
Sanctions violations or U.K. Economic Sanctions violations, (ii) to the
Company’s actual knowledge after making due inquiry, is under investigation by
any Governmental Authority for possible violation of Anti-Money Laundering Laws,
or any violation of U.S. Economic Sanctions or U.K. Economic Sanctions,
(iii) has been assessed civil penalties under any Anti-Money Laundering Laws,
U.S. Economic Sanctions or U.K. Economic Sanctions, or (iv) has had any of its
funds seized or forfeited in an action under any Anti-Money Laundering Laws.
Each of the Parent Guarantor and the Company has established procedures and
controls which it reasonably believes are adequate (and otherwise comply with
applicable law) to ensure that the Parent Guarantor, the Company and each
Controlled Entity is and will continue to be in compliance with all applicable
current and future Anti-Money Laundering Laws, U.S. Economic Sanctions and U.K.
Economic Sanctions.

(d)    (1) None of the Parent Guarantor, the Company nor any Controlled Entity
(i) has been charged with, or convicted of bribery or any other anti-corruption
related activity under any applicable law or regulation in a U.S. or any
non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign
Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively,
“Anti-Corruption Laws”), (ii) to each of the Parent Guarantor’s and the
Company’s actual knowledge after making due inquiry, is under investigation by
any U.S. or non-U.S. Governmental Authority for possible violation of
Anti-Corruption Laws, (iii) has been assessed civil or criminal penalties under
any Anti-Corruption Laws or (iv) has been or is the target of sanctions imposed
by the United Nations or the European Union;

(2)    To each of the Parent Guarantor and the Company’s actual knowledge after
making due inquiry, neither the Parent Guarantor, the Company nor any Controlled
Entity has, within the last five years, directly or indirectly offered,
promised, given, paid or authorized the offer, promise, giving or payment of
anything of value to a Governmental Official or a commercial counterparty for
the purposes of: (i) influencing any act, decision or failure to act by such
Governmental Official in his or her official capacity or such commercial
counterparty, (ii) inducing a Governmental Official to do or omit to do any act
in violation of the Governmental Official’s lawful duty, or (iii) inducing a
Governmental Official or a commercial counterparty to use his or her influence
with a government or instrumentality to affect any act or decision of such
government or entity; in each case in order to obtain, retain or direct business
or to otherwise secure an improper advantage in violation of any applicable law
or regulation or which would cause any holder to be in violation of any law or
regulation applicable to such holder; and

 

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(3)    No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for any improper payments, including bribes, to
any Governmental Official or commercial counterparty in order to obtain, retain
or direct business or obtain any improper advantage. Each of the Parent
Guarantor and the Company has established procedures and controls which it
reasonably believes are adequate (and otherwise comply with applicable law) to
ensure that the Parent Guarantor, the Company and each Controlled Entity is and
will continue to be in compliance with all applicable current and future
Anti-Corruption Laws.

Section 5.17.    Status under Certain Statutes. None of the Parent Guarantor,
the Company nor any Subsidiary is subject to regulation under the Investment
Company Act of 1940, as amended, the Public Utility Holding Company Act of 2005,
as amended, the ICC Termination Act of 1995, as amended, or the Federal Power
Act, as amended.

Section 5.18.    Environmental Matters. (a) None of the Parent Guarantor, the
Company nor any Subsidiary has knowledge of any claim or has received any notice
of any claim and no proceeding has been instituted asserting any claim against
the Parent Guarantor, the Company or any of its Subsidiaries or any of their
respective real properties or other assets now or formerly owned, leased or
operated by any of them, alleging any damage to the environment or violation of
any Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect.

(b)    None of the Parent Guarantor, the Company nor any Subsidiary has
knowledge of any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating from,
occurring on or in any way related to real properties now or formerly owned,
leased or operated by any of them or to other assets or their use, except, in
each case, such as could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

(c)    None of the Parent Guarantor, the Company nor any Subsidiary has stored
any Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them in a manner which is contrary to any Environmental Law
that could, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

(d)    None of the Parent Guarantor, the Company nor any Subsidiary has disposed
of any Hazardous Materials in a manner which is contrary to any Environmental
Law that could, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.

(e)    All buildings on all real properties now owned, leased or operated by the
Parent Guarantor, the Company or any Subsidiary are in compliance with
applicable Environmental Laws, except where failure to comply could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

Section 5.19.    Solvency. (a) Immediately after the Closing and after giving
effect to the application of the proceeds of the Notes, (i) the fair value of
the assets of the Parent Guarantor, the Company and its Subsidiaries on a
consolidated basis, will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the Parent Guarantor, the Company and its
Subsidiaries

 

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on a consolidated basis; (ii) the present fair saleable value of the property of
the Parent Guarantor, the Company and its Subsidiaries on a consolidated basis
will be greater than the amount that will be required to pay the probable
liability of the Parent Guarantor, the Company and its Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (iii) the Parent Guarantor, the Company and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (iv) the Parent Guarantor, the Company and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.

(b)    The Parent Guarantor does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.

Section 5.20.    REIT Status. The Parent Guarantor has taken all necessary
actions to qualify as a real estate investment trust under the Code for the
taxable years ended December 31, 2018, 2017, and 2016, and has not taken any
action which would prevent it from maintaining such qualification in the future.

SECTION 6.    REPRESENTATIONS OF THE PURCHASERS.

Section 6.1.    Purchase for Investment. Each Purchaser severally represents
that it is purchasing the Notes for its own account or for one or more separate
accounts maintained by such Purchaser or for the account of one or more pension
or trust funds and not with a view to the distribution thereof, provided that
the disposition of such Purchaser’s or their property shall at all times be
within such Purchaser’s or their control. Each Purchaser understands that the
Notes have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.

Section 6.2.    Source of Funds. Each Purchaser severally represents that at
least one of the following statements is an accurate representation as to each
source of funds (a “Source”) to be used by such Purchaser to pay the purchase
price of the Notes to be purchased by such Purchaser hereunder:

(a)    the Source is an “insurance company general account” (as the term is
defined in the United States Department of Labor’s Prohibited Transaction
Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as
defined by the annual statement for life insurance companies approved by the
NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by
or on behalf of any employee benefit plan together with the amount of the
reserves and liabilities for the general

 

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account contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60)
or by the same employee organization in the general account do not exceed 10% of
the total reserves and liabilities of the general account (exclusive of separate
account liabilities) plus surplus as set forth in the NAIC Annual Statement
filed with such Purchaser’s state of domicile; or

(b)    the Source is a separate account that is maintained solely in connection
with such Purchaser’s fixed contractual obligations under which the amounts
payable, or credited, to any employee benefit plan (or its related trust) that
has any interest in such separate account (or to any participant or beneficiary
of such plan (including any annuitant)) are not affected in any manner by the
investment performance of the separate account; or

(c)    the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within
the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the
Company in writing pursuant to this clause (c), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or

(d)    the Source constitutes assets of an “investment fund” (within the meaning
of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM
Exemption), no employee benefit plan’s assets that are managed by the QPAM in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or
by the same employee organization and managed by such QPAM, represent more than
20% of the total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM maintains an ownership interest in the
Company that would cause the QPAM and the Company to be “related” within the
meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM
and (ii) the names of any employee benefit plans whose assets in the investment
fund, when combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate (within the
meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization, represent 10% or more of the assets of such investment
fund, have been disclosed to the Company in writing pursuant to this clause (d);
or

(e)    the Source constitutes assets of a “plan(s)” (within the meaning of Part
IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption),
the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10%
or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Company in writing pursuant to this clause (e); or

 

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(f)    the Source is a governmental plan; or

(g)    the Source is one or more employee benefit plans, or a separate account
or trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this clause (g); or

(h)    the Source does not include assets of any employee benefit plan, other
than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.

SECTION 7.    INFORMATION AS TO PARENT GUARANTOR AND COMPANY

Section 7.1.    Financial and Business Information The Company shall deliver to
each holder of a Note that is an Institutional Investor:

(a)    Quarterly Statements — within 60 days (or such shorter period as is the
earlier of (x) 15 days greater than the period applicable to the filing of the
Parent Guarantor’s Quarterly Report on Form 10-Q (the “Form 10-Q”) with the SEC
regardless of whether the Parent Guarantor is subject to the filing requirements
thereof and (y) the date by which such financial statements are required to be
delivered under the Primary Credit Facility or the date on which such
corresponding financial statements are delivered under the Primary Credit
Facility if such delivery occurs earlier than such required delivery date) after
the end of each quarterly fiscal period in each fiscal year of the Parent
Guarantor (other than the last quarterly fiscal period of each such fiscal
year), duplicate copies of,

(i)    a consolidated balance sheet of the Consolidated Group as at the end of
such quarter, and

(ii)    consolidated statements of income, changes in shareholders’ equity and
cash flows of the Consolidated Group, for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year ending with such
quarter,

setting forth in each case, in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial statements
generally, and certified by a Senior Financial Officer of the Parent Guarantor
as fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments, provided that delivery

 

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within the time period specified above of copies of the Parent Guarantor’s Form
10-Q prepared in compliance with the requirements therefor and filed with the
SEC shall be deemed to satisfy the requirements of this Section 7.1(a);

(b)    Annual Statements — within 105 days (or such shorter period as is the
earlier of (x) 15 days greater than the period applicable to the filing of the
Parent Guarantor’s Annual Report on Form 10-K (the “Form 10-K”) with the SEC
regardless of whether the Parent Guarantor is subject to the filing requirements
thereof and (y) the date by which such financial statements are required to be
delivered under the Primary Credit Facility or the date on which such
corresponding financial statements are delivered under the Primary Credit
Facility if such delivery occurs earlier than such required delivery date) after
the end of each fiscal year of the Parent Guarantor, duplicate copies of,

(i)    a consolidated balance sheet of the Consolidated Group as at the end of
such year, and

(ii)    consolidated statements of income, changes in shareholders’ equity and
cash flows of the Consolidated Group for such year,

setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by an opinion thereon (without a “going concern” or similar
qualification or exception and without any qualification or exception as to the
scope of the audit on which such opinion is based) of independent public
accountants of recognized national standing, which opinion shall state that such
financial statements present fairly, in all material respects, the financial
position of the companies being reported upon and their results of operations
and cash flows and have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial statements has
been made in accordance with generally accepted auditing standards, and that
such audit provides a reasonable basis for such opinion in the circumstances,
provided that the delivery within the time period specified above of the Parent
Guarantor’s Form 10-K for such fiscal year (together with the Parent Guarantor’s
annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the
Securities Exchange Act of 1934) prepared in accordance with the requirements
therefor and filed with the SEC and satisfying the audit requirements described
above, shall be deemed to satisfy the requirements of this Section 7.1(b);

(c)    SEC and Other Reports — promptly upon their becoming available, one copy
of (i) each financial statement, report, notice or proxy statement sent by the
Parent Guarantor, the Company or any Subsidiary to the administrative agent
under the Primary Credit Facility (excluding information sent to such
administrative agent in the ordinary course of administration of the Primary
Credit Facility, such as information relating to pricing and borrowing
availability) or to its public Securities holders generally, and (ii) each
regular or periodic report, each registration statement (without exhibits except
as expressly requested by such Purchaser or holder), and each prospectus and all
amendments thereto filed by the Parent Guarantor, the Company or any Subsidiary
with

 

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the SEC and of all press releases and other statements made available generally
by the Parent Guarantor, the Company or any Subsidiary to the public concerning
developments that are Material;

(d)    Notice of Default or Event of Default — promptly, and in any event within
five Business Days after a Responsible Officer becoming aware of the existence
of any Default or Event of Default or that any Person has given any notice or
taken any action with respect to a claimed default hereunder or that any Person
has given any notice or taken any action with respect to a claimed default of
the type referred to in Section 11(f), a written notice specifying the nature
and period of existence thereof and what action the Company or the Parent
Guarantor is taking or proposes to take with respect thereto;

(e)    ERISA Matters — promptly, and in any event within five Business Days
after a Responsible Officer becoming aware of any of the following, a written
notice setting forth the nature thereof and the action, if any, that the
Company, the Parent Guarantor or an ERISA Affiliate proposes to take with
respect thereto:

(i)    with respect to any Plan, any reportable event, as defined in section
4043(c) of ERISA and the regulations thereunder, for which notice thereof has
not been waived pursuant to such regulations as in effect on the date hereof; or

(ii)     the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan; or

(iii)    any event, transaction or condition that could result in the incurrence
of any liability by the Company, the Parent Guarantor or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company, the Parent Guarantor or
any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise
tax provisions, if such liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be expected to have a
Material Adverse Effect;

(f)    Notices from Governmental Authority — promptly, and in any event within
30 days of receipt thereof, copies of any notice to the Parent Guarantor, the
Company or any Subsidiary from any federal or state Governmental Authority
relating to any order, ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect;

 

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(g)    Resignation or Replacement of Auditors — within ten days following the
date on which the Parent Guarantor auditors resign or the Parent Guarantor
elects to change auditors, as the case may be, notification thereof, together
with such supporting information as the Required Holders may reasonably request;
and

(h)    Requested Information — with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition,
assets or properties of the Parent Guarantor, the Company or any of their
respective Subsidiaries (including, but without limitation, actual copies of the
Parent Guarantor’s Form 10-Q and Form 10-K) or relating to the ability of the
Parent Guarantor or the Company to perform its obligations hereunder and, with
respect to the Company only, under the Notes, or relating to the ability of any
Subsidiary Guarantor to perform its obligations under any Subsidiary Guaranty,
as from time to time may be reasonably requested by any such holder of a Note.

Section 7.2.    Officer’s Certificate. Each set of financial statements
delivered to a holder of a Note pursuant to Section 7.1(a) or Section 7.1(b)
shall be accompanied by a certificate of a Senior Financial Officer:

(a)    Covenant Compliance — setting forth the information from such financial
statements that is required in order to establish whether the Parent Guarantor
and the Company were in compliance with the requirements of Section 10 during
the quarterly or annual period covered by the statements then being furnished,
(including with respect to each such provision that involves mathematical
calculations, the information from such financial statements that is required to
perform such calculations) and detailed calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the terms of
such Section, and the calculation of the amount, ratio or percentage then in
existence. In the event that the Parent Guarantor, the Company or any Subsidiary
has made an election to measure any financial liability using fair value (which
election is being disregarded for purposes of determining compliance with this
Agreement pursuant to Section 22.2) as to the period covered by any such
financial statement, such Senior Financial Officer’s certificate as to such
period shall include a reconciliation from GAAP with respect to such election;

(b)    Event of Default — certifying that such Senior Financial Officer has
reviewed the relevant terms hereof and has made, or caused to be made, under his
or her supervision, a review of the transactions and conditions of the Parent
Guarantor, the Company and its Subsidiaries from the beginning of the quarterly
or annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from the
failure of the Parent Guarantor, the Company or any Subsidiary to comply with
any Environmental Law), specifying the nature and period of existence thereof
and what action the Parent Guarantor or the Company, as applicable, shall have
taken or proposes to take with respect thereto; and

 

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(c)    Subsidiary Guarantors — setting forth a list of all Subsidiaries that are
Subsidiary Guarantors and certifying that each such Subsidiary is required to be
a Subsidiary Guarantor pursuant to Section 9.7, in each case, as of the date of
such certificate of the Senior Financial Officer.

Section 7.3.    Visitation. The Company shall permit the representatives of each
holder of a Note that is an Institutional Investor:

(a)    No Default — if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to visit
the principal executive office of the Parent Guarantor and the Company, to
discuss the affairs, finances and accounts of the Company and its Subsidiaries
with the Parent Guarantor’s and the Company’s officers, and (with the consent of
the Company or the Parent Guarantor, as applicable, which consent will not be
unreasonably withheld) its independent public accountants, and it being
understood and agreed that only one such request for a discussion with the
Parent Guarantor’s independent public accountants shall be made per fiscal year
by all holders of the Notes and such discussion shall be held on or around the
end of a SAS 100 review period, and with the consent of the Parent Guarantor and
the Company, which consent will not be unreasonably withheld, to visit the other
offices and properties of the Parent Guarantor and the Company and each
Subsidiary, all at such reasonable times and as often as may be reasonably
requested in writing; provided that such holder of a Note shall only be
permitted to make one such visit or have one discussion per fiscal year and,
provided, further, that no such request by any holder of a Note may be made
within the six (6) month period following the date of any all-holders visiting
date wherein all holders of the Notes are invited by the Parent Guarantor and
the Company to its principal executive office; and

(b)    Default — if a Default or Event of Default then exists, at the expense of
the Company to visit and inspect any of the offices or properties of the Parent
Guarantor, the Company or any Subsidiary, to examine all their respective books
of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers and independent public accountants (and by this
provision the Parent Guarantor authorizes said accountants to discuss the
affairs, finances and accounts of the Parent Guarantor, the Company and their
respective Subsidiaries), all at such times and as often as may be requested.

Section 7.4.    Electronic Delivery. Financial statements, opinions of
independent certified public accountants, other information and Officer’s
Certificates that are required to be delivered by the Company and the Parent
Guarantor pursuant to Sections 7.1(a), (b) or (c) and Section 7.2 shall be
deemed to have been delivered if the Company or the Parent Guarantor satisfies
any of the following requirements with respect thereto:

(i)    such financial statements satisfying the requirements of Section 7.1(a)
or (b) and related Officer’s Certificate satisfying the requirements of
Section 7.2 are delivered to each holder of a Note by e-mail;

 

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(ii)    the Parent Guarantor shall have timely filed such Form 10–Q or Form
10–K, satisfying the requirements of Section 7.1(a) or Section 7.1(b), as the
case may be, with the SEC on EDGAR and shall have made such form and the related
Officer’s Certificate satisfying the requirements of Section 7.2 available on
its home page on the internet, which is located http://www.terreno.com/ as of
the date of this Agreement;

(iii)    such financial statements satisfying the requirements of Section 7.1(a)
or Section 7.1(b) and related Officer’s Certificate(s) satisfying the
requirements of Section 7.2 are timely posted by or on behalf of the Company or
the Parent Guarantor on IntraLinks or on any other similar website to which each
holder of Notes has free access; or

(iv)    the Company and the Parent Guarantor shall have filed any of the items
referred to in Section 7.1(c) with the SEC on EDGAR and shall have made such
items available on its home page on the internet or on IntraLinks or on any
other similar website to which each holder of Notes has free access;

provided however, that in the case of any of clauses (ii), (iii) or (iv), the
Company or the Parent Guarantor shall have given each holder of a Note prior
written notice, which may be by e-mail or in accordance with Section 18, of such
posting or filing in connection with each delivery, provided further, that upon
request of any holder to receive paper copies of such forms, financial
statements and Officer’s Certificates or to receive them by e-mail, the Company
or the Parent Guarantor will promptly e-mail them or deliver such paper copies,
as the case may be, to such holder.

SECTION 8.    PAYMENT AND PREPAYMENT OF THE NOTES.

Section 8.1.    Maturity. As provided therein, the entire unpaid principal
balance of each Note shall be due and payable on the Maturity Date thereof.

Section 8.2.    Optional Prepayments with Make-Whole Amount. The Company may, at
its option, upon notice as provided below, prepay at any time all, or from time
to time any part of, the Notes, in an amount not less than 10% of the aggregate
principal amount of Notes then outstanding in the case of a partial prepayment,
at 100% of the principal amount so prepaid, and the Make-Whole Amount determined
for the prepayment date with respect to such principal amount (provided that no
Make-Whole Amount shall be due if such Notes are prepaid during the 90-day
period immediately preceding and ending on the Maturity Date thereof). The
Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than ten days and not more than 60
days prior to the date fixed for such prepayment unless the Company and the
Required Holders agree to another time period pursuant to Section 17. Each such
notice shall specify such date (which shall be a Business Day), the aggregate
principal amount of such Notes to be prepaid on such date, the principal amount
of

 

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Notes held by such holder to be prepaid (determined in accordance with
Section 8.3), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and shall be accompanied by a certificate
of a Senior Financial Officer as to the estimated Make- Whole Amount due in
connection with such prepayment (calculated as if the date of such notice were
the date of the prepayment), if applicable, setting forth the details of such
computation. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date, if applicable.

Section 8.3.    Allocation of Partial Prepayments. In the case of each partial
prepayment of Notes pursuant to Section 8.2, the principal amount of the Notes
to be prepaid shall be allocated among all of the Notes at the time outstanding
in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment. Any prepayments pursuant
to Section 8.8 shall be applied only to the Notes of holders electing to
participate in such prepayment.

Section 8.4.    Maturity; Surrender, Etc. In the case of each optional
prepayment of Notes pursuant to this Section 8, the principal amount of each
Note to be prepaid shall mature and become due and payable on the date fixed for
such prepayment, together with interest on such principal amount accrued to such
date and the applicable Make-Whole Amount, if any. From and after such date,
unless the Company shall fail to pay such principal amount when so due and
payable, together with the interest and Make-Whole Amount, if any, as aforesaid,
interest on such principal amount shall cease to accrue. Any Note paid or
prepaid in full shall be surrendered to the Company and cancelled and shall not
be reissued, and no Note shall be issued in lieu of any prepaid principal amount
of any Note.

Section 8.5.    Purchase of Notes. The Company will not and will not permit any
Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the Notes in accordance with this Agreement and the Notes or
(b) pursuant to an offer to purchase made by the Company or such Affiliate pro
rata to the holders of all Notes at the time outstanding upon the same terms and
conditions. Any such offer shall provide each holder with sufficient information
to enable it to make an informed decision with respect to such offer, and shall
remain open for at least 15 Business Days. If the holders of more than 50% of
the principal amount of the Notes then outstanding accept such offer, the
Company shall promptly notify the remaining holders of such fact and the
expiration date for the acceptance by holders of such offer shall be extended by
the number of days necessary to give each such remaining holder at least 5
Business Days from its receipt of such notice to accept such offer. The Company
will promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment or prepayment or purchase of Notes pursuant to this Agreement and no
Notes may be issued in substitution or exchange for any such Notes.

 

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Section 8.6.    Make-Whole Amount.

“Make-Whole Amount” means, with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled Payments with
respect to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than
zero. For the purposes of determining the Make-Whole Amount, the following terms
have the following meanings:

“Called Principal” means, with respect to any Note, the principal of such Note
that is to be prepaid pursuant to Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the
amount obtained by discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any Note,
0.50% over the yield to maturity implied by the ask-side yield(s) reported as of
10:00 a.m. (New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated
as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg
Financial Markets for the most recently issued actively traded on-the-run U.S.
Treasury securities (“Reported”) having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date. If there are
no such U.S. Treasury securities Reported having a maturity equal to such
Remaining Average Life, then such implied yield to maturity will be determined
by (a) converting U.S. Treasury bill quotations to bond equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between the yields Reported for the applicable most recently issued actively
traded on-the-run U.S. Treasury securities with the maturities (1) closest to
and greater than such Remaining Average Life and (2) closest to and less than
such Remaining Average Life. The Reinvestment Yield shall be rounded to the
number of decimal places as appears in the interest rate of the applicable Note.

If such yields are not Reported or the yields Reported as of such time are not
ascertainable (including by way of interpolation), then “Reinvestment Yield”
means, with respect to the Called Principal of any Note, 0.50% over the yield to
maturity implied by the U.S. Treasury constant maturity yields reported, for the
latest day for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (or any comparable successor
publication) for the U.S. Treasury constant maturity having a term equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. If
there is no such U.S. Treasury constant maturity having a term equal to such
Remaining Average Life, such implied yield to maturity will be determined by
interpolating linearly between (1) the U.S. Treasury constant maturity so
reported with the term closest to and greater than such Remaining Average Life
and (2) the U.S. Treasury constant maturity so reported with the term closest to
and less than such Remaining Average Life. The Reinvestment Yield shall be
rounded to the number of decimal places as appears in the interest rate of the
applicable Note.

 

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“Remaining Average Life” means, with respect to any Called Principal, the number
of years obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number of
years, computed on the basis of a 360-day year composed of twelve 30-day months
and calculated to two decimal places, that will elapse between the Settlement
Date with respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of
any Note, all payments of such Called Principal and interest thereon that would
be due after the Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest payments
are due to be made under the Notes, then the amount of the next succeeding
scheduled interest payment will be reduced by the amount of interest accrued to
such Settlement Date and required to be paid on such Settlement Date pursuant to
Section 8.4 or Section 12.1.

“Settlement Date” means, with respect to the Called Principal of any Note, the
date on which such Called Principal is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.

Section 8.7.    Payments Due on Non-Business Days. Anything in this Agreement or
the Notes to the contrary notwithstanding, (x) subject to clause (y), any
payment of interest on any Note that is due on a date that is not a Business Day
shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next
succeeding Business Day; and (y) any payment of principal of or Make- Whole
Amount on any Note (including principal due on the Maturity Date of such Note)
that is due on a date that is not a Business Day shall be made on the next
succeeding Business Day and shall include the additional days elapsed in the
computation of interest payable on such next succeeding Business Day.

Section 8.8.    Change of Control Prepayment Offer. (a) Promptly upon becoming
aware that a Change of Control has occurred (and in any event not later than 15
days thereafter), the Company shall give written notice (the “Change of Control
Notice”) of such fact to each holder of the Notes. The Change of Control Notice
shall (i) describe the facts and circumstances of such Change of Control in
reasonable detail, (ii) refer to this Section 8.8 and the rights of the holders
hereunder and (iii) contain an offer by the Company to prepay the entire unpaid
principal amount of Notes held by each holder at 100% of the principal amount of
such Notes at par (without any make-whole, premium, penalty or Make-Whole
Amount), together with interest accrued thereon to the prepayment date selected
by the Company, which prepayment shall be on a date specified in the Change of
Control Notice, which date shall be a Business Day not less than 45 nor more
than 90 days after such Change of Control Notice is given should any agreement
to the contrary not be reached among the Company and each of the holders of the
Notes.

 

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(b)    A holder of Notes may accept the offer to prepay made pursuant to this
Section 8.8 by causing a notice of such acceptance to be delivered to the
Company not more than 30 days after the date of the written offer notice
referred to in subsection (a) of this Section 8.8. A failure by a holder of
Notes to respond to an offer to prepay made pursuant to this Section 8.8 shall
be deemed to constitute a rejection of such offer by such holder.

(c)    On the prepayment date specified in the Change of Control Notice, the
entire unpaid principal amount of the Notes held by each holder of Notes which
has accepted such prepayment offer, together with interest accrued thereon to
the prepayment date (but without any make-whole, premium, penalty or Make-Whole
Amount), shall become due and payable.

(d)    For purposes of this Section 8.8 a “Change of Control” means (i) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the SEC thereunder as in effect on the date hereof) of Capital
Stock representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Parent Guarantor
or (ii) any “Change of Control” (as defined from time to time in the Primary
Credit Facility) is deemed to have occurred pursuant to the terms of the Primary
Credit Facility.

SECTION 9.    AFFIRMATIVE COVENANTS.

From the date of this Agreement until the Closing and thereafter, so long as any
of the Notes are outstanding, the Company and, to the extent provided herein,
the Parent Guarantor covenant that:

Section 9.1.    Compliance with Laws. Without limiting Section 10.4, the Company
will and will cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA, Environmental Laws, the USA
PATRIOT Act and the other laws and regulations that are referred to in
Section 5.16, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that non-compliance
with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

Section 9.2.    Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.

 

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Section 9.3.    Maintenance of Properties. The Company will, and will cause each
of its Subsidiaries to, maintain and keep, or cause to be maintained and kept,
their respective properties in good repair, working order and condition (other
than ordinary wear and tear), so that the business carried on in connection
therewith may be properly conducted at all times, provided that this Section
shall not prevent the Company or any Subsidiary from discontinuing the operation
and the maintenance of any of its properties if such discontinuance is desirable
in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

Section 9.4.    Payment of Taxes and Claims. The Parent Guarantor will, and the
Company will and will cause each of its Subsidiaries to, file all tax returns
required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties,
assets, income or franchises, to the extent the same have become due and payable
and before they have become delinquent and all claims for which sums have become
due and payable that have or might become a Lien on properties or assets of the
Parent Guarantor, the Company or any Subsidiary, provided that none of the
Parent Guarantor, the Company nor any Subsidiary need pay any such tax,
assessment, charge, levy or claim if (i) the amount, applicability or validity
thereof is contested by the Parent Guarantor, the Company or such Subsidiary on
a timely basis in good faith and in appropriate proceedings, and the Parent
Guarantor, the Company or a Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of the Parent Guarantor, the
Company or such Subsidiary or (ii) the nonpayment of all such taxes,
assessments, charges, levies and claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

Section 9.5.    Corporate Existence, Etc. Subject to Section 10.2, each of the
Parent Guarantor and the Company will at all times preserve and keep its
corporate (or similar) existence in full force and effect. The Parent Guarantor
and the Company will at all times preserve and keep in full force and effect the
corporate existence of each of its Subsidiaries (unless merged into the Parent
Guarantor, the Company or a Wholly-Owned Subsidiary) and all rights and
franchises of the Parent Guarantor, the Company and its Subsidiaries unless, in
the good faith judgment of the Parent Guarantor or the Company, the termination
of or failure to preserve and keep in full force and effect such corporate
existence, right or franchise could not, individually or in the aggregate, have
a Material Adverse Effect.

Section 9.6.    Books and Records. The Parent Guarantor and the Company will,
and will cause each of their respective Subsidiaries to, maintain proper books
of record and account in conformity with GAAP and all applicable requirements of
any Governmental Authority having legal or regulatory jurisdiction over the
Parent Guarantor, the Company or such Subsidiary, as the case may be. The Parent
Guarantor and the Company will, and will cause each of their respective
Subsidiaries to, keep books, records and accounts which, in reasonable detail,
accurately reflect all transactions and dispositions of assets. The Parent
Guarantor and the Company and their respective Subsidiaries have devised a
system of internal accounting controls sufficient to provide reasonable
assurances that their respective books, records, and accounts accurately reflect
all transactions and dispositions of assets and the Parent Guarantor and the
Company will, and will cause each of their respective Subsidiaries to, continue
to maintain such system.

 

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Section 9.7    Subsidiary Guarantors. (a) The Company will cause each of its
Subsidiaries that guarantees or otherwise becomes liable at any time, whether as
a borrower or an additional or co-borrower or otherwise, for or in respect of
any Indebtedness under the Primary Credit Facility to concurrently therewith
become a Subsidiary Guarantor by executing and delivering to each holder of a
Note a Guaranty Supplement.

(b)    The Company covenants and agrees that each such Subsidiary which it shall
cause to execute a Guaranty Supplement and become party to the Subsidiary
Guaranty shall be fully authorized to do so by its supporting organizational and
authority documents and shall be in good standing in its state of organization
and shall have obtained any necessary foreign qualifications required to conduct
its business. The delivery by the Company to the holders of any such Guaranty
Supplement shall be deemed a representation and warranty by the Company that
each Subsidiary which the Company caused to execute a Guaranty Supplement has
been fully authorized to do so by its supporting organizational and authority
documents and is in good standing in its state of organization and has obtained
any necessary foreign qualifications required to conduct its business. The
Company will deliver to each holder copies of any certificates, legal opinions
or documents, if any, furnished by or on behalf of the Company or such
Subsidiary Guarantor to the lenders under the Primary Credit Facility with
respect to that Subsidiary Guarantor becoming a guarantor, additional or
co-borrower or otherwise under the Primary Credit Facility (but applicable to
such Subsidiary Guaranty).

(c)    A Subsidiary Guarantor will be automatically released from all of its
obligations and liabilities under its Subsidiary Guaranty without the need for
the execution of any other document by the holders or any other Person,
provided, in each case, that (i) such Subsidiary does not have any liability as
a guarantor, borrower, co-borrower or other similar capacity with respect to any
Indebtedness under the Primary Credit Facility, (ii) immediately before and
after giving effect to such release, no Default or Event of Default shall have
occurred and be continuing, (iii) no amount is then due and payable under such
Subsidiary Guaranty, and (iv) each holder of a Note shall have received a
certificate from a Responsible Officer certifying as to the matters set forth in
clauses (i) through (iii) above.

Section 9.8.    Maintenance of Status. The Parent Guarantor shall at all times
maintain its status as a real estate investment trust in compliance with all
applicable provisions of the Code relating to such status.

Section 9.9.    Dividends. Provided there is no Default or Event of Default that
has occurred and is continuing or would result therefrom, the Parent Guarantor
shall be permitted to declare and pay dividends on its Capital Stock, and to pay
such Preferred Dividends as the Parent Guarantor may be contractually required
to make, from time to time in amounts determined by the Parent Guarantor,
provided, however, notwithstanding anything to the contrary contained in this
Agreement, including, without limitation, this Section 9.9, the Parent Guarantor
shall be permitted at all times to distribute whatever amount of dividends is
necessary to maintain its tax status as a real estate investment trust.

 

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SECTION 10.    NEGATIVE COVENANTS.

From the date of this Agreement until the Closing and thereafter, so long as any
of the Notes are outstanding, the Company and, to the extent provided herein,
the Parent Guarantor each covenant that:

Section 10.1.    Transactions with Affiliates. The Parent Guarantor will not,
and the Company will not and will not permit any Subsidiary to enter into
directly or indirectly any transaction or group of related transactions
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate
(other than the Company, the Parent Guarantor or another Subsidiary), except in
the ordinary course and pursuant to the reasonable requirements of the Parent
Guarantor’s, the Company’s or such Subsidiary’s business and upon fair and
reasonable terms no less favorable to the Parent Guarantor, the Company or such
Subsidiary than would be obtainable in a comparable arm’s-length transaction
with a Person not an Affiliate.

Section 10.2.    Merger, Consolidation, Etc. The Parent Guarantor will not, and
the Company will not and will not permit any Subsidiary Guarantor to,
consolidate with or merge with any other Person or convey, transfer or lease all
or substantially all of its assets in a single transaction or series of
transactions to any Person, unless:

(a)    in the case of any such transaction involving the Parent Guarantor or
Company, the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease all or
substantially all of the assets of the Parent Guarantor or the Company as an
entirety, as the case may be, shall be a solvent corporation limited liability
company or limited partnership organized and existing under the laws of the
United States or any state thereof (including the District of Columbia), and, if
the Parent Guarantor or the Company (other than in a transaction involving the
Parent Guarantor) is not such corporation, limited liability company or limited
partnership, (i) such corporation, limited liability company or limited
partnership shall have executed and delivered to each holder of any Notes its
assumption of the due and punctual performance and observance of each covenant
and condition of this Agreement and, with respect to the Company, the Notes and
(ii) such corporation, limited liability company or limited partnership shall
have caused to be delivered to each holder of any Notes a customary opinion of
nationally recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are enforceable in
accordance with their terms and comply with the terms hereof;

(b)    in the case of any such transaction involving a Subsidiary Guarantor, the
successor formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease all or substantially all
of the assets of such Subsidiary Guarantor as an entirety, as the case may be,
shall be (1) the Parent Guarantor, the Company, such Subsidiary Guarantor or
another Subsidiary Guarantor; (2) a solvent corporation or limited liability
company (other than the Parent Guarantor, the Company or another Subsidiary
Guarantor) that is organized and existing under the laws of the

 

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United States or any state thereof (including the District of Columbia), and, if
such Subsidiary Guarantor is not such corporation or limited liability company,
(A) such corporation or limited liability company shall have executed and
delivered to each holder of Notes its assumption of the due and punctual
performance and observance of each covenant and condition of the Subsidiary
Guaranty of such Subsidiary Guarantor and (B) the Company shall have caused to
be delivered to each holder of Notes an opinion of nationally recognized
independent counsel, or other independent counsel reasonably satisfactory to the
Required Holders, to the effect that all agreements or instruments effecting
such assumption are enforceable in accordance with their terms and comply with
the terms hereof; or (3) any other Person so long as the transaction is treated
as a disposition of all of the assets of such Subsidiary Guarantor for purposes
of this Agreement and would not be in violation of any term or provision of this
Agreement before and after giving effect to such transaction;

(c)    each Subsidiary Guarantor under any Subsidiary Guaranty that is
outstanding at the time such transaction or each transaction in such a series of
transactions occurs reaffirms its obligations under such Subsidiary Guaranty in
writing at such time pursuant to documentation that is reasonably acceptable to
the Required Holders; and

(d)    immediately before and immediately after giving effect to such
transaction or each transaction in any such series of transactions, no Default
or Event of Default shall have occurred and be continuing.

No such conveyance, transfer or lease of substantially all of the assets of the
Parent Guarantor, the Company or any Subsidiary Guarantor shall have the effect
of releasing the Parent Guarantor, the Company or such Subsidiary Guarantor, as
the case may be, or any successor corporation, limited liability company or
limited partnership that shall theretofore have become such in the manner
prescribed in this Section 10.2, from its liability under (w) this Agreement, in
the case of the Parent Guarantor, (x) this Agreement or the Notes (in the case
of the Company) or (y) the Subsidiary Guaranty (in the case of any Subsidiary
Guarantor), unless, in the case of the conveyance, transfer or lease of
substantially all of the assets of a Subsidiary Guarantor, such Subsidiary
Guarantor is released from its Subsidiary Guaranty in accordance with
Section 9.7(c) in connection with or immediately following such conveyance,
transfer or lease.

Section 10.3.    Line of Business. The Parent Guarantor will not, and the
Company will not and will not permit any Subsidiary to engage in any business
if, as a result, the general nature of the business in which the Consolidated
Group, taken as a whole, would then be engaged would be substantially changed
from the general nature of the business in which the Consolidated Group, taken
as a whole, is engaged on the date of this Agreement as described in the
Disclosure Documents.

Section 10.4.    Terrorism Sanctions Regulations. Each of Parent Guarantor and
the Company will not and will not permit any Controlled Entity (a) to become
(including by virtue of being owned or controlled by a Blocked Person), own or
control a Blocked Person or any Person that is the target of sanctions imposed
by the United Nations or by the European Union,

 

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or (b) directly or indirectly to have any investment in or engage in any dealing
or transaction (including, without limitation, any investment, dealing or
transaction involving the proceeds of the Notes) with any Person if such
investment, dealing or transaction (i) would cause any holder to be in violation
of any law or regulation applicable to such holder, or (ii) is prohibited by or
subject to sanctions under any U.S. Economic Sanctions or U.K. Economic
Sanctions, or (c) to engage, nor shall any Affiliate of either engage, in any
activity that could subject such Person or any holder to sanctions under CISADA
or any similar law or regulation with respect to Iran or any other country that
is subject to U.S. Economic Sanctions or U.K. Economic Sanctions.

Section 10.5.    Liens. The Company and the Parent Guarantor will not, nor will
they permit any of their respective Subsidiaries to, secure any Indebtedness
outstanding under or pursuant to the Primary Credit Facility unless and until
the Notes (and any guaranty delivered in connection therewith) shall
concurrently be secured equally and ratably with such Indebtedness pursuant to
documentation reasonably acceptable to the Required Holders in substance and in
form, including, without limitation, an intercreditor agreement and opinions of
counsel to the Company and/or any such Subsidiary, as the case may be, from
counsel that is reasonably acceptable to the Required Holders.

Section 10.6.    Financial Covenants. (a) The Company and the Parent Guarantor
shall not permit:

(i)    the Unencumbered Property Pool Leverage Ratio to be greater than sixty
percent (60%) at any time, provided, that such ratio shall surge from sixty
percent (60%) to sixty-five percent (65%) for a period of two complete
consecutive fiscal quarters following a Material Acquisition; provided, however,
that such surge periods shall occur no more than twice prior to the Maturity
Date;

(ii)    Consolidated Total Indebtedness, less Unrestricted Cash and Cash
Equivalents, to be more than sixty percent (60%) of Consolidated Gross Asset
Value at any time, provided, that such ratio shall surge from sixty percent
(60%) to sixty-five percent (65%) for a period of two complete consecutive
fiscal quarters following a Material Acquisition; provided, however, that such
surge periods shall occur no more than twice prior to the Maturity Date;

(iii)    Adjusted EBITDA to be less than 1.50 times Consolidated Fixed Charges
at any time; or

(iv)    Secured Indebtedness, in the aggregate at any time, to be more than
forty percent (40%) of Consolidated Gross Asset Value.

(b)    At any time as such covenants (or the equivalent thereof, however
expressed) are included in the Primary Credit Facility, the Company and the
Parent Guarantor shall not permit:

(i)    the Unsecured Debt Service Coverage to be less than 1.75 to 1.00 at any
time;

 

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(ii)    Recourse Indebtedness that constitutes Secured Indebtedness, in the
aggregate at any time, to be more than ten percent (10%) of Consolidated Gross
Asset Value; or

(iii)    Consolidated Tangible Net Worth of the Company on a consolidated basis
with the Parent Guarantor and its Subsidiaries to be less than $924,254,859 plus
seventy-five percent (75%) of the equity contributions or sales of Capital Stock
received by the Parent Guarantor, the Company or any of its Subsidiaries after
October 19, 2018.

As of the date hereof, each capitalized term used above in Sections 10.6(b)(i),
(ii) and (iii), including any capitalized terms referenced directly or
indirectly therein, shall have the meanings ascribed thereto in the Primary
Credit Facility as in effect on the date hereof.

Notwithstanding the foregoing, provided that no Default or Event of Default has
occurred and is then continuing, if any of the sections in the Primary Credit
Facility that are the equivalent of Section 10.6(b)(i), (ii) or (iii) (however
expressed) (the “MFL Financial Covenants”) are subsequently amended, modified or
varied, including, for the avoidance of doubt, any definitions referenced
directly or indirectly in any such section, in the Primary Credit Facility, such
amendment, modification or variation shall automatically and without any further
action by any party to this Agreement be deemed incorporated by reference into
this Agreement solely with respect to Section 10.6(b)(i), (ii) and/or (iii), as
the case may be, mutatis mutandi, as if set forth fully in this Agreement,
effective beginning on the date on which such amendment, modification or
variation is effective in the Primary Credit Facility.

Section 10.7.    Permitted Investments.    The Consolidated Group’s Investment
in:

 

  (a)

Investment Affiliates (valued at the greater of the cash investment in that
entity by the Consolidated Group or the portion of Consolidated Gross Asset
Value attributable to such entity or its assets, as the case may be),

 

  (b)

Construction in Progress (with each asset valued at its cost basis),

 

  (c)

Unimproved Land (with each asset valued at its cost basis), and

 

  (d)

Drop Lots (with each asset valued at its cost basis),

shall not, individually or in the aggregate, at any time exceed twenty percent
(20%) of Consolidated Gross Asset Value.

 

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Section 10.8.    Unencumbered Properties.. At any time as such covenants (or the
equivalent thereof, however expressed) are included in the Primary Credit
Facility, the Company shall comply with the following additional requirements
with respect to all Qualifying Unencumbered Properties (except as specifically
noted herein to the contrary):

(a)    Occupancy Percentage. The aggregate Occupancy Percentage of all
Qualifying Unencumbered Properties as a group must equal or exceed eighty
percent (80%) at all times. If such minimum percentage requirement would be
violated at any time, the Qualifying Unencumbered Properties with the lowest
Occupancy Percentages shall be eliminated from inclusion in the calculation of
Unencumbered Property Pool Value, as necessary to achieve such percentage
requirement and such eliminated Qualifying Unencumbered Properties shall not be
included in such calculation until their inclusion will not cause the aggregate
Occupancy Percentage of all Qualifying Unencumbered Properties as a group to be
less than eighty percent (80%).

(b)    Restriction on Ground Leased Projects. Not more than ten percent (10%) of
the Unencumbered Property Pool Value and not more than ten percent (10%) of the
Adjusted Unencumbered Property Pool NOI may at any time be attributable to
Qualifying Unencumbered Properties that are not owned in fee simple, but are
instead leased under a Qualifying Ground Lease. To the extent that such
percentage limitation is exceeded, such Qualifying Unencumbered Properties shall
still be included in the calculations of Unencumbered Property Pool Value and of
Adjusted Unencumbered Property Pool NOI, but the amounts so contributed to
Unencumbered Property Pool Value and Adjusted Unencumbered Property Pool NOI
shall be reduced to the extent necessary to comply with such percentage
limitation.

As of the date hereof, each capitalized term used above in Sections 10.8(a) and
(b), including any capitalized terms referenced directly or indirectly therein,
shall have the meanings ascribed thereto in the Primary Credit Facility as in
effect on the date hereof.

Notwithstanding the foregoing, provided that no Default or Event of Default has
occurred and is then continuing, if any of the sections in the Primary Credit
Facility that are the equivalent of Section 10.8(a) or (b) (however expressed)
(the “MFL Unencumbered Property Covenants”) are subsequently amended, modified
or varied, including, for the avoidance of doubt, any definitions referenced
directly or indirectly in any such section, in the Primary Credit Facility, such
amendment, modification or variation shall automatically and without any further
action by any party to this Agreement be deemed incorporated by reference into
this Agreement solely with respect to Section 10.8(a) and/or (b), as the case
may be, mutatis mutandi, as if set forth fully in this Agreement, effective
beginning on the date on which such amendment, modification or variation is
effective in the Primary Credit Facility.

Section 10.9.    Notices. The Company shall, within ten (10) Business Days after
any MFL Financial Covenant or MFL Unencumbered Property Covenant is added,
removed, amended or modified, as the case may be, in the Primary Credit
Facility, provide notice and a description (in reasonable detail) of any such
action to each holder of Notes (which notice shall also include, in the case of
the removal, amendment or modification of an MFL Financial Covenant or an MFL
Unencumbered Property Covenant, a certification that no Default or Event of
Default has occurred and is continuing).

 

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SECTION 11.    EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events
shall occur and be continuing:

(a)    the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b)    the Company defaults in the payment of any interest on any Note for more
than five Business Days after the same becomes due and payable; or

(c)    the Company or the Parent Guarantor, as applicable, defaults in the
performance of or compliance with any term contained in Section 7.1(d) or
Section 10.6; or

(d)    the Company, the Parent Guarantor or any Subsidiary Guarantor, as
applicable, defaults in the performance of or compliance with any term contained
herein (other than those referred to in Sections 11(a), (b) and (c)) or in the
Subsidiary Guaranty and such default is not remedied within 30 days after the
earlier of (i) a Responsible Officer obtaining actual knowledge of such default
and (ii) the Company receiving written notice of such default from any holder of
a Note (any such written notice to be identified as a “notice of default” and to
refer specifically to this Section 11(d)); provided that, other than with
respect to Sections 10.1, 10.2, 10.3, 10.4, 10.5 and 10.8, if such default
cannot be cured within such 30 day period despite the Company’s, Parent
Guarantor’s, or Subsidiary Guarantor’s diligent efforts, but is susceptible of
being cured within 90 days from the Company’s receipt of such holder’s original
notice or knowledge, as the case may be, then Company, Parent Guarantor and
Subsidiary Guarantor shall, so long as they are diligently pursuing such cure,
have such additional time as is reasonably necessary to effect such cure, but in
no event in excess of 90 days from Company’s receipt of such holder’s original
notice or knowledge, as the case may be; or

(e)    (i) any representation or warranty made in writing by or on behalf of the
Company, the Parent Guarantor or any Subsidiary Guarantor, in this Agreement or
in the Subsidiary Guaranty, as applicable, or in any writing furnished in
connection with the transactions contemplated hereby or thereby, proves to have
been false or incorrect in any material respect on the date as of which made
and, if such representation or warranty is susceptible of being cured or
remedied, shall not be cured or remedied so that such representation or warranty
is no longer false or incorrect within ten (10) days after the earlier of notice
from any holder or the actual knowledge of the Company, the Parent Guarantor or
any Subsidiary Guarantor; or

(f)    (i) the Company, the Parent Guarantor or any Material Subsidiary is in
default (as principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on (x) any Recourse
Indebtedness in an

 

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aggregate principal amount of at least $15,000,000 or (y) any other Indebtedness
that is outstanding in an aggregate principal amount of at least $25,000,000, in
each case beyond any period of grace provided with respect thereto, or (ii) the
Company, the Parent Guarantor or any Material Subsidiary is in default in the
performance of or compliance with any term of any evidence of (x) any Recourse
Indebtedness in an aggregate principal amount of at least $15,000,000 or (y) any
other Indebtedness that is outstanding in an aggregate principal amount of at
least $25,000,000 or, in either case, of any mortgage, indenture or other
agreement relating thereto, or any other condition exists, and as a consequence
of such default or condition such Recourse Indebtedness or other Indebtedness
has become, or has been declared, due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iii) the Company, the
Parent Guarantor or any Material Subsidiary is in default in the performance of
or compliance with any term of any evidence of (x) any Recourse Indebtedness in
an aggregate principal amount of at least $25,000,000 or (y) any other
Indebtedness that is outstanding in an aggregate principal amount of at least
$35,000,000 or, in either case, of any mortgage, indenture or other agreement
relating thereto, or any other condition exists, and as a consequence of such
default or condition one or more Persons are entitled to declare such Recourse
Indebtedness or other Indebtedness due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iv) as a consequence of the
occurrence or continuation of any event or condition (other than the passage of
time or the right of the holder of Indebtedness to convert such Indebtedness
into equity interests), (x) the Company, the Parent Guarantor or any Material
Subsidiary has become obligated to purchase or repay Recourse Indebtedness or
any other Indebtedness before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal amount of at
least $15,000,000 and $25,000,000, respectively, or (y) one or more Persons have
the right to require the Company, the Parent Guarantor or any Material
Subsidiary so to purchase or repay such Recourse Indebtedness or other
Indebtedness, as applicable; or

(g)    the Parent Guarantor, the Company or any Material Subsidiary (i) is
generally not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement or any
other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv)
consents to the appointment of a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial part
of its property, (v) is adjudicated as insolvent or to be liquidated, or
(vi) takes corporate action for the purpose of any of the foregoing; or

(h)    a court or other Governmental Authority of competent jurisdiction enters
an order appointing, without consent by the Parent Guarantor, the Company or any
of its Material Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial part
of its property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of

 

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any jurisdiction, or ordering the dissolution, winding-up or liquidation of the
Parent Guarantor, the Company or any of its Material Subsidiaries, or any such
petition shall be filed against the Parent Guarantor, the Company or any of its
Material Subsidiaries and such petition shall not be dismissed within 60 days;
or

(i)    one or more final judgments or orders for the payment of money
aggregating in excess of $15,000,000, including, without limitation, any such
final order enforcing a binding arbitration decision, are rendered against one
or more of the Parent Guarantor, the Company and its Subsidiaries and which
judgments are not, within 60 days after entry thereof, bonded, discharged or
stayed pending appeal, or are not discharged within 60 days after the expiration
of such stay;

(j)    if (i) any Plan shall fail to satisfy the minimum funding standards of
ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed an amount that could reasonably be expected to
have a Material Adverse Effect, (iv) the Company, the Parent Guarantor or any
ERISA Affiliate shall have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (v) the Company, the
Parent Guarantor or any ERISA Affiliate withdraws from any Multiemployer Plan,
or (vi) the Company, the Parent Guarantor or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company, the
Parent Guarantor or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect. As used in this Section 11(j), the terms “employee
benefit plan” and “employee welfare benefit plan” shall have the respective
meanings assigned to such terms in section 3 of ERISA; or

(k)    the Subsidiary Guaranty shall cease to be in full force and effect (other
than as permitted by Section 9.7(c) of this Agreement), any Subsidiary Guarantor
or any Person acting on behalf of any Subsidiary Guarantor shall contest in any
manner the validity, binding nature or enforceability of the Subsidiary
Guaranty, or the obligations of any Subsidiary Guarantor under the Subsidiary
Guaranty cease to be legal, valid, binding and enforceable in accordance with
the terms of the Subsidiary Guaranty.

 

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SECTION 12.    REMEDIES ON DEFAULT, ETC.

Section 12.1.    Acceleration. (a) If an Event of Default with respect to the
Parent Guarantor, the Company or any Subsidiary described in Section 11(g) or
(h) (other than an Event of Default described in clause (i) of Section 11(g) or
described in clause (vi) of Section 11(g) by virtue of the fact that such clause
encompasses clause (i) of Section 11(g)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.

(b)    If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.

(c)    If any Event of Default described in Section 11(a) or (b) has occurred
and is continuing, any holder or holders of Notes at the time outstanding
affected by such Event of Default may at any time, at its or their option, by
notice or notices to the Company, declare all the Notes held by it or them to be
immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued thereon at the Default
Rate) and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

Section 12.2.    Other Remedies. If any Default or Event of Default has occurred
and is continuing, and irrespective of whether any Notes have become or have
been declared immediately due and payable under Section 12.1, the holder of any
Note at the time outstanding may proceed to protect and enforce the rights of
such holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note or Subsidiary Guaranty, or for an injunction against a violation of any of
the terms hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or otherwise.

Section 12.3.    Rescission. At any time after any Notes have been declared due
and payable pursuant to Section 12.1(b) or (c), the Required Holders, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate,

 

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(b) neither the Company nor any other Person shall have paid any amounts which
have become due solely by reason of such declaration, (c) all Events of Default
and Defaults, other than nonpayment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (d) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.

Section 12.4.    No Waivers or Election of Remedies, Expenses, Etc. No course of
dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement, any Subsidiary Guaranty or any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15, the
Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys’ fees, expenses and disbursements.

SECTION 13.    REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

Section 13.1.    Registration of Notes. The Company shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. If any holder of one or more Notes
is a nominee, then (a) the name and address of the beneficial owner of such Note
or Notes shall also be registered in such register as an owner and holder
thereof and (b) at any such beneficial owner’s option, either such beneficial
owner or its nominee may execute any amendment, waiver or consent pursuant to
this Agreement. Prior to due presentment for registration of transfer, the
Person(s) in whose name any Note(s) shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes hereof, and the Company
shall not be affected by any notice or knowledge to the contrary. The Company
shall give to any holder of a Note that is an Institutional Investor promptly
upon request therefor, a complete and correct copy of the names and addresses of
all registered holders of Notes.

Section 13.2.    Transfer and Exchange of Notes. Upon surrender of any Note to
the Company at the address and to the attention of the designated officer (all
as specified in Section 18(iii)), for registration of transfer or exchange (and
in the case of a surrender for registration of transfer accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of
such Note or part thereof), within ten Business Days thereafter, the Company
shall execute and deliver, at the Company’s expense (except as provided below),
one or more new Notes (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Schedule 1.

 

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Each such new Note shall be dated and bear interest from the date to which
interest shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $100,000, provided that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000. Any transferee,
by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representation set forth in Section 6.2.

Section 13.3.    Replacement of Notes. Upon receipt by the Company at the
address and to the attention of the designated officer (all as specified in
Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of
and the loss, theft, destruction or mutilation of any Note (which evidence shall
be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and

(a)    in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $100,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b)    in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.

SECTION 14.    PAYMENTS ON NOTES.

Section 14.1.    Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of KeyBank
in such jurisdiction. The Company may at any time, by notice to each holder of a
Note, change the place of payment of the Notes so long as such place of payment
shall be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.

Section 14.2.    Home Office Payment. So long as any Purchaser or its nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, interest and
all other amounts becoming due hereunder by the method and at the address
specified for such purpose below such Purchaser’s name in Schedule B, or by such
other method or at such other address as such Purchaser shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the

 

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Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by a Purchaser or its nominee, such Purchaser will, at its
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by a
Purchaser under this Agreement and that has made the same agreement relating to
such Note as the Purchasers have made in this Section 14.2.

Section 14.3.    Tax Forms.

 

  (a)

Each holder of a Note that is not resident in the United States for tax purposes
(a “Foreign Noteholder”), shall deliver to the Company on or prior to the date
that it becomes a holder hereunder and at such times prescribed by applicable
law, or as reasonably requested by the Company, whichever of the following is
applicable;

 

  (i)

in the case of a Foreign Noteholder claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under the Notes, an executed IRS Form W-8BEN-E or IRS Form W-8BEN
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 the Notes, IRS Form W-8BEN-E or IRS Form
W-8BEN 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)

in the case of a Foreign Noteholder claiming that its extension of credit will
generate U.S. effectively connected income, an executed IRS Form W-8ECI;

 

  (iii)

in the case of a Foreign Noteholder claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Foreign holder is not a “bank” extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent
shareholder” of the Company 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) an executed IRS
Form W-8BEN-E or IRS Form W-8BEN; or

 

  (iv)

to the extent a Foreign Noteholder is not the beneficial owner, an executed IRS
Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E, IRS Form W-8BEN,
a U.S. Tax Compliance Certificate with respect to the beneficial owner, IRS Form
W-9, and/or other certification documents from each beneficial owner, as
applicable; provided that if the Foreign Noteholder is a partnership and

 

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  one or more direct or indirect partners of such Foreign Noteholder are
claiming the portfolio interest exemption, such Foreign Noteholder may provide a
U.S. Tax Compliance Certificate on behalf of each such direct and indirect
partner; or

 

  (v)

any Foreign Noteholder shall, to the extent it is legally entitled to do so,
deliver to the Company on or prior to the date on which such Foreign Noteholder
becomes a holder under this Agreement (and from time to time thereafter upon the
reasonable request of the Company), executed originals of any other form
prescribed by applicable law as a basis for claiming exemption from or a
reduction in U.S. Federal withholding tax, duly completed, together with such
supplementary documentation required to be made.

 

  (b)

Any holder of a Note that is not a Foreign Noteholder shall provide the Company
with an executed copy of IRS Form W-9 certifying such holder is entitled to an
exemption from U.S. backup withholding tax.

Nothing in this Section 14.3 shall require any holder to provide information
that is confidential or proprietary to such holder unless the Company is
required to obtain such information under the Code and, in such event, the
Company shall treat any such information it receives as confidential.

SECTION 15.    EXPENSES, ETC.

Section 15.1.    Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys’ fees of a special counsel and, if reasonably
required by the Required Holders, local or other counsel) incurred by the
Purchasers and each other holder of a Note in connection with such transactions
and in connection with any amendments, waivers or consents under or in respect
of this Agreement, any Subsidiary Guaranty or the Notes (whether or not such
amendment, waiver or consent becomes effective), including, without limitation:
(a) the costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement, any
Subsidiary Guaranty or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement, any Subsidiary Guaranty or the Notes, or by reason of being a holder
of any Note, (b) the costs and expenses, including financial advisors’ fees,
incurred in connection with the insolvency or bankruptcy of the Parent
Guarantor, the Company or any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the Notes and any
Subsidiary Guaranty and (c) the costs and expenses incurred in connection with
the initial filing of this Agreement and all related documents and financial
information with the SVO provided, that such costs and expenses under this
clause (c) shall not exceed $3,500 per series of Notes. The Company will pay,
and will save each Purchaser and each other holder of a Note harmless from,
(i) all claims in respect of any fees, costs or expenses, if any, of brokers and
finders (other than those, if any, retained by a Purchaser or other holder in
connection with its purchase of the Notes) and (ii) any and all wire transfer
fees that any bank deducts from any payment under such Note to such holder or
otherwise charges to a holder of a Note with respect to a payment under such
Note.

 

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Section 15.2.    Survival. The obligations of the Company under this Section 15
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement, any Subsidiary Guaranty or the Notes,
and the termination of this Agreement.

SECTION 16.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the Notes, the purchase or transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent holder of a Note, regardless
of any investigation made at any time by or on behalf of such Purchaser or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company, the Parent Guarantor or any
Subsidiary Guarantor pursuant to this Agreement shall be deemed representations
and warranties of the Company, the Parent Guarantor or the Subsidiary Guarantor,
as applicable, under this Agreement. Subject to the preceding sentence, this
Agreement, the Notes and any Subsidiary Guaranties embody the entire agreement
and understanding among each Purchaser, the Parent Guarantor and the Company and
supersede all prior agreements and understandings relating to the subject matter
hereof.

SECTION 17.    AMENDMENT AND WAIVER.

Section 17.1.    Requirements. This Agreement and the Notes may be amended, and
the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), only with the written consent of the Company,
the Parent Guarantor and the Required Holders, except that:

(a)    no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 21 hereof,
or any defined term (as it is used therein), will be effective as to any
Purchaser unless consented to by such Purchaser in writing; and

(b)    no amendment or waiver may, without the written consent of each Purchaser
and the holder of each Note at the time outstanding, (i) subject to Section 12
relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or reduce the rate or change the time of
payment or method of computation of (x) interest on the Notes or (y) the
Make-Whole Amount, (ii) change the percentage of the principal amount of the
Notes the holders of which are required to consent to any amendment or waiver or
the principal amount of the Notes that the Purchasers are to purchase pursuant
to Section 2 upon the satisfaction of the conditions to Closing that appear in
Section 4, or (iii) amend any of Sections 8 (except as set forth in the second
sentence of Section 8.2), 11(a), 11(b), 12, 17 or 20.

Section 17.2.    Solicitation of Holders of Notes.

(a)    Solicitation. The Company or the Parent Guarantor will provide each
holder of a Note with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such holder to make an informed and
considered decision with respect to any proposed

 

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amendment, waiver or consent in respect of any of the provisions hereof or of
the Notes or any Subsidiary Guaranty. The Company or the Parent Guarantor will
deliver executed or true and correct copies of each amendment, waiver or consent
effected pursuant to this Section 17 or any Subsidiary Guaranty to each holder
of a Note promptly following the date on which it is executed and delivered by,
or receives the consent or approval of, the requisite holders of Notes.

(b)    Payment. Neither the Company nor the Parent Guarantor will directly or
indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any security or
provide other credit support, to any holder of a Note as consideration for or as
an inducement to the entering into by such holder of any waiver or amendment of
any of the terms and provisions hereof or of any Subsidiary Guaranty or any Note
unless such remuneration is concurrently paid, or security is concurrently
granted or other credit support concurrently provided, on the same terms,
ratably to each holder of a Note even if such holder did not consent to such
waiver or amendment.

(c)    Consent in Contemplation of Transfer. Any consent given pursuant to this
Section 17 or any Subsidiary Guaranty by a holder of a Note that has transferred
or has agreed to transfer its Note to the Company, the Parent Guarantor any
Subsidiary or any Affiliate of the Parent Guarantor in connection with such
consent shall be void and of no force or effect except solely as to such holder,
and any amendments effected or waivers granted or to be effected or granted that
would not have been or would not be so effected or granted but for such consent
(and the consents of all other holders of Notes that were acquired under the
same or similar conditions) shall be void and of no force or effect except
solely as to such holder.

Section 17.3.    Binding Effect, etc. Any amendment or waiver consented to as
provided in this Section 17 or any Subsidiary Guaranty applies equally to all
holders of Notes and is binding upon them and upon each future holder of any
Note and upon the Company, the Parent Guarantor and each Subsidiary Guarantor
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the
Company, the Parent Guarantor, a Subsidiary Guarantor and any holder of a Note
and no delay in exercising any rights hereunder or under any Note or Subsidiary
Guaranty shall operate as a waiver of any rights of any holder of such Note.

Section 17.4.    Notes Held by Company, etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement, any Subsidiary
Guaranty or the Notes, or have directed the taking of any action provided herein
or in any Subsidiary Guaranty or the Notes to be taken upon the direction of the
holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of
its Affiliates shall be deemed not to be outstanding.

 

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SECTION 18.    NOTICES.

Except to the extent otherwise provided in Section 7.4, all notices and
communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by
an internationally recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by an internationally recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:

(i)    if to any Purchaser or its nominee, to such Purchaser or nominee at the
address specified for such communications in Schedule B, or at such other
address as such Purchaser or nominee shall have specified to the Company in
writing,

(ii)    if to any other holder of any Note, to such holder at such address as
such other holder shall have specified to the Company in writing, or

(iii)    if to the Company or to the Parent Guarantor, to the Company or the
Parent Guarantor at its address set forth at the beginning hereof to the
attention of Jaime J. Cannon, or at such other address as the Company or the
Parent Guarantor shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

SECTION 19.    REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic,
digital, or other similar process and such Purchaser may destroy any original
document so reproduced. Each of the Company and the Parent Guarantor agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company, the Parent Guarantor or any other
holder of Notes from contesting any such reproduction to the same extent that it
could contest the original, or from introducing evidence to demonstrate the
inaccuracy of any such reproduction.

SECTION 20.    CONFIDENTIAL INFORMATION.

For the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser by or on behalf of the Company, the
Parent Guarantor or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise

 

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adequately identified when received by such Purchaser as being confidential
information of the Company, the Parent Guarantor or such Subsidiary, provided
that such term does not include information that (a) was publicly known or
otherwise known to such Purchaser prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by such
Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes
known to such Purchaser other than through disclosure by the Company, the Parent
Guarantor or any Subsidiary or (d) constitutes financial statements delivered to
such Purchaser under Section 7.1 that are otherwise publicly available. Each
Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser, provided
that such Purchaser may deliver or disclose Confidential Information to (i) its
directors, officers, employees, agents, attorneys, trustees and affiliates (to
the extent such disclosure reasonably relates to the administration of the
investment represented by its Notes), (ii) its auditors, financial advisors and
other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which it sells or offers
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by this Section 20), (v) any Person from which it offers
to purchase any Security of the Company, the Parent Guarantor or any Subsidiary
Guarantor (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by this Section 20), (vi) any federal or
state regulatory authority having jurisdiction over such Purchaser, (vii) the
NAIC or the SVO or, in each case, any similar organization, or any nationally
recognized rating agency that requires access to information about such
Purchaser’s investment portfolio, or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to such Purchaser, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which such Purchaser is a party or (z) if an Event of Default has
occurred and is continuing, to the extent such Purchaser may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under such
Purchaser’s Notes, this Agreement or any Subsidiary Guaranty. Each holder of a
Note, by its acceptance of a Note, will be deemed to have agreed to be bound by
and to be entitled to the benefits of this Section 20 as though it were a party
to this Agreement. On reasonable request by the Company or the Parent Guarantor
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company or the Parent Guarantor
embodying this Section 20.

In the event that as a condition to receiving access to information relating to
the Parent Guarantor or its Subsidiaries in connection with the transactions
contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder
of a Note is required to agree to a confidentiality undertaking (whether through
IntraLinks, another secure website, a secure virtual workspace or otherwise)
which is different from this Section 20, this Section 20 shall not be amended
thereby and, as between such Purchaser or such holder and the Company or the
Parent Guarantor, as applicable, this Section 20 shall supersede any such other
confidentiality undertaking.

 

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SECTION 21.    SUBSTITUTION OF PURCHASER.

Each Purchaser shall have the right to substitute any one of its Affiliates or
another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute
Purchaser”) as the purchaser of the Notes that it has agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both such Purchaser and such Substitute Purchaser, shall contain such Substitute
Purchaser’s agreement to be bound by this Agreement and shall contain a
confirmation by such Substitute Purchaser of the accuracy with respect to it of
the representations set forth in Section 6. Upon receipt of such notice, any
reference to such Purchaser in this Agreement (other than in this Section 21),
shall be deemed to refer to such Substitute Purchaser in lieu of such original
Purchaser. In the event that such Substitute Purchaser is so substituted as a
Purchaser hereunder and such Substitute Purchaser thereafter transfers to such
original Purchaser all of the Notes then held by such Substitute Purchaser, upon
receipt by the Company of notice of such transfer, any reference to such
Substitute Purchaser as a “Purchaser” in this Agreement (other than in this
Section 21), shall no longer be deemed to refer to such Substitute Purchaser,
but shall refer to such original Purchaser, and such original Purchaser shall
again have all the rights of an original holder of the Notes under this
Agreement.

SECTION 22.    MISCELLANEOUS.

Section 22.1.    Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.

Section 22.2.    Accounting Terms. All accounting terms used herein which are
not expressly defined in this Agreement have the meanings respectively given to
them in accordance with GAAP. Except as otherwise specifically provided herein,
(i) all computations made pursuant to this Agreement shall be made in accordance
with GAAP, and (ii) all financial statements shall be prepared in accordance
with GAAP. For purposes of determining compliance with this Agreement
(including, without limitation, Section 9, Section 10 and the definition of
“Indebtedness”), any election by the Company to measure any financial liability
using fair value (as permitted by Financial Accounting Standards Board
Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option,
International Accounting Standard 39 – Financial Instruments: Recognition and
Measurement or any similar accounting standard) shall be disregarded and such
determination shall be made as if such election had not been made.

Section 22.3.    Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

Section 22.4.    Construction, etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary

 

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Terreno Realty LLC   Note Purchase Agreement

 

provision) be deemed to excuse compliance with any other covenant. Where any
provision herein refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person.

Section 22.5.    Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

Section 22.6.    Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York excluding choice-of-law principles of the law of such
State that would permit the application of the laws of a jurisdiction other than
such State.

Section 22.7.    Jurisdiction and Process; Waiver of Jury Trial. (a) Each of the
Company and the Parent Guarantor irrevocably submits to the non-exclusive
jurisdiction of any New York State or federal court sitting in the Borough of
Manhattan, The City of New York, over any suit, action or proceeding arising out
of or relating to this Agreement or the Notes. To the fullest extent permitted
by applicable law, each of the Company and the Parent Guarantor irrevocably
waives and agrees not to assert, by way of motion, as a defense or otherwise,
any claim that it is not subject to the jurisdiction of any such court, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

(b)    Each of the Company and the Parent Guarantor consents to process being
served by or on behalf of any holder of Notes in any suit, action or proceeding
of the nature referred to in Section 22.7(a) by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, return receipt requested, to it at its address specified in
Section 18 or at such other address of which such holder shall then have been
notified pursuant to said Section. Each of the Company and the Parent Guarantor
agrees that such service upon receipt (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and
(ii) shall, to the fullest extent permitted by applicable law, be taken and held
to be valid personal service upon and personal delivery to it. Notices hereunder
shall be conclusively presumed received as evidenced by a delivery receipt
furnished by the United States Postal Service or any reputable commercial
delivery service.

(c)    Nothing in this Section 22.7 shall affect the right of any holder of a
Note to serve process in any manner permitted by law, or limit any right that
the holders of any of the Notes may have to bring proceedings against the
Company or the Parent Guarantor in the courts of any appropriate jurisdiction or
to enforce in any lawful manner a judgment obtained in one jurisdiction in any
other jurisdiction.

 

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Terreno Realty LLC   Note Purchase Agreement

 

(d)    THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR
WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH.

SECTION 23.    PARENT GUARANTY.

Section 23.1.    Guaranty. (a) The Parent Guarantor absolutely, unconditionally,
and irrevocably guarantees to each of the holders:

(i)    the full and prompt payment of the principal of and interest on the Notes
and Make-Whole Amount, if any, when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, and the prompt payment
of all sums that may now be or may hereafter become due and owing under the
Notes, this Agreement, or any Subsidiary Guaranty;

(ii)    the payment of all Parent Guaranty Enforcement Costs (as defined in
Section 23.3 below); and

(iii)    the full, complete, and punctual observance, performance, and
satisfaction of all of the obligations, duties, covenants, and agreements of the
Company under this Agreement.

All amounts due, debts, liabilities, and payment obligations described in
subparagraph (i) of this Section 23.1(a) are referred to herein as the
“Guaranteed Note Indebtedness.” All obligations described in subparagraph
(iii) of this Section 23.1(a) are referred to herein as the “Parent Guaranty
Obligations.”

(b)    In the event of any default by the Company in making payment of the
Guaranteed Note Indebtedness, or in performance of the Parent Guaranty
Obligations, as aforesaid, in each case beyond the expiration of any applicable
grace period, the Parent Guarantor agrees, on demand by the holders, to pay all
the Guaranteed Note Indebtedness and to perform all the Parent Guaranty
Obligations as are then or thereafter become due and owing or are to be
performed under the terms of the Notes and this Agreement.

(c)    The Parent Guarantor does hereby waive (i) any and all notices and
demands of every kind that may be required to be given by any law, (ii) any
defense or right of set-off that the Parent Guarantor may have against the
Company or that Parent Guarantor or the Company may have against any holder of a
Note, (iii) presentment for payment, demand for payment (other than as provided
for in paragraph (b) above), notice of nonpayment (other than as provided for in
paragraph (b) above) or dishonor, protest and notice of protest, diligence in
collection and any and all formalities that otherwise might be legally required
to charge the Parent Guarantor with liability, (iv) any defense based on the
failure by the holders to inform the Parent Guarantor of any fact that the
holders may now or hereafter know about the Company, the Notes, this Agreement,
or the transactions contemplated by this Agreement, it being understood and
agreed that the holders have no duty so to inform and that the Parent Guarantor
is fully responsible for being and remaining informed by the Company of all
circumstances bearing on

 

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Terreno Realty LLC   Note Purchase Agreement

 

the existence or creation, or the risk of nonpayment of the Guaranteed Note
Indebtedness or the risk of nonperformance of the Parent Guaranty Obligations,
and (v) any and all right to cause a marshalling of assets of the Company or any
other action by any court or governmental body with respect thereto, or to cause
the holders to proceed against any other security given another holder in
connection with the Guaranteed Note Indebtedness or the Parent Guaranty
Obligations. The holders shall have no obligation to disclose or discuss with
the Parent Guarantor such holder’s assessment of the financial condition of the
Company. The Parent Guarantor acknowledges that no representations of any kind
whatsoever have been made by the holders to the Parent Guarantor, except as
expressly set forth in Section 6 herein.    

(d)    The Parent Guarantor further agrees that its liability as guarantor shall
in no way be impaired by any renewals or extensions that may be made from time
to time, with or without the knowledge or consent of the Parent Guarantor of the
time for payment of interest or principal under a Note or any Make-Whole Amount
or by any forbearance or delay in collecting interest or principal under a Note,
or by any waiver by any holder, or by any holder’s failure or election not to
pursue any other remedies it may have against the Company, or by any change or
modification in a Note, this Agreement, any Subsidiary Guaranty, or by the
acceptance by any holder of any security or any increase, substitution or change
therein, or by the release by any holder of any security or any withdrawal
thereof or decrease therein, or by the application of payments received from any
source to the payment of any obligation other than the Guaranteed Note
Indebtedness, (unless such payment was expressly directed to be applied to the
Guaranteed Note Indebtedness and such direction was made in accordance with this
Agreement) even though a holder may lawfully have elected to apply such payments
to any part or all of the Guaranteed Note Indebtedness, it being the intent
hereof that Parent Guarantor shall remain liable as principal for payment of the
Guaranteed Note Indebtedness and performance of the Parent Guaranty Obligations
until all Indebtedness has been paid in full and the other terms, covenants and
conditions of the this Agreement, the Notes, any Subsidiary Guaranty and this
Section 23 have been performed, notwithstanding any act or thing that might
otherwise operate as a legal or equitable discharge of a surety. The Parent
Guarantor further understands and agrees that the holders may at any time enter
into agreements with the Company to amend or modify a Note, this Agreement or
any Subsidiary Guaranty and may waive or release any provision or provisions of
a Note, this Agreement or any Subsidiary Guaranty and, with reference to such
instruments, may make and enter into any such agreement or agreements as the
holders and the Company may deem proper and desirable, without in any manner
impairing the guaranty in this Section 23 or any of the holders’ rights
hereunder or any of the Parent Guarantor’s obligations hereunder.

Section 23.2.    Obligations Absolute and Unconditional. The obligations of the
Parent Guarantor under this Section 23 shall be a complete, present and
continuing guaranty of payment and performance and not of collection. The Parent
Guarantor agrees that its obligations hereunder shall be joint and several with
any and all other guarantees given in connection with this Agreement and the
Notes from time to time. The Parent Guarantor agrees that the guaranty in this
Section 23 may be enforced by the holders without the necessity at any time of
resorting to or exhausting any security or collateral, if any, given in
connection herewith or with a Note or this Agreement or by or resorting to any
other guaranties, including, but not limited to any Subsidiary Guaranty, and the
Parent Guarantor hereby waives the right to require the any holder to join the
Company in any action brought under this Agreement or to commence any action

 

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Terreno Realty LLC   Note Purchase Agreement

 

against or obtain any judgment against the Company or to pursue any other remedy
or enforce any other right. The Parent Guarantor further agrees that nothing
contained herein or otherwise shall prevent any holder from pursuing
concurrently or successively all rights and remedies available to them at law
and/or in equity or under a Note, this Agreement or any Subsidiary Guaranty, and
the exercise of any of their rights or the completion of any of their remedies
shall not constitute a discharge of any of the Parent Guarantor’s obligations
under this Section 23, it being the purpose and intent of the Parent Guarantor
that the obligations of such Parent Guarantor hereunder shall be primary,
absolute, independent and unconditional under any and all circumstances
whatsoever. Neither the Parent Guarantor’s obligations under this Section 23 nor
any remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by any impairment, modification, change,
release or limitation of the liability of the Company under a Note, this
Agreement or any Subsidiary Guaranty or by reason of the Company’s bankruptcy or
by reason of any creditor or bankruptcy proceeding instituted by or against the
Company. This guaranty shall continue to be effective and be deemed to have
continued in existence or be reinstated (as the case may be) if at any time
payment of all or any part of any sum payable pursuant to a Note, this Agreement
or any Subsidiary Guaranty is rescinded or otherwise required to be returned by
the payee upon the insolvency, bankruptcy, or reorganization of the payor, all
as though such payment to such holder had not been made, regardless of whether
such holder contested the order requiring the return of such payment. The
obligations of the Parent Guarantor pursuant to the preceding sentence shall
survive any termination, cancellation, or release of this guaranty.

Section 23.3.    Enforcement Costs. If: (i) this Agreement (including this
guaranty), a Note or any Subsidiary Guaranty are placed in the hands of an
attorney for collection or is collected through any legal proceeding; (ii) an
attorney is retained to represent any holder in any bankruptcy, reorganization,
receivership, or other proceedings affecting creditors’ rights and involving a
claim under this Agreement (including this guaranty), a Note, or any Subsidiary
Guaranty; (iii) an attorney is retained to provide advice or other
representation with respect to this Agreement, the Notes or any Subsidiary
Guaranty in connection with an enforcement action or potential enforcement
action; or (iv) an attorney is retained to represent any holder in any other
legal proceedings whatsoever in connection with this Agreement (including this
guaranty), a Note, any Subsidiary Guaranty, or any property securing the
Guaranteed Note Indebtedness, then the Parent Guarantor shall pay to such holder
upon demand all reasonable attorney’s fees, costs and expenses, including,
without limitation, court costs, filing fees and all other costs and expenses
incurred in connection therewith (the “Parent Guaranty Enforcement Costs”), in
addition to all other amounts due hereunder.

Section 23.4.    Subrogation. The Parent Guarantor hereby subordinates to the
Guaranteed Note Indebtedness any and all claims and rights, including, without
limitation, subrogation rights, contribution rights, reimbursement rights and
set-off rights, which the Parent Guarantor may have against the Company arising
from a payment made by the Parent Guarantor under this Guaranty and agrees that,
until the entire Guaranteed Note Indebtedness is paid in full, not to assert or
take advantage of any subrogation rights of the Parent Guarantor or the holders
or any right of the Parent Guarantor or the holders proceed against (i) the
Company for reimbursement, or (ii) any other guarantor or any collateral
security or guaranty or right of offset held by the holders for the payment of
the Guaranteed Note Indebtedness and performance of the

 

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Terreno Realty LLC   Note Purchase Agreement

 

Parent Guaranty Obligations, nor shall the Parent Guarantor seek or be entitled
to seek any contribution or reimbursement from the Company or any other
guarantor in respect of payments made by the Parent Guarantor hereunder. It is
expressly understood that the agreements of the Parent Guarantor set forth above
constitute additional and cumulative benefits given to the holders for their
security and as an inducement for their purchase of the Notes of the Company.

Section 23.5.    Preference. Any Indebtedness of the Company to the Parent
Guarantor now or hereafter existing is hereby subordinated to the Guaranteed
Note Indebtedness. The Parent Guarantor will not seek, accept, or retain for its
own account, any payment from the Company on account of such subordinated
Indebtedness at any time when a Default or Event of Default exists under this
Agreement, the Notes or any Subsidiary Guaranty, and any such payments to the
Parent Guarantor made while any Default or Event of Default then exists under
the this Agreement, the Notes or any Subsidiary Guaranty on account of such
subordinated Indebtedness shall be collected and received by the Parent
Guarantor in trust for the holders and shall be paid over to the holders on
account of the Guaranteed Note Indebtedness without impairing or releasing the
obligations of the Parent Guarantor hereunder.

Section 23.6.    Marshalling and Accounts. (a) None of the holders of the Notes
shall be under any obligation (i) to marshal any assets in favor of the Parent
Guarantor or in payment of any or all of the liabilities of the Company under or
in respect of the Notes and this Agreement or the obligation of the Parent
Guarantor hereunder or (ii) to pursue any other remedy that the Parent Guarantor
may or may not be able to pursue itself and that may lessen the Parent
Guarantor’s burden or any right to which the Parent Guarantor hereby expressly
waives.

(b)    Until all amounts which may be or become payable by the Company under or
in connection with the Notes have been irrevocably paid in full while an Event
of Default is continuing, any moneys received from the Parent Guarantor under
this Agreement may be held in an interest-bearing bank account.

(c)    This guaranty is in addition to and is not in any way prejudiced by any
other guaranty (including, without limitation, any Subsidiary Guaranty) now or
subsequently held by a holder of a Note.

*    *    *    *    *

 

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If you are in agreement with the foregoing, please sign the form of agreement on
a counterpart of this Agreement and return it to the Company and the Parent
Guarantor, whereupon this Agreement shall become a binding agreement among you,
the Company and the Parent Guarantor.

 

Very truly yours, TERRENO REALTY LLC By:  

TERRENO REALTY CORPORATION,

ITS SOLE MEMBER

By:  

/s/ Jaime J. Cannon

Name:   Jaime J. Cannon Title:  

Executive Vice President, Chief

Financial Officer and Secretary

TERRENO REALTY CORPORATION By:  

/s/ Jaime J. Cannon

Name:   Jaime J. Cannon Title:  

Executive Vice President, Chief

Financial Officer and Secretary

[SIGNATURE PAGE TO NOTE PURCHASE AGREEMENT]

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Terreno Realty LLC   Note Purchase Agreement

This Agreement is hereby accepted and agreed to as of the date hereof.

 

AMERICAN GENERAL LIFE INSURANCE COMPANY

THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK

By:  

AIG Asset Management (U.S.), LLC, as

Investment Adviser

By:  

/s/ Peter DeFazio

Name:   Peter DeFazio Title:   Managing Director AMERICAN INTERNATIONAL GROUP UK
LIMITED, acting by its investment adviser, AIG Asset Management (Europe)
Limited, acting by its agent, AIG Asset Management (U.S.), LLC By:  

/s/ Peter DeFazio

Name:   Peter DeFazio Title:   Managing Director

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

Terreno Realty LLC   Note Purchase Agreement

This Agreement is hereby accepted and agreed to as of the date hereof.

 

JACKSON NATIONAL LIFE INSURANCE COMPANY By:   PPM America, Inc., as attorney in
fact, on behalf of Jackson National Life Insurance Company By:  

/s/ Elena Unger

Name:   Elena Unger Title:   Vice President

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Terreno Realty LLC    Note Purchase Agreement

This Agreement is hereby accepted and agreed to as of the date hereof.

 

THRIVENT FINANCIAL FOR LUTHERANS

  By:  

/s/ Martin Rosacker

  LOGO [g801784img01.jpg] Name:   Martin Rosacker Title:   Managing Director  

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Terreno Realty LLC    Note Purchase Agreement

This Agreement is hereby accepted and agreed to as of the date hereof.

 

UNITED SERVICES AUTOMOBILE ASSOCIATION By:   BlackRock Financial Management,
Inc., as investment manager By:  

/s/ Kaidi Huang

Name:   Kaidi Huang Title:   Authorized Signatory USAA CASUALTY INSURANCE
COMPANY By:   BlackRock Financial Management, Inc., as investment manager By:  

/s/ Kaidi Huang

Name:   Kaidi Huang Title:   Authorized Signatory USAA GENERAL INDEMNITY COMPANY
By:   BlackRock Financial Management, Inc., as investment manager By:  

/s/ Kaidi Huang

Name:   Kaidi Huang Title:   Authorized Signatory

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

Terreno Realty LLC    Note Purchase Agreement

This Agreement is hereby accepted and agreed to as of the date hereof.

 

GENWORTH LIFE INSURANCE COMPANY

By:  

/s/ Nikhil Jain

Name:   Nikhil Jain Title:   Investment Officer

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

DEFINED TERMS

As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:

“Adjusted EBITDA” means, as of any date, an annualized amount determined by
multiplying two (2) times the Consolidated EBITDA for the most recent fiscal
quarter of the Company for which financial results have been reported and the
immediately preceding fiscal quarter and deducting from such annualized amount
an annual amount for capital expenditures equal to $0.15 per square foot times
the weighted daily average rentable area of Projects owned by the Consolidated
Group or any Investment Affiliate (but only deducting the applicable
Consolidated Group Pro Rata Share of such amount with respect to such Investment
Affiliate) during the applicable calculation period for such annualized
Consolidated EBITDA.

“Adjusted Unencumbered Property Pool NOI” means, as of any date, an annualized
amount determined by (i) multiplying two (2) times the Unencumbered Property
Pool NOI for the two (2) most recent full fiscal quarters of the Company for
which financial results have been reported and deducting from such annualized
amount an annual amount for capital expenditures equal to $0.15 per square foot
times the weighted average daily aggregate rentable area during such two
(2) fiscal quarter period of all Unencumbered Properties which are included in
the Unencumbered Property Pool as of such date of calculation.

“Affiliate” means, at any time, and with respect to any Person, any other Person
that at such time directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, such first
Person, and, with respect to the Company, shall include any Person beneficially
owning or holding, directly or indirectly, 10% or more of any class of voting or
equity interests of the Company or any Subsidiary or any Person of which the
Company and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity interests.
As used in this definition, “Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an “Affiliate” is a reference to an Affiliate of the Company.

“Agreement” means this Agreement, including all Schedules attached to this
Agreement, as it may be amended, restated, supplemented or otherwise modified
from time to time.

“Anti-Corruption Laws” is defined in Section 5.16(d)(1).

“Anti-Money Laundering Laws” is defined in Section 5.16(c).

“Blocked Person” is defined in Section 5.16(a).

SCHEDULE A

(to Note Purchase Agreement)

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“Business Day” means (a) for the purposes of Section 8.6 only, any day other
than a Saturday, a Sunday or a day on which commercial banks in New York City
are required or authorized to be closed, and (b) for the purposes of any other
provision of this Agreement, any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, New York are required or authorized to be
closed.

“Capital Lease” means, at any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person which is not a corporation and any
and all warrants or options to purchase any of the foregoing.

“Capitalization Rate” shall have the meaning ascribed to such term in the
Primary Credit Facility, from time to time and, if for any reason, no Primary
Credit Facility then exists or such term is no longer used therein, the
Capitalization Rate in effect immediately prior to such time, provided that such
rate shall not be permitted, in any circumstance, to be less than 6.0%.

“Capitalized Lease Obligations” of a Person means the amount of the obligations
of such Person under Capital Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with GAAP.

“Cash Equivalents” means, 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) mutual funds organized under the United States Investment Company Act rated
AAm or AAm-G by S&P and P-1 by Moody’s;

(iii) certificates of deposit or other interest-bearing obligations of a bank or
trust company which is a member in good standing of the Federal Reserve System
having a short term unsecured debt rating of not less than A-1 by S&P and not
less than P-1 by Moody’s (or in each case, if no bank or trust company is so
rated, the highest comparable rating then given to any bank or trust company,
but in such case only for funds invested overnight or over a weekend) provided
that such investments shall mature or be redeemable upon the option of the
holders thereof on or prior to a date one month from the date of their purchase;

(iv) certificates of deposit or other interest-bearing obligations of a bank or
trust company which is a member in good standing of the Federal Reserve System
having a short term unsecured debt rating of not less than A-1+ by S&P, and not
less than P-1 by Moody’s and which has a long term unsecured debt rating of not
less than A1 by Moody’s (or in each case, if no bank or trust company is so
rated, the highest comparable rating then given to any bank or trust company,
but in such case only for funds invested

 

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overnight or over a weekend) provided that such investments shall mature or be
redeemable upon the option of the holders thereof on or prior to a date three
months from the date of their purchase;

(v) bonds or other obligations having a short term unsecured debt rating of not
less than A-1+ by S&P and P-1+ by Moody’s and having a long term debt rating of
not less than A1 by Moody’s issued by or by authority of any state of the United
States, any territory or possession of the United States, including the
Commonwealth of Puerto Rico and agencies thereof, or any political subdivision
of any of the foregoing;

(vi) repurchase agreements issued by an entity rated not less than A-1+ by S&P,
and not less than P-1 by Moody’s which are secured by U.S. Government securities
of the type described in clause (i) of this definition maturing on or prior to a
date one month from the date the repurchase agreement is entered into;

(vii) short term promissory notes rated not less than A-1+ by S&P, and not less
than P-1 by Moody’s maturing or to be redeemable upon the option of the holders
thereof on or prior to a date one month from the date of their purchase; and

(viii) commercial paper (having original maturities of not more than 365 days)
rated at least A-1+ by S&P and P-1 by Moody’s and issued by a foreign or
domestic issuer who, at the time of the investment, has outstanding long-term
unsecured debt obligations rated at least A1 by Moody’s.

“Change of Control” is defined in Section 8.8(d).

“Change of Control Notice” is defined in Section 8.8(a).

“CISADA” is defined in Section 5.16(a).

“Closing” is defined in Section 3.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

“Company” means Terreno Realty LLC, a Delaware limited liability company or any
successor that becomes such in the manner prescribed in Section 10.2.

“Confidential Information” is defined in Section 20.

“Consolidated EBITDA” means, for any period without duplication an amount equal
to the net income or loss of the Consolidated Group determined in accordance
with GAAP (before minority interests and excluding losses attributable to the
sale or other disposition of assets and the adjustment for so-called
“straight-line rent accounting”) for such period, plus (x) the following to the
extent deducted in computing such Consolidated Net Income for such period:
(i) Consolidated Interest Expense for such period, (ii) real estate depreciation
and amortization for such period, (iii) other non-cash charges for such period
and (iv) acquisition costs for such period with respect to all Projects acquired
by the Company or another member of the

 

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Consolidated Group; and minus (y) all gains attributable to the sale or other
disposition of assets or debt restructurings in such period, adjusted to include
the Consolidated Group Pro Rata Share of the net income or loss of all
Investment Affiliates for such period, determined and adjusted in the same
manner as provided above in this definition with respect to the Consolidated
Group’s net income or loss.

“Consolidated Fixed Charges” means, for any period, without duplication, the sum
of (a) Consolidated Interest Expense for such period plus (b) the aggregate
amount of scheduled principal payments attributable to Consolidated Total
Indebtedness (excluding optional prepayments and scheduled principal payments
due on maturity of any such Indebtedness) required to be made during such period
by any member of the Consolidated Group plus (c) a percentage of all such
scheduled principal payments required to be made during such period by any
Investment Affiliate on Indebtedness taken into account in calculating
Consolidated Interest Expense, equal to the greater of (x) the percentage of the
principal amount of such Indebtedness for which any member of the Consolidated
Group is liable and (y) the Consolidated Group Pro Rata Share of such Investment
Affiliate plus (d) Preferred Dividends with respect to such period plus (e) all
rental payments due and payable with respect to such period under ground leases
of properties at which one or more members of the Consolidated Group are
tenants.

“Consolidated Gross Asset Value” means, as of any date, (i) the aggregate Net
Operating Income for the two (2) most recent full fiscal quarters of the Company
for which financial results have been reported attributable to Projects owned by
the Company or another member of the Consolidated Group as of the last day of
such period (excluding both Development Projects and 100% of the aggregate Net
Operating Income attributable to any Projects not so owned for the four (4) most
recent consecutive full fiscal quarters of the Company for which financial
results have been reported), multiplied by two (2), with the product thereof
divided by the Capitalization Rate, plus (ii) the cost basis value for any such
Projects first acquired by the Company or a member of the Consolidated Group
during such four (4) most recent consecutive full fiscal quarters, plus
(iii) the Consolidated Group’s Pro Rata Share of the aggregate Net Operating
Income for the two (2) most recent full fiscal quarters of the Company for which
financial results have been reported attributable to Projects owned by
Investment Affiliates on the last day of such period (excluding Development
Projects and 100% of the aggregate Net Operating Income attributable to any
Projects not so owned for the four (4) most recent consecutive full fiscal
quarters of the Company for which financial results have been reported)
multiplied by two (2), with the product divided by the Capitalization Rate, plus
(iv) the Consolidated Group Pro Rata Share of such the cost value basis of any
Projects not so owned for such four (4) most recent consecutive full fiscal
quarters by an Investment Affiliate, plus (v) the cost value basis of all
Development Projects of the Company or any other member of the Consolidated
Group, as of the last day of such most recent fiscal quarter, plus (vi) the cost
value basis of any Unimproved Land owned by the Company or any other member of
the Consolidated Group as of the last day of such most recent fiscal quarter.
Notwithstanding the foregoing, for purposes of calculating the amount of Net
Operating Income to be used in clauses (i) and (iii) of the preceding sentence
of this definition, (A) no Project shall be deemed to have Net Operating Income
of less than zero for any period and (B) if any Project is subject to a Lease
which has commenced but provides for an initial period of rent abatement or
reduction that falls in whole or in part within the period on which Net
Operating Income is being calculated, the Net Operating

 

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Income attributable to such Project for such initial abatement or reduction
period shall be determined as if the rental income for such Project included
rents paid at the rental rate that will be payable under such Lease during the
first full calendar month immediately following such period, provided that
(i) no such period of deemed increase shall continue for longer than the first
twenty percent (20%) of the initial term of such Lease and (ii) the portion of
Consolidated Gross Asset Value attributable to Projects which have Net Operating
Income then deemed to be increased under this clause (B) shall not at any time
constitute more than fifteen percent (15%) of total Consolidated Gross Asset
Value.

“Consolidated Group” means the Parent Guarantor, the Company and all
Subsidiaries which are consolidated with it for financial reporting purposes
under GAAP.

“Consolidated Group Pro Rata Share” means, with respect to any Investment
Affiliate, the percentage interest held by the Consolidated Group in the
aggregate, in such Investment Affiliate determined by calculating the greater of
(i) the percentage of the issued and outstanding Capital Stock in such
Investment Affiliate held by the Consolidated Group in the aggregate and
(ii) the percentage of the total book value of such Investment Affiliate that
would be received by the Consolidated Group in the aggregate, upon liquidation
of such Investment Affiliate, after repayment in full of all Indebtedness of
such Investment Affiliate.

“Consolidated Interest Expense” means, for any period without duplication, the
sum of (a) the aggregate amount of interest required to be paid, accrued,
expensed or, to the extent it could be expensed, capitalized in accordance with
GAAP of the Consolidated Group for such period attributable to Consolidated
Total Indebtedness during such period (including the loans, obligations under
Capital Leases (to the extent Consolidated EBITDA has not been reduced by such
Capitalized Lease Obligations in the applicable period), any subordinated
indebtedness, original issue discount and amortization of prepaid interest, if
any, but excluding any Preferred Dividends) plus (b) all amounts available for
borrowing, or for drawing under letters of credit, if any, issued for the
account of any member of the Consolidated Group, but only if such interest was
or is required to be reflected as an item of expense, plus (c) all commitment
fees, agency fees, facility fees, balance deficiency fees and similar fees and
expenses in connection with the borrowing of money plus (d) the Consolidated
Group Pro Rata Share of any such interest items, as similarly calculated and
determined in accordance with GAAP, of any Investment Affiliate, for such
period, whether recourse or non-recourse.

“Consolidated Net Income” means, for any period, the sum of (i) consolidated net
income (or loss) of the Consolidated Group for such period determined on a
consolidated basis in accordance with GAAP plus (ii) without duplication, the
applicable Consolidated Group Pro Rata Share of the net income (or loss) of each
Investment Affiliate for such period determined in accordance with GAAP.

“Consolidated Tangible Net Worth” means, as of any date of determination, an
amount equal to (a) Consolidated Gross Asset Value, plus (b) Unrestricted Cash
and Cash Equivalents, minus (c) Consolidated Total Indebtedness as of such date,
provided that any amounts attributable to Projects that are required to be
reported as “intangibles” under GAAP pursuant to Financial Accounting Standards
Board Statement of Policy No. 141 and 142 shall be permitted to be added back to
“tangible property” for purposes of calculating such Consolidated Tangible Net
Worth.

 

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“Consolidated Total Indebtedness” means, as of any date of determination,
without duplication, the sum of (a) all Indebtedness of the Consolidated Group
at such date, determined on a consolidated basis in accordance with GAAP, plus
(b) the applicable Consolidated Group Pro Rata Share of any Indebtedness of each
Investment Affiliate other than Indebtedness of such Investment Affiliate to a
member of the Consolidated Group, provided that (x) to the extent that any
member of the Consolidated Group is providing a completion guaranty in
connection with a construction loan entered into by an Investment Affiliate,
Consolidated Total Indebtedness shall include such member’s pro rata liability
under the Indebtedness relating to such completion guaranty (or, if greater,
such member’s potential liability under such completion guaranty) and (y) in
connection with the liabilities described in clauses (a) and (d) of the
definition of “Indebtedness” (other than completion guarantees) Consolidated
Total Indebtedness shall include the portion of the liabilities of such
Investment Affiliate which is attributable to the Consolidated Group Pro Rata
Share of such Investment Affiliate or such greater amount of such liabilities
for which any member of the Consolidated Group is or has agreed to be, liable by
way of guaranty, indemnity for borrowed money, stop-loss agreement or the like,
it being agreed that, in any case, Indebtedness of an Investment Affiliate shall
not be excluded from Consolidated Total Indebtedness by virtue of the liability
of such Investment Affiliate being Non-Recourse Indebtedness.

“Construction in Progress” means, as of any date, the sum of (i) the total
construction cost expended as of the applicable date to construct any
Development Project which involves construction of a new building or to
redevelop or renovate any Development Project which includes the redevelopment
or renovation of an existing building, plus (ii) the book value of all land not
then included in Unimproved Land.

“Controlled Entity” means (i) any of the Subsidiaries of the Parent Guarantor
and any of their or the Parent Guarantor’s respective Controlled Affiliates and
(ii) if the Parent Guarantor has a parent company, such parent company and its
Controlled Affiliates. As used in this definition, “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

“Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

“Default Rate” means that per annum rate of interest that is the greater of (i)
2.0% above the rate of interest stated in clause (a) of the first paragraph of
the Notes or (ii) 2.0% over the rate of interest publicly announced by KeyBank
in New York, New York as its “base” or “prime” rate.

“Development Project” means a Project which is either (i) under development for
which any member of the Consolidated Group is actively pursuing construction of
one or more buildings or other improvements or (ii) the subject of a major
redevelopment or renovation,

 

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involving extensive capital expenditures beyond those normally incurred in
connection with the installation of tenant improvements for a new tenant, to
upgrade and reposition such Project to meet prevailing market standards and
requiring such Project to be vacated during such redevelopment or renovation
and, in the case of all such developments, redevelopments or renovations, for
which construction is proceeding to completion without undue delay from permit
denial, construction delays or otherwise, all pursuant to such member’s ordinary
course of business, provided that any such Project will no longer be considered
a Development Project following a date twelve (12) months after the first date
on which a certificate of occupancy has issued or reissued for such Development
Project or on which such Development Project may otherwise be lawfully occupied
for its intended use.

“Disclosure Documents” is defined in Section 5.3.

“Drop Lots” means any parcel of land unimproved with material revenue producing
buildings (e.g., other than small miscellaneous structures such as security,
stacks, maintenance sheds, etc.) but which is accessible from public roads and
highways, is fenced or otherwise enclosed and is paved or otherwise prepared to
accept the temporary storage of tractor trailers, containers or other freight
equipment.

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System
or any successor SEC electronic filing system for such purposes.

“Eligible Unencumbered Property” shall mean (i) any Project which does not meet
the criteria below but is approved by the Required Holders in their sole
discretion or (ii) any Project which meets the following criteria:

(a) Such Project must be wholly-owned in fee simple or leased pursuant to a
Qualifying Ground Lease by a Wholly-Owned Subsidiary of the Company that is a
Subsidiary Guarantor or will be added as a Subsidiary Guarantor when such
Project becomes a Qualifying Unencumbered Property.

(b) Such Project must be an industrial property consisting of one of the
following property types: warehouse, distribution, flex (light manufacturing or
research and development), Drop Lot or trans-shipment.

(c) Such Project must be located in one of the following markets: Los Angeles
area, San Francisco Bay area, Seattle area, Northern New Jersey/New York City
area, Washington D.C./Baltimore area, or Miami area.

(d) Such Project must be free of any Liens, mortgages and pledges (other than
those described in clauses (a) through (d) of the definition of Permitted
Liens).

(e) Such Project may not be subject to any material environmental or structural
issues, or any other environmental issues which have not been insured over,
(such insurance to be subject to the reasonable approval of the Required
Holders).

 

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“Environmental Laws” means any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to Hazardous Materials.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is treated as a single employer together with the Company under section 414 of
the Code.

“Event of Default” is defined in Section 11.

“Excluded Tenant” means, as of any date, any tenant under a Lease who is then
either (i) the subject of a voluntary or involuntary proceeding for relief under
the bankruptcy code or any state bankruptcy codes or insolvency laws, unless
such tenant has assumed such Lease and provided adequate assurances of future
performance, all as may be required in such proceeding, or (ii) more than sixty
(60) days delinquent in the payment of any installment of base rent due under
such tenant’s Lease.

“Foreign Noteholder” is defined in Section 14.3(a).

“Form 10-K” is defined in Section 7.1(b).

“Form 10-Q” is defined in Section 7.1(a).

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States of America.

“Governmental Authority” means

(a) the government of

(i) the United States of America or any state or other political subdivision
thereof, or

(ii) any other jurisdiction in which the Company or any Subsidiary conducts all
or any part of its business, or which asserts jurisdiction over any properties
of the Company or any Subsidiary, or

(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

 

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“Governmental Official” means any governmental official or employee, employee of
any government-owned or government-controlled entity, political party, any
official of a political party, candidate for political office, official of any
public international organization or anyone else acting in an official capacity.

“Guaranty” means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

(a) to purchase such indebtedness or obligation or any property constituting
security therefor;

(b) to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of such
indebtedness or obligation;

(c) to lease properties or to purchase properties or services primarily for the
purpose of assuring the owner of such indebtedness or obligation of the ability
of any other Person to make payment of the indebtedness or obligation; or

(d) otherwise to assure the owner of such indebtedness or obligation against
loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

“Guaranteed Note Indebtedness” is defined in Section 23.1(a).

“Guaranty Supplement” means the guaranty supplement in the form attached as
Exhibit A to the Subsidiary Guaranty.

“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or
other substances that might pose a hazard to health and safety, the removal of
which may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage or filtration of which is or
shall be restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.

“holder” means, with respect to any Note, the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1,
provided,

 

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however, that if such Person is a nominee, then for the purposes of Sections 7,
12, 17.2 and 18 and any related definitions in this Schedule A, “holder” shall
mean the beneficial owner of such Note whose name and address appears in such
register.

“Indebtedness” with respect to any Person means, at any time, without
duplication,

(a) its liabilities for borrowed money and its redemption obligations in respect
of mandatorily redeemable Preferred Stock;

(b) its liabilities for the deferred purchase price of property acquired by such
Person (excluding accounts payable arising in the ordinary course of business
but including all liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such property);

(c) (i) all liabilities appearing on its balance sheet in accordance with GAAP
in respect of Capital Leases and (ii) all liabilities which would appear on its
balance sheet in accordance with GAAP in respect of Synthetic Leases assuming
such Synthetic Leases were accounted for as Capital Leases;

(d) all liabilities for borrowed money secured by any Lien with respect to any
property owned by such Person (whether or not it has assumed or otherwise become
liable for such liabilities);

(e) all its liabilities in respect of letters of credit or instruments serving a
similar function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money);

(f) the aggregate Swap Termination Value of all Swap Contracts of such Person;
and

(g) any Guaranty of such Person with respect to liabilities of a type described
in any of clauses (a) through (f) hereof.

Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.

“INHAM Exemption” is defined in Section 6.2(e).

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a
Note holding (together with one or more of its affiliates) more than 10% of the
aggregate principal amount of the Notes then outstanding, (c) any bank, trust
company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form, and (d) any Related Fund of any holder of any Note.

 

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“Investment” of a Person means any loan, advance (other than commission, travel
and similar advances to officers and employees made in the ordinary course of
business), extension of credit (other than accounts receivable arising in the
ordinary course of business on terms customary in the trade), deposit account or
contribution of capital by such Person to any other Person or any investment in,
or purchase or other acquisition of, the stock, partnership interests, notes,
debentures or other securities of any other Person made by such Person.

“Investment Affiliate” means any Person in which the Consolidated Group,
directly or indirectly, holds an ownership interest whose financial results are
not consolidated under GAAP with the financial results of the Consolidated
Group.

“Leases” shall mean, collectively, all leases, subleases and similar occupancy
agreements affecting any Unencumbered Property, or any part thereof, now
existing or hereafter executed and all material amendments, material
modifications or supplements thereto.

“Lien” means any lien (statutory or other), mortgage, pledge, encumbrance,
priority or any other type of security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under a Capital Lease).

“Make-Whole Amount” is defined in Section 8.6.

“Management Fees” means, with respect to each Project for any period, an amount
equal to (i) the actual management fees payable with respect thereto for such
period if the property manager of such Project is a third party and not the
Company or an Affiliate thereof or (ii) three percent (3.0%) of the aggregate
net and other revenue due under the Leases at such Project for such period if
the property manager is the Company or an Affiliate thereof.

“Material” means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Parent Guarantor
and its Subsidiaries taken as a whole.

“Material Acquisition” means an acquisition (consummated in one transaction or a
series of related transactions with one seller (or Affiliated sellers)) with a
minimum aggregate gross purchase price equal to at least ten percent (10%) of
the Consolidated Gross Asset Value as of the last day of the fiscal quarter most
recently ended prior to the date such acquisition is consummated.

“Material Adverse Effect” means a material adverse effect on (a) the business,
properties or condition (financial or otherwise) of the Parent Guarantor and its
Subsidiaries taken as a whole, (b) the ability of the Company to perform its
obligations under this Agreement and the Notes, (c) the ability of the Parent
Guarantor to perform its obligations under this Agreement, or (d) the validity
or enforceability of this Agreement, the Notes or any Subsidiary Guaranty.

 

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“Material Subsidiary” means, at any time, any Subsidiary of the Parent Guarantor
which, together with all Subsidiaries of such Subsidiary (determined on a
consolidated basis for such Subsidiary), accounts for 5% or more of Consolidated
Gross Asset Value.

“Maturity Date” is defined in the first paragraph of each Note.

“Moody’s” means Moody’s Investors Service Limited and any successor to the
rating agency business of Moody’s Investors Service Limited.

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term
is defined in section 4001(a)(3) of ERISA).

“NAIC” means the National Association of Insurance Commissioners or any
successor thereto.

“Negative Pledge” means, with respect to a given asset, any provision of a
document, instrument or agreement (other than this Agreement) which prohibits
the creation or assumption of any Lien on such asset as security for
Indebtedness of the Person owning such asset or any other Person; provided,
however, that an agreement that conditions a Person’s ability to encumber its
assets upon the maintenance of one or more specified ratios that limit such
Person’s ability to encumber its assets but that do not generally prohibit the
encumbrance of its assets, or the encumbrance of specific assets, shall not
constitute a Negative Pledge.

“Net Operating Income” means, with respect to any Project for any period,
property rental and other income attributable to such Project accruing for such
period minus all expenses and other proper charges incurred in connection with
the operation of such Project (including, without limitation, real estate taxes,
Management Fees, payments under ground leases and bad debt expenses) during such
period; but, in any case, before payment of or provision for debt service
charges for such period, income taxes for such period, capital expenses for such
period, and depreciation, amortization, and other non-cash expenses for such
period, all as determined in accordance with GAAP (except that (a) any rent
leveling adjustments and (b) any SFAS 141 amortization shall be excluded from
rental income).

“Non-Recourse Indebtedness” means, with respect to any Person, Indebtedness for
which the liability of such Person (except for liability for fraud,
misrepresentation, misapplication of cash, waste, environmental claims and
liabilities and other circumstances customarily excluded by institutional
lenders from exculpation provisions and/or included in separate indemnification
agreements in non-recourse financing of real estate, including, without
limitation, provisions converting such Indebtedness to recourse in connection
with certain bankruptcy filings, transfer violations or other defaults) either
is contractually limited to collateral securing such Indebtedness or is so
limited by operation of law.

“Notes” is defined in Section 1.

“Occupancy Percentage” means, as of any date, with respect to any Project or
group of Projects, the percentage of the total rentable area of such Project or
Projects that is then demised

 

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under a Lease to tenants who are not an Affiliate of the Parent Guarantor or the
Company and who took initial occupancy of their demised spaces under such Leases
(even if any such space is then vacant), but excluding from such calculation
space demised to any tenant who is then an Excluded Tenant.

“OFAC” is defined in Section 5.16(a).

“OFAC Listed Person” is defined in Section 5.16(a).

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is
responsible for administering and enforcing. A list of OFAC Sanctions Programs
may be found at
http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of
any other officer of the Company, the Parent Guarantor or a Subsidiary
Guarantor, as applicable, whose responsibilities extend to the subject matter of
such certificate.

“Parent Guarantor” means Terreno Realty Corporation, a Maryland corporation, or
any successor that becomes such in the manner prescribed in Section 10.2.

“Parent Guaranty Enforcement Costs” is defined in Section 23.3.

“Parent Guaranty Obligations” is defined in Section 23.1(a).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA or any successor thereto.

“Permitted Liens” means:

(a) Liens for taxes, assessments or governmental charges or levies on its
property if the same shall not at the time be delinquent or thereafter can be
paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves shall have been set aside on its
books;

(b) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens
and other similar liens arising in the ordinary course of business which secure
payment of obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books;

(c) Liens arising out of pledges or deposits under workers’ compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation;

(d) easements, restrictions and such other encumbrances or charges against real
property as are of a nature generally existing with respect to properties of a
similar

 

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character and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the Parent Guarantor
or its Subsidiaries; and

(e) other Liens securing any Indebtedness which does not cause any of the
covenants contained in this Agreement to be breached, including, without
limitation, Sections 10.5 and 10.6.

“Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, business entity or
Governmental Authority.

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA)
subject to Title I of ERISA that is or, within the preceding five years, has
been established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

“Preferred Dividends” means, for any period, with respect to any entity,
dividends or other distributions which are payable to holders of any ownership
interests in such entity which entitle the holders of such ownership interests
to be paid on a preferred basis prior to dividends or other distributions to the
holders of other types of ownership interests in such entity.

“Preferred Stock” means any class of capital stock of a Person that is preferred
over any other class of capital stock (or similar equity interests) of such
Person as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such Person.

“Presentation” is defined in Section 5.3.

“Primary Credit Facility” means the Fifth Amended and Restated Senior Credit
Agreement dated as of October 19, 2018, by and among the Company, the Parent
Guarantor, KeyBank National Association, as administrative agent, and the other
financial institutions party thereto, as amended, restated, joined, supplemented
or otherwise modified from time to time, and any renewals, extensions,
refinancings or replacements thereof.

“Project” means any real estate asset operated or intended to be operated as an
industrial property.

“property” or “properties” means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate.

“PTE” is defined in Section 6.2(a).

“Purchaser” or “Purchasers” means each of the purchasers that has executed and
delivered this Agreement to the Company and such Purchaser’s successors and
assigns (so long as any such assignment complies with Section 13.2), provided,
however, that any Purchaser of a Note that ceases to be the registered holder or
a beneficial owner (through a nominee) of such

 

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Note as the result of a transfer thereof pursuant to Section 13.2 shall cease to
be included within the meaning of “Purchaser” of such Note for the purposes of
this Agreement upon such transfer.

“Qualified Institutional Buyer” means any Person who is a “qualified
institutional buyer” within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.

“Qualifying Ground Lease” means a ground lease that has (i) a remaining term of
at least twenty-five (25) years including, for this purpose, any renewal option
exercisable at the sole option of the ground lessee thereunder, with no veto or
approval rights by the ground lessor or any lender to such ground lessor,
(ii) can be mortgaged without the consent of the ground lessor thereunder,
(iii) contains customary leasehold mortgagee protection rights reasonably
satisfactory to the Required Holders, (iv) can be transferred without the
consent of the ground lessor thereunder (or if consent of such ground lessor is
required, such consent is subject to either an express reasonableness standard
or an objective financial standard for the transferee that is reasonably
satisfactory to the Required Holders), and (v) that the tenant under the ground
lease is entitled to all insurance proceeds and condemnation awards (other than
the amount attributable to landlord’s fee interest in the land if an adjustment
in rent is provided for in connection therewith).

“Qualifying Unencumbered Property” means any Eligible Unencumbered Property
which, as of any date of determination: (a) is not, nor is any of the Company’s
direct or indirect ownership interests in the Subsidiary Guarantor owning such
Project, subject to any Negative Pledge or any Lien (other than those described
in clauses (a) through (d) of the definition of Permitted Liens); (b) had an
Occupancy Percentage of at least sixty-five percent (65%) at the time it was
added to the Unencumbered Property Pool; and (c) is not required to be
eliminated by Section 10.8 hereof.

“QPAM Exemption” is defined in Section 6.2(d).

“Recourse Indebtedness” means any Indebtedness of the Company or any other
member of the Consolidated Group other than Non-Recourse Indebtedness.

“Related Fund” means, with respect to any holder of any Note, any fund or entity
that (i) invests in Securities or bank loans, and (ii) is advised or managed by
such holder, the same investment advisor as such holder or by an affiliate of
such holder or such investment advisor.

“Required Holders” means at any time (a) prior to the Closing, the Purchasers
and (b) on or after the Closing, the holders of at least 66% in principal amount
of the Notes at the time outstanding (exclusive of Notes then owned by the
Parent Guarantor, the Company or any of its Affiliates).

“Responsible Officer” means any Senior Financial Officer and any other officer
of the Company or the Parent Guarantor with responsibility for the
administration of the relevant portion of this Agreement.

 

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“S&P” means Standard & Poor’s Rating Services and any successor to the rating
agency business of Standard & Poor’s Rating Services.

“SEC” means the Securities and Exchange Commission of the United States, or any
successor thereto.

“Secured Indebtedness” means (without duplication) the sum of (a) all
Indebtedness of Subsidiaries (excluding (i) Indebtedness owing to any other
member of the Consolidated Group and (ii) Indebtedness of a Subsidiary
Guarantor) and (b) all Indebtedness of the Company or any other member of the
Consolidated Group which is secured by a Lien on a Project, any ownership
interests in any Person or any other assets which had, in the aggregate, a value
in excess of the amount of such Indebtedness at the time such Indebtedness was
incurred.

“Securities” or “Security” shall have the meaning specified in section 2(a)(1)
of the Securities Act.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

“Senior Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company, the Parent
Guarantor or any Subsidiary Guarantor, as applicable.

“Source” is defined in Section 6.2.

“Subsidiary” of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a “Subsidiary” shall mean a
Subsidiary of the Company.

“Subsidiary Guarantor” means each Subsidiary that has executed and delivered a
Subsidiary Guaranty.

“Subsidiary Guaranty” is defined in Section 2.2.

“Substitute Purchaser” is defined in Section 21.

“SVO” means the Securities Valuation Office of the NAIC or any successor to such
Office.

“Swap Contract” means (a) any and all interest rate swap transactions, basis
swap transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or

 

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options, bond or bond price or bond index swaps or options or forward foreign
exchange transactions, cap transactions, floor transactions, currency options,
spot contracts or any other similar transactions or any of the foregoing
(including, without limitation, any options to enter into any of the foregoing),
and (b) 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. or any International Foreign Exchange Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amounts(s) determined as the
mark-to-market values(s) for such Swap Contracts, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts.

“Synthetic Lease” means, at any time, any lease (including leases that may be
terminated by the lessee at any time) of any property (a) that is accounted for
as an operating lease under GAAP and (b) in respect of which the lessee retains
or obtains ownership of the property so leased for U.S. federal income tax
purposes, other than any such lease under which such Person is the lessor.

“U.K. Economic Sanctions” means those laws, executive orders, enabling
legislation or regulations administered and enforced by the United Kingdom
pursuant to which economic sanctions have been imposed on any Person, entity,
organization, country or regime, including the Anti-Terrorism, Crime and
Security Act 2001, Counter Terrorism Act 2008 and Terrorist Asset-Freezing etc.
Act 2010.

“Unencumbered Property” means, as of any date, any Qualifying Unencumbered
Property.

“Unencumbered Property Pool” means, as of any date, all Qualifying Unencumbered
Properties as of such date.

“Unencumbered Property Pool Leverage Ratio” means the Unsecured Indebtedness
divided by Unencumbered Property Pool Value, expressed as a percentage.

“Unencumbered Property Pool NOI” means, as of any date, the Net Operating Income
for the applicable period of the Company attributable to all Unencumbered
Properties owned by a Subsidiary Guarantor as of such date, but excluding any
portion of such Net Operating Income attributable to a tenant who is an Excluded
Tenant as of such date.

“Unencumbered Property Pool Value” means, as of any date, the sum of (x) the
most recent two (2) full fiscal quarters of Unencumbered Property Pool NOI
attributable to all Unencumbered Properties owned by a Subsidiary Guarantor as
of such date of determination

 

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which have been owned by such Subsidiary Guarantor for the most recent four
(4) full fiscal quarters for which financial results of the Company have been
reported, multiplied by two (2), with the product thereof divided by the
Capitalization Rate plus (y) the aggregate cost value basis of all Unencumbered
Properties owned by a Subsidiary Guarantor as of such date of determination
which were not so owned for such period of four (4) consecutive full fiscal
quarters. Notwithstanding the foregoing, for purposes of calculating the amount
of Unencumbered Property Pool NOI to be used in clause (x) of the preceding
sentence of this definition, (A) no Unencumbered Property shall be deemed to
have Net Operating Income of less than zero for any period and (B) if any
Unencumbered Property is subject to a Lease which has commenced but provides for
an initial period of rent abatement or reduction that falls in whole or in part
within the period on which Unencumbered Property Pool NOI is being calculated,
the Net Operating Income attributable to such Unencumbered Property for such
initial abatement or reduction period shall be determined as if the rental
income for such Unencumbered Property included rents paid at the rental rate
that will be payable under such Lease during the first full calendar month
immediately following such period, provided that (i) no such period of deemed
increase shall continue for longer than the first twenty percent (20%) of the
initial term of such Lease and (ii) the portion of Unencumbered Property Pool
Value attributable to Unencumbered Properties which have Unencumbered Property
Pool NOI then deemed to be increased under this clause (B) shall not at any time
constitute more than fifteen percent (15%) of total Unencumbered Property Pool
Value.

“Unimproved Land” means, as of any date, any land which (i) is not appropriately
zoned for industrial development, (ii) does not have access to all necessary
utilities or (iii) does not have access to publicly dedicated streets, unless
such land has been designated in writing by the Company in a certificate
delivered to the Required Holders as land that is reasonably expected to satisfy
all such criteria within twelve (12) months after such date, but excluding in
any event any land which qualifies as a Drop Lot.

“Unrestricted Cash and Cash Equivalents” means, in the aggregate, all cash and
Cash Equivalents which are not pledged or otherwise restricted for the benefit
of any creditor and which are owned by the Company or another member of the
Consolidated Group, to be valued for purposes of this Agreement at 100% of its
then-current book value, as determined under GAAP.

“Unsecured Debt Service Coverage” means, as of any date, the then-current
Adjusted Unencumbered Property Pool NOI divided by the then-current Unsecured
Interest Expense.

“Unsecured Indebtedness” means, as of any date of determination, the aggregate
principal amount of Consolidated Total Indebtedness outstanding at such date
that is not secured by a Lien evidenced by a mortgage, deed of trust, assignment
of partnership interests or other security interest. Notwithstanding the
foregoing, Unsecured Indebtedness shall include Recourse Indebtedness that is
secured solely by partnership or other ownership interests in any Subsidiary or
Investment Affiliate that owns a Project that is encumbered by a mortgage
securing Indebtedness.

 

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“Unsecured Interest Expense” means Consolidated Interest Expense attributable to
the Unsecured Indebtedness of the Company, Parent Guarantor and the Subsidiary
Guarantors.

“USA PATRIOT Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

“U.S. Economic Sanctions” is defined in Section 5.16(a).

“U.S. Tax Compliance Certificate” is defined in Section 14.3(a).

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary all of the equity
interests (except directors’ qualifying shares) and voting interests of which
are owned by any one or more of the Company and the Company’s other Wholly-Owned
Subsidiaries at such time.

 

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[FORM OF NOTE]

TERRENO REALTY LLC

3.14% SENIOR GUARANTEED NOTE DUE DECEMBER 2, 2029

 

No. [                    ]   [                    ] $[            ]   PPN 88150*
AE3

FOR VALUE RECEIVED, the undersigned, Terreno Realty LLC (herein called the
“Company”), a limited liability company organized and existing under the laws of
the State of Delaware, hereby promises to pay to [                    ], or
registered assigns, the principal sum of [                    ] DOLLARS (or so
much thereof as shall not have been prepaid) on December 2, 2029 (the “Maturity
Date”), with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance hereof at the rate of 3.14% per annum from the
date hereof, payable semiannually, on the 2nd day of June and December in each
year, commencing with the June 2 or December 2 next succeeding the date hereof,
and on the Maturity Date, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, (x) on any overdue payment of
interest and (y) during the continuance of an Event of Default, on such unpaid
balance and on any overdue payment of any Make-Whole Amount, at a rate per annum
from time to time equal to the greater of (i) 5.14% or (ii) 2.00% over the rate
of interest publicly announced by KeyBank from time to time in New York, New
York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at
the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of the United States of America at
KeyBank or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.

This Note is one of a series of Senior Notes (herein called the “Notes”) issued
pursuant to the Note Purchase Agreement, dated September 12, 2019 (as from time
to time amended, the “Note Purchase Agreement”), among the Company, the Parent
Guarantor and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) made the representation set
forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated,
capitalized terms used in this Note shall have the respective meanings ascribed
to such terms in the Note Purchase Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer accompanied by a
written instrument of transfer

SCHEDULE 1

(to Note Purchase Agreement)

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

duly executed, by the registered holder hereof or such holder’s attorney duly
authorized in writing, a new Note for a like principal amount will be issued to,
and registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

This Note is subject to optional prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of
the Company and the holder of this Note shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would permit the application of the laws of a jurisdiction other than such
State.

 

TERRENO REALTY LLC By: Terreno Realty Corporation, its sole member By  

 

Name:   Jaime J. Cannon Title:   Executive Vice President,   Chief Financial
Officer and   Secretary

 

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FORM OF SUBSIDIARY GUARANTY

This Subsidiary Guaranty is made as of [                    ] (this “Guaranty”)
by the parties identified in the signature pages thereto, and any Joinder to
Guaranty hereafter delivered (collectively, the “Subsidiary Guarantors”), to and
for the benefit of the Purchasers listed in Schedule B to the hereinafter
defined Note Purchase Agreement (the “Purchasers”) and the holders from time to
time of the Notes. The Purchasers and such holders are collectively called the
“holders”, and individually a “holder”.

RECITALS

A. Terreno Realty LLC, a limited liability company organized under the laws of
the State of Delaware (the “Company”), has authorized the issuance and sale of
$100,000,000 aggregate principal amount of its 3.14% Senior Guaranteed Notes due
December 2, 2029 (the “Notes”) pursuant to that certain Note Purchase Agreement
dated September 12, 2019 (the “Note Purchase Agreement”), among the Company,
Terreno Realty Corporation, a corporation organized under the laws of Maryland,
as parent guarantor (the “Parent Guarantor”) and the Purchasers.

B. The Purchasers have agreed to purchase the Notes pursuant to the terms and
conditions set forth in the Note Purchase Agreement, including, but not limited
to, the condition that the Subsidiary Guarantors execute and deliver this
Guaranty. All capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in the Note Purchase Agreement.

C. The Company has executed and delivered or will execute and deliver to the
Purchasers the Notes. The Parent Guarantor has unconditionally guaranteed or
will unconditionally guarantee the payment and performance obligations under the
Notes and the Note Purchase Agreement.

D. The Subsidiary Guarantors are subsidiaries of the Company. The Subsidiary
Guarantors acknowledge that the Company’s issuance and sale of the Notes and the
Purchasers’ agreement to purchase the Notes issued by the Company pursuant to
the Note Purchase Agreement will directly and indirectly benefit the Subsidiary
Guarantors by making funds available to Subsidiary Guarantors through the
Company and by enhancing the financial strength of the Consolidated Group of
which the Subsidiary Guarantors, the Company and the Parent Guarantor are
members. The execution and delivery of this Guaranty by the Subsidiary
Guarantors is a condition precedent to the performance by the Purchasers of
their obligations under the Note Purchase Agreement.

GUARANTY AND AGREEMENTS

NOW, THEREFORE, the Subsidiary Guarantors, in consideration of the matters
described in the foregoing Recitals, which Recitals are incorporated herein and
made a part hereof, and for other good and valuable consideration, hereby agree
as follows:

1. The Subsidiary Guarantors absolutely, unconditionally, and irrevocably
guaranty to each of the holders:

SCHEDULE 2

(to Note Purchase Agreement)

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

(a) the full and prompt payment of the principal of and interest on the Notes
and Make-Whole Amount, if any, when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, and the prompt payment
of all sums that may now be or may hereafter become due and owing under the
Notes, the Note Purchase Agreement or any Subsidiary Guaranty;

(b) the payment of all Enforcement Costs (as hereinafter defined in Paragraph 7
hereof); and

(c) the full, complete, and punctual observance, performance, and satisfaction
of all of the obligations, duties, covenants, and agreements of the Company
under the Note Purchase Agreement and the Notes.

All amounts due, debts, liabilities, and payment obligations described in
subparagraph (a) of this Paragraph 1 are referred to herein as the “Guaranteed
Indebtedness.” All obligations described in subparagraph (c) of this Paragraph 1
are referred to herein as the “Obligations.” The Subsidiary Guarantors, the
Company, and the holders agree that the Subsidiary Guarantors’ obligations
hereunder shall not exceed the greater of: (i) the aggregate amount of all
monies received, directly or indirectly, by the Subsidiary Guarantors from the
Company (whether by loan, capital infusion or other means) which were received
and which have not been repaid, or (ii) the maximum amount of the Guaranteed
Indebtedness not subject to avoidance under Title 11 of the United States Code,
as same may be amended from time to time, or any applicable state law (the
“Bankruptcy Code”). To that end, to the extent such obligations would otherwise
be subject to avoidance under the Bankruptcy Code if the Subsidiary Guarantors
are not deemed to have received valuable consideration, fair value or reasonably
equivalent value for its obligations hereunder, each Subsidiary Guarantor’s
obligations hereunder shall be reduced to that amount which, after giving effect
thereto, would not render such Subsidiary Guarantor insolvent, or leave such
Subsidiary Guarantor with an unreasonably small capital to conduct its business,
or cause such Subsidiary Guarantor to have incurred debts (or intended to have
incurred debts) beyond its ability to pay such debts as they mature, as such
terms are determined, and at the time such obligations are deemed to have been
incurred, under the Bankruptcy Code. In the event a Subsidiary Guarantor shall
make any payment or payments under this Guaranty, each other guarantor of the
Guaranteed Indebtedness shall contribute to such Subsidiary Guarantor an amount
equal to such non-paying Subsidiary Guarantor’s pro rata share (based on their
respective maximum liabilities hereunder and under such other guaranty) of such
payment or payments made by such Subsidiary Guarantor, provided that such
contribution right shall be subordinate and junior in right of payment in full
of all the Guaranteed Indebtedness to the holders.

2. In the event of any default by the Company in making payment of the
Guaranteed Indebtedness, or in the performance of the Obligations, as aforesaid,
in each case beyond the expiration of any applicable grace period, the
Subsidiary Guarantors agree, on demand by the holders, to pay all the Guaranteed
Indebtedness and to perform all the Obligations as are then or thereafter become
due and owing or are to be performed under the terms of the Notes or the Note
Purchase Agreement, as the case may be.

3. The Subsidiary Guarantors do hereby waive (i) notice of acceptance of this
Guaranty by the holders and any and all notices and demands of every kind that
may be required to be given by any law, (ii) any defense or right of set-off
that the Subsidiary Guarantors may have against the

 

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Company or the Parent Guarantor or which the Subsidiary Guarantors, the Company
or the Parent Guarantor may have against any holder of a Note, (iii) presentment
for payment, demand for payment (other than as provided for in Paragraph 2
above), notice of nonpayment (other than as provided for in Paragraph 2 above)
or dishonor, protest and notice of protest, diligence in collection and any and
all formalities which otherwise might be legally required to charge the
Subsidiary Guarantors with liability, (iv) any defense based on the failure by
the holders to inform the Subsidiary Guarantors of any fact that the holder may
now or hereafter know about the Company, the Parent Guarantor, the Notes, the
Note Purchase Agreement or the transactions contemplated by the Note Purchase
Agreement, it being understood and agreed that the holders have no duty so to
inform and that the Subsidiary Guarantors are fully responsible for being and
remaining informed by the Company or the Parent Guarantor of all circumstances
bearing on the existence or creation, or the risk of nonpayment of the
Guaranteed Indebtedness or the risk of nonperformance of the Obligations, and
(v) any and all right to cause a marshalling of assets of the Company or any
other action by any court or governmental body with respect thereto, or to cause
the holders to proceed against any other security given another holder in
connection with the Guaranteed Indebtedness or the Obligations. The holders
shall have no obligation to disclose or discuss with any Subsidiary Guarantor,
such holder’s assessment of the financial condition of the Company. The
Subsidiary Guarantors acknowledge that no representations of any kind whatsoever
have been made by the holders to the Subsidiary Guarantors. No modification or
waiver of any of the provisions of this Guaranty shall be binding upon the
holders except as expressly set forth in a writing duly signed and delivered on
behalf of the holders. The Subsidiary Guarantors further agree that any
exculpatory language contained in the Note Purchase Agreement or the Notes shall
in no event apply to this Guaranty, and will not prevent any holder from
proceeding against the Subsidiary Guarantors to enforce this Guaranty.

4. The Subsidiary Guarantors further agree that Subsidiary Guarantors’ liability
as guarantors shall in no way be impaired by any renewals or extensions which
may be made from time to time, with or without the knowledge or consent of the
Subsidiary Guarantors of the time for payment of interest or principal under a
Note or any Make-Whole Amount or by any forbearance or delay in collecting
interest or principal under a Note, or by any waiver by any holder under the
Note Purchase Agreement, the Notes, or this Guaranty, or by any holder’s failure
or election not to pursue any other remedies they may have against the Company
or the Parent Guarantor, or by any change or modification in a Note, the Note
Purchase Agreement, or this Guaranty, or by the acceptance by any holder of any
security or any increase, substitution or change therein, or by the release by
any holder of any security or any withdrawal thereof or decrease therein, or by
the application of payments received from any source to the payment of any
obligation other than the Guaranteed Indebtedness, (unless such payment was
expressly directed to be applied to the Guaranteed Indebtedness and such
direction was made in accordance with the Note Purchase Agreement) even though a
holder might lawfully have elected to apply such payments to any part or all of
the Guaranteed Indebtedness, it being the intent hereof that the Subsidiary
Guarantors shall remain liable as principal for payment of the Guaranteed
Indebtedness and performance of the Obligations until all indebtedness has been
paid in full and the other terms, covenants and conditions of the Note Purchase
Agreement, the Notes and this Guaranty have been performed, notwithstanding any
act or thing which might otherwise operate as a legal or equitable discharge of
a surety. The Subsidiary Guarantors further understand and agree that the
holders may at any time enter into agreements with the Company to amend and
modify a Note, and with the Company and the Parent Guarantor to amend and modify
a Note, the Note Purchase Agreement or this Guaranty and may waive or release
any provision or provisions of a

 

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Note, the Note Purchase Agreement, or this Guaranty and, with reference to such
instruments, may make and enter into any such agreement or agreements as the
holders and the Company may deem proper and desirable, without in any manner
impairing this Guaranty or any of the holders’ rights hereunder or any of the
Subsidiary Guarantors’ obligations hereunder.

5. This is an absolute, unconditional, complete, present and continuing guaranty
of payment and performance and not of collection. Each Subsidiary Guarantor
agrees that its obligations hereunder shall be joint and several with any and
all other guarantees given in connection with the Note Purchase Agreement and
the Notes from time to time. The Subsidiary Guarantors agree that this Guaranty
may be enforced by the holders without the necessity at any time of resorting to
or exhausting any security or collateral, if any, given in connection herewith
or with a Note or the Note Purchase Agreement or by or resorting to any other
guaranties, and the Subsidiary Guarantors hereby waive the right to require any
holder to join the Company or the Parent Guarantor in any action brought
hereunder or to commence any action against or obtain any judgment against the
Company or the Parent Guarantor or to pursue any other remedy or enforce any
other right. The Subsidiary Guarantors further agree that nothing contained
herein or otherwise shall prevent the holders from pursuing concurrently or
successively all rights and remedies available to them at law and/or in equity
or under a Note, the Note Purchase Agreement or this Guaranty, and the exercise
of any of their rights or the completion of any of their remedies shall not
constitute a discharge of any of any the Subsidiary Guarantor’s obligations
hereunder, it being the purpose and intent of the Subsidiary Guarantors that the
obligations of such Subsidiary Guarantors hereunder shall be primary, absolute,
independent and unconditional under any and all circumstances whatsoever.
Neither the Subsidiary Guarantors’ obligations under this Guaranty nor any
remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by any impairment, modification, change,
release or limitation of the liability of the Company or the Parent Guarantor
under a Note, the Note Purchase Agreement or this Guaranty or by reason of the
Company’s or the Parent Guarantor’s bankruptcy or by reason of any creditor or
bankruptcy proceeding instituted by or against the Company or the Parent
Guarantor. This Guaranty shall continue to be effective and be deemed to have
continued in existence or be reinstated (as the case may be) if at any time
payment of all or any part of any sum payable pursuant to a Note, the Note
Purchase Agreement, or any other related document is rescinded or otherwise
required to be returned by the payee upon the insolvency, bankruptcy, or
reorganization of the payor, all as though such payment to such party had not
been made, regardless of whether such party contested the order requiring the
return of such payment. The obligations of the Subsidiary Guarantors pursuant to
the preceding sentence shall survive any termination, cancellation, or release
of this Guaranty.

6. This Guaranty shall be assignable by a holder to any assignee of all or a
portion of such holder’s rights under the Note Purchase Agreement or the Notes.

7. If: (i) this Guaranty, a Note or the Note Purchase Agreement is placed in the
hands of an attorney for collection or is collected through any legal
proceeding; (ii) an attorney is retained to represent the holders in any
bankruptcy, reorganization, receivership, or other proceedings affecting
creditors’ rights and involving a claim under this Guaranty, a Note or the Note
Purchase Agreement; (iii) an attorney is retained to provide advice or other
representation with respect to this Guaranty, a Note or the Note Purchase
Agreement in connection with an enforcement action or potential enforcement
action; or (iv) an attorney is retained to represent the holders in any other
legal proceedings whatsoever in connection with this Guaranty, a Note or the
Note Purchase Agreement,

 

-4-

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or any property securing the Guaranteed Indebtedness, then the Subsidiary
Guarantors shall pay to such holders upon demand all reasonable attorney’s fees,
costs and expenses, including, without limitation, court costs, filing fees and
all other costs and expenses incurred in connection therewith (all of which are
referred to herein as “Enforcement Costs”), in addition to all other amounts due
hereunder.

8. The parties hereto intend that each provision in this Guaranty comports with
all applicable local, state and federal laws and judicial decisions. However, if
any provision or provisions, or if any portion of any provision or provisions,
in this Guaranty is found by a court of law to be in violation of any applicable
local, state or federal ordinance, statute, law, administrative or judicial
decision, or public policy, and if such court should declare such portion,
provision or provisions of this Guaranty to be illegal, invalid, unlawful, void
or unenforceable as written, then it is the intent of all parties hereto that
such portion, provision or provisions shall be given force to the fullest
possible extent that they are legal, valid and enforceable, that the remainder
of this Guaranty shall be construed as if such illegal, invalid, unlawful, void
or unenforceable portion, provision or provisions were not contained therein,
and that the rights, obligations and interest of any holder of a Note under the
remainder of this Guaranty shall continue in full force and effect.

9. Any indebtedness of the Company or the Parent Guarantor to the Subsidiary
Guarantors now or hereafter existing is hereby subordinated to the Guaranteed
Indebtedness. The Subsidiary Guarantors will not seek, accept, or retain for
such Subsidiary Guarantors’ own accounts, any payment from the Company or the
Parent Guarantor on account of such subordinated debt at any time when a Default
or Event of Default exists under the Note Purchase Agreement, and any such
payments to the Subsidiary Guarantors made while any such Default or Event of
Default then exists under the Note Purchase Agreement shall be collected and
received by the Subsidiary Guarantors in trust for the holders and shall be paid
over to the holders, on account of the Guaranteed Indebtedness without impairing
or releasing the obligations of the Subsidiary Guarantors hereunder.

10. The Subsidiary Guarantors hereby subordinate to the Guaranteed Indebtedness
any and all claims and rights, including, without limitation, subrogation
rights, contribution rights, reimbursement rights and set-off rights, which the
Subsidiary Guarantors may have against the Company or the Parent Guarantor
arising from a payment made by the Subsidiary Guarantors under this Guaranty and
agree that, until the entire Guaranteed Indebtedness is paid in full, not to
assert or take advantage of any subrogation rights of the Subsidiary Guarantors
or any right of the Subsidiary Guarantors or holders to proceed against (i) the
Company or the Parent Guarantor for reimbursement, or (ii) any other guarantor
or any collateral security or guaranty or right of offset held by the holders
for the payment of the Guaranteed Indebtedness and performance of the
Obligations, nor shall the Subsidiary Guarantors seek or be entitled to seek any
contribution or reimbursement from the Company or the Parent Guarantor or any
other guarantor in respect of payments made by the Subsidiary Guarantors
hereunder. It is expressly understood that the agreements of the Subsidiary
Guarantors set forth above constitute additional and cumulative benefits given
to the holders for their security and as an inducement for their purchase of the
Notes.

11. Any amounts received by a holder from any source on account of any
indebtedness may be applied by such holder toward the payment of such
indebtedness, and in such order of application, as such holder may from time to
time elect.

 

-5-

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REPRESENTATIONS AND WARRANTIES.

12. Each Subsidiary Guarantor represents and warrants to each holder as follows:

(a) Such Subsidiary Guarantor is a limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign limited liability company and
is in good standing in each jurisdiction in which such qualification is required
by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Such Subsidiary
Guarantor has the limited liability company power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Guaranty and to perform the provisions hereof.

(b) This Guaranty has been duly authorized by all necessary limited liability
company action on the part of such Subsidiary Guarantor, and this Guaranty
constitutes a legal, valid and binding obligation of such Subsidiary Guarantor
enforceable against such Subsidiary Guarantor in accordance with its terms,
except as such enforceability may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

(c) Such Subsidiary Guarantor has delivered to each holder copies of the
financial statements of the Consolidated Group listed on Schedule 5.5 to the
Note Purchase Agreement. All of such financial statements (including in each
case the related schedules and notes) fairly present in all material respects
the consolidated financial position of the Consolidated Group as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments). Such
Subsidiary Guarantor and its Subsidiaries do not have any Material liabilities
that are material to such Subsidiary Guarantor and its Subsidiaries taken as a
whole that are not disclosed in such financial statements.

(d) The execution, delivery and performance by such Subsidiary Guarantor of this
Guaranty will not (i) contravene, result in any breach of, or constitute a
default under, any (a) indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease or any other agreement or instrument to which such
Subsidiary Guarantor or any of its Subsidiaries is bound or by which such
Subsidiary Guarantor or any of its Subsidiaries or any of their respective
properties may be bound or affected, or (b) limited liability company or
corporate charter, operating agreement or by-laws or any other legal entity
organizational documents or members or shareholders agreement or similar
agreement, or (ii) result in the creation of any Lien in respect of any property
of the Subsidiary Guarantor or any of its Subsidiaries under any of the
agreements, instruments or documents described in the foregoing clause (i), or

 

-6-

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(iii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority applicable to the Subsidiary Guarantor or any of its
Subsidiaries or (iv) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Subsidiary Guarantor
or any of its Subsidiaries, except in each case (excluding clauses (i)(b) and
(ii) herein) that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

(e) Such Subsidiary Guarantor now has and will continue to have independent
means of obtaining information concerning the affairs, financial condition and
business of the Company and the Parent Guarantor. No holder shall have any duty
or responsibility to provide such Subsidiary Guarantor with any credit or other
information concerning the affairs, financial condition or business of the
Company or the Parent Guarantor which may come into possession of the holders.
Such Subsidiary Guarantor has executed and delivered this Guaranty without
reliance upon any representation by the holders including, without limitation,
with respect to (i) the due execution, validity, effectiveness or enforceability
of any instrument, document or agreement evidencing or relating to any of the
Guaranteed Indebtedness or Obligations or any loan or other financial
accommodation made or granted to the Company or the Parent Guarantor, (ii) the
validity, genuineness, enforceability, existence, value or sufficiency of any
property securing any of the Guaranteed Indebtedness or Obligations or the
creation, perfection or priority of any lien or security interest in such
property or (iii) the existence, number, financial condition or creditworthiness
of other guarantors or sureties, if any, with respect to any of the Guaranteed
Indebtedness or Obligations.

(f) Upon the execution and delivery hereof, such Subsidiary Guarantor will be
solvent, will be able to pay its debts as they mature, and will have capital
sufficient to carry on its business.

MISCELLANEOUS

13. The Subsidiary Guarantors hereby irrevocably submit to the non-exclusive
jurisdiction of any state court in New York New York, or the United States
District Court sitting in the Borough of Manhattan, City of New York, New York
in any action, suit, or proceeding arising out of or relating to this Guaranty.
To the fullest extent permitted by applicable law, the Subsidiary Guarantors
irrevocably waive and agree not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the jurisdiction of any such
court, any objection that it may now or hereafter have to the laying of the
venue of any such action, suit, or proceeding in any such court and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.

 

-7-

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

14. All notices and communications provided for under this Guaranty shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below or at such other address as may be designated by
such party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by facsimile, shall be deemed given when transmitted. Notice may
be given as follows:

To Subsidiary Guarantors:

 

c/o Terreno Realty Corporation 101 Montgomery Street, Suite 200, San Francisco
CA 94104 Attention:    Jaime J. Cannon Telephone:    (415) 655-4593 Facsimile:
   (415) 655-4599

With a copy to:

 

Goodwin Procter LLP 620 8th Avenue New York NY 10018 Attention:    Ettore
Santucci, Esq. Telephone:    212-459-7413 Facsimile:    617-523-1231

To any holder, to its address set forth in Schedule B to the Note Purchase
Agreement or such other addresses as such holder shall have specified to the
Subsidiary Guarantors in writing.

15. This Guaranty shall be binding upon the heirs, executors, legal and personal
representatives, successors and assigns of the Subsidiary Guarantors and shall
inure to the benefit of the holders and their respective successors and assigns.

16. This Guaranty shall be construed and enforced under the internal laws of the
State of New York.

17. THE SUBSIDIARY GUARANTORS, BY THEIR ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS GUARANTY, THE NOTE PURCHASE AGREEMENT OR THE NOTES OR ANY OTHER
DOCUMENT EXECUTED IN CONNECTION THEREWITH.

18. From time to time, additional parties may execute a joinder substantially in
the form of Exhibit A hereto, and thereby become a party to this Guaranty. From
and after delivery of such joinder, the Subsidiary delivering such joinder shall
be a Subsidiary Guarantor, and be bound by all of the terms and provisions of
this Guaranty.

 

-8-

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

IN WITNESS WHEREOF, Subsidiary Guarantors have delivered this Guaranty as of the
date first written above.

 

TERRENO AMERICA’S GATEWAY LLC By:   TERRENO REALTY LLC, its Manager   By:  
TERRENO REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO RIALTO LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 79TH AVE SOUTH LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO KENT CORPORATE PARK LLC By:   TERRENO REALTY LLC, its Manager   By:  
TERRENO REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO MITC LLC By:   TERRENO REALTY LLC,
its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 4930 3RD AVENUE SOUTH LLC By:  
TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole
member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO INTERSTATE LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 299 LAWRENCE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 60TH AVENUE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO DORSEY LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY
    CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO DELL LLC By:   TERRENO REALTY LLC,
its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 70TH AVENUE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 48TH AVE LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO GLOBAL PLAZA LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 78TH AVENUE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO CARIBBEAN LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO CARLTON COURT LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 26TH STREET LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO SWEITZER LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO SOUTH MAIN LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 631 BRENNAN LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO SEATAC 8TH AVE LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 107TH AVE LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 101ST ROAD LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 17 MADISON LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 1 DODGE LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 550 DELANCY LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 341 MICHELE LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 465 MEADOW LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 60 ETHEL LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 4230 FORBES LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO AIRGATE LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 3601 PENNSY LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO MELANIE LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY
    CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO MELANIE II LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO PARKWAY LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 20 PULASKI LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 747 GLASGOW LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 10TH AVENUE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 19601 HAMILTON LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO SW 34TH LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 900 HART LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO PARK UNION CITY LLC By:   TERRENO REALTY LLC, its Manager   By:  
TERRENO REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 75TH AVE LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO V STREET LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO NW 81ST LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY
    CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO AHERN II LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO KENT 190TH LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 14611 BROADWAY LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 240 LITTLEFIELD LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO BURROUGHS LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO AUBURN 1307 LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO LAS HERMANAS LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO KENT 216TH LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO JUNCTION LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO NW 131ST STREET LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO TROY HILL LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO TROY HILL HOLDINGS LLC By:   TERRENO REALTY LLC, its Manager   By:  
TERRENO REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO TERMINAL WAY LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO OLYMPIC LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 238 LAWRENCE LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO MIDDLEBROOK LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 630 GLASGOW LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 3401 LIND LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 180 MANOR LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 22 MADISON LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 4225 2ND AVENUE SOUTH LLC By:   TERRENO REALTY LLC, its Manager   By:  
TERRENO REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 9070 JUNCTION LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 221 MICHELE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO LUND LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY  
  CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO DENVER AVE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO NW 70TH AVENUE II LLC By:  
TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole
member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 445 WILSON LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 709 HINDRY LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 7120 NW 74TH AVE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 74TH NORTH BERGEN LLC By:   TERRENO REALTY LLC, its Manager   By:  
TERRENO REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO BUSINESS PARKWAY LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO HAMPTON OVERLOOK LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO NEW RIDGE LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO NW 70TH AVE III LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO PATERSON PLANK LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO SCHOOLHOUSE LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 1215 WALNUT LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 12950 RIVER LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 139TH LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY  
  CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 50 KERO LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 7777 WEST SIDE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO ACACIA LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY
    CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO DAWSON LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO DOMINGUEZ LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO HANFORD LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY
    CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO HAWTHORNE LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO LUCILE LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO LYNWOOD LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY
    CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO NEW DUTCH LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO NW 70TH IV LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO STOCKTON LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO TELEGRAPH SPRINGS LLC By:  
TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole
member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO WEST 140TH LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO WHITTIER LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO WICKS LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 85 DOREMUS LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO EAST VALLEY LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO MERCED LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO SAN CLEMENTE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO AHERN LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO REALTY  
  CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO KENT 188 LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 620 DIVISION LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO 17600 WVH LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 2920 V STREET LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO AVENUE A LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

TERRENO WOODSIDE LLC By:   TERRENO REALTY LLC, its Manager   By:   TERRENO
REALTY     CORPORATION, its sole member     By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO 130 COMMERCE LLC By:   TERRENO
REALTY LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member
    By:  

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary TERRENO SHOEMAKER LLC By:   TERRENO REALTY
LLC, its Manager   By:   TERRENO REALTY     CORPORATION, its sole member     By:
 

 

    Name:   Jaime J. Cannon     Title:   Executive Vice President,       Chief
Financial Officer and       Secretary

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

EXHIBIT A TO SUBSIDIARY GUARANTY

FORM OF JOINDER TO GUARANTY

THIS JOINDER (this “Joinder”) is executed by                             , a
                         (“Subsidiary”), which hereby agrees as follows:

1. All capitalized terms used herein and not defined in this Joinder shall have
the meanings provided in that certain Subsidiary Guaranty (the “Guaranty”) dated
as of [            ] executed for the benefit of the holders of Notes, with
respect to the issuance by Terreno Realty LLC (the “Company”) of $100,000,000
aggregate principal amount of its 3.14% Senior Guaranteed Notes due December 2,
2029 (the “Notes”) pursuant to that certain Note Purchase Agreement dated
September 12, 2019 (the “Note Purchase Agreement”), among the Company, Terreno
Realty Corporation, a corporation organized under the laws of Maryland (the
“Parent Guarantor”) and the Purchasers listed in Schedule B thereto.

2. As required by the Note Purchase Agreement, the Subsidiary is executing this
Joinder to become a party to the Guaranty.

3. Each and every term, condition, representation, warranty, and other provision
of the Guaranty, by this reference, is incorporated herein as if set forth
herein in full and the undersigned agrees to fully and timely perform each and
every obligation of a Subsidiary Guarantor under such Guaranty.

 

[NAME OF SUBSIDIARY]

 

By:

 

 

Name:

Title:

Notice Address for such additional

Subsidiary Guarantor