Exhibit 10.134

CREDIT AGREEMENT

DATED AS OF DECEMBER 2, 2015

by and among

GTJ REALTY, LP,

as THE Borrower,

KEYBANK NATIONAL ASSOCIATION,

THE OTHER LENDERS WHICH ARE PARTIES TO THIS AGREEMENT

AND

OTHER LENDERS THAT MAY BECOME

PARTIES TO THIS AGREEMENT,

KEYBANK NATIONAL ASSOCIATION,

AS THE AGENT,

AND

KEYBANC CAPITAL MARKETS INC.,

AS LEAD ARRANGER

 

 

 

 

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

 

Credit Agreement

THIS CREDIT AGREEMENT (this “Agreement”) is made as of December 2, 2015, by and
among GTJ REALTY, LP, a Delaware limited partnership (the “Borrower”), KEYBANK
NATIONAL ASSOCIATION (“KeyBank”), the other lending institutions which are
parties to this Agreement as “Lenders”, and the other lending institutions that
may become parties hereto as “Lenders” pursuant to §18, KEYBANK NATIONAL
ASSOCIATION, as Agent for the Lenders (the “Agent”), and KEYBANC CAPITAL MARKETS
INC., as Lead Arranger (the “Arranger”).

R E C I T A L S

WHEREAS, the Borrower has requested that the Lenders provide a revolving credit
facility to the Borrower; and

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

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

§1.

DEFINITIONS AND RULES OF INTERPRETATION.

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

Acknowledgments.  The Acknowledgments executed by a Guarantor or another Person
in which Equity Interests have been pledged pursuant to the Loan Documents in
favor of the Agent, acknowledging the pledge of Equity Interests in such
Guarantor or other Person to the Agent, such Acknowledgments to be in form and
substance satisfactory to the Agent, as the same may be modified, amended or
restated.

Additional Guarantor.  Each additional Subsidiary of the Borrower which becomes
a Subsidiary Guarantor pursuant to §5.4.

Adjusted Consolidated EBITDA.  With respect to any period of determination, the
sum of (a) Consolidated EBITDA for the applicable period, less (b) the amount
equal to Capital Reserves for such period.

Adjusted Net Operating Income.  On any date of determination for the applicable
Real Estate and with respect to any period, the sum of (i) Net Operating Income
from such Real Estate for the trailing four (4) calendar quarter period, less
(ii) the Capital Reserves for such period.  Notwithstanding the foregoing, for
the calculation above for assets that have been owned by Borrower or a
Subsidiary of Borrower for less than four (4) quarters, the calculation of Net
Operating Income shall be calculated for the first (1st) calendar quarter after
acquisition by multiplying the pro forma Net Operating Income for such Real
Estate (as approved by Agent) for the first (1st) calendar quarter after such
Real Estate is acquired by four (4), and thereafter by

 

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

 

annualizing the most recent actual quarterly Net Operating Income for such Real
Estate since it was acquired until there are four (4) calendar quarters of
actual results.

Affected Lender.  See §4.14.

Affiliate.  An Affiliate, as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person.  For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote ten percent (10%) or more of the stock, shares,
voting trust certificates, beneficial interest, partnership interests, member
interests or other interests having voting power for the election of directors
of such Person or otherwise to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise, or (b) the ownership of (i) a general partnership
interest, (ii) a managing member’s or manager’s interest in a limited liability
company or (iii) a limited partnership interest or preferred stock (or other
ownership interest) representing ten percent (10%) or more of the outstanding
limited partnership interests, preferred stock or other ownership interests of
such Person.

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

Agent Appraisal.  An MAI appraisal of the value of a parcel of Real Estate that
is or is to become a Mortgaged Property (or as provided in §5.2(c), any other
Real Estate), determined on an “as-is” value basis, performed by an independent
appraiser selected by the Agent who is not an employee of REIT, the Borrower,
any of their respective Subsidiaries, the Agent or a Lender, the form and
substance of such appraisal and the identity of the appraiser to be in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, the rules and regulations adopted pursuant thereto and all
other regulatory laws and policies (both regulatory and internal) applicable to
the Lenders and otherwise acceptable to the Agent.

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

Agent’s Special Counsel.  Dentons US LLP or such other counsel as selected by
the Agent.

Agreement.  This Credit Agreement, including the Schedules and Exhibits hereto.

Agreement Regarding Fees.  See §4.2.

Applicable Law.  All applicable provisions of constitutions, statutes, rules,
regulations, guidelines and orders of all Governmental Authorities and all
orders and decrees of all courts, tribunals and arbitrators.

2

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

 

Applicable Margin.  On any date, the Applicable Margin for LIBOR Rate Loans and
Base Rate Loans shall be a percentage per annum as set forth below based on the
ratio of the Consolidated Total Indebtedness to Borrower’s Gross Asset Value:

 

Pricing Level

Ratio

Applicable Margin

for

LIBOR Rate Loans

Applicable Margin

for

Base Rate Loans

Pricing Level 1

Less than 55%

3.00%

2.00%

Pricing Level 2

Equal to or greater than 55% but less than 60%

3.25%

2.25%

Pricing Level 3

Equal to or greater than 60%

3.50%

2.50%

 

The initial Applicable Margin shall be at Pricing Level 1.  The Applicable
Margin for each Base Rate Loan shall be determined by reference to the ratio of
Consolidated Total Indebtedness to Gross Asset Value in effect from time to
time, and the Applicable Margin for any Interest Period for all LIBOR Rate Loans
comprising part of the same borrowing shall be determined by reference to the
ratio of Consolidated Total Indebtedness to Gross Asset Value in effect on the
first (1st) day of such Interest Period.  The Applicable Margin shall not be
adjusted based upon such ratio, if at all, until the first (1st) day of the
first (1st) month following the delivery by REIT to the Agent of the Compliance
Certificate after the end of a calendar quarter.  In the event that REIT shall
fail to deliver to the Agent a quarterly Compliance Certificate on or before the
date required by §7.4(c), then without limiting any other rights of the Agent
and the Lenders under this Agreement, the Applicable Margin for Loans shall be
at Pricing Level 3 until such failure is cured within any applicable cure
period, or waived in writing by the Required Lenders in which event the
Applicable Margin shall adjust, if necessary, on the first (1st) day of the
first (1st) month following receipt of such Compliance Certificate.

In the event that the Agent, REIT or the Borrower determine that any financial
statements previously delivered were incorrect or inaccurate (regardless of
whether this Agreement or the Commitments are in effect when such inaccuracy is
discovered), and such inaccuracy, if corrected, would have led to the
application of a higher Applicable Margin for any period (an “Applicable
Period”) than the Applicable Margin applied for such Applicable Period, then
(a) the Borrower shall as soon as practicable deliver to the Agent the corrected
financial statements for such Applicable Period, (b) the Applicable Margin shall
be determined as if the Pricing Level for such higher Applicable Margin were
applicable for such Applicable Period, and (c) the Borrower shall within three
(3) Business Days of demand thereof by the Agent pay to the Agent the accrued
additional amount owing as a result of such increased Applicable Margin for such
Applicable Period, which payment shall be promptly applied by the Agent in
accordance with this Agreement.

Appraisal.  An Agent Appraisal or Borrower Appraisal, as applicable.

Appraised Value.  The “as-is” value of a parcel of Real Estate determined by the
most recent Appraisal of such Real Estate applicable to such Real Estate
obtained pursuant to this Agreement.

Arranger.  As defined in the preamble hereto.

3

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

 

Assignment and Acceptance Agreement.  See §18.1.

Assignment of Interests.  Collectively, each of the Assignments of Interests
executed by the Borrower or a Subsidiary Guarantor in favor of the Agent, each
such agreement to be substantially in the form of Exhibit L attached hereto,
with such changes thereto as Agent may reasonably require.

Assignment of Leases and Rents.  Each of the assignments of leases and rents
from the Borrower or a Subsidiary Guarantor that is an owner of a Mortgaged
Property to the Agent, as it may be modified or amended, pursuant to which there
shall be assigned to the Agent for the benefit of the Lenders a security
interest in the interest of the Borrower or such Subsidiary Guarantor, as lessor
with respect to all Leases of all or any part of such Mortgaged Property, each
such assignment to be substantially in the form of Exhibit K hereto, with such
changes thereto as Agent may reasonably require as a result of state law or
practice or type of asset.

Authorized Officer.  Any of the following Persons:  Paul Cooper, Louis Sheinker,
Ben Zimmerman and such other Persons as the Borrower shall designate in a
written notice to the Agent.

Balance Sheet Date.  September 30, 2015.

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

Base Rate.  The greater of (a) the fluctuating annual rate of interest announced
from time to time by the Agent at the Agent’s Head Office as its “prime rate”,
(b) one half of one percent (0.5%) above the Federal Funds Effective Rate, and
(c) LIBOR for an Interest Period of one (1) month plus one percent (1.0%).  The
Base Rate is a reference rate used by the lender acting as Agent in determining
interest rates on certain loans and is not intended to be the lowest rate of
interest charged by the lender acting as the Agent or any other lender on any
extension of credit to any debtor.  Any change in the rate of interest payable
hereunder resulting from a change in the Base Rate shall become effective as of
12:01 a.m. on the Business Day on which such change in the Base Rate becomes
effective, without notice or demand of any kind.

Base Rate Loans.  Collectively, (a) the Revolving Credit Loans bearing interest
calculated by reference to the Base Rate and (b) the Swing Loans.

Borrower.  As defined in the preamble hereto.

Borrower Appraisal.  An MAI appraisal reasonably acceptable to the Agent of the
value of Real Estate that is not a Mortgaged Property, determined on an “as-is”
value basis, performed by an independent appraiser.

Breakage Costs.  The cost to any Lender of re-employing funds bearing interest
at LIBOR incurred (or reasonably expected to be incurred) in connection with
(a) any payment of any portion of the Loans bearing interest at LIBOR prior to
the termination of any applicable Interest Period, (b) the conversion of a LIBOR
Rate Loan to any other applicable interest rate on

4

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

 

a date other than the last day of the relevant Interest Period, or (c) the
failure of the Borrower to draw down, on the first day of the applicable
Interest Period, any amount as to which the Borrower has elected a LIBOR Rate
Loan.

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

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

Capital Reserve.  With respect to any Person or property, a reserve for
replacements and capital expenditures equal to $0.15 per square foot of space in
any Building located on any of the Real Estate.

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

Capitalized Value.  With respect to any Stabilized Property owned by Borrower or
any of its Subsidiaries or Unconsolidated Affiliates, an amount equal to (a) the
Adjusted Net Operating Income from such Stabilized Property for the preceding
four (4) calendar quarter period, divided by (b) six and one-fourth percent
(6.25%).

Cash Collateral Agreement.  The Cash Collateral Account and Control Agreement
among Agent, KeyBank as depository, Borrower and the Subsidiary Guarantors which
own Mortgaged Properties.

Cash Equivalents.  As of any date, (a) 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, (b) time deposits and certificates of deposits having maturities of not
more than one (1) year from such date and issued by any domestic commercial bank
having (i) senior long term unsecured debt rated at least A or the equivalent
thereof by S&P or A2 or the equivalent thereof by Moody’s and (ii) capital and
surplus in excess of $100,000,000.00, (c) commercial paper rated at least A‑1 or
the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in
either case maturing within one hundred twenty (120) days from such date, and
(d) shares of any money market mutual fund rated at least AAA or the equivalent
thereof by S&P or at least Aaa or the equivalent thereof by Moody’s.

CERCLA.  The federal Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended from time to time, and regulations promulgated
thereunder.

5

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

 

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

(a) any Person (including a Person’s Affiliates and associates) or group (as
that term is understood under Section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and the rules and regulations thereunder)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of a percentage (based on voting power, in the event different
classes of stock or interests shall have different voting powers) of the voting
stock or voting interests of REIT equal to at least thirty-five percent (35%);

(b) as of any date a majority of the Board of Directors or Trustees or similar
body (the “Board”) of REIT consists of individuals who were not either (i)
directors or trustees of REIT as of the corresponding date of the previous year,
or (ii) selected or nominated to become directors or trustees by the Board of
REIT of which a majority consisted of individuals described in clause (i) above,
or (iii) selected or nominated to become directors or trustees by the Board of
REIT which majority consisted of individuals described in clause (i) above and
individuals described in clause (ii) above;

(c) the REIT, Paul Cooper, Jerome Cooper, Jeffrey Ravetz, Sarah Ravetz, Louis
Sheinker, Jeffrey Wu and the Wu Family 2012 Gift Trust fail to own, directly or
indirectly, at least fifty-one percent (51%) of the ownership interests of
Borrower;

(d) any of Paul Cooper, Chief Executive Officer, or Louis Sheinker, Chief
Operating Officer, shall cease to be an executive officer of the REIT holding
the position described above and a competent and experienced officer shall not
be approved by the Required Lenders within ninety (90) days of such event, which
approval the Required Lenders shall not unreasonably withhold, condition or
delay;

(e) REIT, General Partner or the Borrower consolidates with, is acquired by, or
merges into or with any Person (other than a merger permitted by §8.4);

(f) General Partner fails to (i) be the sole general partner of Borrower,
(ii) own, directly or indirectly, free of any lien, encumbrance or other adverse
claim, at least one percent (1%) of the economic, voting and beneficial interest
of the Borrower, or (iii) control the Borrower;

(g) the Borrower fails to own, directly or indirectly, free of any lien,
encumbrance or other adverse claim (other than any Lien of the Agent granted
pursuant to the Loan Documents), at least one hundred percent (100%) of the
economic, voting and beneficial interest of each Subsidiary Guarantor; or

(h) the REIT fails to (i) own directly, free of any lien, encumbrance or other
adverse claim, at least one hundred percent (100%) of the economic, voting and
beneficial interest of General Partner and at least twenty-five percent (25%) of
the economic, voting and beneficial interest of Borrower or (ii) control the
General Partner.

Closing Date.  The date of this Agreement.

6

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

 

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

Collateral.  All of the property, rights and interests of the Borrower, the
Guarantor or any of their Subsidiaries which are or are intended to be subject
to the security interests, liens and mortgages created by the Security
Documents, including, without limitation, the Mortgaged Property and the
Guaranty.

Collateral Account.  A special deposit account established by the Agent pursuant
to §12.6 and under its sole dominion and control.

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

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

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

Communications.  See §7.4.

Compliance Certificate.  See §7.4(c).

Condemnation Proceeds.  All compensation, awards, damages, judgments and
proceeds awarded to the Borrower or a Subsidiary Guarantor by reason of any
Taking, net of all reasonable and customary amounts actually expended to collect
the same, including, without limitation, reasonable and customary amounts
expended in negotiating, litigating, if appropriate, or investigating the amount
of such compensation, awards, damages, judgments and proceeds.

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

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

7

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

 

Consolidated EBITDA.  With respect to any period, an amount equal to the EBITDA
of REIT and its Subsidiaries for such period determined on a Consolidated basis
plus (without duplication) such Person’s Equity Percentage of EBITDA of its
Unconsolidated Affiliates.

Consolidated Fixed Charges.  With respect to any period, the sum of
(a) Consolidated Interest Expense for such period, plus (b) all of the principal
due and payable and principal paid with respect to Indebtedness of the REIT, the
Borrower and their respective Subsidiaries during such period (and without
double counting amounts funded with reserve accounts if payment to such reserve
accounts has already been taken into account in determining Consolidated Fixed
Charges), other than any balloon, bullet or similar principal payment which
repays such Indebtedness in full and any voluntary prepayments, plus (c) all
Preferred Distributions paid during such period.  Such Person’s Equity
Percentage in the fixed charges referred to above of its Unconsolidated
Affiliates shall be included (without duplication) in the determination of
Consolidated Fixed Charges.

Consolidated Interest Expense.  With respect to any period, without duplication,
(a) total Interest Expense of REIT and its Subsidiaries determined on a
Consolidated basis in accordance with GAAP for such period, plus (b) such
Person’s Equity Percentage of Interest Expense of its Unconsolidated Affiliates
for such period.

Consolidated Tangible Net Worth.  As of any date of determination, for the REIT
and its Subsidiaries, an amount determined by subtracting the Consolidated Total
Indebtedness from the Gross Asset Value.

Consolidated Total Indebtedness.  All Indebtedness of REIT and its Subsidiaries
determined on a Consolidated basis and shall include (without duplication), such
Person’s Equity Percentage of the Indebtedness of its Unconsolidated Affiliates.

Contribution Agreement.  The Contribution Agreement dated as of even date
herewith among the Borrower, REIT, General Partner and the Subsidiary Guarantors
that are a party thereto as of the Closing Date, and each Additional Guarantor
which may hereafter become a party thereto, as the same may be modified, amended
or ratified from time to time.

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

Default.  See §12.1.

Default Rate.  See §4.11.

Defaulting Lender.  Any Lender that, as reasonably determined by the Agent,
(a) has failed to (i) fund all or any portion of its Loans within two (2)
Business Days of the date such Loans were required to be funded by it hereunder
unless such Lender notifies the Agent and the Borrower in writing that such
failure is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii)  pay to Agent, any Issuing Lender, any Swing Loan Lender
or any other Lender any other

8

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

 

amount required to be paid by it hereunder (including in respect of its
participation in Letters of Credit or Swing Loans) within two (2) Business Days
of the date when due, (b) has notified the Borrower, the Agent or any Lender
that it does not intend to comply with its funding obligations hereunder or has
made a public statement to that effect unless with respect to this clause (b),
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied, (c) has failed, within three
(3) Business Days after request by the Agent, to confirm in a manner reasonably
satisfactory to the Agent that it will comply with its funding obligations;
provided that, notwithstanding the provisions of §2.13, such Lender shall cease
to be a Defaulting Lender upon the Agent’s receipt of confirmation that such
Defaulting Lender will comply with its funding obligations, or (d) has, or has a
direct or indirect parent company that has, (i) become the subject of a
proceeding under any bankruptcy, insolvency, reorganization, liquidation,
conservatorship, assignment for the benefit of creditors, moratorium,
receivership, rearrangement or similar debtor relief law of the United States or
other applicable jurisdictions from time to time in effect, including any law
for the appointment of the Federal Deposit Insurance Corporation or any other
state or federal regulatory authority as receiver, conservator, trustee,
administrator or any similar capacity, (ii) had a receiver, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person,
including the Federal Deposit Insurance Corporation or any other state or
federal regulatory authority acting in such capacity, charged with
reorganization or liquidation of its business or a custodian appointed for it,
or (iii) taken any action in furtherance of, or indicated its consent to,
approval of or acquiescence in any such proceeding or appointment; provided that
a Lender shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any equity interest in that Lender or any direct or indirect
parent company thereof by a governmental authority (including any agency,
instrumentality, regulatory body, central bank or other authority) so long as
such ownership interest does not result in or provide such Lender with immunity
from the jurisdiction of courts of the United States or from the enforcement of
judgments or writs of attachment of its assets or permit such Lender (or such
governmental authority or instrumentality) to reject, repudiate, disavow, or
disaffirm any contracts or agreements made with such Person).  Any determination
by the Agent that a Lender is a Defaulting Lender under any one or more of
clauses (a) through (d) above shall be conclusive and binding absent manifest
error, and such Lender shall be deemed to be a Defaulting Lender (subject to
§2.13(g)) upon delivery of written notice of such determination to the Borrower
and each Lender.

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

9

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

 

governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement of similar type, including any such
obligations or liabilities under any such master agreement.

Derivatives Termination Value.  In respect of any one or more Derivatives
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Derivatives Contracts, (a) for any date on or
after the date such Derivatives 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) above, the amount(s)
determined as the mark-to-market value(s) for such Derivatives Contracts, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Derivatives Contracts
(which may include the Agent or any Lender).

Designated Person.  See §6.31.

Development Property.  Any Real Estate owned or acquired by the Borrower or its
Subsidiaries or Unconsolidated Affiliates and on which construction,
redevelopment or material rehabilitation of material improvements for use as an
Industrial Property has commenced and is proceeding to completion without undue
delay from permit denial, construction delays or otherwise, all pursuant to the
ordinary course of business of Borrower and its Subsidiaries; provided that any
Real Estate will no longer be considered a Development Property upon the earlier
of (a) such property reaching an occupancy of at least 85% for the most recent
completed calendar quarter or (b) four (4) complete fiscal quarters after
issuance of the certificate of occupancy for such Real Estate.  Upon meeting the
defined thresholds above, the asset will be considered to be a “Stabilized
Property”.

Directions.  See §14.14.

Distribution.  Any (a) dividend or other distribution, direct or indirect, on
account of any Equity Interest of REIT or any of its Subsidiaries now or
hereafter outstanding, except a dividend payable solely in Equity Interests of
identical class to the holders of that class; (b) redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Equity Interest of REIT or any
of its Subsidiaries now or hereafter outstanding; and (c) payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any Equity Interests of REIT or any of its Subsidiaries
now or hereafter outstanding.  Distributions from any Subsidiary of the Borrower
to, directly or indirectly, the Borrower shall be excluded from this definition.

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

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

10

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

 

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

EBITDA.  With respect to a Person any period, without duplication, the
Consolidated Net Income (or Loss) of such Person and its Subsidiaries for such
period (before deduction for minority interests in any of the Subsidiaries and
excluding any adjustments for “straight-line rent accounting”); plus (A) the
following items to the extent deducted in computing such Consolidated Net Income
for such period:  (i) Consolidated Interest Expense for such period,
(ii) Consolidated income tax expense for such period, (iii) Consolidated
expenses associated with the upfront costs of acquisitions and not otherwise
capitalized, (iv) Consolidated real estate depreciation, amortization, and other
extraordinary and non-cash items for such period (except, in the case of such
other non-cash items, to the extent that a cash payment will be required to be
made in respect thereof in a future period), and (v) losses from discontinued
operations; minus (B) the following items to the extent included in computing
such Consolidated Net Income for such period: (i) all Consolidated gains (or
plus all Consolidated losses) attributable to any sales or other dispositions of
assets, debt restructurings or early retirement of debt in such period, and
(ii) all income (or plus all losses) from all Unconsolidated Affiliates of such
Person for such period; plus (or minus, as applicable), plus (C) the pro-rata
share of any of the items described above in this definition that are
attributable to any Unconsolidated Affiliates of such Person for such period.

Electronic System.  See §7.4.

Eligible Real Estate.  Real Estate which at all times satisfies the following
requirements:

(a) which is wholly owned in fee by the Borrower or a Wholly Owned Subsidiary of
Borrower that is a Subsidiary Guarantor;

(b) which is located within the contiguous forty-eight (48) States of the
continental United States or the District of Columbia;

(c) which is improved by an income producing Industrial Property, as to which
all improvements related to the development of the Industrial Property have been
completed and for which a certificate of occupancy or equivalent has been
issued;

(d) as to which all of the representations set forth in §6 of this Agreement and
in the other Loan Documents concerning such Real Estate are true and correct;

(e) such Real Estate is in compliance with all of the covenants in this
Agreement and the other Loan Documents;

(f) as to which the Agent has received and approved all Guarantor Qualification
Documents required by the Agent, or will receive, and approve them prior to the
acquisition of such Real Estate and inclusion of such property as a Mortgaged
Property; and

11

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

 

(g) none of the Real Estate shall have any material title, survey,
environmental, structural or other defects that would give rise to a materially
adverse effect as to the value, use of, operation of or ability to sell or
finance such property.

Eligible Real Estate Qualification Documents.  See Schedule 5.3B attached
hereto.

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

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

Environmental Laws.  As defined in the Indemnity Agreement.

Environmental Reports.  See §6.19.

EPA.  See §6.19(b).

Equity Interests.  With respect to any Person, (a) any share of capital stock of
(or other ownership or profit interests in) such Person, (b) any warrant, option
or other right for the purchase or other acquisition from such Person of (i) any
share of capital stock of (or other ownership or profit interests in) such
Person, or (ii) any security convertible into or exchangeable for any share of
capital stock of (or other ownership or profit interests in) such Person or
warrant, right or option for the purchase or other acquisition from such Person
of such shares (or such other interests) and whether or not such share, warrant,
option, right or other interest is authorized or otherwise existing on any date
of determination, and (c) any other ownership or profit interest in such Person
(including, without limitation, partnership, member or trust interests therein),
whether voting or nonvoting.

Equity Offering.  The issuance and sale after the Closing Date by REIT or any of
its Subsidiaries of any equity securities of such Person (other than equity
securities issued to REIT or any one or more of its Subsidiaries in their
respective Subsidiaries).

Equity Percentage.  The aggregate ownership percentage of REIT or its
Subsidiaries in each Unconsolidated Affiliate or Subsidiary that is not a
Wholly-Owned Subsidiary, which shall be calculated as the greater of (a) such
Person’s direct or indirect nominal capital ownership interest in the
Unconsolidated Affiliate or Subsidiary that is not a Wholly-Owned Subsidiary as
set forth in the Unconsolidated Affiliate’s or Subsidiaries’ organizational
documents, and (b) such Person’s direct or indirect economic ownership interest
in the Unconsolidated Affiliate or Subsidiary that is not a Wholly-Owned
Subsidiary reflecting such Person’s current allocable share of income and
expenses of the Unconsolidated Affiliate or Subsidiary that is not a
Wholly-Owned Subsidiary.

12

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

 

ERISA.  The Employee Retirement Income Security Act of 1974, as amended and in
effect from time to time and all regulations and formal guidelines issued
thereunder.

ERISA Affiliate.  Any Person which is treated as a single employer with REIT or
its Subsidiaries under Section 414 of the Code or Section 4001 of ERISA and any
predecessor entity of any of them.

ERISA Reportable Event.  A reportable event with respect to a Guaranteed Pension
Plan within the meaning of Section 4043 of ERISA and the regulations promulgated
thereunder as to which the requirement of notice has not been waived or any
other event with respect to which the Borrower, a Guarantor or an ERISA
Affiliate could have liability under Section 4062(e) or Section 4063 of ERISA.

Event of Default.  See §12.1.

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

Excluded Subsidiary.  Any Subsidiary of the Borrower which is prohibited from
guaranteeing the Indebtedness of any other Person pursuant to (i) any document,
instrument or agreement evidencing Secured Indebtedness permitted by this
Agreement, (ii) a provision of such Subsidiary’s organizational documents, which
provision is included as a condition to the extension of such Secured
Indebtedness, or (iii) any joint venture agreement with an unaffiliated third
Person.

Excluded Taxes.  Any of the following Taxes imposed on or with respect to a
Recipient or required to be withheld or deducted from a payment to a Recipient,
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Recipient being organized under the laws of, or having its principal office or,
in the case of any Lender, its applicable lending office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or its Commitment
pursuant to an Applicable Law in effect on the date on which (i) such Lender
acquires such interest in the Loan or its Commitment (other than pursuant to an
assignment request by the Borrower under §4.14 as a result of costs sought to be
reimbursed pursuant to §4.3 or (ii) such Lender changes its lending office,
except in each case to the extent

13

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

 

that, pursuant to §4.3, amounts with respect to such Taxes were payable either
to such Lender’s assignor immediately before such Lender became a party hereto
or to such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with §4.3(g) and (d) any U.S.
federal withholding Taxes imposed under FATCA.

Extension Request.  See §2.12(a)(i).

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

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

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

Fronting Exposure.  At any time there is a Defaulting Lender, (a) with respect
to the Issuing Lender, such Defaulting Lender’s Commitment Percentage of the
outstanding Letter of Credit Liabilities other than Letter of Credit Liabilities
as to which such Defaulting Lender’s participation obligation has been
reallocated to other Lenders or cash collateral or other credit support
acceptable to the Issuing Lender shall have been provided in accordance with the
terms hereof and (b) with respect to the Swing Loan Lender, such Defaulting
Lender’s Commitment Percentage of Swing Loans other than Swing Loans as to which
such Defaulting Lender’s participation obligation has been reallocated to other
Lenders, repaid by the Borrower or for which cash collateral or other credit
support acceptable to the Swing Loan Lender shall have been provided in
accordance with the terms hereof.

14

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

 

Funds from Operations.  With respect to REIT and its Subsidiaries on a
consolidated basis, Consolidated Net Income (or Loss) calculated in accordance
with GAAP, excluding gains or losses from debt restructuring and sales of
depreciable property, plus depreciation and amortization (excluding amortization
of financing costs), and after adjustments for unconsolidated partnerships and
joint ventures (with adjustments for unconsolidated partnerships and joint
ventures calculated to reflect funds from operations on the same basis) and the
payment of dividends on preferred stock, as interpreted by the National
Association of Real Estate Investment Trusts in its April 1,2002, White Paper;
provided, however, the following shall be excluded when calculating “Funds From
Operations”: (i) non-cash adjustments for preferred stock issuance costs, (ii)
non-cash adjustments for loan amortization costs, (iii) non-cash adjustments for
impairment losses on real estate development assets, net of any tax benefit, and
(iv) losses from discontinued operations.

GAAP.  Principles that are (a) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time and (b) consistently applied with past financial
statements of the Person adopting the same principles.

General Partner.  GTJ GP, LLC, a Maryland limited liability company.

Governmental Authority.  Any national, state or local government (whether
domestic or foreign), any political subdivision thereof or any other
governmental, quasi‑governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau, commission, board, department or other entity
(including, without limitation, the Federal Deposit Insurance Corporation, the
Comptroller of the Currency or the Federal Reserve Board, any central bank or
any comparable authority) or any arbitrator with authority to bind a party at
law, and including any supra-national bodies such as the European Union or the
European Central Bank.

Gross Asset Value.  On a Consolidated basis for REIT and its Subsidiaries, the
sum of (without duplication with respect to any Real Estate):

(a) With respect to any Real Estate owned by Borrower and its Subsidiaries that
is a Stabilized Property and which is either owned (i) as of the Closing Date or
(ii) for not less than the prior twelve (12) consecutive month period most
recently ended, the Capitalized Value of such Real Estate;

(b) with respect to any Real Estate owned by Borrower and its Subsidiaries that
is a Stabilized Property and which is not included in clause (a) above   , the
lesser of (i) Capitalized Value of such Real Estate and (ii) the Appraised Value
of such Real Estate; provided that if pursuant to §5.3 Agent has not obtained an
Appraisal of any Real Estate, such Real Estate shall, until such Appraisal is
obtained and approved, be valued at the lesser of (x) Capitalized Value of such
Real Estate and (y) the undepreciated book value determined in accordance with
GAAP of such Real Estate; plus

15

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

 

(c) with respect to all Development Properties owned by Borrower and its
Subsidiaries, the undepreciated book value determined in accordance with GAAP of
such Development Properties; plus

(d) with respect to all Land Assets owned by Borrower and its Subsidiaries, the
undepreciated book value determined in accordance with GAAP of such Land Assets;
plus

(e) the GAAP book value of all Unrestricted Cash and Cash Equivalents of REIT
and its Subsidiaries as of the date of determination.

Gross Asset Value will be adjusted, as appropriate, for acquisitions,
dispositions and other changes to the portfolio during the calendar quarter most
recently ended prior to a date of determination.  Additionally, without limiting
or affecting any other provision hereof, Gross Asset Value shall not include any
income or value associated with Real Estate which is not operated or intended to
be operated principally as an Industrial Property.  All income, expense and
value associated with assets included in Gross Asset Value disposed of during
the calendar quarter period most recently ended prior to a date of determination
will be eliminated from calculations.  Gross Asset Value will be adjusted to
only include an amount equal to REIT's or any of its Subsidiaries’ Equity
Percentage of the Gross Asset Value attributable to any of the items listed
above in this definition owned by an Unconsolidated Affiliate.

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

Guarantor.  Collectively, REIT, General Partner, each Subsidiary Guarantor and
each Additional Guarantor, and individually any one of them.

Guarantor Qualification Documents.  See Schedule 5.3A attached hereto.

Guaranty.  The Unconditional Guaranty of Payment and Performance dated of even
date herewith made by REIT, General Partner, the Subsidiary Guarantors that are
a party thereto as of the Closing Date, and each Additional Guarantor in favor
of the Agent and the Lenders, as the same may be modified, amended, restated or
ratified, such Guaranty to be in form and substance satisfactory to the Agent.

Hazardous Substances.  As defined in the Indemnity Agreement.

16

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

 

Hedge Obligations.  All obligations of Borrower to any Lender Hedge Provider to
make any payments under any agreement with respect to an interest rate swap,
collar, cap or floor or a forward rate agreement or other agreement regarding
the hedging of interest rate risk exposure relating to the Obligations, and any
confirming letter executed pursuant to such hedging agreement, and which shall
include, without limitation, any obligation to pay or perform under any
agreement, contract or transaction that constitutes a “swap” within the meaning
of Section 1a(47) of the Commodity Exchange Act, all as amended, restated or
otherwise modified.  Under no circumstances shall any of the Hedge Obligations
secured or guaranteed by any Loan Document as to a Guarantor include any
obligation that constitutes an Excluded Hedge Obligation of such Guarantor.

Indebtedness.  With respect to a Person, at the time of computation thereof, all
of the following (without duplication):  (a) all obligations of such Person in
respect of money borrowed (other than trade debt incurred in the ordinary course
of business which is not more than sixty (60) days past due); (b) all
obligations of such Person, whether or not for money borrowed (i) represented by
notes payable, or drafts accepted, in each case representing extensions of
credit, (ii) evidenced by bonds, debentures, notes or similar instruments, or
(iii) constituting purchase money indebtedness, conditional sales contracts,
title retention debt instruments or other similar instruments, upon which
interest charges are customarily paid or that are issued or assumed as full or
partial payment for property or services rendered; (c) obligations of such
Person as a lessee or obligor under a Capitalized Lease; (d) all reimbursement
obligations of such Person under any letters of credit or acceptances (whether
or not the same have been presented for payment); (e) all Off-Balance Sheet
Obligations of such Person; (f) all obligations of such Person in respect of any
purchase obligation, repurchase obligation, takeout commitment or forward equity
commitment, in each case evidenced by a binding agreement (excluding any such
obligation to the extent the obligation can be satisfied solely by the issuance
of Equity Interests); (g) net obligations under any Derivatives Contract not
entered into as a hedge against existing Indebtedness, in an amount equal to the
Derivatives Termination Value thereof; (h) all Indebtedness of other Persons
which such Person has guaranteed or is otherwise recourse to such Person (except
for guaranties of customary exceptions for fraud, misapplication of funds,
environmental indemnities, violations of “special purpose entity” covenants and
other similar exceptions to recourse liability until a claim is made with
respect thereto, and then shall be included only to the extent of the amount of
such claim, including liability of a general partner in respect of liabilities
of a partnership in which it is a general partner which would constitute
“Indebtedness” hereunder, any obligation to supply funds to or in any manner to
invest directly or indirectly in a Person, to maintain working capital or equity
capital of a Person or otherwise to maintain net worth, solvency or other
financial condition of a Person, to purchase indebtedness, or to assure the
owner of indebtedness against loss, including, without limitation, through an
agreement to purchase property, securities, goods, supplies or services for the
purpose of enabling the debtor to make payment of the indebtedness held by such
owner or otherwise; (i) all Indebtedness of another Person secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property or assets owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness or other payment obligation; (j) all obligations of such
Person to purchase, redeem, retire, defease or otherwise make any payment in
respect of any Mandatorily Redeemable Stock issued by such Person or any other
Person, valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends; and (k) such

17

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

 

Person’s pro rata share of the Indebtedness (based upon its Equity Percentage)
of any Unconsolidated Affiliate of such Person.  For the avoidance of doubt, if
a Person has guaranteed Indebtedness of an Unconsolidated Affiliate, the greater
of the Indebtedness guaranteed or the Equity Percentage of such Indebtedness
shall be included in Indebtedness.  Indebtedness shall be adjusted to remove any
impact of intangibles pursuant to FAS 141, as issued by the Financial Accounting
Standards Board in June of 2001.

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

Indemnity Agreement.  The Indemnity Agreement Regarding Hazardous Materials made
by the Borrower and Guarantors, in favor of the Agent and the Lenders, as the
same may be modified, amended or ratified, pursuant to which each of the
Borrower and the Guarantors agrees to indemnify the Agent and the Lenders with
respect to Hazardous Substances and Environmental Laws.

Industrial Property.  Any Real Estate that is an industrial property designed to
be used primarily for one of the following purposes: warehouse, distribution,
office flex (light manufacturing or research and development), or
trans-shipment.  With respect to Real Estate owned by REIT and its Subsidiaries
as of the Closing Date, an Industrial Property shall also include the uses of
such Real Estate as of the Closing Date; provided, however, that any Real Estate
that is used as a bank branch or for any retail purpose shall not be considered
to be an Industrial Property.

Information Materials.  See §7.4.

Initial Maturity Date.  December 1, 2017.

Insurance Proceeds.  All insurance proceeds, damages and claims and the right
thereto under any insurance policies relating to any portion of any Mortgaged
Property, net of all reasonable and customary amounts actually expended to
collect the same, including, without limitation, reasonable and customary
amounts expended in negotiating, litigating, if appropriate, or investigating
the amount of such insurance, proceeds, damages and claims.

Interest Expense.  With respect to any period, with respect to REIT and its
Subsidiaries, without duplication, the sum of (x) total interest expense paid,
incurred, capitalized or accrued on Indebtedness (whether direct, indirect or
contingent, and including without limitation, interest expense attributable to
Capitalized Leases, amounts attributable to interest incurred under Derivatives
Contracts, interest on all convertible debt, and commissions, discount fees and
other charges in connection with standby letters of credit and similar
instruments, but excluding amortization of financing costs) of REIT and its
Subsidiaries, on a consolidated basis, during such period, determined in
accordance with GAAP, plus (y) the portion of the upfront costs and expenses for
Derivatives Contracts relating to interest rate hedges entered into (to the
extent not included in Interest Expense) fairly allocated to such Derivatives
Contracts as expenses for such period, as determined in accordance with GAAP;
provided, that, included in

18

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

 

Interest Expense will be all interest expense accrued by REIT and its
Subsidiaries during such period, even if not payable on or before the Maturity
Date, and excluded from Interest Expense will be all amortization of costs for
the issuance of debt and interest accrued under any intracompany debt that is
subordinated to the Indebtedness pursuant to a subordination agreement
reasonably satisfactory to Agent and all upfront fees, arrangement fees,
commitment fees, commissions and similar charges associated with the issuance of
Indebtedness.  Interest Expense shall include (without duplication) the Equity
Percentage of Interest Expense for the Unconsolidated Affiliates of REIT and its
Subsidiaries.

Interest Hedge.  See §7.22.

Interest Payment Date.  As to each Base Rate Loan, the first day of each
calendar month during the term of such Loan.  As to each LIBOR Rate Loan, the
last day of each Interest Period relating thereto; provided that in the event
that the Interest Period for a LIBOR Rate Loan shall be for a period in excess
of three months, then interest shall also be payable on the three months
anniversary of the commencement of such Interest Period.

Interest Period.  With respect to each LIBOR Rate Loan (a)  initially, the
period commencing on the Drawdown Date of such LIBOR Rate Loan and ending one
(1), two (2), three (3) or six (6) months thereafter, and (b)  thereafter, each
period commencing on the day following the last day of the next preceding
Interest Period applicable to such Loan and ending on the last day of one (1) of
the periods set forth above, as selected by the Borrower in a Loan Request or
Conversion/Continuation Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:

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

(ii) if the Borrower shall fail to give notice as provided in §4.1, the Borrower
shall be deemed to have requested a continuation of the affected LIBOR Rate Loan
as a Base Rate Loan on the last day of the then current Interest Period with
respect thereto;

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

(iv) no Interest Period relating to any LIBOR Rate Loan shall extend beyond the
Maturity Date.

Investments.  With respect to any Person, all shares of capital stock, evidences
of Indebtedness and other securities issued by any other Person and owned by
such Person, all loans, advances, or extensions of credit to, or contributions
to the capital of, any other Person, all purchases of the securities or business
or integral part of the business of any other Person and

19

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

 

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

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

Joinder Agreement.  The Joinder Agreement with respect to the Guaranty, the
Contribution Agreement, the Cash Collateral Agreement, and the Indemnity
Agreement to be executed and delivered pursuant to §5.4 by any Additional
Guarantor, such Joinder Agreement to be substantially in the form of Exhibit A
hereto.

KCM.  KeyBanc Capital Markets Inc.

KeyBank.  As defined in the preamble hereto.

Land Assets  Land to be developed as an Industrial Property with respect to
which the commencement of grading, construction of improvements (other than
improvements that are not material and are temporary in nature) or
infrastructure has not yet commenced and for which no such work is reasonably
scheduled to commence within the following twelve (12) months.

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

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

Lenders.  KeyBank, the other lending institutions which are party hereto and any
other Person which becomes an assignee of any rights of a Lender pursuant to
this Agreement (but not including any participant as described in §18).  The
Issuing Lender shall be a Lender, as applicable.  The Swing Loan Lender shall be
a Lender.

Letter of Credit.  Any standby letter of credit issued at the request of the
Borrower and for the account of the Borrower in accordance with §2.10.

20

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

 

Letter of Credit Commitment.  An amount equal to Five Million and No/100 Dollars
($5,000,000.00), as the same may be changed from time to time in accordance with
the terms of this Agreement.

Letter of Credit Liabilities.  At any time and in respect of any Letter of
Credit, the sum of (a) the maximum undrawn face amount of such Letter of Credit
plus (b) the aggregate unpaid principal amount of all drawings made under such
Letter of Credit which have not been repaid (including repayment by a Revolving
Credit Loan).  For purposes of this Agreement, a Lender (other than the Lender
acting as the Issuing Lender) shall be deemed to hold a Letter of Credit
Liability in an amount equal to its participation interest in the related Letter
of Credit under §2.10, and the Lender acting as the Issuing Lender shall be
deemed to hold a Letter of Credit Liability in an amount equal to its retained
interest in the related Letter of Credit after giving effect to the acquisition
by the Lenders other than the Lender acting as the Issuing Lender of their
participation interests under §2.10.

Letter of Credit Request.  See §2.10(a).

LIBOR.  For any LIBOR Rate Loan for any Interest Period, the average rate as
shown in Reuters Screen LIBOR 01 Page (or any successor service, or if such
Person no longer reports such rate as determined by the Agent, by another
commercially available source providing such quotations approved by the Agent)
at which deposits in U.S.  dollars are offered by first class banks in the
London Interbank Market at approximately 11:00 a.m.  (London time) on the day
that is two (2) LIBOR Business Days prior to the first day of such Interest
Period with a maturity approximately equal to such Interest Period and in an
amount approximately equal to the amount to which such Interest Period relates,
adjusted for reserves and taxes if required by future regulations.  If such
service or such other Person approved by the Agent described above no longer
reports such rate or the Agent determines in good faith that the rate so
reported no longer accurately reflects the rate available to the Agent in the
London Interbank Market, Loans shall accrue interest at the Base Rate plus the
Applicable Margin for such Loan.  For any period during which a Reserve
Percentage shall apply, LIBOR with respect to LIBOR Rate Loans shall be equal to
the amount determined above divided by an amount equal to 1 minus the Reserve
Percentage.  Notwithstanding the foregoing, if the rate shown on Reuters Screen
LIBOR01 Page (or any successor service designated pursuant to this definition)
shall be less than zero, such rate shall be deemed to be zero for the purposes
of this Agreement.

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

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

LIBOR Rate Loans.  Those Loans bearing interest calculated by reference to
LIBOR.

Lien.  See §8.2.

21

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

 

Liquidity.  As of any date of determination, the sum of (a) Borrower’s
Unrestricted Cash and Cash Equivalents plus (b) the amount of the Loans then
available to be borrowed by Borrower pursuant to the terms of this Agreement.

Loan Documents.  This Agreement, the Notes, the Guaranty, each Letter of Credit
Request, the Security Documents, the Subordination of Management Agreement, the
Agreement Regarding Fees and all other documents, instruments or agreements now
or hereafter executed or delivered by or on behalf of the Borrower or any
Guarantor in connection with the Loans.

Loan Request.  See §2.7.

Loan and Loans.  An individual loan or the aggregate loans (including a
Revolving Credit Loan and a Swing Loan (or Loans)), as the case may be, in the
maximum principal amount of the Total Commitment.  All Loans shall be made in
Dollars.  Amounts drawn under a Letter of Credit shall also be considered
Revolving Credit Loans as provided in §2.10.

Management Agreements.  Agreements to which any Person that owns a Mortgaged
Property is a party, whether written or oral, providing for the management of
any of the Mortgaged Property.

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

Material Adverse Effect.  A material adverse effect on (a) the business,
properties, assets, condition (financial or otherwise), prospects or results of
operations of REIT and its Subsidiaries, taken as a whole; (b) the ability of
the Borrower or any Guarantor to perform any of its material obligations under
the Loan Documents; or (c) the validity or enforceability of any of the Loan
Documents or the creation, perfection and priority of any Liens of the Agent in
the Collateral; or (d) the rights or remedies of the Agent or the Lenders
thereunder.

Material Subsidiary.  Any Subsidiary of Borrower that is not an Excluded
Subsidiary.

Maturity Date.  The Initial Maturity Date, as such date may be extended as
provided in §2.12, or such earlier date on which the Loans shall become due and
payable pursuant to the terms hereof.

Moody’s.  Moody’s Investor Service, Inc., and any successor thereto.

22

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

 

Mortgages.  The Mortgages, Deeds to Secure Debt and/or Deeds of Trust from the
Borrower or a Subsidiary Guarantor to the Agent for the benefit of the Agent and
the Lenders (or to trustees named therein acting on behalf of the Agent for the
benefit of the Agent and the Lenders), as the same may be modified or amended,
pursuant to which a Borrower or a Guarantor has conveyed or granted a mortgage
lien upon or a conveyance in fee simple (or of a leasehold, if applicable) of
any Mortgaged Property, as security for the Obligations, each such Mortgage to
be substantially in the form of Exhibit J, with such changes as Agent may
reasonably require as a result of state law or practice or type of asset.

Mortgaged Property or Mortgaged Properties.  The Real Estate owned by a Borrower
or a Subsidiary Guarantor that is security for the Obligations pursuant to the
Mortgages.  Notwithstanding anything in the Loan Documents to the contrary, in
the event that proceeds of the Loan or a Letter of Credit are used, in whole or
in part, to acquire such Real Estate, and the Mortgage is not delivered until
after acquisition of the applicable Real Estate as provided in §5.3, such Real
Estate shall for all purposes of the Loan Documents be deemed to be a Mortgaged
Property as of the date of the acquisition of such Real Estate by Borrower or
such Subsidiary.  The Development Properties owned by GL East Halsey LLC and
Wu/LH 466 Bridgeport LLC shall also be considered Mortgaged Properties.

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

Negative Pledge.  See §7.19(a)(i).

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

Net Offering Proceeds.  The total gross cash proceeds received by REIT or any of
its Subsidiaries as a result of an Equity Offering or as a result of receipt of
any contribution of capital less the customary and reasonable costs, expenses
and discounts paid by REIT or such Subsidiary in connection therewith.

Net Operating Income.  For any Real Estate and for a given period, an amount
equal to the sum of (a) the gross revenues from such Real Estate for such Real
Estate for such period received in the ordinary course of business from tenants
(excluding (i) pre-paid rents and revenues and security deposits except to the
extent applied in satisfaction of tenants’ obligations for rent and (ii) all
rents common area reimbursements and other income for such Real Estate received
from tenants in default of obligations under their Lease or with respect to
Leases as to which the tenant or any guarantor thereunder is subject to any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation or similar debtor relief proceeding), minus (b) all
expenses paid or accrued and related to the ownership, operation or maintenance
of such Real Estate for such period, including, but not limited to, taxes,
assessments and the like, insurance, utilities, payroll costs, maintenance,
repair and landscaping expenses, marketing expenses, and general and
administrative expenses (including an appropriate allocation for legal,
accounting, advertising, marketing and other expenses incurred in connection
with such Real Estate, but specifically excluding general overhead expenses of
REIT

23

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

 

and its Subsidiaries, any property management fees, debt service charges, income
taxes, depreciation, amortization, other non-cash expenses, and any
extraordinary, non-recurring expense associated with any financing, merger,
acquisition, divestiture or other capital transaction) in each case, in
connection with such Real Estate), minus (c) actual property management expenses
of such Real Estate.

Non-Consenting Lender.  See §18.8.

Non-Defaulting Lender.  At any time, any Lender that is not a Defaulting Lender
at such time.

Non-Recourse Exclusions.  With respect to any Non-Recourse Indebtedness of any
Person, any usual and customary exclusions from the non‑recourse limitations
governing such Indebtedness, including, without limitation, exclusions for
claims that (a) are based on fraud, intentional or material misrepresentation,
misapplication of funds, gross negligence or willful misconduct, (b) result from
intentional mismanagement of or waste at the Real Property securing such
Non-Recourse Indebtedness, (c) arise from the presence of Hazardous Substances
on the Real Property securing such Non-Recourse Indebtedness, (d) are the result
of any unpaid real estate taxes and assessments (whether contained in a loan
agreement, promissory note, indemnity agreement or other document) or (e) result
from the borrowing Subsidiary and/or its assets becoming the subject of a
voluntary or involuntary bankruptcy, insolvency or similar proceeding.

Non-Recourse Indebtedness.  With respect to a Person, (a) Indebtedness for
borrowed money in respect of which recourse for payment (except for Non‑Recourse
Exclusions until a claim is made with respect thereto, and then such
Indebtedness shall not constitute Non‑Recourse Indebtedness only to the extent
of the amount of such claim) is contractually limited to specific assets of such
Person encumbered by a Lien securing such Indebtedness or (b) if such Person is
a Single Asset Entity, any Indebtedness solely of such Person.

Notes.  Collectively, the Revolving Credit Notes and the Swing Loan Note.

Notice.  See §19.

Obligations.  All indebtedness, obligations and liabilities of the Borrower or
any Guarantor to any of the Lenders or the Agent, individually or collectively,
under this Agreement or any of the other Loan Documents or in respect of any of
the Loans, the Notes or the Letters of Credit, or other instruments at any time
evidencing any of the foregoing, whether existing on the date of this Agreement
or arising or incurred hereafter, or whether arising before or after any
bankruptcy or insolvency proceeding, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise.

OFAC.  Office of Foreign Asset Control of the Department of the Treasury of the
United States of America, or any successor thereto carrying out similar
functions.

Off-Balance Sheet Obligations.  Liabilities and obligations of REIT or any of
its Subsidiaries or any other Person in respect of “off-balance sheet
arrangements” (as defined in

24

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

 

Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act, which
REIT would be required to disclose in the “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” section of REIT's report on
Form 10-Q or Form 10-K (or their equivalents) which REIT is required to file
with the SEC or would be required to file if it were subject to the jurisdiction
of the SEC (or any Governmental Authority substituted therefor).

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

Other Taxes.  All present or future stamp, court or documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
§4.14 as a result of costs sought to be reimbursed pursuant to §4.3).

Outstanding.  With respect to the Loans, the aggregate unpaid principal thereof
as of any date of determination.  With respect to Letters of Credit, the
aggregate undrawn face amount of issued Letters of Credit.

Participant Register.  See §18.4.

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

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

Permits.  With respect to any Person, any permit, approval, authorization,
license, registration, certificate, concession, grant, franchise, variance or
permission from, and any other contractual obligations with, any Governmental
Authority, in each case whether or not having the force of law and applicable to
or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

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

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

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

25

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

 

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

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

Real Estate.  All real property, including, without limitation, the Mortgaged
Properties, at the time of determination then owned or leased (as lessee or
sublessee) in whole or in part or operated by REIT or any of its Subsidiaries,
or an Unconsolidated Affiliate of the Borrower and which is located in the
United States of America or the District of Columbia.

Recipient.  The Agent and any Lender.

Record.  The grid attached to any Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by the Agent with
respect to any Loan referred to in such Note.

Recourse Indebtedness.  As of any date of determination, any Indebtedness
(whether secured or unsecured) which is recourse to REIT or any of its
Subsidiaries.  Recourse Indebtedness shall not include Non‑Recourse
Indebtedness, but shall include any Non-Recourse Exclusions at such time a
written claim is made with respect thereto.

Register.  See §18.2.

REIT.  GTJ REIT, Inc., a Maryland  corporation.

REIT Status.  With respect to a Person, its status as a real estate investment
trust as defined in Section 856(a) of the Code.

Related Fund.  With respect to any Lender which is a fund that invests in loans,
any Affiliate of such Lender or any other fund that invests in loans that is
managed by the same investment advisor as such Lender or by an Affiliate of such
Lender or such investment advisor.

Release.  Any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping (other than the
storing of materials in reasonable quantities to the extent necessary for the
operation of property in the ordinary course of business, and in any event in
compliance with all Environmental Laws) of Hazardous Substances.

Rent Roll.  A report prepared by the Borrower showing for all Real Estate, owned
or leased by the Borrower or its Subsidiaries, its occupancy, lease expiration
dates, lease rent and

26

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

 

other information, including, without limitation, identification of vacant units
and market rents, in substantially the form presented to the Agent prior to the
date hereof or in such other form as may be reasonably acceptable to the Agent.

Representative.  See §14.16.

Required Lenders.  As of any date, the Lender or Lenders whose aggregate
Commitment Percentage is equal to or greater than sixty-six and 7/10 percent
(66.7%) of the Total Commitment; provided that in determining said percentage at
any given time, all then existing Defaulting Lenders will be disregarded and
excluded and the Commitment Percentages of the Lenders shall be redetermined for
voting purposes only to exclude the Commitment Percentages of such Defaulting
Lenders; provided that if there are three (3) or fewer Lenders, then Required
Lenders shall mean two (2) Lenders that are Non-Defaulting Lenders (or if there
shall not be two (2) Lenders that are Non-Defaulting Lenders, then such fewer
number of Lenders that are Non-Defaulting Lenders.

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

Revolving Credit Loan or Loans.  An individual Revolving Credit Loan or the
aggregate Revolving Credit Loans, as the case may be, in the maximum principal
amount of the Total Commitment to be made by the Lenders hereunder as more
particularly described in §2.  Without limiting the foregoing, Revolving Credit
Loans shall also include Revolving Credit Loans made pursuant to §2.10(f).

Revolving Credit Notes.  See §2.1(b).

Sanctions Laws and Regulations.  Any applicable sanctions, prohibitions or
requirements imposed by any applicable executive order or by any applicable
sanctions program administered by OFAC, the United Nations Security Council, the
European Union or Her Majesty’s Treasury.

S&P.  Standard & Poor’s Ratings Group, and any successor thereto.

SEC.  The federal Securities and Exchange Commission.

Secured Indebtedness.  With respect to REIT and its Subsidiaries as of any given
date, the aggregate principal amount of all Indebtedness of such Persons
outstanding at such date and that is secured in any manner by any Lien.  Secured
Indebtedness shall not include the Obligations.

27

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

 

Secured Recourse Indebtedness.  As of any date of determination, any Secured
Indebtedness which is recourse to REIT or any of its Subsidiaries.  Secured
Recourse Indebtedness shall not include the Obligations.

Securities Act.  The Securities Act of 1933, as amended from time to time,
together with all rules and regulations issued thereunder.

Security Documents.  Collectively, the Joinder Agreements, the Assignment of
Interests, the Acknowledgments, the Mortgages, the Assignments of Leases and
Rents, the Cash Collateral Agreement, the Indemnity Agreement, the Guaranty, the
UCC-1 financing statements and any further collateral assignments to the Agent
for the benefit of the Lenders.

Single Asset Entity.  A bankruptcy remote, single purpose entity which is a
Subsidiary of the Borrower and which is not a Subsidiary Guarantor or an owner
of a direct or indirect interest in a Subsidiary Guaranty which owns real
property and related assets which are security for Indebtedness of such entity,
and which Indebtedness does not constitute Indebtedness of any other Person
except as provided in the definition of Non‑Recourse Indebtedness (except for
Non‑Recourse Exclusions).

Stabilized Property.  A completed Industrial Property (a) on which all
improvements related to the development of such Real Estate (other than tenant
improvements) have been substantially completed and which has an occupancy rate
of at least eighty-five percent (85.0%) for one calendar quarter, or (b) as to
which four (4) calendar quarters have elapsed from the receipt of the
certificate of occupancy for such project.  A property may also become a
Stabilized Property as provided in the definition of Development Property.  Once
a property becomes a Stabilized Property under this Agreement, it shall remain a
Stabilized Property.

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

Subordination of Management Agreement.  An agreement pursuant to which a manager
of any Mortgaged Property subordinates its rights under a Management Agreement
to the Loan Documents, such agreement to be in the form and substance
satisfactory to Agent.

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

Subsidiary Guarantor.  Each Person, other than REIT and General Partner, that is
a party to the Guaranty as of the date of this Agreement and each Additional
Guarantor.

28

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

 

Survey.  An instrument survey of each parcel of Real Estate prepared by a
registered land surveyor, certified to Agent, which shall show the location of
all buildings, structures, easements and utility lines on such property, shall
be sufficient to remove the standard survey exception from the relevant Title
Policy, shall show that all buildings and structures are within the lot lines of
such Real Estate and shall not show any encroachments by others (or to the
extent any encroachments are shown, such encroachments shall be acceptable to
the Agent in its reasonable discretion), shall show rights of way, adjoining
sites, establish building lines and street lines, the distance to and names of
the nearest intersecting streets and such other details as the Agent may
reasonably require; and shall show whether or not such Real Estate is located in
a flood hazard district as established by the Federal Emergency Management
Agency or any successor agency or is located in any flood plain, flood hazard or
wetland protection district established under federal, state or local law and
shall otherwise be in form and substance reasonably satisfactory to the Agent.

Swing Loan.  See §2.5(a).

Swing Loan Commitment.  An amount equal to Five Million and No/100 Dollars
($5,000,000), as the same may be changed from time to time in accordance with
the terms of this Agreement.

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

Swing Loan Note.  See §2.5(b).

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

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

Title Insurance Company.  Any title insurance company or companies approved by
the Agent and the Borrower.

Title Policy.  With respect to each of the Mortgaged Properties, an ALTA
standard form title insurance policy (or, if such form is not available, an
equivalent, legally promulgated form of mortgagee title insurance policy
reasonably acceptable to the Agent) issued by a Title Insurance Company (with
such reinsurance as the Agent may reasonably require, any such reinsurance to be
with direct access endorsements to the extent available under applicable law) in
an amount as the Agent may reasonably require based upon the fair market value
of the applicable Mortgaged Property insuring the priority of the Mortgage
thereon and that the Borrower or a Subsidiary Guarantor, as applicable, holds
marketable or indefeasible (with respect to Texas) fee simple title or a valid
and subsisting leasehold interest to such parcel,

29

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

 

subject only to the encumbrances acceptable to Agent in its reasonable
discretion and which shall not contain standard exceptions for mechanics liens,
persons in occupancy (other than tenants as tenants only under Leases) or
matters which would be shown by a survey, shall not insure over any matter
except to the extent that any such affirmative insurance is acceptable to the
Agent in its reasonable discretion, and shall contain (a) a revolving credit
endorsement and (b) such other endorsements and affirmative insurance as the
Agent may reasonably require and is available in the State in which the
Mortgaged Property is located, including but not limited to (i) a comprehensive
endorsement, (ii) a variable rate of interest endorsement, (iii) a usury
endorsement, (iv) a doing business endorsement, (v) an ALTA form 3.1 zoning
endorsement, (vi) a “tie-in” endorsement relating to all Title Policies issued
by such Title Insurance Company in respect of other Mortgaged Properties,
(vii) “first loss” and “last dollar” endorsements, and (viii) a utility location
endorsement; provided, however, that with respect to a Mortgaged Property as to
which Agent has not yet recorded the Mortgage, the “Title Policy” shall be an
owner’s policy of title insurance, in a form satisfactory to the Agent,
containing only exceptions satisfactory to the Agent, supplemented by a current
“date down” or “nothing further” certificate (or if such endorsement or
certificate is not available a current mortgagee’s title commitment in favor of
the Agent) provided by an issuer satisfactory to the Agent, evidencing the state
of title to the Mortgaged Property, as of a date not earlier than thirty (30)
days prior to delivery thereof to the Agent or such later date as may be
required by any other provision hereof (it being acknowledged that a Title
Policy relating to a Mortgaged Property shall not be considered in full force
and effect if such a current satisfactory supplement has not been delivered
within a period of one year).

Titled Agents.  The Arranger, and any syndication agent or documentation agent.

Total Commitment.  The sum of the Commitments of the Lenders, as in effect from
time to time.  As of the date of this Agreement, the Total Commitment is Fifty
Million and No/100 Dollars ($50,000,000.00).

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

Unconsolidated Affiliate.  In respect of any Person, any other Person in whom
such Person holds an Investment, which Investment is accounted for in the
financial statements of such Person on an equity basis of accounting and whose
financial results would not be consolidated under GAAP with the financial
results of such first Person on the consolidated financial statements of such
first Person if such financial statements were prepared in accordance with the
full consolidation method of GAAP as of such date.

Unhedged Variable Rate Debt.  Any Indebtedness with respect to which the
interest is not fixed (or hedged to a fixed rate) for the entire term of such
Indebtedness to maturity.

Unpledgeable Interest.  Any Equity Interest of Borrower in a Subsidiary or
Unconsolidated Affiliate, which Equity Interests may not be pledged as security
to any Person pursuant to restrictions contained in (a) any document, instrument
or agreement evidencing Secured Indebtedness permitted by this Agreement,
(b) such Subsidiary’s or Unconsolidated Affiliate’s organizational documents
included as a condition to the extension of such Secured

30

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

 

Indebtedness, or (c) any joint venture agreement with an unaffiliated third
Person (provided that any portion of such Equity Interest that is not so
restricted shall not be considered an Unpledgeable Interest).

Unrestricted Cash and Cash Equivalents.  As of any date of determination, the
sum of (a) the aggregate amount of Unrestricted cash and (b) the aggregate
amount of Unrestricted Cash Equivalents (valued at fair market value).  As used
in this definition, “Unrestricted” means the specified asset is readily
available for the satisfaction of any and all obligations of such Person and is
not subject to any Lien, claim, cash trap, restriction, escrow or reserve.  For
the avoidance of doubt, Unrestricted Cash and Cash Equivalents shall not include
any tenant security deposits or other restricted deposits.

Unused Fee.  See §2.3.

Unused Fee Percentage.  With respect to any day during a calendar quarter,
(i) 0.20% per annum if the sum of the Loans and the face amount of Letters of
Credit Outstanding on such day is 50% or more of the Total Commitment, or
(ii) 0.30% per annum if the sum of the Loans and the face amount of Letters of
Credit Outstanding on such day is less than 50% of the Total Commitment.

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

U.S. Tax Compliance Certificate.  See §4.3(g)(ii)(B)(iii).

Wholly-Owned Subsidiary.  As to the Borrower or REIT, any Subsidiary of the
Borrower or REIT that is directly or indirectly owned one hundred percent (100%)
by the Borrower or REIT, respectively.

Withholding Agent.  The REIT, the Borrower, any other Guarantor and the Agent,
as applicable.

§1.2 Rules of Interpretation.

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

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

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

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

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

31

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

 

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

(g) The words “approval” and “approved”, as the context requires, means an
approval in writing given to the party seeking approval after full and fair
disclosure to the party giving approval of all material facts necessary in order
to determine whether approval should be granted.

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

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

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

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

(l) Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made (i) without
giving effect to any election under Accounting Standards Codification 825-10-25
(or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or other
liabilities of the REIT or any of its Subsidiaries at “fair value”, as defined
therein, (ii) without giving effect to any treatment of Indebtedness in respect
of convertible debt instruments under Accounting Standards Codification 470-20
(or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any such Indebtedness in a reduced
or bifurcated manner as described therein, and such Indebtedness shall at all
times be valued at the full stated principal amount thereof

32

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

 

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

§2.

THE CREDIT FACILITY.

§2.1 Revolving Credit Loans.

(a) Subject to the terms and conditions set forth in this Agreement, each of the
Lenders severally agrees to lend to the Borrower, and the Borrower may borrow
(and repay and reborrow) from time to time between the Closing Date and the
Maturity Date upon notice by the Borrower to the Agent given in accordance with
§2.7, such sums as are requested by the Borrower for the purposes set forth in
§2.9 up to a maximum aggregate principal amount outstanding (after giving effect
to all amounts requested) at any one time equal to the sum of such Lender’s
Commitment; provided, that, in all events no Default or Event of Default shall
have occurred and be continuing; and provided, further, that the outstanding
principal amount of the Revolving Credit Loans (after giving effect to all
amounts requested), Swing Loans and Letter of Credit Liabilities shall not at
any time exceed the Total Commitment.  The Revolving Credit Loans shall be made
pro rata in accordance with each Lender’s Commitment Percentage.  Each request
for a Revolving Credit Loan hereunder shall constitute a representation and
warranty by the Borrower that all of the conditions required of the Borrower set
forth in §§10 and 11 have been satisfied on the date of such request.  The Agent
may assume that the conditions in §§10 and 11 have been satisfied unless it
receives prior written notice from a Lender that such conditions have not been
satisfied.  No Lender shall have any obligation to make Revolving Credit Loans
to the Borrower or participate in Letter of Credit Liabilities in the maximum
aggregate principal outstanding balance of more than the lesser of the amount
equal to its Commitment Percentage of the Commitments and the principal face
amount of its Revolving Credit Note.  Notwithstanding anything in this Agreement
to the contrary, the Borrower shall not be entitled to obtain a disbursement of
the Loan or a Letter of Credit for, and shall not use any of the proceeds of any
Loan or any Letter of Credit, directly or indirectly, in whole or in part, to
acquire Real Estate or an interest therein unless simultaneously therewith the
terms of §5.3 are complied with and Agent receives the documents and items
required thereunder.

(b) The Revolving Credit Loans shall be evidenced by separate promissory notes
of the Borrower in substantially the form of Exhibit B hereto (collectively, the
“Revolving Credit Notes”), dated of even date with this Agreement (except as
otherwise provided in §18.3) and completed with appropriate insertions.  One
Revolving Credit Note shall be payable to the order of each Lender in the
principal amount equal to such Lender’s Commitment or, if less, the outstanding
amount of all Revolving Credit Loans made by such Lender, plus interest accrued
thereon, as set forth below.  The Borrower irrevocably authorizes the Agent to
make or cause to be made, at or about the time of the Drawdown Date of any
Revolving Credit Loan or the time of receipt of any payment of principal
thereof, an appropriate notation on the Agent’s Record reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such
payment.  The outstanding amount of the Revolving Credit Loans set forth on the
Agent’s Record shall be prima facie evidence of the principal amount thereof
owing and unpaid to each

33

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

 

Lender, but the failure to record, or any error in so recording, any such amount
on the Agent’s Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.

§2.2 [Intentionally Omitted].

§2.3 Unused Fee.  The Borrower agrees to pay to the Agent for the account of the
Lenders (other than a Defaulting Lender for such period of time as such Lender
is a Defaulting Lender) in accordance with their respective Commitment
Percentages a facility unused fee (the “Unused Fee”) calculated by multiplying
the Unused Fee Percentage applicable to such day, calculated as a per diem rate,
times the excess of the Total Commitment over the outstanding principal amount
of Revolving Credit Loans, Swing Loans and the face amount of Letters of Credit
Outstanding on such day.  The Unused Fee shall be payable quarterly in arrears
on the first (1st) day of each calendar quarter for the immediately preceding
calendar quarter or portion thereof, and on any earlier date on which the
Commitments shall be reduced or shall terminate as provided in §2.10, with a
final payment on the Maturity Date.

§2.4 Reduction and Termination of the Commitments.  The Borrower shall have the
right at any time and from time to time upon five (5) Business Days’ prior
written notice to the Agent to reduce by $5,000,000.00 or an integral multiple
of $1,000,000.00 in excess thereof (provided that in no event shall the Total
Commitment be reduced in such manner to an amount less than $25,000,000.00) or
to terminate entirely the Commitments, whereupon the Commitments of the Lenders
shall be reduced pro rata in accordance with their respective Commitment
Percentages of the amount specified in such notice or, as the case may be,
terminated, any such termination or reduction to be without penalty except as
otherwise set forth in §4.7; provided, however, that no such termination or
reduction shall be permitted if, after giving effect thereto, the sum of
Outstanding Revolving Credit Loans, the Outstanding Swing Loans and the Letter
of Credit Liabilities would exceed the Commitments of the Lenders as so
terminated or reduced.  Promptly after receiving any notice from the Borrower
delivered pursuant to this §2.4, the Agent will notify the Lenders of the
substance thereof.  Any reduction of the Commitments shall also result in a
proportionate reduction (rounded to the next lowest integral multiple of
$100,000.00) in the maximum amount of Swing Loans and Letters of Credit.  Upon
the effective date of any such reduction or termination, the Borrower shall pay
to the Agent for the respective accounts of the Lenders the full amount of any
fee under §2.3 then accrued on the amount of the reduction.  No reduction or
termination of the Commitments may be reinstated.

§2.5 Swing Loan Commitment.

(a) Subject to the terms and conditions set forth in this Agreement, the Swing
Loan Lender agrees to lend to the Borrower (the “Swing Loans”), and the Borrower
may borrow (and repay and reborrow) from time to time between the Closing Date
and the date which is five (5) Business Days prior to the Maturity Date upon
notice by the Borrower to the Swing Loan Lender given in accordance with this
§2.5, such sums as are requested by the Borrower for the purposes set forth in
§2.9 in an aggregate principal amount at any one time outstanding not exceeding
the Swing Loan Commitment; provided that in all events (i) no Default or Event
of Default shall have occurred and be continuing; and (ii) the outstanding
principal amount of the

34

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

 

Revolving Credit Loans and Swing Loans (after giving effect to all amounts
requested) plus Letter of Credit Liabilities shall not at any time exceed the
Total Commitment.  Notwithstanding anything to the contrary contained in this
§2.5, the Swing Loan Lender shall not be obligated to make any Swing Loan at a
time when any other Lender is a Defaulting Lender, unless the Swing Loan Lender
is satisfied that the participation therein will otherwise be fully allocated to
the Lenders that are Non-Defaulting Lenders consistent with §2.13(c) and the
Defaulting Lender shall not participate therein, except to the extent the Swing
Loan Lender has entered into arrangements with the Borrower or such Defaulting
Lender that are satisfactory to the Swing Loan Lender in its good faith
determination to eliminate the Swing Loan Lender’s Fronting Exposure with
respect to any such Defaulting Lender, including the delivery of cash
collateral.  Swing Loans shall constitute “Revolving Credit Loans” for all
purposes hereunder.  The funding of a Swing Loan hereunder shall constitute a
representation and warranty by the Borrower that all of the conditions set forth
in §§10 and 11 have been satisfied on the date of such funding.  The Swing Loan
Lender may assume that the conditions in §§10 and 11 have been satisfied unless
the Swing Loan Lender has received written notice from a Lender that such
conditions have not been satisfied.  Each Swing Loan shall be due and payable
within one (1) Business Day of demand by Agent but in any event no later than
five (5) Business Days of the date such Swing Loan was provided and the Borrower
hereby agrees (to the extent not repaid as contemplated by §2.5(d)) to repay
each Swing Loan on or before the date that is five (5) Business Days from the
date such Swing Loan was provided.  A Swing Loan may not be refinanced with
another Swing Loan.

(b) The Swing Loans shall be evidenced by a separate promissory note of the
Borrower in substantially the form of Exhibit C hereto (the “Swing Loan Note”),
dated the date of this Agreement and completed with appropriate insertions.  The
Swing Loan Note shall be payable to the order of the Swing Loan Lender in the
principal face amount equal to the Swing Loan Commitment and shall be payable as
set forth below.  The Borrower irrevocably authorizes the Swing Loan Lender to
make or cause to be made, at or about the time of the Drawdown Date of any Swing
Loan or at the time of receipt of any payment of principal thereof, an
appropriate notation on the Swing Loan Lender’s Record reflecting the making of
such Swing Loan or (as the case may be) the receipt of such payment.  The
outstanding amount of the Swing Loans set forth on the Swing Loan Lender’s
Record shall be prima facie evidence of the principal amount thereof owing and
unpaid to the Swing Loan Lender, but the failure to record, or any error in so
recording, any such amount on the Swing Loan Lender’s Record shall not limit or
otherwise affect the obligations of the Borrower hereunder or under the Swing
Loan Note to make payments of principal of or interest on any Swing Loan Note
when due.

35

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

 

(c) The Borrower shall request a Swing Loan by delivering to the Swing Loan
Lender a Loan Request executed by an Authorized Officer no later than 11:00
a.m.  (Cleveland time) on the requested Drawdown Date specifying the amount of
the requested Swing Loan (which shall be in the minimum amount of $1,000,000.00
or an integral multiple of $250,000.00 in excess thereof) and providing the wire
instructions for the delivery of the Swing Loan proceeds.  The Loan Request
shall also contain the statements and certifications required by §2.7(a), (b)
and (c).  Each such Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept such Swing Loan on the
Drawdown Date.  Notwithstanding anything herein to the contrary, a Swing Loan
shall be a Base Rate Loan and shall bear interest at the Base Rate plus the
Applicable Margin.  The proceeds of the Swing Loan will be disbursed by wire by
the Swing Loan Lender to the Borrower no later than 1:00 p.m.  (Cleveland time)
on the Drawdown Date.

(d) The Swing Loan Lender shall, within two (2) Business Days after the Drawdown
Date with respect to such Swing Loan, request each Lender to make a Revolving
Credit Loan pursuant to §2.1 in an amount equal to such Lender’s Commitment
Percentage of the amount of the Swing Loan outstanding on the date such notice
is given.  In the event that the Borrower does not notify the Agent in writing
otherwise on or before noon (Cleveland Time) on the Business Day of the Drawdown
Date with respect to such Swing Loan, the Agent shall notify the Lenders that
such Loan shall be a LIBOR Rate Loan with an Interest Period of one (1) month,
provided that the making of such LIBOR Rate Loan will not be in contravention of
any other provision of this Agreement, or if the making of a LIBOR Rate Loan
would be in contravention of this Agreement, then such notice shall indicate
that such loan shall be a Base Rate Loan.  The Borrower hereby irrevocably
authorizes and directs the Swing Loan Lender to so act on its behalf, and agrees
that any amount advanced to the Agent for the benefit of the Swing Loan Lender
pursuant to this §2.5(d) shall be considered a Revolving Credit Loan pursuant to
§2.1.  Unless any of the events described in §§12.1(g), 12.1(h) or 12.1(i) shall
have occurred (in which event the procedures of §2.5(e) shall apply), each
Lender shall make the proceeds of its Revolving Credit Loan available to the
Swing Loan Lender for the account of the Swing Loan Lender at the Agent’s Head
Office prior to 12:00 noon (Cleveland time) in funds immediately available no
later than one (1) Business Day after the date such request was made by the
Swing Line Lender just as if the Lenders were funding directly to the Borrower,
so that thereafter such Obligations shall be evidenced by the Revolving Credit
Notes.  The proceeds of such Revolving Credit Loan shall be immediately applied
to repay the Swing Loans.

(e) If for any reason a Swing Loan cannot be refinanced by a Revolving Credit
Loan pursuant to §2.5(d), each Lender will, on the date such Revolving Credit
Loan pursuant to §2.5(d) was to have been made, purchase an undivided
participation interest in the Swing Loan in an amount equal to its Commitment
Percentage of such Swing Loan.  Each Lender will immediately transfer to the
Swing Loan Lender in immediately available funds the amount of its participation
and upon receipt thereof the Swing Loan Lender will deliver to such Lender a
Swing Loan participation certificate dated the date of receipt of such funds and
in such amount.

(f) Whenever at any time after the Swing Loan Lender has received from any
Lender such Lender’s participation interest in a Swing Loan, the Swing Loan
Lender receives any payment on account thereof, the Swing Loan Lender will
distribute to such Lender its participation interest in such amount
(appropriately adjusted in the case of interest payments to

36

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

 

reflect the period of time during which such Lender’s participating interest was
outstanding and funded); provided, however, that in the event that such payment
received by the Swing Loan Lender is required to be returned, such Lender will
return to the Swing Loan Lender any portion thereof previously distributed by
the Swing Loan Lender to it.

(g) Each Lender’s obligation to fund a Loan as provided in §2.5(d) or to
purchase participation interests pursuant to §2.5(e) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (a) any setoff, counterclaim, recoupment, defense or other right
which such Lender or the Borrower may have against the Swing Loan Lender, the
Borrower or anyone else for any reason whatsoever; (b) the occurrence or
continuance of a Default or an Event of Default; (c) any adverse change in the
condition (financial or otherwise) of REIT or any of its Subsidiaries; (d) any
breach of this Agreement or any of the other Loan Documents by the Borrower or
any Guarantor or any Lender; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.  Any portions of a
Swing Loan not so purchased or converted may be treated by the Agent and the
Swing Loan Lender as against such Lender as a Revolving Credit Loan which was
not funded by the non‑purchasing Lender, thereby making such Lender a Defaulting
Lender.  Each Swing Loan, once so sold or converted, shall cease to be a Swing
Loan for the purposes of this Agreement, but shall be a Revolving Credit Loan
made by each Lender under its Commitment.

§2.6 Interest on Loans.

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

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

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

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

§2.7 Requests for Revolving Credit Loans.  The Borrower shall give to the Agent
written notice executed by an Authorized Officer in the form of Exhibit D hereto
(or telephonic notice confirmed in writing in the form of Exhibit D hereto) of
each Revolving Credit Loan requested hereunder (a “Loan Request”) by 11:00
a.m.  (Cleveland time) one (1) Business Day prior to the proposed Drawdown Date
with respect to Base Rate Loans and three (3) Business Days prior to the
proposed Drawdown Date with respect to LIBOR Rate Loans.  Each such notice shall
specify with respect to the requested Revolving Credit Loan the proposed
principal amount of such Revolving Credit Loan, the Type of Revolving Credit
Loan, the initial Interest Period (if

37

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

 

applicable) for such Revolving Credit Loan and the Drawdown Date.  Each such
notice shall also contain (a) a general statement as to the purpose for which
such advance shall be used (which purpose shall be in accordance with the terms
of §2.9), and (b) a certification by the chief  executive officer, president or
chief financial officer of the REIT that the Borrower and Guarantors are and
will be in compliance with all covenants under the Loan Documents after giving
effect to the making of such Revolving Credit Loan.  Promptly upon receipt of
any such notice, the Agent shall notify each of the Lenders thereof.  Each such
Loan Request shall be irrevocable and binding on the Borrower and shall obligate
the Borrower to accept the Revolving Credit Loan requested from the Lenders on
the proposed Drawdown Date.  Nothing herein shall prevent the Borrower from
seeking recourse against any Lender that fails to advance its proportionate
share of a requested Revolving Credit Loan as required by this Agreement.  Each
Loan Request shall be (a) for a Base Rate Loan in a minimum aggregate amount of
$1,000,000.00 or an integral multiple of $250,000.00 in excess thereof; or
(b) for a LIBOR Rate Loan in a minimum aggregate amount of $1,000,000.00 or an
integral multiple of $1,000,000.00 in excess thereof; provided, however, that
there shall be no more than ten (10) LIBOR Rate Loans outstanding at any one
time.

§2.8 Funds for Loans.

(a) Not later than 1:00 p.m.  (Cleveland time) on the proposed Drawdown Date of
any Revolving Credit Loans, each of the Lenders, will make available to the
Agent, at the Agent’s Head Office, in immediately available funds, the amount of
such Lender’s Commitment Percentage of the amount of the requested Loans which
may be disbursed pursuant to §2.1.  Upon receipt from each such Lender of such
amount, and upon receipt of the documents required by §§10 and 11 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Revolving Credit Loans made available to the Agent by the Lenders, as
applicable, by crediting such amount to the account of the Borrower maintained
at the Agent’s Head Office.  The failure or refusal of any Lender to make
available to the Agent at the aforesaid time and place on any Drawdown Date the
amount of its Commitment Percentage of the requested Loans shall not relieve any
other Lender from its several obligation hereunder to make available to the
Agent the amount of such other Lender’s Commitment Percentage of any requested
Loans, including any additional Revolving Credit Loans that may be requested
subject to the terms and conditions hereof to provide funds to replace those not
advanced by the Lender so failing or refusing.

38

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

 

(b) Unless the Agent shall have been notified by any Lender prior to the
applicable Drawdown Date that such Lender will not make available to the Agent
such Lender’s Commitment Percentage of a proposed Loan, the Agent may in its
discretion assume that such Lender has made such Loan available to the Agent in
accordance with the provisions of this Agreement and the Agent may, if it
chooses, in reliance upon such assumption make such Loan available to the
Borrower, and such Lender shall be liable to the Agent for the amount of such
advance.  If such Lender does not pay such corresponding amount upon the Agent’s
demand therefor, the Agent will promptly notify the Borrower, and the Borrower
shall promptly pay such corresponding amount to the Agent.  The Agent shall also
be entitled to recover from the Lender or the Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to the date
such corresponding amount is recovered by the Agent at a per annum rate equal to
(i) from the Borrower at the applicable rate for such Loan or (ii) from a Lender
at the Federal Funds Effective Rate plus one percent (1%).

§2.9 Use of Proceeds.  The Borrower will use the proceeds of the Loans solely
for (a) payment of closing costs in connection with this Agreement,
(b) repayment of Indebtedness, (c) acquisitions, development and capital
improvements, (d) general corporate and working capital purposes, and (e)
purchase contract deposits and, subject to §8.7, stock repurchases.

§2.10 Letters of Credit.

(a) Subject to the terms and conditions set forth in this Agreement, at any time
and from time to time from the Closing Date through the day that is ninety (90)
days prior to the Maturity Date, the Issuing Lender shall issue such Letters of
Credit as the Borrower may request upon the delivery of a written request in the
form of Exhibit E hereto (a “Letter of Credit Request”) to the Issuing Lender,
provided that (i) no Default or Event of Default shall have occurred and be
continuing, (ii) upon issuance of such Letter of Credit, the Letter of Credit
Liabilities shall not exceed the Letter of Credit Commitment, (iii) in no event
shall the sum of the outstanding principal amount of the Revolving Credit Loans,
Swing Loans and Letter of Credit Liabilities (after giving effect to any
requested Letters of Credit) exceed the Total Commitment, (iv) the conditions
set forth in §§10 and 11 shall have been satisfied, and (v) in no event shall
any amount drawn under a Letter of Credit be available for reinstatement or a
subsequent drawing under such Letter of Credit.  Notwithstanding anything to the
contrary contained in this §2.10, the Issuing Lender shall not be obligated to
issue, amend, extend, renew or increase any Letter of Credit at a time when any
other Lender is a Defaulting Lender, unless the Issuing Lender is satisfied that
the participation therein will otherwise be fully allocated to the Lenders that
are Non-Defaulting Lenders consistent with §2.13(c) and the Defaulting Lender
shall have no participation therein, except to the extent the Issuing Lender has
entered into arrangements with the Borrower or such Defaulting Lender which are
satisfactory to the Issuing Lender in its good faith determination to eliminate
the Issuing Lender’s Fronting Exposure with respect to any such Defaulting
Lender, including the delivery of cash collateral.  The Issuing Lender may
assume that the conditions in §§10 and 11 have been satisfied unless it receives
written notice from a Lender that such conditions have not been satisfied.  Each
Letter of Credit Request shall be executed by an Authorized Officer of the
Borrower.  The Issuing Lender shall be entitled to conclusively rely on such
Person’s authority to request a Letter of Credit on behalf of the Borrower.  The
Issuing Lender shall have no duty to verify the authenticity of any signature

39

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

 

appearing on a Letter of Credit Request.  The Borrower assumes all risks with
respect to the use of the Letters of Credit.  Unless the Issuing Lender and the
Required Lenders otherwise consent, the term of any Letter of Credit shall not
exceed a period of time commencing on the issuance of the Letter of Credit and
ending one year after the date of issuance thereof (or such longer period as
Issuing Lender may approve); provided, however, that a Letter of Credit may
contain a provision providing for the automatic extension of the expiration date
in the absence of a notice of non-renewal from the Issuing Lender but in no
event shall any such provision permit the extension of the expiration date of
such Letter of Credit beyond the Maturity Date; provided further, that a Letter
of Credit may, as a result of its express terms or as the result of the effect
of an automatic extension provision, have an expiration of not more than one
year beyond the Maturity Date so long as the Borrower delivers to the Issuing
Lender no later than thirty (30) days prior to the Maturity Date cash collateral
for such Letter of Credit for deposit into the Collateral Account in an amount
equal to the maximum amount available to be drawn under such Letter of
Credit.  The amount available to be drawn under any Letter of Credit shall
reduce on a dollar-for-dollar basis the amount available to be drawn under the
Total Commitment as a Revolving Credit Loan.

(b) Each Letter of Credit Request shall be submitted to the Issuing Lender at
least five (5) Business Days (or such shorter period as the Issuing Lender may
approve) prior to the date upon which the requested Letter of Credit is to be
issued.  Each such Letter of Credit Request shall contain (i) a statement as to
the purpose for which such Letter of Credit shall be used (which purpose shall
be in accordance with the terms of this Agreement), and (ii) a certification by
the chief executive officer, president or chief financial officer of the REIT
that the Borrower and Guarantors are and will be in compliance with all
covenants under the Loan Documents after giving effect to the issuance of such
Letter of Credit.  The Borrower shall further deliver to the Issuing Lender such
additional applications (which application as of the date hereof is in the form
of Exhibit F attached hereto) and documents as the Issuing Lender may require,
in conformity with the then standard practices of its letter of credit
department, in connection with the issuance of such Letter of Credit; provided
that in the event of any conflict, the terms of this Agreement shall control.

(c) The Issuing Lender shall, subject to the conditions set forth in this
Agreement, issue the Letter of Credit on or before five (5) Business Days
following receipt of the documents last due pursuant to §2.10(b).  Each Letter
of Credit shall be in form and substance reasonably satisfactory to the Issuing
Lender in its reasonable discretion.

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

(e) Upon the issuance of each Letter of Credit, the Borrower shall pay to the
Issuing Lender (i) for its own account, a Letter of Credit fronting fee
calculated at the rate equal to one-eighth of one percent (0.125%) per annum of
the face amount of such Letter of Credit (which fee shall not be less than
$1,500 in any event) and an administrative charge of $250, and (ii) for the
accounts of the Lenders (including the Issuing Lender) in accordance with their

40

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

 

respective percentage shares of participation in such Letter of Credit, a Letter
of Credit fee calculated at the rate per annum equal to the Applicable Margin
then applicable to LIBOR Rate Loans on the face amount of such Letter of
Credit.  Such fees shall be payable in quarterly installments in arrears with
respect to each Letter of Credit on the first day of each calendar quarter
following the date of issuance and continuing on each quarter or portion thereof
thereafter, as applicable, or on any earlier date on which the Commitments shall
terminate and on the expiration or return of any Letter of Credit.  In addition,
the Borrower shall pay to the Issuing Lender for its own account within five (5)
days of demand of the Issuing Lender the standard issuance, documentation and
service charges for Letters of Credit issued from time to time by the Issuing
Lender.

(f) In the event that any amount is drawn under a Letter of Credit by the
beneficiary thereof, the Borrower shall reimburse the Issuing Lender by having
such amount drawn treated as an outstanding Base Rate Loan under this Agreement
(the Borrower being deemed to have requested a Base Rate Loan on such date in an
amount equal to the amount of such drawing and such amount drawn shall be
treated as an outstanding Base Rate Loan under this Agreement) and the Agent
shall promptly notify each Lender by telecopy, email, telephone (confirmed in
writing) or other similar means of transmission, and each Lender shall promptly
and unconditionally pay to the Agent, for the Issuing Lender’s own account, an
amount equal to such Lender’s Commitment Percentage of such Letter of Credit (to
the extent of the amount drawn).  If and to the extent any Lender shall not make
such amount available on the Business Day on which such draw is funded, such
Lender agrees to pay such amount to the Agent forthwith on demand, together with
interest thereon, for each day from the date on which such draw was funded until
the date on which such amount is paid to the Agent, at the Federal Funds
Effective Rate until three (3) days after the date on which the Agent gives
notice of such draw and at the Federal Funds Effective Rate plus one percent
(1%) for each day thereafter.  Further, such Lender shall be deemed to have
assigned any and all payments made of principal and interest on its Revolving
Credit Loans, amounts due with respect to its participations in Letters of
Credit and any other amounts due to it hereunder to the Agent to fund the amount
of any drawn Letter of Credit which such Lender was required to fund pursuant to
this §2.10(f) until such amount has been funded (as a result of such assignment
or otherwise).  In the event of any such failure or refusal, the Lenders not so
failing or refusing shall be entitled to a priority secured position for such
amounts as provided in §12.5.  The failure of any Lender to make funds available
to the Agent in such amount shall not relieve any other Lender of its obligation
hereunder to make funds available to the Agent pursuant to this §2.10(f).

(g) If after the issuance of a Letter of Credit pursuant to §2.10(c) by the
Issuing Lender, but prior to the funding of any portion thereof by a Lender, for
any reason a drawing under a Letter of Credit cannot be refinanced as a
Revolving Credit Loan, each Lender will, on the date such Revolving Credit Loan
pursuant to §2.10(f) was to have been made, purchase an undivided participation
interest in the Letter of Credit in an amount equal to its Commitment Percentage
of the amount of such Letter of Credit.  Each Lender will immediately transfer
to the Issuing Lender in immediately available funds the amount of its
participation and upon receipt thereof the Issuing Lender will deliver to such
Lender a Letter of Credit participation certificate dated the date of receipt of
such funds and in such amount.

41

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

 

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

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

(j) The Borrower assumes all risks of the acts, omissions, or misuse of any
Letter of Credit by the beneficiary thereof.  Neither the Agent, the Issuing
Lender nor any Lender will be responsible for (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any Letter of Credit or
any document submitted by any party in connection with the issuance of any
Letter of Credit, even if such document should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) failure
of any beneficiary of any Letter of Credit to comply fully with the conditions
required in order to demand payment under a Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telecopy, email or otherwise; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document or draft required by or from a beneficiary in order to make a
disbursement under a Letter of Credit or the proceeds thereof; (vii) for the
misapplication by the beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Agent or any Lender.  None of the
foregoing will affect, impair or prevent the vesting of any of the rights or
powers granted to the Agent, the Issuing Lender or the Lenders hereunder.  In
furtherance and extension and not in limitation or derogation of any of the
foregoing, any act taken or omitted to be taken by the Agent, the Issuing Lender
or the other Lenders in good faith will be binding on the Borrower and will not
put the Agent, the Issuing Lender or the other Lenders under any resulting
liability to the Borrower; provided nothing contained herein shall relieve the
Issuing Lender for liability to the Borrower arising as a result of the gross
negligence or willful misconduct of the Issuing Lender as determined by a court
of competent jurisdiction after the exhaustion of all applicable appeal periods.

42

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

 

§2.11 Intentionally Omitted.

§2.12 Extension of Maturity Date.

The Borrower shall have the one-time right and option to extend the Maturity
Date to December 3, 2018, upon satisfaction of the following conditions
precedent, which must be satisfied prior to the effectiveness of any extension
of the Maturity Date:

(a) Extension Request.  The Borrower shall deliver written notice of such
request (the “Extension Request”) to the Agent not earlier than the date which
is one hundred ninety (90) days and not later than the date which is forty-five
(45) days prior to the Maturity Date (as determined without regard to such
extension).  Any such Extension Request shall be irrevocable and binding on the
Borrower.

(b) Payment of Extension Fee.  The Borrower shall pay to the Agent, on the date
of exercise by Borrower of the Extension Request, for the pro rata accounts of
the Lenders in accordance with their respective Commitments an extension fee in
an amount equal to twenty (20) basis points on the Total Commitment in effect on
the Maturity Date (as determined without regard to such extension), which fee
shall, when paid, be fully earned and non-refundable under any circumstances.

(c) No Default.  On the date the Extension Request is given and on the effective
date of such extension there shall exist no Default or Event of Default.

(d) Representations and Warranties.  The representations and warranties made by
the Borrower and the Guarantors in the Loan Documents or otherwise made by or on
behalf of the Borrower and the Guarantors in connection therewith or after the
date thereof shall have been true and correct in all material respects when made
and shall also be true and correct in all material respects on the date the
Extension Request is given and on the effective date of such extension (except
(i) to the extent any such representation or warranty is stated to relate solely
to an earlier date, in which case such representation or warranty shall be true
and correct on and as of such earlier date, or (ii) for changes in factual
circumstances which are permitted by this Agreement).

(e) Additional Documents and Expenses.  The Borrower and the Guarantors shall
execute and deliver to the Agent and Lenders such additional opinions, consents
and affirmations and other documents (including, without limitation, amendments
to the Security Documents) as the Agent may reasonably require, and the Borrower
shall pay the cost of any title endorsement or update thereto or any update of
UCC searches, recordings costs and fees, and any and all intangible taxes or
other documentary or mortgage taxes, assessments or charges or any other fees,
taxes, charges or expenses which are required to be paid in connection with such
extension.

§2.13 Defaulting Lenders.

(a) If for any reason any Lender shall be a Defaulting Lender, then, in addition
to the rights and remedies that may be available to the Agent or the Borrower
under this Agreement or applicable law, such Defaulting Lender’s right to
participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to

43

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

 

vote in respect of, to consent to or to direct any action or inaction of the
Agent or to be taken into account in the calculation of the Required Lenders,
all of the Lenders or affected Lenders, shall, except as specifically provided
in §27, be suspended during the pendency of such failure or refusal.  If a
Lender is a Defaulting Lender because it has failed to make timely payment to
the Agent of any amount required to be paid to the Agent hereunder (without
giving effect to any notice or cure periods), in addition to other rights and
remedies which the Agent or the Borrower may have under the immediately
preceding provisions or otherwise, the Agent shall be entitled (i) to collect
interest from such Defaulting Lender on such delinquent payment for the period
from the date on which the payment was due until the date on which the payment
is made at the Federal Funds Effective Rate plus one percent (1%), (ii) to
withhold or setoff and to apply in satisfaction of the defaulted payment and any
related interest, any amounts otherwise payable to such Defaulting Lender under
this Agreement or any other Loan Document and (iii) to bring an action or suit
against such Defaulting Lender in a court of competent jurisdiction to recover
the defaulted amount and any related interest.  Any amounts received by the
Agent in respect of a Defaulting Lender’s Loans shall be applied as set forth in
§2.13(d).

(b) Any Non-Defaulting Lender may, but shall not be obligated, in its sole
discretion, to acquire all or a portion of a Defaulting Lender’s
Commitments.  Any Lender desiring to exercise such right shall give written
notice thereof to the Agent and the Borrower no sooner than two (2) Business
Days and not later than five (5) Business Days after such Defaulting Lender
became a Defaulting Lender.  If more than one Lender exercises such right, each
such Lender shall have the right to acquire an amount of such Defaulting
Lender’s Commitments in proportion to the Commitments of the other Lenders
exercising such right.  If after such fifth Business Day, the Lenders have not
elected to purchase all of the Commitments of such Defaulting Lender, then the
Borrower (so long as no Default or Event of Default exists) or the Required
Lenders may, by giving written notice thereof to the Agent, such Defaulting
Lender and the other Lenders, demand that such Defaulting Lender assign its
Commitments to an eligible assignee subject to and in accordance with the
provisions of §18.1 for the purchase price provided for below.  No party hereto
shall have any obligation whatsoever to initiate any such replacement or to
assist in finding an eligible assignee.  Upon any such purchase or assignment,
and any such demand with respect to which the conditions specified in §18.1 have
been satisfied, the Defaulting Lender’s interest in the Loans and its rights
hereunder (but not its liability in respect thereof or under the Loan Documents
or this Agreement to the extent the same relate to the period prior to the
effective date of the purchase) shall terminate on the date of purchase, and the
Defaulting Lender shall promptly execute all documents reasonably requested to
surrender and transfer such interest to the purchaser or assignee thereof,
including an appropriate Assignment and Acceptance Agreement.  The purchase
price for the Commitments of a Defaulting Lender shall be equal to the amount of
the principal balance of the Loans outstanding and owed by the Borrower to the
Defaulting Lender plus any accrued but unpaid interest thereon and accrued but
unpaid fees.  Prior to payment of such purchase price to a Defaulting Lender,
the Agent shall apply against such purchase price any amounts retained by the
Agent pursuant to §2.13(d).

(c) During any period in which there is a Defaulting Lender, all or any part of
such Defaulting Lender’s obligation to acquire, refinance or fund participations
in Letters of Credit pursuant to §2.10(g) or Swing Loans pursuant to §2.5(e)
shall be reallocated among the Lenders that are Non-Defaulting Lenders in
accordance with their respective Commitment

44

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

 

Percentages (computed without giving effect to the Commitment of such Defaulting
Lender; provided that (i) each such reallocation shall be given effect only if,
at the date the applicable Lender becomes a Defaulting Lender, no Default or
Event of Default exists, (ii) the conditions set forth in §§10 and 11 are
satisfied at the time of such reallocation (and, unless the Borrower shall have
notified the Agent at such time, the Borrower shall be deemed to have
represented and warranted that such conditions are satisfied at the time),
(iii) the representations and warranties in the Loan Documents shall be true and
correct in all material respects on and as of the date of such reallocation with
the same effect as though made on and as of such date, and (iv) the aggregate
obligation of each Lender that is a Non-Defaulting Lender to acquire, refinance
or fund participations in Letters of Credit and Swing Loans shall not exceed the
positive difference, if any, of (a) the Commitment of that Non-Defaulting Lender
minus (b) the sum of (1) the aggregate outstanding principal amount of the
Revolving Credit Loans of that Lender plus (2) such Lender’s pro rata portion in
accordance with its Commitment Percentage of outstanding Letter of Credit
Liabilities and Swing Loans.  No reallocation hereunder shall constitute a
waiver or release of any claim of any party hereunder against a Defaulting
Lender arising from that Lender having become a Defaulting Lender, including any
claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s
increased exposure following such reallocation.

(d) Any payment of principal, interest, fees or other amounts received by the
Agent for the account of such Defaulting Lender (whether voluntary or mandatory,
at maturity, or otherwise, and including any amounts made available to the Agent
for the account of such Defaulting Lender pursuant to §13), shall be applied at
such time or times as may be determined by the Agent as follows:  first, to the
payment of any amounts owing by such Defaulting Lender to the Agent (other than
with respect to Letter of Credit Liabilities) hereunder; second, to the payment
of any amounts owing by such Defaulting Lender to the Issuing Lender (with
respect to Letter of Credit Liabilities) and/or the Swing Loan Lender hereunder;
third, if so determined by the Agent or requested by the Issuing Lender or the
Swing Loan Lender, to be held as cash collateral for future funding obligations
of such Defaulting Lender of any participation in any Letter of Credit or Swing
Loan; fourth, as the Borrower may request (so long as no Default or Event of
Default exists), to the funding of any Loan in respect of which such Defaulting
Lender has failed to fund its portion thereof as required by this Agreement, as
determined by the Agent; fifth, if so determined by the Agent and the Borrower,
to be held in a non-interest bearing deposit account and released pro rata in
order to (x) satisfy obligations of such Defaulting Lender to fund Loans or
participations under this Agreement and (y) be held as cash collateral for
future funding obligations of such Defaulting Lender of any participation in any
Letter of Credit or Swing Loan; sixth, to the payment of any amounts owing to
the Agent or the Lenders (including the Issuing Lender and the Swing Loan
Lender) as a result of any judgment of a court of competent jurisdiction
obtained by the Agent or any Lender (including the Issuing Lender and the Swing
Loan Lender) against such Defaulting Lender as a result of such Defaulting
Lender’s breach of its obligations under this Agreement; seventh, so long as no
Default or Event of Default exists, to the payment of any amounts owing to the
Borrower as a result of any judgment of a court of competent jurisdiction
obtained by the Borrower against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; and eighth,
to such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (i) such payment is a payment of the principal
amount of any Revolving Credit Loans or funded participations in Letters of
Credit or Swing Loans in respect of which such Defaulting Lender has not fully
funded its appropriate share and (ii) such Revolving Credit Loans or funded

45

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

 

participations in Letters of Credit or Swing Loans were made at a time when the
conditions set forth in §§10 and 11, to the extent required by this Agreement,
were satisfied or waived, such payment shall be applied solely to pay the
Revolving Credit Loans of, and funded participations in Letters of Credit or
Swing Loans owed to, all Non-Defaulting Lenders on a pro rata basis until such
time as all Revolving Credit Loans and funded and unfunded participations in
Letters of Credit and Swing Loans are held by the Lenders pro rata in accordance
with their Commitment Percentages without regard to §2.13(c), prior to being
applied to the payment of any Revolving Credit Loans of, or funded
participations in Letters of Credit or Swing Loans owed to, such Defaulting
Lender.  Any payments, prepayments or other amounts paid or payable to a
Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting
Lender or to post cash collateral pursuant to this §2.13(d) shall be deemed paid
to and redirected by such Defaulting Lender, and each Lender irrevocably
consents hereto, and to the extent allocated to the repayment of principal of
the Loan, shall not be considered outstanding principal under this Agreement.

(e) Within five (5) Business Days of demand by the Issuing Lender or the Swing
Loan Lender from time to time, the Borrower shall deliver to the Agent for the
benefit of the Issuing Lender and the Swing Loan Lender cash collateral in an
amount sufficient to cover all Fronting Exposure with respect to the Issuing
Lender and the Swing Loan Lender (after giving effect to §§2.5(a), 2.10(a) and
2.13(c)) on terms satisfactory to the Issuing Lender and/or the Swing Loan
Lender in its good faith determination (and such cash collateral shall be in
Dollars).  Any such cash collateral shall be deposited in the Collateral Account
as collateral (solely for the benefit of the Issuing Lender and/or the Swing
Loan Lender) for the payment and performance of each Defaulting Lender’s pro
rata portion in accordance with their respective Commitment Percentages of
outstanding Letter of Credit Liabilities and Swing Loans.  Moneys in the
Collateral Account deposited pursuant to this §2.13(e) shall be applied by the
Agent to reimburse the Issuing Lender and/or the Swing Loan Lender immediately
for each Defaulting Lender’s pro rata portion in accordance with their
respective Commitment Percentages of any funding obligation with respect to a
Letter of Credit or Swing Loan which has not otherwise been reimbursed by the
Borrower or such Defaulting Lender.

(f) (i) Each Lender that is a Defaulting Lender shall not earn and shall not be
entitled to receive any Unused Fee pursuant to §2.3 for any period during which
that Lender is a Defaulting Lender.

(ii) Each Lender that is a Defaulting Lender shall not earn and shall not be
entitled to receive Letter of Credit fees pursuant to §2.10(e) for any period
during which that Lender is a Defaulting Lender.

(iii) With respect to any Unused Fee or Letter of Credit fees not required to be
paid to any Defaulting Lender pursuant to clause (i) or (ii) above, the Borrower
shall (x) pay to each Non-Defaulting Lender that is a Lender that portion of any
such fee otherwise payable to such Defaulting Lender with respect to such
Defaulting Lender’s participation in Letter of Credit Liabilities or Swing Loans
that has been reallocated to such Non-Defaulting Lender pursuant to §2.13(c),
(y) pay to the Issuing Lender and the Swing Loan Lender the amount of any such
fee otherwise payable to such Defaulting Lender to the extent allocable to

46

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

 

the Issuing Lender’s or the Swing Loan Lender’s Fronting Exposure to such
Defaulting Lender and (z) not be required to pay any remaining amount of any
such fee.

(g) If the Borrower (so long as no Default or Event of Default exists) and the
Agent agree in writing in their sole discretion that a Defaulting Lender should
no longer be deemed to be a Defaulting Lender, the Agent will so notify the
parties hereto, whereupon as of the date specified in such notice and subject to
any conditions set forth therein (which may include arrangements with respect to
any cash collateral), that Lender will, to the extent applicable, purchase that
portion of outstanding Loans of the other Lenders or take such other actions as
the Agent may determine to be necessary to cause the Loans and funded and
unfunded participations in Letters of Credit and Swing Loans to be held on a pro
rata basis by the Lenders in accordance with their Commitments (without giving
effect to §2.13(c)), whereupon such Lender will cease to be a Defaulting Lender;
provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrower while such Lender was a
Defaulting Lender; and provided, further, that except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting
Lender to Lender will constitute a waiver or release of any claim of any party
hereunder arising from such Lender’s having been a Defaulting Lender.

§3.

REPAYMENT OF THE LOANS.

§3.1 Stated Maturity.  The Borrower promises to pay on the Maturity Date and
there shall become absolutely due and payable on the Maturity Date all of the
Revolving Credit Loans, Swing Loans and other Letter of Credit Liabilities
Outstanding on such date, together with any and all accrued and unpaid interest
thereon.

§3.2 Mandatory Prepayments.

(a) If at any time the sum of the aggregate outstanding principal amount of the
Revolving Credit Loans, the Swing Loans and the Letter of Credit Liabilities
exceeds the Total Commitment, then the Borrower shall, within five (5) Business
Days of such occurrence, pay the amount of such excess to the Agent for the
respective accounts of the Lenders for application to the Revolving Credit Loans
as provided in §3.4, together with any additional amounts payable pursuant to
§4.7, except that the amount of any Swing Loans shall be paid solely to the
Swing Loan Lender.

(b) Subject to §7.7(g), in the event there shall have occurred a casualty or
Taking with respect to any Mortgaged Property , the Borrower shall prepay the
Loans concurrently with the date of receipt by Borrower, such Subsidiary
Guarantor or the Agent of any Insurance Proceeds or Condemnation Proceeds in
respect of such casualty or Taking.

47

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

 

§3.3 Optional Prepayments.

(a) The Borrower shall have the right, at its election, to prepay the
outstanding amount of the Revolving Credit Loans and Swing Loans, as a whole or
in part, at any time without penalty or premium; provided, that if any
prepayment of the outstanding amount of any LIBOR Rate Loans pursuant to this
§3.3 is made on a date that is not the last day of the Interest Period relating
thereto, such prepayment shall be accompanied by the payment of any amounts due
pursuant to §4.7.

(b) The Borrower shall give the Agent, no later than 10:00 a.m.  (Cleveland
time) at least three (3) days prior written notice of any prepayment pursuant to
this §3.3, in each case specifying the proposed date of prepayment of the Loans
and the principal amount to be prepaid (provided that any such notice may be
revoked or modified upon one (1) day’s prior notice to the
Agent).  Notwithstanding the foregoing, no prior notice shall be required for
the prepayment of any Swing Loan.

§3.4 Partial Prepayments.  Each prepayment of the Loans under §3.3 shall be in a
minimum amount of $1,000,000.00 or an integral multiple of $100,000.00 in excess
thereof, shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of payment.  Each partial payment under §§3.2 and
3.3 shall be applied first to the principal of any Outstanding Swing Loans,
then, in the absence of instruction by the Borrower and then to the principal of
Revolving Credit Loans (and with respect to each category of Loans, first to the
principal of Base Rate Loans, and then to the principal of LIBOR Rate Loans).

§3.5 Effect of Prepayments.  Amounts of the Revolving Credit Loans prepaid under
§§3.2 and 3.3 prior to the Maturity Date may be reborrowed as provided in §2.

§4.

CERTAIN GENERAL PROVISIONS.

§4.1 Conversion Options.

(a) The Borrower may elect from time to time to convert any of its outstanding
Revolving Credit Loans to a Revolving Credit Loan of another Type and such
Revolving Credit Loans shall thereafter bear interest as a Base Rate Loan or a
LIBOR Rate Loan, as applicable; provided that (i) with respect to any such
conversion of a LIBOR Rate Loan to a Base Rate Loan, the Borrower shall give the
Agent at least one (1) Business Day’s prior written notice of such election, and
such conversion shall only be made on the last day of the Interest Period with
respect to such LIBOR Rate Loan; (ii) with respect to any such conversion of a
Base Rate Loan to a LIBOR Rate Loan, the Borrower shall give the Agent at least
three (3) LIBOR Business Days’ prior written notice of such election and the
Interest Period requested for such Loan, the principal amount of the Loan so
converted shall be in a minimum aggregate amount of $1,000,000.00 or an integral
multiple of $250,000.00 in excess thereof and, after giving effect to the making
of such Loan, there shall be no more than ten (10) LIBOR Rate Loans outstanding
at any one time; and (iii) no Loan may be converted into a LIBOR Rate Loan when
any Default or Event of Default has occurred and is continuing.  All or any part
of the outstanding Revolving Credit Loans of any Type may be converted as
provided herein, provided that no partial conversion shall result in a Base Rate
Loan in a principal amount of less than $1,000,000.00 or

48

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

 

an integral multiple of $250,000.00 or a LIBOR Rate Loan in a principal amount
of less than $1,000,000.00 or an integral multiple of $1,000,000.00.  On the
date on which such conversion is being made, each Lender shall take such action
as is necessary to transfer its Commitment Percentage of such Loans to its
Domestic Lending Office or its LIBOR Lending Office, as the case may be.  Each
Conversion/Continuation Request relating to the conversion of a Base Rate Loan
to a LIBOR Rate Loan shall be irrevocable by the Borrower.

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

(c) In the event that the Borrower does not notify the Agent of its election
hereunder with respect to any LIBOR Rate Loan, such Loan shall be automatically
converted at the end of the applicable Interest Period to a LIBOR Rate Loan with
an Interest Period of one (1) month; provided that if a Default or Event of
Default has occurred and is continuing, such Loan shall be converted at the end
of the applicable Interest Period to a Base Rate Loan.

§4.2 Fees.  The Borrower agrees to pay to KeyBank, the Agent and the Arranger
for their own account certain fees for services rendered or to be rendered in
connection with the Loans as provided pursuant to that certain fee letter dated
as of December 2, 2015 among the Borrower, KeyBank and the Arranger (the
“Agreement Regarding Fees”).  All such fees shall be fully earned when paid and
nonrefundable under any circumstances.

§4.3 Funds for Payments.

(a) All payments of principal, interest, facility fees, Letter of Credit fees,
closing fees and any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of the Lenders
and the Agent, as the case may be, at the Agent’s Head Office, not later than
2:00 p.m. (Cleveland time) on the day when due, in each case in lawful money of
the United States in immediately available funds.  The Agent is hereby
authorized to charge the accounts of the Borrower with KeyBank set forth on
Schedule 4.3, on the dates when the amount thereof shall become due and payable,
with the amounts of the principal of and interest on the Loans and all fees,
charges, expenses and other amounts owing to the Agent and/or the Lenders
(including the Swing Loan Lender) under the Loan Documents.  Subject to the
foregoing, all payments made to the Agent on behalf of the Lenders, and actually
received by the Agent, shall be deemed received by the Lenders on the date
actually received by the Agent.

(b) All payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without setoff or counterclaim, and free and clear of
and without deduction or withholding for any Taxes, except as required by
Applicable Law. If any Applicable Law (as determined in the good faith
discretion of an applicable Withholding Agent) requires the deduction or
withholding of any Tax from any such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or

49

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

 

withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with Applicable Law and, if such
Tax is an Indemnified Tax, then the sum payable by the Borrower or other
applicable Guarantor shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this §4.3) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(c) The Borrower and the Guarantors shall timely pay to the relevant
Governmental Authority in accordance with Applicable Law, or at the option of
the Agent timely reimburse it for the payment of, any Other Taxes.

(d) The Borrower and the Guarantors shall jointly and severally indemnify each
Recipient, within ten (10) days after demand therefor, for the full amount of
any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this §4.3) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Agent), or by the Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error; provided that the determinations in such
statement are made on a reasonable basis and in good faith.

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

(f) As soon as practicable after any payment of Taxes by the Borrower or any
Guarantor to a Governmental Authority pursuant to this §4.3, the Borrower or
such Guarantor shall deliver to the Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Agent, at the time or times reasonably requested by the
Borrower or the Agent,

50

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

 

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

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

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

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

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

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

(III) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit I-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign

51

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

 

corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

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

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), an electronic copy (or an
original if requested by the Borrower or the Agent) of any other form prescribed
by 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 as may be prescribed by Applicable Law to permit the Borrower or
the Agent to determine the withholding or deduction required to be made; and

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

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

(g) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this §4.3 (including by the payment of additional amounts pursuant
to this §4.3), it shall pay to the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this §4.3 with
respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses (including Taxes) of such indemnified party and without interest (other

52

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

 

than any interest paid by the relevant Governmental Authority with respect to
such refund). Such indemnifying party, upon the request of such indemnified
party, shall repay to such indemnified party the amount paid over pursuant to
this subsection (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event that such indemnified party is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this subsection, in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this
subsection the payment of which would place the indemnified party in a less
favorable net after-Tax position than the indemnified party would have been in
if the Tax subject to indemnification and giving rise to such refund has not
been deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid. This subsection
shall not be construed to require any indemnified party to make available its
Tax returns (or any other information relating to its Taxes that it reasonably
deems confidential) to the indemnifying party or any other Person.

(h) Each party’s obligations under this §4.3 shall survive the resignation or
replacement of the Agent or any assignment of rights by, or the replacement of,
a Lender, the termination of the Commitments and the repayment, satisfaction or
discharge of all obligations under any Loan Document.

(i) The obligations of the Borrower to the Lenders under this Agreement with
respect to Letters of Credit (and of the Lenders to make payments to the Issuing
Lender with respect to Letters of Credit and to the Swing Loan Lender with
respect to Swing Loans) shall be absolute, unconditional and irrevocable, and
shall be paid and performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without limitation,
the following circumstances:  (i) any lack of validity or enforceability of this
Agreement, any Letter of Credit or any of the other Loan Documents; (ii) any
improper use which may be made of any Letter of Credit or any improper acts or
omissions of any beneficiary or transferee of any Letter of Credit in connection
therewith; (iii) the existence of any claim, set-off, defense or any right which
the Borrower or any of its Subsidiaries or Affiliates may have at any time
against any beneficiary or any transferee of any Letter of Credit (or persons or
entities for whom any such beneficiary or any such transferee may be acting) or
the Lenders (other than the defense of payment to the Lenders in accordance with
the terms of this Agreement) or any other person, whether in connection with any
Letter of Credit, this Agreement, any other Loan Document, or any unrelated
transaction; (iv) any draft, demand, certificate, statement or any other
documents presented under any Letter of Credit proving to be insufficient,
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever; (v) any breach of any agreement
between the Borrower or any of its Subsidiaries or Affiliates and any
beneficiary or transferee of any Letter of Credit; (vi) any irregularity in the
transaction with respect to which any Letter of Credit is issued, including any
fraud by the beneficiary or any transferee of such Letter of Credit;
(vii) payment by the Issuing Lender under any Letter of Credit against
presentation of a sight draft, demand, certificate or other document which does
not comply with the terms of such Letter of Credit, provided that such payment
shall not have constituted gross negligence or willful misconduct on the part of
the Issuing Lender as determined by a court of competent jurisdiction after the
exhaustion of all applicable appeal periods; (viii) any non-application or
misapplication by the beneficiary of a Letter of Credit of the proceeds of such
Letter of Credit; (ix) the legality, validity, form,

53

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

 

regularity or enforceability of the Letter of Credit; (x) the failure of any
payment by the Issuing Lender to conform to the terms of a Letter of Credit (if,
in the Issuing Lender’s good faith judgment, such payment is determined to be
appropriate); (xi) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(xii) the occurrence of any Default or Event of Default; and (xiii) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing.

§4.4 Computations.  All computations of interest on the Base Rate Loans to the
extent applicable shall be based on a three hundred sixty-five (365) or three
hundred sixty-six (366)-day year, as applicable, and paid for the actual number
of days elapsed.  All other computations of interest on the Loans and of other
fees to the extent applicable shall be based on a 360-day year and paid for the
actual number of days elapsed.  Except as otherwise provided in the definition
of the term “Interest Period” with respect to LIBOR Rate Loans, whenever a
payment hereunder or under any of the other Loan Documents becomes due on a day
that is not a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and interest shall accrue during such
extension.  The Outstanding Loans and Letter of Credit Liabilities as reflected
on the records of the Agent from time to time shall be considered prima facie
evidence of such amount absent manifest error.

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

§4.6 Illegality.  Notwithstanding any other provisions herein, if any present or
future law, regulation, treaty or directive or the interpretation or application
thereof shall make it unlawful, or any central bank or other Governmental
Authority having jurisdiction over a Lender or its LIBOR Lending Office shall
assert that it is unlawful, for any Lender to make or maintain LIBOR Rate Loans,
such Lender shall forthwith give notice of such circumstances to the Agent and
the Borrower and thereupon (a) the commitment of the Lenders to make LIBOR Rate
Loans shall forthwith be suspended and (b) the LIBOR Rate Loans then outstanding
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such LIBOR Rate Loans or within such earlier
period as may be required by law.  Notwithstanding the foregoing, before giving
such notice, the applicable Lender shall designate a different lending office if
such designation will void the need for giving such notice and will not, in the
judgment of such Lender, be otherwise materially disadvantageous to such Lender
or increase any costs payable by the Borrower hereunder.

54

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

 

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

§4.8 Additional Costs, Etc..  Notwithstanding anything herein to the contrary,
if any present or future Applicable Law, which expression, as used herein,
includes statutes, rules and regulations thereunder and interpretations thereof
by any competent court or by any governmental or other regulatory body or
official charged with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time (or from time to
time) hereafter made upon or otherwise issued to any Lender or the Agent by any
central bank or other fiscal, monetary or other authority (whether or not having
the force of law), shall:

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

(b) impose on any Lender or Issuing Lender or the London interbank market any
other condition, cost or expense (other than Taxes) affecting this Agreement or
Loans made by such Lender or any Letter of Credit or participation therein, or

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

55

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

 

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

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

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

(iii) to require any Lender or the Agent to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender or the Agent from the Borrower
hereunder, then, and in each such case, the Borrower will, within fifteen (15)
days of demand made by such Lender or (as the case may be) the Agent at any time
and from time to time and as often as the occasion therefor may arise, pay to
such Lender or the Agent such additional amounts as such Lender or the Agent
shall determine in good faith to be sufficient to compensate such Lender or the
Agent for such additional cost, reduction, payment or foregone interest or other
sum.  Each Lender and the Agent in determining such amounts may use any
reasonable averaging and attribution methods generally applied by such Lender or
the Agent.

56

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

 

§4.9 Capital Adequacy.  If after the date hereof any Lender determines that
(a) the adoption of or change in any Applicable Law regarding liquidity or
capital requirements for banks or bank holding companies or any change in the
interpretation or application thereof by any Governmental Authority charged with
the administration thereof, or (b) compliance by such Lender or its parent bank
holding company with any guideline, request or directive of any such entity
regarding liquidity or capital adequacy (whether or not having the force of
law), has the effect of reducing the return on such Lender’s or such holding
company’s capital as a consequence of such Lender’s commitment to make Loans or
participate in Letters of Credit hereunder to a level below that which such
Lender or holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such holding company’s
then existing policies with respect to capital adequacy and assuming the full
utilization of such entity’s capital) by any amount deemed by such Lender to be
material, then such Lender may notify the Borrower thereof.  The Borrower agrees
to pay to such Lender the amount of such reduction in the return on capital as
and when such reduction is determined, upon presentation by such Lender of a
statement of the amount setting forth the Lender’s calculation thereof.  In
determining such amount, such Lender may use any reasonable averaging and
attribution methods generally applied by such Lender.  For purposes of §4.8 and
this §4.9, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, publications, orders, guidelines and directives thereunder or
issued in connection therewith and all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, in each case pursuant to Basel III, shall be
deemed to have been adopted and gone into effect after the date hereof
regardless of when adopted, enacted or issued.

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

§4.11 Default Interest; Late Charge.  Following the occurrence and during the
continuance of any Event of Default, and regardless of whether or not the Agent
or the Lenders shall have accelerated the maturity of the Loans, all Loans shall
bear interest payable on demand at a rate per annum equal to the sum of the Base
Rate plus the Applicable Margin plus two percent (2.0%) (the “Default Rate”),
until such amount shall be paid in full (after as well as before judgment) and
the fee payable with respect to Letters of Credit shall be increased to a rate
equal to two percent (2.0%) above the Letter of Credit fee that would otherwise
be applicable to such time, if any of such amounts shall exceed the maximum rate
permitted by law, then at the maximum rate permitted by law.  In addition, the
Borrower shall pay a late charge equal to four percent (4%) of any amount of
interest and/or principal payable on the Loans or any other amounts payable
hereunder or under the other Loan Documents, which is not paid by the Borrower
within ten (10) days of the date when due (or, in the case of amounts due at the
Maturity Date, within fifteen (15) Business Days of such date).

57

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

 

§4.12 Certificate.  A certificate setting forth any amounts payable pursuant to
§4.7, §4.8, §4.9, §4.10 or §4.11 and a reasonably detailed explanation of such
amounts which are due, submitted by any Lender or the Agent to the Borrower,
shall be conclusive in the absence of manifest error, and shall be promptly
provided to the Agent and the Borrower upon their written request.

§4.13 Limitation on Interest.  Notwithstanding anything in this Agreement or the
other Loan Documents to the contrary, all agreements between or among the
Borrower, the Guarantors, the Lenders and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Lenders exceed the maximum amount permissible under applicable law.  If,
from any circumstance whatsoever, interest would otherwise be payable to the
Lenders in excess of the maximum lawful amount, the interest payable to the
Lenders shall be reduced to the maximum amount permitted under applicable law;
and if from any circumstance the Lenders shall ever receive anything of value
deemed interest by applicable law in excess of the maximum lawful amount, an
amount equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations and to the payment of interest or, if such
excessive interest exceeds the unpaid balance of principal of the Obligations,
such excess shall be refunded to the Borrower.  All interest paid or agreed to
be paid to the Lenders shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal of the Obligations (including the period of any
renewal or extension thereof) so that the interest thereon for such full period
shall not exceed the maximum amount permitted by applicable law.  This §4.13
shall control all agreements between or among the Borrower, the Guarantors, the
Lenders and the Agent.

§4.14 Certain Provisions Relating to Increased Costs.  If a Lender gives notice
of the existence of the circumstances set forth in §4.8 or any Lender requests
compensation for any losses or costs to be reimbursed pursuant to any one or
more of the provisions of §4.3 (as a result of the imposition of U.S.
withholding taxes on amounts paid to such Lender under this Agreement), §4.8 or
§4.9, then, upon request of the Borrower, such Lender, as applicable, shall use
reasonable efforts in a manner consistent with such institution’s practice in
connection with loans like the Loan of such Lender to eliminate, mitigate or
reduce amounts that would otherwise be payable by the Borrower under the
foregoing provisions, provided that such action would not be otherwise
prejudicial to such Lender, including, without limitation, by designating
another of such Lender’s offices, branches or affiliates; the Borrower agreeing
to pay all reasonably incurred costs and expenses incurred by such Lender in
connection with any such action.  Notwithstanding anything to the contrary
contained herein, if no Default or Event of Default shall have occurred and be
continuing, and if any Lender has given notice of the existence of the
circumstances set forth in §4.8 or has requested payment or compensation for any
losses or costs to be reimbursed pursuant to any one or more of the provisions
of §4.3 (as a result of the imposition of U.S. withholding taxes on amounts paid
to such Lender under this Agreement), §4.8 or §4.9 and following the request of
the Borrower has been unable to take the steps described above to mitigate such
amounts (each, an “Affected Lender”), then, within thirty (30) days after such
notice or request for payment or compensation, the Borrower shall have the
one-time right as to such Affected Lender, to be exercised by delivery of
written notice delivered to the Agent and the Affected Lender within thirty (30)
days of receipt of such notice, to elect to

58

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

 

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

§5.

COLLATERAL SECURITY; GUARANTORS.

§5.1 Collateral.  The Obligations shall be secured by a perfected first priority
lien and security interest to be held by the Agent for the benefit of the
Lenders on the Collateral, pursuant to the terms of the Security Documents.

§5.2 Appraisal.

(a) The Agent shall on behalf of the Lenders obtain current Agent Appraisals of
each of the Mortgaged Properties; provided no Event of Default has occurred and
is continuing, Borrower shall not be obligated to pay for the cost of any
Appraisal of Real Estate which is then a Mortgaged Property if the Mortgaged
Property is released as Collateral pursuant to §5.5 within six (6) months after
the date such Real Estate first became a Mortgaged Property.  In any such case,
said Agent Appraisals will be ordered by Agent and used to determine the current
Appraised Value of the Mortgaged Properties, and the Borrower shall pay to Agent
within ten (10) days after written demand all reasonable costs of such Agent
Appraisals.

(b) [Intentionally Omitted.]  

(c) The Agent may obtain new Agent Appraisals or an update to existing Agent
Appraisals with respect to the Mortgaged Properties, or any of them, as the
Agent shall determine (i) at any time that the regulatory requirements of any
Lender generally applicable to real estate loans of the category made under this
Agreement as reasonably interpreted by such Lender shall require more frequent
Agent Appraisals, (ii) at any time following and during the continuance of an
Event of Default, or (iii) if the Agent reasonably believes that there has been
a casualty, Taking or material adverse change or deterioration with respect to
any Mortgaged Property, including, without limitation, a material change in the
market in which any Mortgaged Property is located.  The expense of such Agent
Appraisals and/or updates performed pursuant to this §5.2(c) shall be borne by
the Borrower and payable to the Agent within ten (10) days of demand; provided
the Borrower shall not be obligated to pay for an Agent Appraisal of a Mortgaged
Property obtained pursuant to this §5.2(c) more often than once in any period of
twelve (12) months if no Event of Default exists.

59

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

 

(d) The Borrower acknowledges that the Agent has the right to approve any
Appraisal performed pursuant to this Agreement.  The Borrower further agrees
that the Lenders and the Agent do not make any representations or warranties
with respect to any such Appraisal and shall have no liability as a result of or
in connection with any such Appraisal for statements contained in such
Appraisal, including without limitation, the accuracy and completeness of
information, estimates, conclusions and opinions contained in such Appraisal, or
variance of such Appraisal from the fair value of such property that is the
subject of such Appraisal given by the local tax assessor’s office, or the
Borrower’s idea of the value of such property.

§5.3 Additional Collateral.

(a) In the event that Borrower desires to use proceeds of the Loans or any
Letter of Credit to directly or indirectly acquire Real Estate or any interest
therein, such Real Estate shall be required to become a Mortgaged Property as a
condition thereto.  No Real Estate shall be included as a Mortgaged Property
unless and until the following conditions precedent shall have been satisfied:

(i) such Real Estate shall be Eligible Real Estate;

(ii) if such Real Estate is owned by a Wholly-Owned Subsidiary of the Borrower,
said Wholly-Owned Subsidiary shall have executed a Joinder Agreement and
satisfied the conditions of §5.4;

(iii) the Borrower or the Wholly-Owned Subsidiary which is the owner of the Real
Estate shall have executed and delivered to the Agent all Guarantor
Qualification Documents, all of which instruments, documents or agreements
shall, to the extent required by this Agreement, be in form and substance
reasonably satisfactory to the Agent; and

(iv) after giving effect to the inclusion of such Eligible Real Estate, each of
the representations and warranties made by or on behalf of the Borrower or the
Guarantors or any of their respective Subsidiaries contained in this Agreement,
the other Loan Documents or in any document or instrument delivered pursuant to
or in connection with this Agreement shall be true in all material respects both
as of the date as of which it was made and shall also be true as of the time of
the addition of such Mortgaged Property with the same effect as if made at and
as of that time, except to the extent of changes resulting from transactions
permitted by the Loan Documents (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct only as of such specified date), and no
Default or Event of Default shall have occurred and be continuing and the Agent
shall have received a certificate of the Borrower to such effect.  For the
avoidance of doubt, the delivery by Borrower to Agent of the Guarantor
Qualification Documents or the Eligible Real Estate Qualification Documents
shall not modify any representation, warranty or covenant in this Agreement or
the other Loan Documents.

(b) If such Real Estate is owned by a Wholly Owned Subsidiary of Borrower, then
Borrower shall pledge to Agent 100% of the Equity Interests in the Wholly Owned
Subsidiary owning or leasing the Real Estate pursuant to the Assignment of
Interests and as provided in Schedule 5.3.  

60

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

 

(c) Borrower shall on or before the date that is thirty (30) days following the
date of acquisition of any Real Estate by Borrower or such Subsidiary which
becomes a Mortgaged Property, cause to be executed and delivered to the Agent
all Eligible Real Estate Qualification Documents, all of which, to the extent
required by this Agreement, shall be in form and substance satisfactory to
Agent.  Notwithstanding the foregoing, Borrower shall not be required to deliver
to Agent a Mortgage and Assignment of Leases and Rents with respect to the
Development Properties owned as of the Closing Date by GWL East Halsey LLC and
Wu/LH 466 Bridge Port LLC as long as their Real Estate remains Development
Properties.

(d) The Mortgage and Assignment of Leases and Rents shall be effective upon the
delivery thereof, but shall not be recorded until the occurrence of an Event of
Default.  Upon the occurrence of an Event of Default, the Agent may, and upon
the direction of the Required Lenders, shall, record the Mortgage and Assignment
of Leases and Rents and file UCC financing statements and fixture filings with
respect thereto as deemed necessary by Agent in the public records without any
further action of or notice to the Borrower or any other party and without
waiving such Event of Default.  In addition, the Borrower shall promptly deliver
or cause to be delivered to the Agent such further documents as may be
reasonably requested by the Agent relating to such Real Estate, including
without limitation, owner’s affidavits, updated legal opinions and copies of
leases and such changes to the Mortgage and Assignment of Leases and Rents as
may be necessary or desirable to comply with changes in applicable law.  In
connection with the recording of the Mortgage and Assignment of Leases and
Rents, the Agent may obtain, at the Borrower’s sole cost and expense, a
mortgagee’s title insurance policy with respect to each Mortgaged Property
encumbered by such Mortgage and Assignment of Leases and Rents in such amount as
is determined by the Agent.  The Borrower shall upon demand pay the cost of any
such mortgagee’s title insurance policy, the cost of any updated UCC searches,
all recording costs and fees, and any and all intangible taxes or other
documentary or mortgage taxes, assessments or charges which are demanded in
connection with the recording of any of the Mortgages or Assignments of Leases
and Rents.  In addition, the Borrower shall pay within five (5) days after
demand any and all costs, fees, intangible tax, documentary or mortgage tax,
assessments or charges as are demanded by any governmental authority by reason
of any Mortgage or Assignment of Leases and Rents to Agent prior to the
recording of the same.  In the event that the Borrower fails to pay such amounts
as provided in this section, then the Banks may advance such amounts as are
required to be paid as Loans hereunder, which Loans shall bear interest at the
Default Rate.

(e) Within ten (10) days of the Borrower acquiring, forming, holding or
otherwise receiving or owning after the Closing Date any Equity Interest in a
Subsidiary or Unconsolidated Affiliates (other than an Equity Interest in a
Subsidiary that is covered by §5.4(a) or that is an Unpledgeable Interest), the
Borrower shall cause to be delivered to the Agent each of the following in form
and substance reasonably satisfactory to the Agent:  (i) a supplement or
amendment to the Assignment of Interests (or if no Assignment of Interests has
been executed by the applicable party, then the Assignment of Interests)
executed by the Borrower or the applicable Subsidiary, subjecting such Equity
Interest (or interest therein) to the Lien of the Assignment of Interests;
(ii) all original existing certificates, if any, representing shares of Equity
Interests pledged pursuant to the Assignment of Interests, together with an
undated stock or similar power for each such certificate executed in blank by a
duly authorized officer of Borrower or such Subsidiary, together with an
Acknowledgement substantially in the form of

61

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

 

Exhibit G to the Assignment of Interests, duly executed by any issuer of such
Equity Interest; (iii) all formation and organizational agreements relating to
any Person to which such pledged Equity Interest relate as Agent may reasonably
require; (iv) results from a recent UCC lien search as to Borrower or the
applicable Subsidiary in such jurisdictions as Agent may designate, which
results shall be satisfactory to Agent; and (v) such certified organizational
documents, updated good standing certificates, resolutions, incumbency
certificates, legal opinions and other documents as Agent may reasonably
require.

§5.4 Additional Guarantors; Release of Guarantors.

(a) In the event that the Borrower shall request that certain Real Estate of a
Wholly-Owned Subsidiary of the Borrower be included as a Mortgaged Property as
contemplated by §5.3(a) and such Real Estate is included as a Mortgaged Property
in accordance with the terms hereof, the Borrower shall, as a condition to such
Real Estate being included as a Mortgaged Property, cause each such Wholly-Owned
Subsidiary, to execute and deliver to the Agent a Joinder Agreement, and such
Subsidiary shall become a Guarantor hereunder and thereunder.  In addition, in
the event any Subsidiary of the Borrower shall constitute a Material Subsidiary,
the Borrower shall promptly cause such Subsidiary to execute and deliver to
Agent a Joinder Agreement, and such Subsidiary shall become a Guarantor
hereunder and thereunder.  Each such Subsidiary shall be specifically
authorized, in accordance with its respective organizational documents, to be a
Guarantor hereunder and thereunder and to execute the Contribution Agreement and
such Security Documents as the Agent may require.  The Borrower shall further
cause all representations, covenants and agreements in the Loan Documents with
respect to the Guarantors to be true and correct with respect to each such
Subsidiary.  In connection with the delivery of such Joinder Agreement, the
Borrower shall deliver to the Agent such organizational agreements, resolutions,
consents, opinions and other documents and instruments as the Agent may
reasonably require.

(b) In the event that all Mortgaged Properties owned by a Subsidiary Guarantor
shall have been released as Collateral for the Obligations and Hedge Obligations
in accordance with the terms of this Agreement, then such Subsidiary Guarantor
shall be released by Agent from liability under this Agreement, provided that
such Subsidiary Guarantor is not otherwise required to be a Guarantor.

(c) The Borrower may request in writing that the Agent release, and upon receipt
of such request the Agent shall release (subject to the terms hereof), a
Subsidiary Guarantor that is a Guarantor solely by virtue of being a Material
Subsidiary from the Guaranty so long as:  (i) no Default or Event of Default
shall then be in existence or would occur as a result of such release; (ii) the
Agent shall have received such written request at least ten (10) Business Days
(or such shorter period as Agent may approve) prior to the requested date of
release; (iii) such Subsidiary Guarantor is not the owner of a Mortgaged
Property; and (iv) the Borrower shall deliver to Agent evidence reasonably
satisfactory to Agent that (A) the Borrower has disposed of or simultaneously
with such release will dispose of its entire interest in such Guarantor or that
all of the assets of such Guarantor will be disposed of in compliance with the
terms of this Agreement, and if such transaction involves the disposition by
such Guarantor of all  of its assets, the net cash proceeds, if any, from such
disposition are being distributed to the Borrower in connection with such
disposition, or (B) such Guarantor will be the borrower with respect to

62

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

 

Secured Indebtedness that is not prohibited under this Agreement, which
Indebtedness will be secured by a Lien on the assets of such Guarantor, and the
provisions of such Secured Indebtedness make such Subsidiary Guarantor an
Excluded Subsidiary, or (C) the Borrower has contributed or simultaneously with
such release will contribute its entire direct or indirect interest in such
Guarantor to an Unconsolidated Affiliate in compliance with the terms of this
Agreement, or (D) such Guarantor is an Excluded Subsidiary.  Delivery by the
Borrower to the Agent of any such request for a release shall constitute a
representation by the Borrower that the matters set forth in the preceding
sentence (both as of the date of the giving of such request and as of the date
of the effectiveness of such request) are true and correct with respect to such
request.

(d) The provisions of §5.4(b) and (c) shall not entitle Borrower, General
Partner or REIT to any release from the Loan Documents.

§5.5 Partial Release of Collateral.  Provided no Default or Event of Default
shall have occurred hereunder and be continuing (or would exist immediately
after giving effect to the transactions contemplated by this §5.5), the Agent
shall release a Mortgaged Property or Equity Interests from the lien or security
title of the Security Documents encumbering the same (and if such Collateral is
a Mortgaged Property, such release shall include the Equity Interests in the
applicable Subsidiary Guarantor) upon the request of the Borrower in connection
with a sale or other permanent disposition or refinancing of such Mortgaged
Property or other Real Estate to which the Equity Interests relate, as
applicable, subject to and upon the following terms and conditions:

(a) the Borrower shall deliver to the Agent written notice of its desire to
obtain such release no later than ten (10) days prior to the date on which such
release is to be effected;

(b) the Borrower shall submit to the Agent with such request a Compliance
Certificate prepared using the financial statements of the Borrower most
recently provided or required to be provided to the Agent under §6.4 or §7.4
adjusted in the best good faith estimate of the Borrower to give effect to the
proposed release and demonstrating that no Default or Event of Default with
respect to the covenants referred to therein shall exist after giving effect to
such release;

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

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

(e) the Borrower shall pay to the Agent for the account of the Lenders a release
price, which payment shall be applied to reduce the outstanding principal
balance of the Loans as provided in §3.4, in an amount equal to the gross amount
received by Borrower or its Subsidiary in connection with such sale, disposition
or refinance less normal and customary closing costs paid to third parties; and

63

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

 

(f) if such release is requested in connection with a financing or refinancing
of such Mortgaged Property or other Real Estate, Borrower shall have complied
with the terms of the Agreement Regarding Fees.

§5.6 Release of Collateral.  Upon the refinancing or repayment of the
Obligations in full and termination of the obligation to provide additional
Loans or issue Letters of Credit to Borrower, then the Agent shall release the
Collateral from the lien and security interest of the Security Documents and
release the Borrower and Guarantors (other than with respect to obligations that
survive termination of this Agreement), provided that Agent has not received a
notice from the Representative or the holder of the Hedge Obligations that any
Hedge Obligation is then due and payable to the holder thereof.

§5.7 Non-Encumbrance.  Without implying any limitation upon the generality of
§8.2, the Borrower will not, and will not permit any other Person to, create or
incur or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, negative pledge, change, restriction or other security
interest of any kind upon any Mortgaged Property described in any Mortgage
(whether now owned or hereafter acquired), except for matters set forth in the
Title Policies relating to such Mortgaged Property submitted to and approved by
the Agent.

§6.

REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Agent and the Lenders as follows.

§6.1 Corporate Authority, Etc..

(a) Incorporation; Good Standing.  REIT is a Maryland corporation duly organized
pursuant to Articles of incorporation filed with the Maryland Secretary of
State, and is validly existing and in good standing under the laws of
Maryland.  REIT conducts its business in a manner which enables it to qualify as
a real estate investment trust under, and to be entitled to the benefits of,
Section 856 of the Code, and has elected to be treated as and is entitled to the
benefits of a real estate investment trust thereunder.  The Borrower is a
Delaware limited partnership duly organized pursuant to its certificate of
limited partnership filed with the Delaware Secretary of State, and is validly
existing and in good standing under the laws of Delaware.  The Borrower (i) has
all requisite power to own its property and conduct its business as now
conducted and as presently contemplated, and (ii) is in good standing and is
duly authorized to do business in the jurisdiction of its organization and where
any Real Estate owned by it is located and in each other jurisdiction where a
failure to be so qualified in such other jurisdiction could have a Material
Adverse Effect.

(b) Subsidiaries.  Each of the Guarantors and each of the Subsidiaries of the
Borrower and the Guarantors (i) is a corporation, limited partnership, general
partnership, limited liability company or trust duly organized under the laws of
its State of organization and is validly existing and in good standing under the
laws thereof, (ii) has all requisite power to own its property and conduct its
business as now conducted and as presently contemplated and (iii) is in good
standing and is duly authorized to do business in each jurisdiction where it is
organized and where any Real Estate owned by it is located and in each other
jurisdiction where a failure to be so qualified could reasonably be expected to
have a Material Adverse Effect.

64

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

 

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

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

§6.2 Governmental Approvals.  The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower or any Guarantor is
a party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing or registration with, or the giving of any
notice to, any court, department, board, governmental agency or authority other
than those already obtained, the filing of the Security Documents in the
appropriate records office with respect thereto, and filings after the date
hereof of disclosures with the SEC.

§6.3 Title to Properties.  Except as indicated on Schedule 6.3 hereto, REIT and
its Subsidiaries own or lease all of the assets reflected in the consolidated
balance sheet of the REIT as of the Balance Sheet Date or acquired or leased
since that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date) subject to no rights of others,
including any mortgages, leases pursuant to which REIT or any of its
Subsidiaries or any of their respective Affiliates is the lessee, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.

§6.4 Financial Statements.  The Borrower has furnished to the Agent:  (a) the
consolidated balance sheet balance sheet of REIT and its Subsidiaries as of the
Balance Sheet Date and the related consolidated statement of income and cash
flow as of the Balance Sheet Date certified by the chief financial officer of
REIT, (b) an unaudited statement of Net Operating Income for the period ending
September 30, 2015, reasonably satisfactory in form to the Agent and certified
by the chief financial officer of REIT as fairly presenting the Net Operating
Income for such periods, and (c) certain other financial information relating to
the Borrower, the Guarantors and the Collateral, including, without limitation,
the Real Estate.  The balance sheet

65

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

 

and statements referred to in clauses (a) and (b) above have been prepared in
accordance with generally accepted accounting principles and fairly present the
consolidated financial condition of REIT and its Subsidiaries as of such dates
and the consolidated results of the operations of REIT and its Subsidiaries for
such periods.  There are no liabilities, contingent or otherwise, of REIT or any
of its Subsidiaries involving material amounts not disclosed in said financial
statements and the related notes thereto.

§6.5 No Material Changes.  Since the Balance Sheet Date or the date of the most
recent financial statements delivered pursuant to §7.4 (with the date which is
the most recent being applicable), there has occurred no materially adverse
change in the financial condition, operations, business or assets of REIT and
its Subsidiaries taken as a whole as shown on or reflected in the consolidated
balance sheets of REIT as of the Balance Sheet Date, or its consolidated
statement of income or cash flows as of the Balance Sheet Date, other than
changes in the ordinary course of business that have not and could not
reasonably be expected to have a Material Adverse Effect.  As of the date
hereof, except as set forth on Schedule 6.5 hereto, there has occurred no
materially adverse change in the financial condition, operations, business or
assets of REIT, its Subsidiaries or any of the Real Estate from the condition
shown on the financial statements delivered to the Agent pursuant to §6.4 other
than changes in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business, assets,
operations or financial condition of REIT and its Subsidiaries, considered as a
whole, or of any of the Real Estate.

§6.6 Franchises, Patents, Copyrights, Etc..  The Borrower, the Guarantors and
their respective Subsidiaries possess all franchises, patents, copyrights,
trademarks, trade names, service marks, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of their business
substantially as now conducted without known conflict with any rights of
others.  Except as set forth on Schedule 6.6 hereto or in any Mortgage accepted
after the Closing Date, none of the Mortgaged Properties is owned or operated by
the Borrower or its Subsidiaries under or by reference to any trademark, trade
name, service mark or logo, and none of the trademarks, tradenames, service
marks or logos are registered or subject to any license or provision of law
limiting their assignability or use except as specifically set forth on
Schedule 6.6 or in any Mortgage accepted after the Closing Date.

§6.7 Litigation.  Except as stated on Schedule 6.7, there are no actions, suits,
proceedings or investigations of any kind pending or to the knowledge of the
Borrower threatened against the Borrower, any Guarantor or any of their
respective Subsidiaries before any court, tribunal, arbitrator, mediator or
administrative agency or board which question the validity of this Agreement or
any of the other Loan Documents, any action taken or to be taken pursuant hereto
or thereto, the Collateral or any lien, security title or security interest
created or intended to be created pursuant hereto or thereto, or which if
adversely determined could reasonably be expected to have a Material Adverse
Effect.  Except as set forth on Schedule 6.7, as of the Closing Date there are
no judgments, final orders or awards outstanding against or affecting the
Borrower, any Guarantor, any of their respective Subsidiaries or any
Collateral.  No injunction, writ, temporary restraining order or any order of
any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.

66

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

 

§6.8 No Material Adverse Contracts, Etc..  None of the Borrower, any Guarantor
or any of their respective Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation that
has or is expected in the future to have a Material Adverse Effect.  None of the
Borrower, any Guarantor or any of their respective Subsidiaries is a party to
any contract or agreement that has or could reasonably be expected to have a
Material Adverse Effect.

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

§6.10 Tax Status.  Each of the Borrower, the Guarantors and their respective
Subsidiaries (a) has made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject or has obtained an extension for filing, (b) has paid prior to
delinquency all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations except those
which are being contested in good faith and by appropriate proceedings as
permitted by this Agreement, and (c) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.  Except as set
forth on Schedule 6.10, there are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers or
partners of such Person know of no basis for any such claim.  Except as set
forth on Schedule 6.10, there are no audits pending or to the knowledge of the
Borrower threatened with respect to any tax returns filed by the Borrower, any
Guarantor or their respective Subsidiaries.  The taxpayer identification number
for REIT is 20-5188065, the taxpayer identification number for the General
Partner is 45-5323164 and the taxpayer identification number for the Borrower is
38-3887995.

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

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

§6.13 Setoff, Etc..  The Collateral and the rights of the Agent and the Lenders
with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses by the Borrower or any of their Subsidiaries or
Affiliates or, to the best knowledge of the Borrower, any other Person.

§6.14 Certain Transactions.  Except as disclosed on Schedule 6.14 hereto, none
of the partners, officers, trustees, managers, members, directors, or employees
of the Borrower, any Guarantor or any of their respective Subsidiaries is, nor
shall any such Person become, a party to

67

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

 

any transaction with the Borrower, any Guarantor or any of their respective
Subsidiaries or Affiliates (other than for services as partners, managers,
members, employees, officers and directors), including any agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any partner, officer, trustee, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any partner, officer, trustee, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, which are
on terms less favorable to the Borrower, a Guarantor or any of their respective
Subsidiaries than those that would be obtained in a comparable arms-length
transaction.

§6.15 Employee Benefit Plans.  The Borrower, each Guarantor and each ERISA
Affiliate has fulfilled its obligation, if any, under the minimum funding
standards of ERISA and the Code with respect to each Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the Code
with respect to each Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan.  Neither the Borrower, any Guarantor nor any ERISA Affiliate has
(a) sought a waiver of the minimum funding standard under Section 412 of the
Code in respect of any Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan, (b) failed to make any contribution or payment to any Employee
Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, or made any
amendment to any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension
Plan, which has resulted or could result in the imposition of a Lien or the
posting of a bond or other security under ERISA or the Code, or (c) incurred any
liability under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.  None of the assets of REIT or any of its
Subsidiaries, including, without limitation, any Mortgaged Property or other
Collateral, constitutes a “plan asset” of any Employee Plan, Multiemployer Plan
or Guaranteed Pension Plan.

§6.16 Disclosure.  All of the representations and warranties made by or on
behalf of the Borrower, the Guarantors and their respective Subsidiaries in this
Agreement and the other Loan Documents or any document or instrument delivered
to the Agent or the Lenders pursuant to or in connection with any of such Loan
Documents are true and correct in all material respects, and neither the
Borrower nor any Guarantor has failed to disclose such information as is
necessary to make such representations and warranties not misleading.  All
information contained in this Agreement, the other Loan Documents or otherwise
furnished to or made available to the Agent or the Lenders by or on behalf of
the Borrower, any Subsidiary or any Guarantor, as supplemented to date, taken as
a whole, is and, when delivered, will be true and correct in all material
respects and, as supplemented to date, does not, and when delivered will not (to
Borrower’s knowledge), contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements contained therein not
misleading.  The written information, reports and other papers and data with
respect to the Borrower, any Subsidiary, any Guarantor or the Collateral,
including, without limitation, the Mortgaged Properties (other than projections
and estimates) furnished to the Agent or the Lenders in connection with this
Agreement or the obtaining of the Commitments of the Lenders hereunder was, at
the time so furnished, taken as a whole, complete and correct in all material
respects, or has been subsequently supplemented by other written information,
reports or other papers or data, to the extent necessary to give in all material
respects a true and accurate knowledge of the subject

68

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

 

matter in all material respects; provided that such representation shall not
apply to (a) the accuracy of any appraisal, title commitment, survey, or
engineering and environmental reports prepared by third parties or legal
conclusions or analysis provided by the Borrower’s or the Guarantors’ counsel
(although the Borrower and the Guarantors have no reason to believe that the
Agent and the Lenders may not rely on the accuracy thereof) or (b) budgets,
projections and other forward-looking speculative information prepared in good
faith by the Borrower (except to the extent the related assumptions were when
made manifestly unreasonable).

§6.17 Trade Name; Place of Business.  Neither the Borrower nor any Guarantor
uses any trade name and conducts business under any name other than its actual
name set forth in the Loan Documents.  The principal place of business of the
Borrower is 60 Hempstead Avenue, Suite 718, West Hempstead, New York 11552.

§6.18 Regulations T, U and X.  No portion of any Loan is to be used for the
purpose of purchasing or carrying any “margin security” or “margin stock” as
such terms are used in Regulations T, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R.  Parts 220, 221 and 224.  Neither the Borrower
nor any Guarantor is engaged, nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any “margin security” or “margin stock” as such terms are
used in Regulations T, U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R.  Parts 220, 221 and 224.

§6.19 Environmental Compliance.  The Borrower, in the case of Mortgaged
Properties acquired after the date hereof will obtain and provide to the Agent,
written environmental site assessment reports of the Environmental Engineer,
which reports shall be in form and substance satisfactory to the Agent
(collectively, the “Environmental Reports”).  Except as set forth in the
executive summaries attached as Schedule 6.19 hereto with respect to the Real
Estate of the Borrower and its Subsidiaries owned as of the Closing Date or in
the Environmental Reports with respect to Mortgaged Properties, the Borrower
makes the following representations and warranties:

(a) None of the Borrower, the Guarantors or their respective Subsidiaries nor
any manager of the Real Estate, nor any tenant or operations thereon, is in
violation, or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including without
limitation, those arising under any Environmental Law, which violation
(i) involves Real Estate (other than the Mortgaged Properties) and has had or
could reasonably be expected to have a Material Adverse Effect or (ii) involves
a Mortgaged Property.

(b) None of the Borrower, any Guarantor nor any of their respective Subsidiaries
has received notice from any third party including, without limitation, any
Governmental Authority, (i) that it has been identified by the United States
Environmental Protection Agency (“EPA”) as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B (1986); (ii) that any Hazardous Substance(s) which it has
generated, transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has ordered
that the Borrower, any Guarantor or any of their respective Subsidiaries conduct
a remedial investigation,

69

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

 

removal or other response action pursuant to any Environmental Law; or
(iii) that it is or shall be a named party to any claim, action, cause of
action, complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party’s incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with the
release of Hazardous Substances, which in any case (i) involves Real Estate
(other than the Mortgaged Properties) and has had or could reasonably be
expected to have a Material Adverse Effect or (ii) involves a Mortgaged
Property.

(c) (i) no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance
with applicable Environmental Laws, and no underground tank or other underground
storage receptacle for Hazardous Substances is located on any portion of the
Real Estate except those which are being operated and maintained in compliance
with Environmental Laws; (ii) in the course of any activities conducted by the
Borrower, the Guarantors, their respective Subsidiaries or the tenants of their
properties, no Hazardous Substances have been generated or are being used on the
Real Estate except in the ordinary course of the Borrower’s, the Guarantors’ and
their respective Subsidiaries’ respective businesses or the tenant’s residency
and in accordance with applicable Environmental Laws; (iii) there has been no
past or present Release or threatened Release of Hazardous Substances on, upon,
into or from the Real Estate; (iv) there have been no Releases on, upon, from or
into any real property in the vicinity of any of the Real Estate which, through
soil or groundwater contamination, may have come to be located on the Real
Estate; and (v) any Hazardous Substances that have been generated on any of the
Real Estate have been transported off‑site in accordance with all applicable
Environmental Laws (except with respect to the foregoing in this §6.19(c) as to
any Real Estate (other than the Mortgaged Properties) where the foregoing has
not had or could not reasonably be expected to have a Material Adverse Effect).

(d) none of the Borrower, the Guarantors, their respective Subsidiaries nor the
Real Estate is subject to any applicable Environmental Law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any governmental
agency or the recording or delivery to other Persons of an environmental
disclosure document or statement in each case by virtue of the transactions set
forth herein and contemplated hereby, or as a condition to the recording of the
Mortgages or to the effectiveness of any other transactions contemplated hereby,
except for such matters with which the Borrower, the Guarantors, their
respective Subsidiaries shall have complied with as of the Closing Date.

(e) There are no existing or closed sanitary landfills, solid waste disposal
sites, or hazardous waste treatment, storage or disposal facilities (i) on or
affecting the Real Estate (other than the Mortgaged Properties) except where
such existence has not had or could not be reasonably be expected to have a
Material Adverse Effect, or (ii) on or affecting a Mortgaged Property.

(f) There has been no claim by any party that any use, operation, or condition
of the Real Estate has caused any nuisance or any other liability or adverse
condition on any other property, nor is there any basis for such a claim.

70

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

 

§6.20 Subsidiaries; Organizational Structure.  Schedule 6.20(a) sets forth, as
of the date hereof, all of the Subsidiaries of REIT, the form and jurisdiction
of organization of each of the Subsidiaries, and REIT’s direct and indirect
ownership interests therein.  Schedule 6.20(b) sets forth, as of the date
hereof, all of the Unconsolidated Affiliates of the REIT and its Subsidiaries,
the form and jurisdiction of organization of each of the Unconsolidated
Affiliates, REIT’s or its Subsidiary’s ownership interest therein and the other
owners of the applicable Unconsolidated Affiliate.  No Person owns any legal,
equitable or beneficial interest in any of the Persons set forth on
Schedules 6.20(a) and 6.20(b) except as set forth on such Schedules.

§6.21 Intentionally Omitted.

§6.22 Property.  Except as set forth in the property condition reports listed on
Schedule 6.22, (i) all of the Mortgaged Properties, and all major building
systems located thereon, are structurally sound, in good condition and working
order and free from material defects, subject to ordinary wear and tear,
(ii) all of the other Real Estate of the Borrower, the Guarantors and their
respective Subsidiaries is structurally sound, in good condition and working
order, subject to ordinary wear and tear, except where such defects have not had
and could not reasonably be expected to have a Material Adverse Effect,
(iii) the Real Estate, and the use and operation thereof, is in material
compliance with all applicable federal and state law and governmental
regulations and any local ordinances, orders or regulations, including without
limitation, laws, regulations and ordinances relating to zoning, building codes,
subdivision, fire protection, health, safety, handicapped access, historic
preservation and protection, wetlands and tidelands (but excluding for purposes
of this §6.22, Environmental Laws) except where a failure to so comply as to
Real Estate other than Mortgaged Properties has not and could not reasonably be
expected to have a Material Adverse Effect, (iv) all utilities necessary for the
use and operation of the Mortgaged Properties are installed to the property
lines of the Mortgaged Properties through dedicated public rights of way or
through perpetual private easements approved by the Agent with respect to which,
as applicable, the applicable Mortgage creates a valid and enforceable first
lien and, except in the case of drainage facilities, are connected to the
Building located thereon with valid permits and are adequate to service the
Building in compliance with applicable law, (v) the streets abutting the Real
Estate are dedicated and accepted public roads, to which the Real Estate in each
case has direct access or are perpetual private ways (with direct access to
public roads) to which the Real Estate have direct access approved by the Agent
and with respect to which, as applicable, the applicable Mortgage creates a
valid and enforceable first lien, (vi) there are no unpaid or outstanding real
estate or other taxes or assessments on or against any of the Real Estate which
are payable by the Borrower, any Guarantor or any of their respective
Subsidiaries (except only real estate or other taxes or assessments, that are
not yet delinquent or are being protested as permitted by this Agreement),
(vii) each Real Estate asset is separately assessed for purposes of real estate
tax assessment and payment, (viii) there are no pending, or to the knowledge of
the Borrower, threatened or contemplated, eminent domain proceedings against any
Real Estate except as disclosed to Agent pursuant to §7.7, (ix) none of the Real
Estate is now damaged as a result of any fire, explosion, accident, flood or
other casualty except as disclosed to Agent pursuant to §7.7, (x) none of the
Borrower, the Guarantors or any of their respective Subsidiaries has received
any outstanding notice from any insurer or its agent requiring performance of
any work with respect to any of the Real Estate, or canceling or threatening to
cancel any policy of insurance, and each of the Real Estate Properties complies
with the material requirements of all of the Borrower’s, Guarantors’

71

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

 

and their respective Subsidiaries’ insurance carriers, (xi) no person or entity
has any right or option to acquire any Real Estate or any portion thereof or
interest therein, (xii) neither the Borrower nor any Guarantor is a party to any
Management Agreements for any of the Real Estate except as has been delivered to
the Agent and with respect to which the provisions of §7.12 have been complied
with, and (xiii) there are no defaults or material claims or any bases for
defaults or material claims in respect of any Real Estate or its operation by
any party to any Management Agreement.

§6.23 Brokers.  None of REIT nor any of its Subsidiaries has engaged or
otherwise dealt with any broker, finder or similar entity in connection with
this Agreement or the Loans contemplated hereunder.

§6.24 Other Debt.  As of the date of this Agreement, (a) none of the Borrower,
any Guarantor nor any of their respective Subsidiaries is in default of (i) the
payment of any Indebtedness, the performance of any related agreement, mortgage,
deed of trust, security agreement, financing agreement, indenture or lease to
which any of them is a party, and (b) no Indebtedness of the Borrower, any
Guarantor or any of their respective Subsidiaries has been accelerated.  Neither
the Borrower nor any Guarantor is a party to or bound by any agreement,
instrument or indenture that may require the subordination in right or time or
payment of any of the Obligations to any other indebtedness or obligation of the
Borrower or any Guarantor.  Schedule 6.24 hereto sets forth all agreements,
mortgages, deeds of trust, financing agreements or other material agreements
binding upon the Borrower and each Guarantor or their respective properties and
entered into by the Borrower and/or such Guarantor as of the date of this
Agreement with respect to any Indebtedness of the Borrower or any Guarantor in
an amount greater than $1,000,000.00, and the Borrower has provided the Agent
with such true, correct and complete copies thereof.

§6.25 Solvency.  After giving effect to the transactions contemplated by this
Agreement and the other Loan Documents, including all Loans made or to be made
hereunder, neither the Borrower nor any Guarantor is insolvent on a balance
sheet basis such that the sum of such Person’s assets exceeds the sum of such
Person’s liabilities, the Borrower and each Guarantor is able to pay its debts
as they become due, and the Borrower and each Guarantor has sufficient capital
to carry on its business.

§6.26 No Bankruptcy Filing.  Neither the Borrower nor any Guarantor is
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or for the liquidation of its assets or property,
and the Borrower has no knowledge of any Person contemplating the filing of any
such petition against it or any Guarantor.

§6.27 No Fraudulent Intent.  Neither the execution and delivery of this
Agreement or any of the other Loan Documents nor the performance of any actions
required hereunder or thereunder is being undertaken by the Borrower, any
Guarantor or any of their respective Subsidiaries with or as a result of any
actual intent by any of such Persons to hinder, delay or defraud any entity to
which any of such Persons is now or will hereafter become indebted.

§6.28 Transaction in Best Interests of the Borrower and Guarantors;
Consideration.  The transaction evidenced by this Agreement and the other Loan
Documents is in the best interests of

72

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

 

the Borrower, each Guarantor and their respective Subsidiaries.  The Borrower
and the Guarantors are engaged in common business enterprises related to those
of the Borrower and each Guarantor will derive substantial direct and indirect
benefit from the effectiveness and existence of this Agreement.  The direct and
indirect benefits to inure to the Borrower, each Guarantor and their respective
Subsidiaries pursuant to this Agreement and the other Loan Documents constitute
substantially more than “reasonably equivalent value” (as such term is used
in  Section 548 of the Bankruptcy Code) and “valuable consideration,” “fair
value,” and “fair consideration” (as such terms are used in any applicable state
fraudulent conveyance law), in exchange for the benefits to be provided by the
Borrower, the Guarantors and their respective Subsidiaries pursuant to this
Agreement and the other Loan Documents, and but for the willingness of each
Guarantor to guaranty the Loan, the Borrower would be unable to obtain the
financing contemplated hereunder which financing will enable the Borrower, each
Guarantor and their respective Subsidiaries to have available financing to
conduct and expand their business.

§6.29 Contribution Agreement.  The Borrower and the Guarantors have executed and
delivered the Contribution Agreement, and the Contribution Agreement constitutes
the valid and legally binding obligations of such parties enforceable against
them in accordance with the terms and provisions thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors’
rights and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.

§6.30 Representations and Warranties of Guarantors.  The Borrower has no
knowledge that any of the representations or warranties of any Guarantor
contained in any Loan Document to which such Guarantor is a party are untrue or
inaccurate in any material respect.

§6.31 OFAC.  None of the Borrower or the Guarantors (i) is (or will be) a person
with whom any Lender is restricted from doing business under OFAC (including,
those Persons named on OFAC’s Specially Designated and Blocked Persons list) or
under any statute, executive order (including the September 24, 2001 Executive
Order Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action or
(ii) is engaged (or will engage) in any dealings or transactions or otherwise be
associated with such persons (any such Person, a “Designated Person”).  In
addition, the Borrower hereby agrees to provide to the Lenders any additional
information that a Lender reasonably deems necessary from time to time in order
to ensure compliance with all applicable laws concerning money laundering and
similar activities.  Neither Borrower, any Guarantor, nor any Subsidiary,
director or officer of Borrower or Guarantor or, to the knowledge of Borrower,
any Affiliate, agent or employee of Borrower or any Guarantor, has engaged in
any activity or conduct which would violate any applicable anti-bribery,
anti-corruption or anti-money laundering laws or regulations in any applicable
jurisdiction, including without limitation, any Sanctions Laws and Regulations.

§6.32 Guaranty; Assignment of Interests.  There is no Material Subsidiary that
is not a party to the Guaranty, and there is no Equity Interest that is not an
Unpledgeable Interest that has not been pledged to Agent pursuant to the
Assignment of Interests.

73

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

 

§7.

AFFIRMATIVE COVENANTS. 

The Borrower covenants and agrees that, so long as any Loan, Note or Letter of
Credit is outstanding or any Lender has any obligation to make any Loans or
issue Letters of Credit:

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

§7.2 Maintenance of Office.  The Borrower and each Guarantor will maintain their
respective chief executive office at 60 Hempstead Avenue, Suite 718, West
Hempstead, New York 11552, or at such other place in the United States of
America as the Borrower or any Guarantor shall designate upon thirty (30) days
prior written notice to the Agent and the Lenders, where notices, presentations
and demands to or upon the Borrower or such Guarantor in respect of the Loan
Documents may be given or made.

§7.3 Records and Accounts.  The Borrower and each Guarantor will (a) keep, and
cause each of their respective Subsidiaries to keep true and accurate records
and books of account in which full, true and correct entries will be made in
accordance with GAAP and (b) maintain adequate accounts and reserves for all
taxes (including income taxes), depreciation and amortization of its properties
and the properties of their respective Subsidiaries, contingencies and other
reserves.  Neither the Borrower, any Guarantor nor any of their respective
Subsidiaries shall, without the prior written consent of the Agent, (x) make any
material change to the accounting policies/principles used by such Person in
preparing the financial statements and other information described in §6.4 or
§7.4, or (y) change its fiscal year.  The Agent and the Lenders acknowledge that
REIT's fiscal year is a calendar year.  The REIT’s interest in the Borrower
shall always be such that the Borrower and its Subsidiaries shall be
consolidated with the REIT in accordance with GAAP.

§7.4 Financial Statements, Certificates and Information.  The Borrower will
deliver or cause to be delivered to the Agent, in form and substance
satisfactory to the Agent, with sufficient copies for each of the Lenders:

(a) within ten (10) days of the filing of REIT's Form 10-K with the SEC, if
applicable, but in any event not later than ninety (90) days after the end of
each calendar year, the audited consolidated balance sheet of REIT and its
Subsidiaries at the end of such year, and the related audited consolidated
statements of income, shareholders’ equity, changes in capital and cash flows
for such year, setting forth in comparative form the figures for the previous
fiscal year and all such statements to be in reasonable detail, prepared in
accordance with GAAP, together with a certification by the chief financial
officer, chief executive officer, treasurer or chief accounting officer of the
REIT, that the information contained in such financial statements fairly
presents the financial position of REIT and its Subsidiaries, and accompanied by
an auditor’s report prepared without qualification as to the scope of the audit
by an independent nationally recognized accounting firm reasonably approved by
the Agent and who shall have authorized REIT to deliver such financial
statements and certifications thereof to the Agent and the Lenders;

74

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

 

(b) within ten (10) days of the filing of REIT's Form 10-Q with the SEC, if
applicable, but in any event not later than forty-five (45) days after the end
of each of the first three (3) calendar quarters of each year, copies of the
unaudited consolidated balance sheet of REIT and its Subsidiaries, at the end of
such quarter, and the related unaudited consolidated statements of income,
unaudited consolidated balance sheet and cash flows for the portion of REIT's
fiscal year then elapsed, all in reasonable detail and prepared in accordance
with GAAP, together with a certification by the chief financial officer, chief
executive officer, treasurer or chief accounting officer of REIT that the
information contained in such financial statements fairly presents the financial
position of REIT and its Subsidiaries on the date thereof (subject to year-end
adjustments);

(c) simultaneously with the delivery of the financial statements referred to in
§§7.4(a) and 7.4(b), (i) a statement (a “Compliance Certificate”) certified by
the chief financial officer, chief executive officer, treasurer or chief
accounting officer of REIT in the form of Exhibit G hereto (or in such other
form as the Agent may approve from time to time) setting forth in reasonable
detail computations evidencing compliance or non-compliance (as the case may be)
with the covenants contained in §9 and the other covenants described in such
certificate and (if applicable) setting forth reconciliations to reflect changes
in GAAP since the Balance Sheet Date, (ii) a statement of Funds from Operations
for the relevant period, and (iii) a projection for the current and next three
(3) succeeding calendar quarters of compliance with the covenants described in
the Compliance Certificate.  All income, expense and value associated with Real
Estate or other Investments acquired or disposed of during any quarter will be
adjusted, where applicable;

(d) simultaneously with the delivery of the financial statements referred to in
§§7.4(a) and 7.4(b), (i) a Rent Roll for each of the Real Estate in form
satisfactory to the Agent as of the end of each calendar quarter (including the
fourth calendar quarter in each year), and (ii) an operating statement for each
of the Mortgaged Properties for each such calendar quarter and year to date and
a consolidated operating statement for the Real Estate for each such calendar
quarter and year to date (such statements and reports to be in form reasonably
satisfactory to the Agent);

(e) simultaneously with the delivery of the financial statements referred to in
§§7.4(a) and 7.4(b) above, a statement (i) listing the Real Estate owned by REIT
and its Subsidiaries (or in which REIT or any of its Subsidiaries owns an
interest) and stating the location thereof, the date acquired and the
acquisition cost, the Net Operating Income, square footage and occupancy, and
whether such Real Estate constitutes a Land Asset or a Development Property, and
(ii) listing the Indebtedness of REIT and its Subsidiaries (excluding
Indebtedness of the type described in §§8.1(a), 8.1(c), 8.1(d) and 8.1(f)),
which statement shall include, without limitation, a statement of the original
principal amount of such Indebtedness and the current amount outstanding, the
holder thereof, the maturity date and any extension options, the interest rate,
the collateral provided for such Indebtedness and whether such Indebtedness is
Secured Indebtedness, Recourse Indebtedness or Non-Recourse Indebtedness;

(f) contemporaneously with the filing or mailing thereof, copies of all material
of a financial nature, reports, proxy statements and all other information sent
to the owners of the Borrower or REIT;

75

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

 

(g) promptly following the Agent’s request, after they are filed with the
Internal Revenue Service, copies of all annual federal income tax returns and
amendments thereto of the Borrower and REIT;

(h) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and annual, quarterly, monthly, special (8-K) or other reports
or information that REIT or any of its Subsidiaries shall file with the SEC;

(i) notice of any audits pending or threatened in writing with respect to any
tax returns filed by REIT or any of its Subsidiaries promptly following notice
of such audit;

(j) evidence reasonably satisfactory to the Agent of the timely payment of all
real estate taxes for the Real Estate;

(k) promptly following the occurrence thereof, written notice to the Agent of
any new or additional Indebtedness or Liens on any Real Estate directly or
indirectly owned by Borrower;

(l) within five (5) Business Days of receipt, copies of any written claim made
with respect to any Non-Recourse Exclusion; and

(m) from time to time, such other financial data and information in the
possession of REIT or its Subsidiaries (including without limitation auditors’
management letters, status of litigation or investigations against REIT or any
of its Subsidiaries and any settlement discussions relating thereto, property
inspection and environmental reports and information as to zoning and other
legal and regulatory changes affecting REIT or any of its Subsidiaries) as the
Agent may reasonably request.

The Borrower shall cooperate with the Agent in connection with the publication
of certain materials and/or information provided by or on behalf of the
Borrower.  Documents required to be delivered pursuant to the Loan Documents
shall be delivered by or on behalf of the Borrower to the Agent and the Lenders
(collectively, “Information Materials”) pursuant to this Section.  Any material
to be delivered pursuant to this §7.4 may be delivered electronically directly
to Agent and the Lenders provided that such material is in a format reasonably
acceptable to Agent, and such material shall be deemed to have been delivered to
Agent and the Lenders upon Agent’s receipt thereof.  Upon the request of Agent,
the Borrower shall deliver paper copies thereof to Agent and the
Lenders.  Notwithstanding anything to the contrary in this §7.4, the Borrower
shall not be required to deliver any 10-K or 10-Q of REIT to Agent if such 10-K
or 10‑Q is publicly available on the SEC’s EDGAR Website  The Borrower and the
Guarantors authorize Agent and Arranger to disseminate any such materials,
including without limitation the Information Materials through the use of
Intralinks, SyndTrak or any other electronic information dissemination system
(an “Electronic System”).  Any such Electronic System is provided “as is” and
“as available.”  The Agent and the Arranger do not warrant the adequacy of any
Electronic System and expressly disclaim liability for errors or omissions in
any notice, demand, communication, information or other material provided by or
on behalf of Borrower that is distributed over or by any such Electronic System
(“Communications”).  No

76

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

 

warranty of any kind, express, implied or statutory, including, without
limitation, any warranty of merchantability, fitness for a particular purpose,
non-infringement of third-party rights or freedom from viruses or other code
defects, is made by Agent or the Arranger in connection with the Communications
or the Electronic System.  In no event shall the Agent, the Arranger or any of
their directors, officers, employees, agents or attorneys have any liability to
the Borrower or the Guarantors, any Lender or any other Person for damages of
any kind, including, without limitation, direct or indirect, special, incidental
or consequential damages, losses or expenses (whether in tort, contract or
otherwise) arising out of the Borrower’s, any Guarantors’, the Agent’s or any
Arranger’s transmission of Communications through the Electronic System, and the
Borrower and the Guarantors release Agent, the Arranger and the Lenders from any
liability in connection therewith.

§7.5 Notices.

(a) Defaults.  The Borrower will promptly upon becoming aware of same notify the
Agent in writing of the occurrence of any Default or Event of Default, which
notice shall describe such occurrence with reasonable specificity and shall
state that such notice is a “notice of default”.  If any Person shall give any
notice of the existence of a claimed default or take any other action in respect
of a claimed default (whether or not constituting an Event of Default) under
this Agreement or under any note, evidence of indebtedness, indenture or other
obligation to which or with respect to which the Borrower, any Guarantor or any
of their respective Subsidiaries is a party or obligor, whether as principal or
surety, and such default would permit the holder of such note or obligation or
other evidence of indebtedness to accelerate the maturity thereof, which
acceleration would either cause a Default or have a Material Adverse Effect, the
Borrower shall forthwith give written notice thereof to the Agent and each of
the Lenders, describing the notice or action and the nature of the claimed
default.

(b) Environmental Events.  The Borrower will give notice to the Agent within
five (5) Business Days of becoming aware of (i) any potential or known Release,
or threat of Release, of any Hazardous Substances in violation of any applicable
Environmental Law; (ii) any violation of any Environmental Law that the
Borrower, any Guarantor or any of their respective Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any written
report supplemental to any oral report is made) to any federal, state or local
environmental agency or (iii) any inquiry, proceeding, investigation, or other
action, including a notice from any agency of potential environmental liability,
of any federal, state or local environmental agency or board, that in any case
involves (A) any Mortgaged Property, (B) any other Real Estate and could
reasonably be expected to have a Material Adverse Effect or (C) the Agent’s
liens or security title on the Collateral pursuant to the Security Documents.

(c) Notification of Claims Against Collateral.  The Borrower will give notice to
the Agent in writing within five (5) Business Days of becoming aware of any
material setoff, claims (including, with respect to any Mortgaged Property,
environmental claims), withholdings or other defenses to which any of the
Collateral, or the rights of the Agent or the Lenders with respect to the
Collateral, are subject.

(d) Notice of Litigation and Judgments.  The Borrower will give notice to the
Agent in writing within five (5) Business Days of becoming aware of any
litigation or

77

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

 

proceedings threatened in writing or any pending litigation and proceedings
affecting the Borrower, any Guarantor or any of their respective Subsidiaries or
to which the Borrower, any Guarantor or any of their respective Subsidiaries is
or is to become a party involving an uninsured claim against the Borrower, any
Guarantor or any of their respective Subsidiaries that could either reasonably
be expected to cause a Default or could reasonably be expected to have a
Material Adverse Effect and stating the nature and status of such litigation or
proceedings.  The Borrower will give notice to the Agent, in writing, in form
and detail reasonably satisfactory to the Agent and each of the Lenders, within
ten (10) days of any judgment not covered by insurance, whether final or
otherwise, against the REIT or any of its Subsidiaries in an amount in excess of
$2,500,000.00.

(e) Notice of Defaults Under Organizational Agreements.  The Borrower will,
within five (5) Business Days of notice or receipt, provide to the Agent copies
of any and all written notices of default under any partnership agreement,
operating agreement or other organizational agreement to which Borrower or any
of its Subsidiaries is a party or of any failure by the Borrower or any of its
Subsidiaries to perform any material obligation under any such partnership
agreement, operating agreement or other organizational agreement.

(f) ERISA.  The Borrower will give notice to the Agent within five (5) Business
Days after REIT or any ERISA Affiliate (i) gives or is required to give notice
to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with
respect to any Guaranteed Pension Plan, Multiemployer Plan or Employee Benefit
Plan, or knows that the plan administrator of any such plan has given or is
required to give notice of any such reportable event; (ii) gives a copy of any
notice of complete or partial withdrawal liability under Title IV of ERISA; or
(iii) receives any notice from the PBGC under Title IV or ERISA of an intent to
terminate or appoint a trustee to administer any such plan.

(g) Intentionally Omitted.

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

§7.6 Existence; Maintenance of Properties.

(a) Except as permitted under §§8.4 and 8.8, the Borrower and each Guarantor
will (i) preserve and keep in full force and effect their legal existence in the
jurisdiction of its incorporation or formation and (ii) will cause each of their
respective Subsidiaries that are not Guarantors to preserve and keep in full
force and effect their legal existence in the jurisdiction of its incorporation
or formation except where such failure has not had and could not reasonably be
expected to have a Material Adverse Effect.  The Borrower and each Guarantor
will preserve and keep in full force all of their rights and franchises and
those of their respective Subsidiaries, the preservation of which is necessary
to the conduct of their business (except with respect to Subsidiaries of the
Borrower that are not Guarantors, where such failure has not had and could not
reasonably be expected to have a Material Adverse Effect).  REIT shall at all
times comply with all requirements and applicable laws and regulations necessary
to maintain REIT Status and

78

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

 

shall continue to receive REIT Status.  The Borrower shall continue to own
directly or indirectly one hundred percent (100%) of the Subsidiary Guarantors.

(b) The Borrower and each Guarantor (i) will cause all of its properties and
those of its Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment, and (ii) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof.

§7.7 Insurance; Condemnation.

(a) The Borrower and each Subsidiary Guarantor will, at its expense, procure and
maintain for the benefit of the Borrower, each such Subsidiary Guarantor and the
Agent, insurance policies issued by such insurance companies, in such amounts,
in such form and substance, and with such coverages, endorsements, deductibles
and expiration dates as are acceptable to the Agent, providing the following
types of insurance covering each Mortgaged Property:

(i) “Cause of Loss-Special Form” property insurance (including broad form flood,
broad form earthquake, coverage from loss or damage arising from acts of
terrorism, and comprehensive boiler and machinery coverages) on each Building
and the contents therein of the Borrower and its Subsidiaries in an amount not
less than one hundred percent (100%) of the full replacement cost of each
Building and the contents therein of the Borrower and its Subsidiaries or such
other amount as the Agent may approve, with deductibles not to exceed
$100,000.00 for any one occurrence, with a replacement cost coverage
endorsement, an agreed amount endorsement, and, if requested by the Agent, a
contingent liability from operation of building laws endorsement in such amounts
as the Agent may require.  Full replacement cost as used herein means the cost
of replacing the Building (exclusive of the cost of excavations, foundations and
footings below the lowest basement floor) and the contents therein of the
Borrower and its Subsidiaries without deduction for physical depreciation
thereof;

(ii) During the course of construction or repair of any Building, the insurance
required by clause (i) above shall be written on a builders risk, completed
value, non-reporting form, meeting all of the terms required by clause (i)
above, covering the total value of work performed, materials, equipment,
machinery and supplies furnished, existing structures, and temporary structures
being erected on or near the Mortgaged Property, including coverage against
collapse and damage during transit or while being stored off-site, and
containing a soft costs (including loss of rents) coverage endorsement and a
permission to occupy endorsement;

(iii) Flood insurance if at any time any Building is located in any federally
designated “special hazard area” (including any area having special flood,
mudslide and/or flood-related erosion hazards, and shown on a Flood Hazard
Boundary Map or a Flood Insurance Rate Map published by the Federal Emergency
Management Agency as Zone A, AO, Al-30, AE, A99, AH, VO, V1-30, VE, V, M or E)
and the broad form flood coverage required by clause (i) above is not available,
in an amount equal to the full replacement cost or the maximum amount then
available under the National Flood Insurance Program;

79

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

 

(iv) Rent loss insurance in an amount sufficient to recover at least the total
estimated gross receipts from all sources of income, including without
limitation, rental income, for the Mortgaged Property for a twelve (12) month
period;

(v) Commercial general liability insurance against claims for personal injury
(to include, without limitation, bodily injury and personal and advertising
injury) and property damage liability, all on an occurrence basis, if
commercially available, with such coverages as the Agent may reasonably request
(including, without limitation, contractual liability coverage, completed
operations coverage for a period of two (2) years following completion of
construction of any improvements on the Mortgaged Property, and coverages
equivalent to an ISO broad form endorsement), with a general aggregate limit of
not less than $2,000,000.00, a completed operations aggregate limit of not less
than $2,000,000.00, and a combined single “per occurrence” limit of not less
than $1,000,000.00 for bodily injury and property damage and medical payments;

(vi) During the course of construction or repair of any improvements on the
Mortgaged Property, the general contractor selected to oversee such improvements
shall provide commercial general liability insurance (including completed
operations coverage) naming Borrower as an additional insured, or in lieu
thereof, may provide for such coverage by way of an owner’s contingent or
protective liability insurance covering claims not covered by or under the terms
or provisions of the insurance required by clause (v) above;

(vii) Employer’s liability insurance with respect to the Borrower’s employees
(or if the Borrower have no employees, with respect to the employees of the
managers under the Management Agreements);

(viii) Umbrella liability insurance with limits of not less than $25,000,000.00
to be in excess of the limits of the insurance required by clauses (v), (vi) and
(vii) above, with coverage at least as broad as the primary coverages of the
insurance required by clauses (v), (vi) and (vii) above, with any excess
liability insurance to be at least as broad as the coverages of the lead
umbrella policy.  All such policies shall be endorsed to provide defense
coverage obligations;

(ix) Workers’ compensation insurance for all employees of the Borrower or its
Subsidiaries engaged on or with respect to the Mortgaged Property with limits as
required by applicable law (or if Borrower have no employees, for all employees
of the managers under the Management Agreements); and

(x) Such other insurance in such form and in such amounts as may from time to
time be reasonably required by the Agent against other insurable hazards and
casualties which at the time are commonly insured against in the case of
properties of similar character and location to the Mortgaged Property.

The Borrower shall pay all premiums on insurance policies.  The insurance
policies with respect to all Mortgaged Properties provided for in clauses (v),
(vi) and (viii) above shall name the Agent and each Lender as an additional
insured and shall contain a cross liability/severability endorsement.  The
insurance policies provided for in clauses (i), (ii), (iii),

80

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

 

(iv) and (vi) above shall name the Agent as mortgagee and loss payee, shall be
first payable in case of loss to the Agent, and shall contain mortgage clauses
and lender’s loss payable endorsements in form and substance acceptable to the
Agent.  The Borrower shall deliver certificates of insurance evidencing all such
policies to the Agent, and the Borrower shall promptly furnish to the Agent all
renewal notices and evidence that all premiums or portions thereof then due and
payable have been paid.  Borrower shall provide to Agent a duplicate original or
certified copy of the insurance policies required hereunder promptly after the
original policy is received by Borrower.  Not less than ten (10) days prior to
the expiration date of the policies, as the same may be reduced by Agent, the
Borrower shall deliver to the Agent evidence of continued coverage, as may be
satisfactory to the Agent, and within five (5) Business Days after the renewal
date of such policies, the Borrower shall deliver a certificate of insurance to
Agent, in form and substance satisfactory to the Agent.

(b) All policies of insurance required by this Agreement shall contain clauses
or endorsements to the effect that (i) no act or omission of the Borrower or any
Subsidiary or anyone acting for the Borrower or any Subsidiary (including,
without limitation, any representations made in the procurement of such
insurance), which might otherwise result in a forfeiture of such insurance or
any part thereof, no occupancy or use of the Real Estate for purposes more
hazardous than permitted by the terms of the policy, and no foreclosure or any
other change in title to the Real Estate or any part thereof, shall affect the
validity or enforceability of such insurance insofar as the Agent is concerned,
(ii) the insurer waives any right of set off, counterclaim, subrogation, or any
deduction in respect of any liability of the Borrower or any Subsidiary and the
Agent, (iii) such insurance is primary and without right of contribution from
any other insurance which may be available, (iv) such policies shall not be
modified so as to reduce or in any way negatively affect insurance coverage on
any Mortgaged  Property, canceled or terminated prior to the scheduled
expiration date thereof without the insurer thereunder giving at least thirty
(30) days prior written notice to the Agent by certified or registered mail;
provided, however, that only ten (10) days prior written notice to Agent shall
be required if such cancellation or termination is due to non-payment of any
insurance premium, and (v) that the Agent or the Lenders shall not be liable for
any premiums thereon or subject to any assessments thereunder, and shall in all
events be in amounts sufficient to avoid any coinsurance liability.

(c) The insurance required by this Agreement may be effected through a blanket
policy or policies covering additional locations and property of the Borrower
and other Persons not included in the Mortgaged Properties, provided that such
blanket policy or policies comply with all of the terms and provisions of this
§7.7, including, without limitation, the Agent’s determination based on a review
of the schedule of locations and values that the amount of such coverage is
sufficient in light of the other risks and properties insured under the blanket
policy.

(d) All policies of insurance required by this Agreement shall be issued by
companies licensed to do business in the State where the policy is issued and
also in the States where the Real Estate is located and shall be issued by
companies having a rating in Best’s Key Rating Guide of at least “A” and a
financial size category of at least “X”.

81

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

 

(e) Neither the Borrower nor any Subsidiary shall carry separate insurance,
concurrent in kind or form or contributing in the event of loss, with any
insurance required under this Agreement unless such insurance complies with the
terms and provisions of this §7.7.

(f) In the event of any loss or damage to or Taking of any Mortgaged Property,
the Borrower or the applicable Guarantor shall give prompt written notice to the
insurance carrier and the Agent.  Each of the Borrower and the Guarantors hereby
irrevocably authorizes and empowers the Agent, at the Agent’s option and in the
Agent’s sole discretion or at the request of the Required Lenders in their sole
discretion, as its attorney in fact, to make proof of such loss, to adjust and
compromise any claim under insurance policies or as a result of a Taking, to
appear in and prosecute any action arising from such insurance policies or as a
result of a Taking, to collect and receive Insurance Proceeds and Condemnation
Proceeds, and to deduct therefrom the Agent’s reasonable expenses incurred in
the collection of such Insurance Proceeds and Condemnation Proceeds; provided,
however, that so long as no Default or Event of Default has occurred and is
continuing and so long as the Borrower or any Guarantor shall in good faith
diligently pursue such claim, the Borrower or such Guarantor may make proof of
loss and appear in any proceedings or negotiations with respect to the
adjustment of such claim, except that the Borrower or such Guarantor may not
settle, adjust or compromise any such claim without the prior written consent of
the Agent, which consent shall not be unreasonably withheld or delayed;
provided, further, that the Borrower or such Guarantor may make proof of loss
and adjust and compromise any claim under casualty insurance policies which is
in an amount less than $1,000,000.00 so long as no Default or Event of Default
has occurred and is continuing and so long as the Borrower or such Guarantor
shall in good faith diligently pursue such claim.  The Borrower and each
Guarantor further authorize the Agent, at the Agent’s option, to (i) apply the
balance of such Insurance Proceeds and Condemnation Proceeds to the payment of
the Obligations whether or not then due, or (ii) if the Agent shall require the
reconstruction or repair of the Mortgaged Property, to hold the balance of such
proceeds as trustee to be used to pay taxes, charges, sewer use fees, water
rates and assessments which may be imposed on the Mortgaged Property and the
Obligations as they become due during the course of reconstruction or repair of
the Mortgaged Property and to reimburse the Borrower or such Guarantor, in
accordance with such terms and conditions as the Agent may prescribe, for, or to
pay directly, the costs of reconstruction or repair of the Mortgaged Property,
and upon completion of such reconstruction or repair to pay any excess Insurance
Proceeds to the Borrower, provided that (i) upon completion of such
reconstruction or repair, such Mortgaged Property is in compliance with all
applicable state, federal and local laws, ordinances and regulations, including,
without limitation, all building and zoning laws, ordinances and regulations and
(ii) no Defaults or Events of Default exist or are continuing under this
Agreement on the date of such payment to the Borrower.

(g) Notwithstanding the foregoing or anything to the contrary contained in the
Mortgages, the Agent shall make net Insurance Proceeds and Condemnation Proceeds
available to the Borrower or such Guarantor to reconstruct and repair the
Mortgaged Property, in accordance with such terms and conditions as the Agent
may prescribe in the Agent’s discretion for the disbursement of the proceeds,
provided that (i) the cost of such reconstruction or repair is not estimated by
the Agent to exceed twenty-five percent (25%) of the replacement cost of the
damaged Building (as reasonably estimated by the Agent), (ii) no Default or
Event of Default shall have occurred and be continuing, (iii) the Borrower or
such Guarantor shall have provided

82

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

 

to the Agent additional cash security in an amount equal to the amount
reasonably estimated by the Agent to be the amount in excess of such proceeds
which will be required to complete such repair or restoration, (iv) the Agent
shall have approved the plans and specifications, construction budget,
construction contracts, and construction schedule for such repair or restoration
and reasonably determined that the repaired or restored Mortgaged Property will
provide the Agent with adequate security for the Obligations (provided that the
Agent shall not disapprove such plans and specifications if the Building is to
be restored to substantially its condition immediately prior to such damage),
(v) the Borrower or such Guarantor shall have delivered to the Agent written
agreements binding upon not less than eighty percent (80%) of the tenants or
other parties having present or future rights to possession of any portion of
the affected Mortgaged Property or having any right to require repair,
restoration or completion of the Mortgaged Property or any portion thereof
(determined by reference to those tenants that in the aggregate occupy or have
rights to occupy not less than eighty percent (80%) of the net rentable area of
the Building so damaged), agreeing upon a date for delivery of possession of the
Mortgaged Property or their respective portions thereof, to permit time which is
sufficient in the judgment of the Agent for such repair or restoration and
approving the plans and specifications for such repair or restoration, or other
evidence satisfactory to the Agent that none of such tenants or other parties
may terminate their Leases as a result of such casualty or as a result of having
a right to approve the plans and specifications for such repair or restoration,
(vi) the Agent shall reasonably determine that such repair or reconstruction can
be completed prior to the Maturity Date, (vii) the Agent shall receive evidence
reasonably satisfactory to it that any such restoration, repair or rebuilding
complies in all respects with any and all applicable state, federal and local
laws, ordinances and regulations, including without limitation, zoning laws,
ordinances and regulations, and that all required permits, licenses and
approvals relative thereto have been or will be issued in a manner so as not to
materially impede the progress of restoration, (viii) the Agent shall receive
evidence reasonably satisfactory to it that the insurer under such policies of
fire or other casualty insurance does not assert any defense to payment under
such policies against the Borrower, any Guarantor or the Agent, and (ix) with
respect to any Taking, (a) the value of the land taken under such condemnation
is less than $500,000.00; (b) less than five percent (5%) of the land is taken;
(c) the land that is taken is located along the perimeter or periphery of the
land; (d) access to the Mortgaged Property is not affected in any way by the
Taking; (e) no portion of the improvements are taken.  Any excess Insurance
Proceeds shall be paid to the Borrower, or if a Default or Event of Default has
occurred and is continuing, such proceeds shall be applied to the payment of the
Obligations, unless in either case by the terms of the applicable insurance
policy the excess proceeds are required to be returned to such insurer.  Any
excess Condemnation Proceeds shall be applied to the payment of the
Obligations.  In no event shall the provisions of this Section be construed to
extend the Maturity Date or to limit in any way any right or remedy of the Agent
upon the occurrence of an Event of Default hereunder.  If the Mortgaged Property
is sold or the Mortgaged Property is acquired by the Agent, all right, title and
interest of the Borrower and any Guarantor in and to any insurance policies to
the extent that they relate to Mortgaged Properties and unearned premiums
thereon and in and to the proceeds thereof resulting from loss or damage to the
Mortgaged Property prior to the sale or acquisition shall pass to the Agent or
any other successor in interest to the Borrower or purchaser of the Mortgaged
Property.

(h) The Borrower, the Guarantors and their respective Subsidiaries (as
applicable) will, at their expense, procure and maintain insurance covering the
Borrower, the Guarantors and

83

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

 

their respective Subsidiaries (as applicable) and the Real Estate other than the
Mortgaged Properties in such amounts and against such risks and casualties as
are customary for properties of similar character and location, due regard being
given to the type of improvements thereon, their construction, location, use and
occupancy.

(i) The Borrower and the Guarantors will provide to the Agent for the benefit of
the Lenders Title Policies for all of the Mortgaged Properties.

§7.8 Taxes; Liens.  The Borrower and the Guarantors will, and will cause their
respective Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become delinquent, all taxes, assessments and
other governmental charges imposed upon them or upon the Mortgaged Properties or
the other Real Estate, sales and activities, or any part thereof, or upon the
income or profits therefrom as well as all claims for labor, materials or
supplies that if unpaid might by law become a lien or charge upon any of its
property or other Liens affecting any of the Collateral or other property of the
Borrower, the Guarantors or their respective Subsidiaries and all
non-governmental assessments, levies, maintenance and other charges, whether
resulting from covenants, conditions and restrictions or otherwise, water and
sewer rents and charges assessments on any water stock, utility charges and
assessments and owner association dues, fees and levies, provided that any such
tax, assessment, charge or levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings which shall suspend the collection thereof with respect to such
property and the Borrower or applicable Guarantor shall not be subject to any
fine, suspension or loss of privileges or rights by reason of such proceeding,
neither such property nor any portion thereof or interest therein would be in
any danger of sale, forfeiture, loss or suspension of operation  by reason of
such proceeding and the Borrower, such Guarantor or any such Subsidiary shall
have set aside on its books adequate reserves in accordance with GAAP (or if
such aggregate amount so contested relates to a Mortgaged Property and equals or
exceeds $100,000, then Borrower shall have deposited with Agent as additional
Collateral adequate reserves as reasonably determined by Agent); and provided,
further, that forthwith upon the commencement of proceedings to foreclose any
lien that may have attached as security therefor, the Borrower, such Guarantor
or any such Subsidiary either (i) will provide a bond issued by a surety
reasonably acceptable to the Agent and sufficient to stay all such proceedings
or (ii) if no such bond is provided, will pay each such tax, assessment, charge
or levy.  Borrower shall deliver to the Agent evidence of payment of taxes,
other assessments, levies and charges described in this §7.8 with respect to the
Mortgaged Properties not later than ten (10) Business Days prior to the date
upon which such amounts are due and payable unless the same are being contested
in accordance with the terms hereof and the other Loan Documents.

§7.9 Inspection of Properties and Books.  The Borrower and the Guarantors will,
and will cause their respective Subsidiaries to, permit the Agent and the
Lenders, at the Lender’s expense (except during the continuance of an Event of
Default, in which case at the Borrower’s expense), and upon reasonable prior
notice, to visit and inspect any of the properties of the Borrower, each
Guarantor or any of their respective Subsidiaries (subject to the rights of
tenants under their Leases), to examine the books of account of the Borrower,
any Guarantor and their respective Subsidiaries (and to make copies thereof and
extracts therefrom) and to discuss the affairs, finances and accounts of the
Borrower, any Guarantor and their respective Subsidiaries with, and to be
advised as to the same by, their respective officers, partners or members, all
at such

84

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

 

reasonable times and intervals as the Agent or any Lender may reasonably
request, provided that so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower shall not be required to pay for such
visits and inspections more often than once in any twelve (12) month
period.  The Lenders shall use good faith efforts to coordinate such visits and
inspections so as to minimize the interference with and disruption to the normal
business operations of such Persons.

§7.10 Compliance with Laws, Contracts, Licenses, and Permits.  The Borrower and
the Guarantors will, and will cause each of their respective Subsidiaries to,
comply in all material respects with (a) all applicable laws and regulations now
or hereafter in effect wherever its business is conducted, including all
Environmental Laws, (b) the provisions of its corporate charter, partnership
agreement, limited liability company agreement or declaration of trust, as the
case may be, and other charter documents and bylaws, (c) all agreements and
instruments to which it is a party or by which it or any of its properties may
be bound, (d) all applicable decrees, orders, and judgments, and (e) all
licenses and permits required by applicable laws and regulations for the conduct
of its business or the ownership, use or operation of its properties.  If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower, any Guarantor or their respective Subsidiaries may fulfill
any of its obligations hereunder, the Borrower, such Guarantor or such
Subsidiary will promptly take or cause to be taken all steps necessary to obtain
such authorization, consent, approval, permit or license and furnish the Agent
and the Lenders with evidence thereof.  The Borrower shall develop and implement
such programs, policies and procedures as are necessary to comply with the
Patriot Act and shall promptly advise the Agent in writing in the event that the
Borrower shall determine that any investors in the Borrower are in violation of
such act.

§7.11 Further Assurances.  The Borrower and each Guarantor will and will cause
each of their respective Subsidiaries to, cooperate with the Agent and the
Lenders and execute such further instruments and documents as the Lenders or the
Agent shall reasonably request to carry out to their satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.

§7.12 Management.  The Borrower shall not and shall not permit any Subsidiary
Guarantor to enter into any Management Agreement for any Mortgaged Property
without the prior written consent of the Agent (which shall not be unreasonably
withheld), and after such approval, no such Management Agreement shall be
modified in any material respect or terminated without the Agent’s prior written
approval, such approval not to be unreasonably withheld.  The Agent may
condition any approval of a manager engaged by the Borrower or a Subsidiary
Guarantor or a Management Agreement with respect to a Mortgaged Property upon
the execution and delivery to the Agent of a Subordination of Management
Agreement.  The Borrower shall not and shall not permit any Subsidiary Guarantor
or any other Subsidiary to increase any management fee payable under a
Management Agreement after the date the applicable Real Estate becomes a
Mortgaged Property without the prior written consent of the Agent.

§7.13 Leases of the Property.  Neither the Borrower nor any Subsidiary Guarantor
will without the prior written consent of Agent (a) lease all or any portion of
the Real Estate other

85

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

 

than as an Industrial Property in the ordinary course of business consistent
with prudent leasing and management standards, or (b) amend, waive, terminate,
cancel, or accept the surrender of, any lease or other occupancy agreement at
any Mortgaged Property except in the ordinary course of leasing and managing an
Industrial Property consistent with prudent leasing and management standards.

§7.14 Business Operations.  REIT and its Subsidiaries shall operate their
respective businesses in substantially the same manner and in substantially the
same fields and lines of business as such business is now conducted and such
other lines of business that are reasonably related or incidental thereto and in
compliance with the terms and conditions of this Agreement and the Loan
Documents.  Neither REIT nor the Borrower will, or permit any of their
respective Subsidiaries to, directly or indirectly, engage in any line of
business other than the acquisition, ownership, operation and development of
Industrial Properties.

§7.15 Registered Service Mark.  Without prior written notice to the Agent,
except with respect to the trademarks, tradenames, service marks or logos listed
on Schedule 6.6 hereto or in any Mortgage with respect to any Mortgaged
Property, none of the Mortgaged Properties shall be owned or operated by the
Borrower or any Guarantor under any trademark, tradename, service mark or
logo.  In the event any of the Mortgaged Properties shall be owned or operated
under any tradename, trademark, service mark or logo, not listed on Schedule 6.6
hereto or in any Mortgage with respect to any Mortgaged Property, the Borrower
or the applicable Guarantor shall enter into such agreements with the Agent in
form and substance reasonably satisfactory to the Agent, as the Agent may
reasonably require to grant the Agent a perfected first priority security
interest therein and to grant to the Agent or any successful bidder at a
foreclosure sale of such Mortgaged Property the right and/or license to continue
operating such Mortgaged Property under such tradename, trademark, service mark
or logo as determined by the Agent.

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

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

86

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

 

§7.18 Plan Assets.  The Borrower, the Guarantors and each of their respective
Subsidiaries will do, or cause to be done, all things necessary to ensure that
none of its Real Estate or other assets will be deemed to be Plan Assets at any
time.

§7.19 Intentionally Omitted.

§7.20 Intentionally Omitted.

§7.21 Sanctions Laws and Regulations.  The Borrower shall not, directly or
indirectly, use the proceeds of the Loans or any Letter of Credit or lend,
contribute or otherwise make available such proceeds to any Guarantor,
Subsidiary, Unconsolidated Affiliate or other Person (i) to fund any activities
or business of or with any Designated Person, or in any country or territory,
that at the time of such funding is itself the subject of territorial sanctions
under applicable Sanctions Laws and Regulations, (ii) in any manner that would
result in a violation of applicable Sanctions Laws and Regulations by any party
to this Agreement, or (iii) in any manner that would cause the Borrower, the
Guarantors or any of their respective Subsidiaries to violate the United States
Foreign Corrupt Practices Act.  None of the funds or assets of the Borrower or
Guarantors that are used to pay any amount due pursuant to this Agreement shall
constitute funds obtained from transactions with or relating to Designated
Persons or countries which are themselves the subject of territorial sanctions
under applicable Sanctions Laws and Regulations.  Borrower shall maintain
policies and procedures designed to achieve compliance with Sanctions Laws and
Regulations.

§7.22 Assignment of Interest Rate Protection.  In the event that the Borrower
shall enter into an interest rate cap, swap, collar or other interest rate
protection agreement with a Lender Hedge Provider (the “Interest Hedge”), then
as a condition to the obligations of Borrower with respect thereto constituting
Hedge Obligations for the purposes of the Loan Documents, Borrower shall execute
and deliver to Agent a collateral assignment of such Interest Hedge in form and
substance reasonably satisfactory to Agent, and shall further deliver such legal
opinions as to Borrower, and consents to and acknowledgments of such pledge by
the provider of the Interest Hedge, as Agent may reasonably require.  For the
avoidance of doubt, unless the provisions of this §7.22 are complied with, no
Lender Hedge Provider shall have any right or benefit under or from the Loan
Documents or the Collateral.

§8.

NEGATIVE COVENANTS.

The Borrower covenants and agrees that, so long as any Loan, Note or Letter of
Credit is outstanding or any of the Lenders has any obligation to make any Loans
or issue any Letter of Credit:

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

(a) Indebtedness to the Lenders arising under any of the Loan Documents;

(b) Indebtedness to the Lender Hedge Providers in respect of any Hedge
Obligations;

87

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

 

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

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

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

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

(g) subject to the provisions of §9, Indebtedness that is Recourse Indebtedness,
provided that the aggregate amount of such Indebtedness (excluding the
Obligations) shall not at any time exceed five percent (5.0%) of Gross Asset
Value; and

(h) subject to the provisions of §9, Non-Recourse Indebtedness.

Notwithstanding anything in this Agreement to the contrary, (i) none of the
Indebtedness described in §8.1(g) or (h) above shall have any of the Mortgaged
Properties or any interest therein or any direct or indirect ownership interest
in the Borrower or any Subsidiary Guarantor as collateral, a borrowing base,
asset pool or any similar form of credit support for such Indebtedness,
(ii) none of the Subsidiary Guarantors which own a Mortgaged Property shall
create, incur, assume, guarantee or be or remain liable, contingently or
otherwise, with respect to any Indebtedness (including, without limitation,
pursuant to any conditional or limited guaranty or indemnity agreement creating
liability with respect to usual and customary exclusions from the non-recourse
limitations governing the Non-Recourse Indebtedness of any Person, or otherwise)
other than Indebtedness described in §§8.1(a), 8.1(b), 8.1(c), 8.1(d),
8.1(e) and 8.1(f), (iii) none of the Borrower, the Guarantors or any of their
Subsidiaries shall create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Unsecured Indebtedness, any
Indebtedness (other than the Obligations) secured by Equity Interests or rights
to Distributions (so-called “mezzanine financing”), structurally subordinated
Indebtedness or second priority Liens, or any revolving credit facilities (other
than this Agreement)); and (iv) none of the Real Estate of REIT and its
Subsidiaries as of the Closing Date shall have any Indebtedness of the type
described in §8.1(f) or (g) except for the Indebtedness existing as of the
Closing Date that is secured by such Real Estate.

§8.2 Restrictions on Liens, Etc..  The Borrower will not, and will not permit
any Guarantor or their respective Subsidiaries to (a) create or incur or suffer
to be created or incurred or to exist any lien, security title, encumbrance,
mortgage, deed of trust, security deed, pledge, negative pledge, charge,
restriction or other security interest of any kind upon any of their respective
property or assets of any character whether now owned or hereafter acquired, or
upon the income or profits therefrom; (b) transfer any of their property or
assets or the income or

88

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

 

profits therefrom for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment of
its general creditors; (c) acquire any property or assets upon conditional sale
or other title retention or purchase money security agreement, device or
arrangement (or any financing lease having substantially the same economic
effect as any of the foregoing); (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against any of them that if unpaid could by law or upon
bankruptcy or insolvency, or otherwise, be given any priority whatsoever over
any of their general creditors; (e) sell, assign, pledge or otherwise transfer
any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; (f) in the case of securities, create or
incur or suffer to be created or incurred any purchase option, call or similar
right with respect to such securities; or (g) incur or maintain any obligation
to any holder of Indebtedness of any of such Persons which prohibits the
creation or maintenance of any lien securing the Obligations (collectively,
“Liens”); provided that notwithstanding anything to the contrary contained
herein, the Borrower, any Guarantor or any such Subsidiary may create or incur
or suffer to be created or incurred or to exist:

(i) Liens on properties to secure taxes, assessments and other governmental
charges (excluding any Lien imposed pursuant to any of the provisions of ERISA
or pursuant to any Environmental Laws) or claims for labor, material or supplies
incurred in the ordinary course of business in respect of obligations not then
delinquent or which are being contested as permitted under this Agreement;

(ii) Liens on assets other than (A) the Collateral or (B) any direct or indirect
interest of the Borrower, any Guarantor or any Subsidiary of the Borrower in any
Guarantor which owns a Mortgaged Property or in any other Subsidiary, in respect
of judgments permitted by §8.1(e);

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

(iv) encumbrances on Real Estate other than Mortgaged Properties consisting of
easements, rights of way, zoning restrictions, leases and other occupancy
agreements, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord’s or lessor’s liens under leases
to which the Borrower or a Subsidiary of such Person is a party, and other minor
non-monetary liens or encumbrances none of which interferes materially with the
use of the property affected in the ordinary conduct of the business of the
Borrower or any such Subsidiary, which defects do not individually or in the
aggregate have a Material Adverse Effect;

(v) direct liens on Real Estate (other than the Mortgaged Properties or other
Collateral) to secure Indebtedness of Borrower or Subsidiaries of the Borrower
that are not Subsidiary Guarantors which own a Mortgaged Property permitted by
§8.1(g) and (h);

(vi) rights of setoff or bankers’ liens upon deposits of cash in favor of banks
or other depository institutions, solely to the extent incurred in connection
with the maintenance of such deposit accounts in the ordinary course of
business;

89

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

 

(vii) Liens of Capitalized Leases on the property leased thereby;

(viii) Liens in favor of the Agent and the Lenders under the Loan Documents to
secure the Obligations and the Hedge Obligations; and

(ix) Leases, liens and encumbrances on a Mortgaged Property expressly permitted
under the terms of the Mortgage relating thereto.

Notwithstanding anything in this Agreement to the contrary, (i) no Guarantor
shall create or incur or suffer to be created or incurred or to exist any Lien
other than Liens contemplated in (i) with respect to any Subsidiary Guarantor
that directly or indirectly owns a Mortgaged Property, §§8.2(i), 8.2(vi),
8.2(viii) and 8.2(ix), and (ii) with respect to REIT and General Partner,
§§8.2(i) and 8.2(vi), and (ii) neither Borrower, any Guarantor nor any of their
respective Subsidiaries shall grant any Liens secured by Equity Interests or any
distributions or any other rights or interests relating thereto except for Liens
granted to Agent under the Loan Documents.

§8.3 Restrictions on Investments.  Neither the Borrower will, nor will it permit
any Guarantor or any of its Subsidiaries to, make or permit to exist or to
remain outstanding any Investment except Investments in:

(a) marketable direct or guaranteed obligations of the United States of America
that mature within one (1) year from the date of purchase by the REIT or its
Subsidiary;

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

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

(d) commercial paper assigned the highest rating by two (2) or more national
credit rating agencies and maturing not more than ninety (90) days from the date
of creation thereof;

(e) 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 A by S&P and 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;

90

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

 

(f) repurchase agreements having a term not greater than ninety (90) days and
fully secured by securities described in the foregoing §§8.3(a), 8.3(b) or
8.3(c) with banks described in the foregoing §8.3(c) or with financial
institutions or other corporations having total assets in excess of
$500,000,000; and

(g) shares of so-called “money market funds” registered with the SEC under the
Investment Company Act of 1940 which maintain a level per-share value, invest
principally in investments described in the foregoing §§8.3(a) through 8.3(f)
and have total assets in excess of $50,000,000.

(h) the acquisition of fee interests by the Borrower or its Subsidiaries in
(i) Real Estate which is utilized as an Industrial Property located in the
continental United States or the District of Columbia and businesses and
investments incidental thereto, and (ii) subject to the restrictions set forth
in this §8.3, the acquisition of Land Assets to be developed for the foregoing
purpose;

(i) Investments by the Borrower in Subsidiaries that are directly or indirectly
one hundred percent (100%) owned by the Borrower, which in turn own Investments
permitted by this §8.3;

(j) Investments in Land Assets; provided that the aggregate amount of such
Investments shall not exceed five percent (5%) of Gross Asset Value;

(k) Investments in non-Wholly-Owned Subsidiaries and Unconsolidated Affiliates,
which in turn own Investments permitted by this §8.3; provided that the
aggregate amount of such Investments shall not exceed ten percent (10%) of Gross
Asset Value; and

(l) Investments in Development Properties for properties of the type described
in §8.3(h)(i), provided that the aggregate construction and development budget
for Development Properties (including land) shall not exceed ten percent (10%)
of Gross Asset Value.

(m) Investments in real estate assets that are not an Industrial Property;
provided that the aggregate amount of such Investments shall not exceed five
percent (5.0%) of Gross Asset Value.

Notwithstanding the foregoing, in no event shall the aggregate value of the
holdings of the Borrower, any Guarantor and their Subsidiaries in the
Investments described in §8.3(j), (k), (l) and (m) exceed twenty-five percent
(25%) of Gross Asset Value at any time.

For the purposes of this §8.3, the Investment of REIT or any of its Subsidiaries
in any Unconsolidated Affiliates will equal (without duplication) the sum of
(i) such Person’s Equity Percentage of their Unconsolidated Affiliates’
Investments valued in the manner set forth for the determination of Gross Asset
Value, or if not included therein, valued at the GAAP book value.

§8.4 Merger, Consolidation.  Other than with respect to or in connection with
any disposition permitted under §8.8, the Borrower will not, nor will it permit
the Guarantors or any of their respective Subsidiaries to, dissolve, liquidate,
dispose of all or substantially all of its assets or business, merge,
reorganize, consolidate or do any other business combination,

91

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

 

individually or in a series of transactions which may have a similar effect as
any of the foregoing, in each case without the prior written consent of the
Required Lenders.  Notwithstanding the foregoing, so long as no Default or Event
of Default has occurred and is continuing immediately before and after giving
effect thereto, the following shall be permitted without the consent of the
Agent or any Lender:  (i) the merger or consolidation of one or more of the
Subsidiaries of the Borrower (other than any Subsidiary that is a Guarantor)
with and into the Borrower (it being understood and agreed that in any such
event the Borrower will be the surviving Person), (ii) the merger or
consolidation of two or more Subsidiaries of the Borrower; provided that no such
merger or consolidation shall involve any Subsidiary that is a Guarantor unless
such Guarantor will be the surviving Person, and (iii) the liquidation or
dissolution of any Subsidiary of the Borrower that does not own any assets so
long as such Subsidiary is not a Guarantor (or if such Subsidiary is a
Guarantor, so long as the Borrower and such Subsidiary comply with the
provisions of §5.4).  Nothing in this §8.4 shall prohibit the dissolution of a
Subsidiary which has disposed of its assets in accordance with this
Agreement.  A Subsidiary of the Borrower may sell all of its assets (and may
effectuate such sale by merger or consolidation with another Person, with such
other Person being the surviving entity) subject to compliance with the terms of
this Agreement (including, without limitation, §§5.4 and 8.8), and after any
such permitted sale, may dissolve.

§8.5 Sale and Leaseback.  The Borrower will not, and will not permit its
Subsidiaries, to enter into any arrangement, directly or indirectly, whereby the
Borrower or any such Subsidiary shall sell or transfer any Real Estate owned by
it in order that then or thereafter the Borrower or any such Subsidiary shall
lease back such Real Estate without the prior written consent of the Agent, such
consent not to be unreasonably withheld.

§8.6 Compliance with Environmental Laws.  Except to the extent disclosed in the
Environmental Reports or on Schedule 6.19, none of the Borrower nor any
Guarantor will, nor will any of them permit any of their respective Subsidiaries
or any other Person to, do any of the following:  (a) use any of the Real Estate
or any portion thereof as a facility for the handling, processing, storage or
disposal of Hazardous Substances, except for quantities of Hazardous Substances
used in the ordinary course of operating Industrial Properties as permitted
under this Agreement and in material compliance with all applicable
Environmental Laws, (b) cause or permit to be located on any of the Real Estate
any underground tank or other underground storage receptacle for Hazardous
Substances except in compliance with Environmental Laws, (c) generate any
Hazardous Substances on any of the Real Estate except in compliance with
Environmental Laws, (d) conduct any activity at any Real Estate or use any Real
Estate in any manner that could reasonably be contemplated to cause a Release of
Hazardous Substances on, upon or into the Real Estate or any surrounding
properties or any threatened Release of Hazardous Substances which could
reasonably be expected to give rise to liability under CERCLA or any other
Environmental Law, or (e) directly or indirectly transport or arrange for the
transport of any Hazardous Substances (except in compliance with all
Environmental Laws), except, with respect to any Real Estate that is not a
Mortgaged Property, where any such use, generation, conduct or other activity
has not had and could not reasonably be expected to have a Material Adverse
Effect.

92

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

 

The Borrower and the Guarantors shall, and shall cause their respective
Subsidiaries to:

(i) in the event of any change in Environmental Laws governing the assessment,
release or removal of Hazardous Substances, take all reasonable action
(including, without limitation, the conducting of engineering tests at the sole
expense of the Borrower) to confirm that no Hazardous Substances are or ever
were Released or disposed of on the Real Estate in violation of applicable
Environmental Laws; and

(ii) if any Release or disposal of Hazardous Substances which any Person may be
legally obligated to contain, correct or otherwise remediate or which may
otherwise expose it to liability shall occur or shall have occurred on any Real
Estate (including, without limitation, any such Release or disposal occurring
prior to the acquisition or leasing of such Real Estate by the Borrower or any
Guarantor), the Borrower shall, after obtaining knowledge thereof, cause the
prompt containment and removal of such Hazardous Substances and remediation of
the Real Estate in full compliance with all applicable Environmental Laws;
provided, that each of the Borrower and a Guarantor shall be deemed to be in
compliance with Environmental Laws for the purpose of this clause (ii) so long
as it or a responsible third party with sufficient financial resources is taking
reasonable action to remediate or manage any event of noncompliance to the
reasonable satisfaction of the Agent and no action shall have been commenced or
filed by any enforcement agency.  The Agent may engage its own Environmental
Engineer to review the environmental assessments and the compliance with the
covenants contained herein.

(iii) At any time after an Event of Default shall have occurred hereunder, the
Agent may at its election (and will at the request of the Required Lenders)
obtain such environmental assessments of any or all of the Real Estate prepared
by an Environmental Engineer as may be necessary or advisable for the purpose of
evaluating or confirming (A) whether any Hazardous Substances are present in the
soil or water at or adjacent to any such Real Estate and (B) whether the use and
operation of any such Real Estate complies with all Environmental Laws to the
extent required by the Loan Documents.  Additionally, at any time that the Agent
or the Required Lenders shall have reasonable grounds to believe that a Release
or threatened Release of Hazardous Substances which any Person may be legally
obligated to contain, correct or otherwise remediate or which otherwise may
expose such Person to liability may have occurred, relating to any Real Estate,
or that any of the Real Estate is not in compliance with Environmental Laws to
the extent required by the Loan Documents, the Borrower shall promptly upon the
request of the Agent obtain and deliver to the Agent such environmental
assessments of such Real Estate prepared by an Environmental Engineer as may be
necessary or advisable for the purpose of evaluating or confirming (A) whether
any Hazardous Substances are present in the soil or water at or adjacent to such
Real Estate and (B) whether the use and operation of such Real Estate comply
with all Environmental Laws to the extent required by the Loan
Documents.  Environmental assessments may include detailed visual inspections of
such Real Estate including, without limitation, any and all storage areas,
storage tanks, drains, dry wells and leaching areas, and the taking of soil
samples, as well as such other investigations or analyses as are reasonably
necessary or appropriate for a complete determination of the compliance of such
Real Estate and the use and operation thereof with all applicable Environmental
Laws.  All environmental assessments contemplated by this §8.6 shall be at the
sole cost and expense of the Borrower.

93

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

 

§8.7 Distributions.

(a) The Borrower shall not pay any Distribution to the partners, members or
other owners of the Borrower, and General Partner and REIT shall not pay any
Distribution to their partners, members or other owners, to the extent that the
aggregate amount of such Distributions paid, when added to the aggregate amount
of all other Distributions paid in any period of four (4) consecutive calendar
quarters, exceeds ninety-five percent (95%) of such Person’s Funds from
Operations for such period; provided that the limitations contained in this
§8.7(a) shall not preclude Distributions in an amount equal to the minimum
distributions required under the Code to maintain the REIT Status of REIT (and
in such event a corresponding distribution to the partners of Borrower in such
amount), as evidenced by a certification of the principal financial or
accounting officer of REIT containing calculations in detail reasonably
satisfactory in form and substance to the Agent.

(b) If a Default or Event of Default shall have occurred and be continuing, the
Borrower, General Partner and REIT shall make no Distributions to their
respective partners, members or other owners, other than Distributions in an
amount equal to the minimum distributions required under the Code to maintain
the REIT Status of the REIT (and in such event a corresponding distribution to
the partners of Borrower in such amount), as evidenced by a certification of the
principal financial or accounting officer of the REIT containing calculations in
detail reasonably satisfactory in form and substance to the Agent.

(c) Notwithstanding the foregoing, at any time when an Event of Default under
§§12.1(a) or 12.1(b) shall have occurred and be continuing, an Event of Default
under §§12.1(g), 12.1(h) or 12.1(i) shall have occurred and be continuing, or
the maturity of the Obligations has been accelerated, neither the Borrower,
General Partner nor REIT shall make any Distributions whatsoever, directly or
indirectly.

§8.8 Asset Sales.  The Borrower will not, and will not permit the Guarantors or
their respective Subsidiaries to, sell, transfer or otherwise dispose of (a) all
or substantially all of their assets or (b) any material asset other than
pursuant to a bona fide arm’s length transaction.

§8.9 Restriction on Prepayment of Indebtedness.  The Borrower and the Guarantors
will not, and will not permit their respective Subsidiaries to, (a) during the
existence of any Default or Event of Default, prepay, redeem, defease, purchase
or otherwise retire the principal amount, in whole or in part, of any
Indebtedness other than the Obligations; provided, that the foregoing shall not
prohibit (x) the prepayment of Indebtedness which is financed solely from the
proceeds of a new loan which would otherwise be permitted by the terms of §8.1,
and (y) the prepayment, redemption, defeasance or other retirement of the
principal of Indebtedness secured by Real Estate which is satisfied solely from
the proceeds of a sale of the Real Estate securing such Indebtedness; or
(b) modify any document evidencing any Indebtedness (other than the Obligations)
to accelerate the maturity date or required payments of principal of such
Indebtedness during the existence of an Event of Default.

§8.10 Zoning and Contract Changes and Compliance.  Neither the Borrower nor any
Guarantor shall (a) initiate or consent to any zoning reclassification of any of
the Real Estate or seek any variance under any existing zoning ordinance or use
or permit the use of any Real

94

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

 

Estate in any manner that could result in such use becoming a non-conforming use
under any zoning ordinance or any other applicable land use law, rule or
regulation or (b) initiate any change in any laws, requirements of governmental
authorities or obligations created by private contracts and Leases which now or
hereafter may materially adversely affect the ownership, occupancy, use or
operation of any Real Estate.

§8.11 Derivatives Contracts.  Neither the Borrower, the Guarantors nor any of
their respective Subsidiaries shall contract, create, incur, assume or suffer to
exist any Derivatives Contracts except for Hedge Obligations and interest rate
swap, collar, cap or similar agreements providing interest rate protection and
currency swaps and currency options made in the ordinary course of business and
permitted pursuant to §8.1.

§8.12 Transactions with Affiliates.  The Borrower shall not, and shall not
permit any Guarantor or Subsidiary of any of them to, permit to exist or enter
into, any transaction (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate (but not including
the Borrower or any Guarantor), except (i) transactions set forth on
Schedule 6.14 attached hereto and (ii) transactions in the ordinary course of
business pursuant to the reasonable requirements of the business of such Person
and upon fair and reasonable terms which are no less favorable to such Person
than would be obtained in a comparable arm’s length transaction with a Person
that is not an Affiliate.

§8.13 [Intentionally Omitted.]

§8.14 Equity Pledges.  Notwithstanding anything in this Agreement to the
contrary, neither the Borrower, the General Partner nor the REIT will create or
incur or suffer to be created or incurred any Lien on any legal, equitable or
beneficial interest of the REIT in the General Partner or the Borrower, of
General Partner in the Borrower, or of Borrower in any Subsidiary Guarantor,
including, without limitation, any Distributions or rights to Distributions on
account thereof.

§8.15 Management Fees.  The Borrower shall not pay, and shall not permit any
Guarantor to pay, any management fees or other payments under any Management
Agreement for any Mortgaged Property to the Borrower, any other manager that is
an Affiliate of the Borrower or any other manager, in the event that a Default
or an Event of Default shall have occurred and be continuing.

§9.

FINANCIAL COVENANTS.

The Borrower covenants and agrees that, so long as any Loan, Note or Letter of
Credit is outstanding or any Lender has any obligation to make any Loans or
issue any Letter of Credit:

§9.1 Minimum Occupancy.  All Buildings located on the Real Estate, collectively,
shall at all times be at least eighty percent (80.0%) leased pursuant to
arms-length leases to tenants that are not an Affiliate of Borrower and that are
not in default under their leases.

§9.2 Consolidated Total Indebtedness to Gross Asset Value.  The Borrower will
not at any time permit the ratio of Consolidated Total Indebtedness to Gross
Asset Value (expressed as a percentage) to exceed sixty-five (65%).

95

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

 

§9.3 Adjusted Consolidated EBITDA to Consolidated Fixed Charges.  The Borrower
will not at any time permit the ratio of Adjusted Consolidated EBITDA determined
for the most recently ended four (4) calendar quarters to Consolidated Fixed
Charges for the most recently ended four (4) calendar quarters to be less than
1.55 to 1.

§9.4 Minimum Consolidated Tangible Net Worth.  The Borrower will not at any time
permit Consolidated Tangible Net Worth to be less than the sum of
(i) $230,978,126.00, plus (ii) seventy-five percent (75.0%) of the sum of any
additional Net Offering Proceeds after the date of this Agreement.

§9.5 Liquidity.  The Borrower shall have Liquidity at all times of not less than
Five Million and No/100 Dollars ($5,000,000.00).

§9.6 Unhedged Variable Rate Debt.  The Borrower will not at any time permit the
Unhedged Variable Rate Debt of the REIT and its Subsidiaries on a Consolidated
basis to exceed twenty percent (20%) of Gross Asset Value.

§10.

CLOSING CONDITIONS.

The obligation of the Lenders to make the Loans or issue the Letter(s) of Credit
shall be subject to the satisfaction of the following conditions precedent:

§10.1 Loan Documents.  Each of the Loan Documents shall have been duly executed
and delivered by the respective parties thereto and shall be in full force and
effect.  The Agent shall have received a fully executed counterpart of each such
document, except that each Lender shall have receive the fully-executed original
of its Note.

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

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

§10.4 Incumbency Certificate; Authorized Signers.  The Agent shall have received
from the Borrower and each Guarantor an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of such Person and giving the
name and bearing a specimen signature of each individual who shall be authorized
to sign, in the name and on behalf of such Person, each of the Loan Documents to
which such Person is or is to become a party.

96

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

 

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

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

§10.7 Performance; No Default.  The Borrower and each Guarantor shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by it on or prior to the Closing Date, and on the
Closing Date there shall exist no Default or Event of Default.

§10.8 Representations and Warranties.  The representations and warranties made
by the Borrower and each Guarantor in the Loan Documents or otherwise made by or
on behalf of the Borrower, the Guarantors and their respective Subsidiaries in
connection therewith or after the date thereof shall have been true and correct
in all material respects when made and shall also be true and correct in all
material respects on the Closing Date.

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

§10.10 Intentionally Omitted.  

§10.11 Compliance Certificate.  The Agent shall have received a Compliance
Certificate dated as of the date of the Closing Date demonstrating compliance
with each of the covenants calculated therein as of the most recent calendar
quarter for which the Borrower has provided financial statements under §6.4.

§10.12 Appraisals.  The Agent shall have received Borrower Appraisals of each
Real Estate asset in form and substance reasonably satisfactory to the Agent.

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

§10.14 Contribution Agreement.  The Agent shall have received a fully executed
counterpart of the Contribution Agreement.

§10.15 Insurance.  The Agent shall have received certificates evidencing that
the Agent and the Lenders are named as mortgagee and/or additional insured, as
applicable, on all policies of insurance as required by this Agreement or the
other Loan Documents.

97

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

 

§10.16 Other.  The Agent shall have reviewed such other documents, instruments,
certificates, opinions, assurances, consents and approvals as the Agent or the
Agent’s Special Counsel may reasonably have requested.

§11.

CONDITIONS TO ALL BORROWINGS.

The obligations of the Lenders to make any Loan or issue any Letter of Credit,
whether on or after the Closing Date, shall also be subject to the satisfaction
of the following conditions precedent:

§11.1 Prior Conditions Satisfied.  All conditions set forth in §10 shall
continue to be satisfied as of the date upon which any Loan is to be made or any
Letter of Credit is to be issued.

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

§11.3 Borrowing Documents.  The Agent shall have received a fully completed Loan
Request for such Loan and the other documents and information as required by
§2.7, or a fully completed Letter of Credit Request required by §2.10, as
applicable.

§11.4 Endorsement to Title Policy.  To the extent the Agent is a beneficiary of
any Mortgage, at such times as the Agent shall determine in its discretion at
any time, to the extent available under applicable law, a “date down”
endorsement to each Title Policy indicating no change in the state of title and
containing no survey exceptions not approved by the Agent, which endorsement
shall, expressly or by virtue of a proper “revolving credit” clause or
endorsement in each Title Policy, increase the coverage of each Title Policy to
the aggregate amount of all Loans advanced and outstanding and Letters of Credit
issued and outstanding (provided that the amount of coverage under an individual
Title Policy for an individual Mortgaged Property need not equal the aggregate
amount of all Loans), or if such endorsement is not available, such other
evidence and assurances as the Agent may reasonably require (which evidence may
include, without limitation, an affidavit from the Borrower stating that there
have been no changes in title from the date of the last effective date of the
Title Policy).

§11.5 Future Advances Tax Payment.  To the extent the Agent is a beneficiary of
any Mortgage, as a condition precedent to any Lender’s obligations to make any
Loans available to the Borrower hereunder, the Borrower will pay to the Agent
any mortgage, recording, intangible, documentary stamp or other similar taxes
and charges which the Agent reasonably determines to be payable as a result of
such Loan to any state or any county or municipality thereof in which

98

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

 

any of the Mortgaged Properties is located, and deliver to the Agent such
affidavits or other information which the Agent reasonably determines to be
necessary in connection with such payment in order to insure that the Mortgages
on the Mortgaged Properties located in such state secure the Borrower’s
obligation with respect to the Loans then being requested by the Borrower.  The
provisions of this §11.5 shall not limit the Borrower’s obligations under other
provisions of the Loan Documents, including §15.

§12.

EVENTS OF DEFAULT; ACCELERATION; ETC..

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

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

(b) the Borrower shall fail to pay any interest on the Loans, any reimbursement
obligations with respect to the Letters of Credit or any fees or other sums due
hereunder or under any of the other Loan Documents when the same shall become
due and payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;

(c) the Borrower shall fail to perform any term, covenant or agreement contained
in §9;

(d) any of the Borrower, the Guarantors or any of their respective Subsidiaries
shall fail to perform any other term, covenant or agreement contained herein or
in any of the other Loan Documents which they are required to perform (other
than those specified in the other subsections or clauses of this §12 or in the
other Loan Documents);

(e) any representation or warranty made by or on behalf of the Borrower, the
Guarantors or any of their respective Subsidiaries in this Agreement or any
other Loan Document, or any report, certificate, financial statement, request
for a Loan, Letter of Credit Request, or in any other document or instrument
delivered pursuant to or in connection with this Agreement, any advance of a
Loan, the issuance of any Letter of Credit or any of the other Loan Documents
shall prove to have been false in any material respect upon the date when made
or deemed to have been made or repeated;

(f) the Borrower, any Guarantor or any of their Subsidiaries shall fail pay when
due (including, without limitation, at maturity), or within any applicable
period of grace, any obligation for borrowed money or credit received or other
Indebtedness (including under any Derivatives Contract), or shall fail to
observe or perform any term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing any obligation for borrowed money or
credit received or other Indebtedness (including under any Derivatives Contract)
for such period of time as would permit (assuming the giving of appropriate
notice if required) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof or require the prepayment,
redemption, purchase, termination or other settlement thereof; provided,
however, that the events described in this §12.1(f) shall not

99

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

 

constitute an Event of Default unless such failure to perform, together with
other failures to perform as described in §12.1(f), involves singly or in the
aggregate obligations totaling $25,000,000.00 of Indebtedness or more;

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

(h) a petition or application shall be filed for the appointment of a trustee or
other custodian, liquidator or receiver of any of the Borrower, the Guarantors,
or any of their respective Subsidiaries or any substantial part of the assets of
any thereof, or a case or other proceeding shall be commenced against any such
Person under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, and any such Person shall indicate its
approval thereof, consent thereto or acquiescence therein or such petition,
application, case or proceeding shall not have been dismissed within sixty (60)
days following the filing or commencement thereof;

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

(j) there shall remain in force, undischarged, unsatisfied and unstayed, for
more than thirty (30) days, whether or not consecutive, one (1) or more
uninsured or unbonded final judgments against the Borrower, any Guarantor or any
of their respective Subsidiaries that, either individually or in the aggregate,
exceed $10,000,000.00 per occurrence or during any twelve (12) month period;

(k) any of the Loan Documents or the Contribution Agreement shall be disavowed,
canceled, terminated, revoked or rescinded otherwise than in accordance with the
terms thereof or the express prior written agreement, consent or approval of the
Lenders, or any action at law, suit in equity or other legal proceeding to
disavow, cancel, revoke, rescind or challenge or content the validity or
enforceability of any of the Loan Documents or the Contribution Agreement shall
be commenced by or on behalf of the Borrower or any Guarantor, or any court or
any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination, or issue a judgment, order, decree or
ruling, to the effect that any one or more of the Loan Documents or the
Contribution Agreement is illegal, invalid or unenforceable in accordance with
the terms thereof;

(l) any dissolution, termination, partial or complete liquidation, merger or
consolidation of the Borrower, any Guarantor or any of their respective
Subsidiaries shall occur

100

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

 

or any sale, transfer or other disposition of the assets of the Borrower, any
Guarantor or any of their respective Subsidiaries shall occur, in each case,
other than as permitted under the terms of this Agreement or the other Loan
Documents;

(m) with respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall
have occurred and the Required Lenders shall have determined in their reasonable
discretion that such event reasonably could be expected to result in liability
of the Borrower, the Guarantors or any of their respective Subsidiaries to the
PBGC or such Guaranteed Pension Plan in excess of $10,000,000.00 and (x) such
event in the circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the appointment
by the appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or (y) a trustee shall have been appointed by the
United States District Court to administer such Plan; or (z) the PBGC shall have
instituted proceedings to terminate such Guaranteed Pension Plan;

(n) the Borrower, any Guarantor or any of their respective Subsidiaries or any
shareholder, officer, director, partner or member of any of them shall be
indicted for a federal crime, a punishment for which could include the
forfeiture of (i) any assets of the Borrower or any of their respective
Subsidiaries which in the good faith judgment of the Required Lenders could
reasonably be expected to have a Material Adverse Effect, or (ii) the
Collateral;

(o) any Guarantor denies that it has any liability or obligation under the
Guaranty or any other Loan Document, or shall notify the Agent or any of the
Lenders of such Guarantor’s intention to attempt to cancel or terminate the
Guaranty or any other Loan Document, or shall fail to observe or comply with any
term, covenant, condition or agreement under any Guaranty or any other Loan
Document;

(p) any Change of Control shall occur; or

(q) an Event of Default under any of the other Loan Documents shall occur; then,
and in any such event, the Agent may, and, upon the request of the Required
Lenders, shall by notice in writing to the Borrower declare all amounts owing
with respect to this Agreement, the Notes, the Letters of Credit and the other
Loan Documents to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; provided that in the
event of any Event of Default specified in §§12.1(g), 12.1(h) or 12.1(i), all
such amounts shall become immediately due and payable automatically and without
any requirement of presentment, demand, protest or other notice of any kind from
any of the Lenders or the Agent, the Borrower hereby expressly waiving any right
to notice of intent to accelerate and notice of acceleration.  Upon demand by
the Agent or the Required Lenders in their absolute and sole discretion after
the occurrence and during the continuance of an Event of Default, and regardless
of whether the conditions precedent in this Agreement for a Revolving Credit
Loan have been satisfied, the Lenders will cause a Revolving Credit Loan to be
made in the undrawn amount of all Letters of Credit.  The proceeds of any such
Revolving Credit Loan will be pledged to and held by the Agent as security for
any amounts that become payable under the Letters of Credit and all other
Obligations and Hedge Obligations.  In the alternative, if demanded by the Agent
in its absolute and sole discretion after the occurrence and during the
continuance of an Event of

101

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

 

Default, the Borrower will deposit into the Collateral Account and pledge to the
Agent cash in an amount equal to the amount of all undrawn Letters of
Credit.  Such amounts will be pledged to and held by the Agent for the benefit
of the Lenders as security for any amounts that become payable under the Letters
of Credit and all other Obligations and Hedge Obligations.  Upon any draws under
Letters of Credit, at the Agent’s sole discretion, the Agent may apply any such
amounts to the repayment of amounts drawn thereunder and upon the expiration of
the Letters of Credit any remaining amounts will be applied to the payment of
all other Obligations and Hedge Obligations or if there are no outstanding
Obligations and Hedge Obligations and the Lenders have no further obligation to
make Revolving Credit Loans or issue Letters of Credit or if such excess no
longer exists, such proceeds deposited by the Borrower will be released to the
Borrower.

§12.2 Certain Cure Periods; Limitation of Cure Periods.  Notwithstanding
anything contained in §12.1 to the contrary, (i) no Event of Default shall exist
hereunder upon the occurrence of any failure described in §12.1(b) in the event
that the Borrower cures such Default within five (5) Business Days after the
date such payment is due (or, with respect to any payments other than interest
on the Loans, any reimbursement obligations with respect to the Letters of
Credit or any fees due under the Loan Documents, within five (5) Business Days
after written notice thereof shall have been given to the Borrower by the
Agent), provided, however, that the Borrower shall not be entitled to receive
more than two (2) grace or cure periods in the aggregate pursuant to this clause
(i) in any period of 365 days ending on the date of any such occurrence of
Default, and provided further, that no such cure period shall apply to any
payments due upon the maturity of the Notes, and (ii) no Event of Default shall
exist hereunder upon the occurrence of any failure described in §12.1(d) in the
event that the Borrower cures (or causes to be cured) such Default within thirty
(30) days following receipt of written notice of such default, provided that the
provisions of this clause (ii) shall not pertain to defaults consisting of a
failure to provide insurance as required by §7.7, to any default (whether of the
Borrower, any Guarantor or any Subsidiary thereof) consisting of a failure to
comply with §§5.3, 7.4(c), 7.14, 7.17, 7.18, 8.1, 8.2, 8.3, 8.4, 8.7, 8.8, 8.9
or 8.14 or to any Default excluded from any provision of cure of defaults
contained in any other of the Loan Documents.

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

§12.4 Remedies.  In case any one or more Events of Default shall have occurred
and be continuing, and whether or not the Lenders shall have accelerated the
maturity of the Loans pursuant to §12.1, the Agent, on behalf of the Lenders
may, and upon the direction of the Required Lenders, shall proceed to protect
and enforce their rights and remedies under this Agreement, the Notes and/or any
of the other Loan Documents by suit in equity, action at law or other
appropriate proceeding, including to the full extent permitted by applicable law
the specific

102

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

 

performance of any covenant or agreement contained in this Agreement and the
other Loan Documents, the obtaining of the ex parte appointment of a receiver,
requiring the establishment of a hard lockbox and cash management system with
Agent, and, if any amount shall have become due, by declaration or otherwise,
the enforcement of the payment thereof.  No remedy herein conferred upon the
Agent or the holder of any Note is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.  Notwithstanding the provisions of
this Agreement providing that the Loans may be evidenced by multiple Notes in
favor of the Lenders, the Lenders acknowledge and agree that only the Agent may
exercise any remedies arising by reason of a Default or Event of Default.  If
the Borrower or any Guarantor fails to perform any agreement or covenant
contained in this Agreement or any of the other Loan Documents beyond any
applicable period for notice and cure, the Agent may itself perform, or cause to
be performed, any agreement or covenant of such Person contained in this
Agreement or any of the other Loan Documents which such Person shall fail to
perform, and the out-of-pocket costs of such performance, together with any
reasonable expenses, including reasonable attorneys’ fees actually incurred
(including attorneys’ fees incurred in any appeal) by the Agent in connection
therewith, shall be payable by the Borrower upon demand and shall constitute a
part of the Obligations and shall if not paid within five (5) days after demand
bear interest at the Default Rate.  In the event that all or any portion of the
Obligations is collected by or through an attorney-at-law, the Borrower shall
pay all costs of collection including, but not limited to, reasonable attorney’s
fees.

§12.5 Distribution of Collateral Proceeds.  In the event that, following the
occurrence and during the continuance of any Event of Default, any monies are
received in connection with the enforcement of any of the Loan Documents, or
otherwise with respect to the realization upon any of the Collateral or other
assets of the Borrower or the Guarantors, such monies shall be distributed for
application as follows:

(a) First, to the payment of, or (as the case may be) the reimbursement of the
Agent for or in respect of, all reasonable out-of-pocket costs, expenses,
disbursements and losses which shall have been paid or incurred or sustained by
the Agent to protect or preserve the Collateral or in connection with the
collection of such monies by the Agent, for the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent or the Lenders under this Agreement or any of the other
Loan Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent or the Lenders to such
monies;

103

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

 

(b) Second, to all other Obligations and Hedge Obligations (including any
interest, expenses or other obligations incurred after the commencement of a
bankruptcy) in such order or preference as the Required Lenders shall determine;
provided, that (i) Swing Loans shall be repaid first, (ii) distributions in
respect of such other Obligations shall include, on a pari passu basis, any
Agent’s fee payable pursuant to §4.2, (iii) in the event that any Lender is a
Defaulting Lender, payments to such Lender shall be governed by §2.13, and
(iv) except as otherwise provided in clause (iii), Obligations owing to the
Lenders with respect to each type of Obligation such as interest, principal,
fees and expenses and Hedge Obligations (but excluding the Swing Loans) shall be
made among the Lenders and Lender Hedge Providers, pro rata; and provided,
further that the Required Lenders may in their discretion make proper allowance
to take into account any Obligations not then due and payable; and

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

§12.6 Collateral Account.

(a) As collateral security for the prompt payment in full when due of all Letter
of Credit Liabilities, Swing Loans and the other Obligations and Hedge
Obligations, the Borrower hereby pledges and grants to the Agent, for the
ratable benefit of the Agent and the Lenders as provided herein, a security
interest in all of its right, title and interest in and to the Collateral
Account and the balances from time to time in the Collateral Account (including
any interest provided for below).  The balances from time to time in the
Collateral Account shall not constitute payment of any Letter of Credit
Liabilities or Swing Loans until applied by the Agent as provided
herein.  Anything in this Agreement to the contrary notwithstanding, funds held
in the Collateral Account shall be subject to withdrawal only as provided in
this §12.6.

(b) Amounts on deposit in the Collateral Account shall not be invested by the
Agent, and will earn interest at a rate paid by Agent with respect to similar
accounts, and shall be held in the name of and be under the sole dominion and
control of the Agent for the ratable benefit of the Lenders.  The Agent shall
exercise reasonable care in the custody and preservation of any funds held in
the Collateral Account and shall be deemed to have exercised such care if such
funds are accorded treatment substantially equivalent to that which the Agent
accords other funds deposited with the Agent, it being understood that the Agent
shall not have any responsibility for taking any necessary steps to preserve
rights against any parties with respect to any funds held in the Collateral
Account.

(c) If a drawing pursuant to any Letter of Credit occurs on or prior to the
expiration date of such Letter of Credit, the Borrower and the Lenders authorize
the Agent to use the monies deposited in the Collateral Account to make payment
to the beneficiary with respect to such drawing or the payee with respect to
such presentment.  If a Swing Loan is not refinanced as a Base Rate Loan as
provided in §2.5 above, then the Agent is authorized to use monies deposited in
the Collateral Account to make payment to the Swing Loan Lender with respect to
any participation not funded by a Defaulting Lender.

104

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

 

(d) If an Event of Default exists, the Required Lenders may, in their
discretion, at any time and from time to time, instruct the Agent to liquidate
or withdraw any amounts in the Collateral Account and apply proceeds thereof to
the Obligations and Hedge Obligations in accordance with §12.5.

(e) So long as no Default or Event of Default exists, and to the extent amounts
on deposit in the Collateral Account exceed the aggregate amount of the Letter
of Credit Liabilities then due and owing and the pro rata share of any Letter of
Credit Obligations and Swing Loans of any Defaulting Lender after giving effect
to §2.13(c), the Agent shall, from time to time, at the request of the Borrower,
deliver to the Borrower within ten (10) Business Days after the Agent’s receipt
of such request from the Borrower, against receipt but without any recourse,
warranty or representation whatsoever, such of the balances in the Collateral
Account as exceed the aggregate amount of the Letter of Credit Liabilities and
Swing Loans at such time.

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

§13.

SETOFF.

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

105

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

 

payment, shall be segregated by such Defaulting Lender from its other funds and
deemed held in trust for the benefit of the Agent and the Lenders, and (b) such
Defaulting Lender shall provide promptly to the Agent a statement describing in
reasonable detail the Obligations owing to such Defaulting Lender as to which it
exercised such right of setoff.

§14.

the Agent.

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

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

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

§14.4 No Representations.  The Agent shall not be responsible for the execution
or validity or enforceability of this Agreement, the Notes, any of the other
Loan Documents or any

106

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

 

instrument at any time constituting, or intended to constitute, collateral
security for the Notes, or for the value of any such collateral security or for
the validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein, or any agreement, instrument or certificate
delivered in connection therewith or in any of the other Loan Documents or in
any certificate or instrument hereafter furnished to it by or on behalf of the
Borrower, the Guarantors or any of their respective Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any of the other Loan
Documents.  The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower, the Guarantors or
any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete.  The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the creditworthiness or financial
condition of the Borrower, the Guarantors or any of their respective
Subsidiaries, or the value of the Collateral or any other assets of the
Borrower, any Guarantor or any of their respective Subsidiaries.  Each Lender
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender, based upon such information
and documents as it deems appropriate at the time, continue to make its own
credit analysis and decisions in taking or not taking action under this
Agreement and the other Loan Documents.  The Agent’s Special Counsel has only
represented the Agent and KeyBank in connection with the Loan Documents and the
only attorney client relationship or duty of care is between the Agent’s Special
Counsel and the Agent or KeyBank.  Each Lender has been independently
represented by separate counsel on all matters regarding the Loan Documents and
the granting and perfecting of liens in the Collateral.

§14.5 Payments.

(a) A payment by the Borrower or any Guarantor to the Agent hereunder or under
any of the other Loan Documents for the account of any Lender shall constitute a
payment to such Lender.  The Agent agrees to distribute to each Lender not later
than one Business Day after the Agent’s receipt of good funds, determined in
accordance with the Agent’s customary practices, such Lender’s pro rata share of
payments received by the Agent for the account of the Lenders except as
otherwise expressly provided herein or in any of the other Loan
Documents.  Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
such Lender is no longer a Defaulting Lender, each payment by the Borrower
hereunder shall be applied in accordance with §2.13(d).

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

107

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

 

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

§14.7 Indemnity.  To the extent that Borrower for any reason fails to
indefeasibly pay any amount required under §15 or §16 to be paid by it to the
Agent, the Lenders ratably agree hereby to indemnify and hold harmless the Agent
from and against any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses (including any expenses for which
the Agent has not been reimbursed by the Borrower as required by §15), and
liabilities of every nature and character arising out of or related to this
Agreement, the Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent’s actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent’s willful misconduct or gross negligence as finally
determined by a court of competent jurisdiction after the expiration of all
applicable appeal periods.  The agreements in this §14.7 shall survive the
payment of all amounts payable under the Loan Documents.

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

§14.9 Resignation.  The Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower.  Any such resignation may at the
Agent’s option also constitute the Agent’s resignation as the Issuing Lender and
the Swing Loan Lender.  Upon any such resignation, the Required Lenders, subject
to the terms of §18.1, shall have the right to appoint as a successor Agent and,
if applicable, Issuing Lender and Swing Loan Lender, any Lender or any bank
whose senior debt obligations are rated not less than “A” or its equivalent by
Moody’s or not less than “A” or its equivalent by S&P and which has a net worth
of not less than $500,000,000.00.  Unless a Default or Event of Default shall
have occurred and be continuing, such successor Agent and, if applicable,
Issuing Lender and Swing Loan Lender, shall be reasonably acceptable to the
Borrower.  If no successor Agent shall have been appointed and shall have
accepted such appointment within ten (10) days after the retiring Agent’s giving
of notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be any Lender or any bank whose senior
debt obligations are rated not less than “A2” or its equivalent by Moody’s or
not less than “A” or its equivalent by S&P and which has a net worth of not less
than $500,000,000.00.  Upon the acceptance of any appointment as the Agent and,
if applicable, the Issuing Lender and the Swing Loan Lender, hereunder by a
successor Agent and, if applicable, Issuing Lender and Swing Loan Lender, such
successor Agent and, if applicable, Issuing Lender and Swing Loan Lender, shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and, if applicable, Issuing Lender and Swing
Loan Lender, and the retiring Agent and, if applicable, Issuing Lender and Swing
Loan Lender, shall be discharged from its duties and obligations hereunder as
the Agent and, if applicable, the Issuing Lender and the Swing Loan
Lender.  After any retiring Agent’s resignation, the provisions of this
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it

108

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

 

while it was acting as the Agent, the Issuing Lender and the Swing Loan
Lender.  If the resigning Agent shall also resign as the Issuing Lender, such
successor Agent shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or shall make other
arrangements satisfactory to the current Issuing Lender, in either case, to
assume effectively the obligations of the current Agent with respect to such
Letters of Credit.  Upon any change in the Agent under this Agreement, the
resigning Agent shall execute such assignments of and amendments to the Loan
Documents as may be necessary to substitute the successor Agent for the
resigning Agent.

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

§14.11 Request for Agent Action.  The Agent and the Lenders acknowledge that in
the ordinary course of business of the Borrower, (a) a Mortgaged Property may be
subject to a Taking, or (b) the Borrower or any Subsidiary Guarantor may desire
to enter into easements or other agreements affecting the Mortgaged Properties,
or take other actions or enter into other agreements in the ordinary course of
business (including, without limitation, Leases) which similarly require the
consent, approval or agreement of the Agent.  In connection with the foregoing,
the Lenders hereby expressly authorize the Agent to (w) execute and deliver to
the Borrower and the Subsidiary Guarantors Subordination, Attornment and
Non-Disturbance Agreements with any tenant under a Lease upon such terms as the
Agent in its good faith judgment determines are appropriate (the Agent in the
exercise of its good faith judgment may agree to allow some or all of the
casualty, condemnation, restoration or other provisions of the applicable Lease
to control over the applicable provisions of the Loan Documents), (x) execute
releases of liens in connection with any Taking, (y) execute consents or
subordinations in form

109

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

 

and substance satisfactory to the Agent in connection with any easements or
agreements affecting the Mortgaged Property, or (z) execute consents, approvals,
or other agreements in form and substance satisfactory to the Agent in
connection with such other actions or agreements as may be necessary in the
ordinary course of the Borrower’s business.

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

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

§14.14 Approvals.  If consent is required for some action under this Agreement,
or except as otherwise provided herein an approval of the Lenders or the
Required Lenders is required or permitted under this Agreement, each Lender
agrees to give the Agent, within ten (10) days of receipt of the request for
action from the Agent together with all reasonably requested information related
thereto (or such lesser period of time required by the terms of the Loan
Documents), notice in writing of approval or disapproval (collectively,
“Directions”) in respect of any action requested or proposed in writing pursuant
to the terms hereof.  To the extent that any Lender does not approve any
recommendation of the Agent, such Lender shall in such notice to the Agent
describe the actions that would be acceptable to such Lender.  If consent is
required for the requested action, any Lender’s failure to respond to a request
for Directions within the required time period shall be deemed to constitute a
Direction to take such requested action.  In the event that any recommendation
is not approved by the requisite number of Lenders and a subsequent approval on
the same subject matter is requested by the Agent, then for the purposes of this
paragraph each Lender shall be required to respond to a request for Directions
within five (5) Business Days of receipt of such request.  The Agent and each
Lender shall be entitled to assume that any officer of the other Lenders
delivering any notice, consent, certificate or other writing is authorized to
give such notice, consent, certificate or other writing unless the Agent and
such other Lenders have otherwise been notified in writing.

110

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

 

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

§14.16 Reliance on Hedge Provider.  For purposes of applying payments received
in accordance with §§12.1, 12.5, 12.6 or any other provision of the Loan
Documents, the Agent shall be entitled to rely upon the trustee, paying agent or
other similar representative (each, a “Representative”) or, in the absence of
such a Representative, upon the holder of the Hedge Obligations for a
determination (which each holder of the Hedge Obligations agrees (or shall
agree) to provide upon request of the Agent) of the outstanding Hedge
Obligations owed to the holder thereof.  Unless it has actual knowledge
(including by way of written notice from such holder) to the contrary, the
Agent, in acting hereunder, shall be entitled to assume that no Hedge
Obligations are outstanding.

§15.

EXPENSES.

The Borrower agrees to pay (a) the reasonable costs of producing and reproducing
this Agreement, the other Loan Documents and the other agreements and
instruments mentioned herein, (b) any Indemnified Taxes (including any interest
and penalties in respect thereto) payable by the Agent or any of the Lenders,
including any recording, mortgage, documentary or intangibles taxes in
connection with the Loan Documents, or other taxes payable on or with respect to
the transactions contemplated by this Agreement, including any such taxes
payable by the Agent or any of the Lenders after the Closing Date (the Borrower
hereby agreeing to indemnify the Agent and each Lender with respect thereto),
(c) all title insurance premiums, engineer’s fees, environmental reviews and
reasonable fees, expenses and disbursements of the counsel to the Agent and
Arranger and any local counsel to the Agent incurred in connection with the
preparation, administration, or interpretation of the Loan Documents and other
instruments mentioned herein, and amendments, modifications, approvals, consents
or waivers hereto or hereunder, (d) the out-of-pocket fees, costs, expenses and
disbursements of the Agent and Arranger incurred in connection with the
syndication and/or participation (by KeyBank) of the Loans, (e) all other
reasonable out of pocket fees, expenses and disbursements of the Agent incurred
by the Agent in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein, the
addition or substitution of additional Collateral, the release of Collateral,
the making of each advance hereunder, the issuance of Letters of Credit, and the
syndication of the Commitments pursuant to §18 (without duplication of those
items addressed in clause (d) above), (f) all out‑of‑pocket expenses (including
attorneys’ fees and costs, and fees and costs of appraisers, engineers,
investment bankers or other experts retained by the Agent) incurred by any
Lender or the Agent in connection with (i) the enforcement of or preservation of
rights under any of the Loan Documents against the Borrower or the Guarantors or
the administration thereof after the occurrence of a Default or Event of Default
or any other workout of the Loan Documents and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to the
Agent’s, or any of the Lenders’ relationship with the Borrower or the Guarantors
(provided that any attorneys’ fees and costs pursuant to this §15(f) with
respect to counsel separate from that retained by Agent (including local
counsel) shall be limited to those incurred

111

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

 

by one primary counsel retained by the Required Lenders), (g) all reasonable
fees, expenses and disbursements of the Agent incurred in connection with UCC
searches, UCC filings, title rundowns, title searches or mortgage recordings,
(h) all reasonable out-of-pocket fees, expenses and disbursements (including
reasonable attorneys’ fees and costs) which may be incurred by KeyBank in
connection with the execution and delivery of this Agreement and the other Loan
Documents (without duplication of any of the items listed above), and (i) all
expenses relating to the use of Intralinks, SyndTrak or any other similar system
for the dissemination and sharing of documents and information in connection
with the Loans.  The covenants of this §15 shall survive the repayment of the
Loans and the termination of the obligations of the Lenders hereunder.

§16.

INDEMNIFICATION.

The Borrower agrees to indemnify and hold harmless the Agent, the Lenders, the
Arranger, their respective Affiliates and Persons who control the Agent, or any
Lender or the Arranger, and each director, officer, employee, agent and attorney
of each of the foregoing Persons, against any and all claims, actions and suits,
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of or
relating to this Agreement or any of the other Loan Documents or the
transactions contemplated hereby and thereby including, without limitation,
(a) any and all claims for brokerage, leasing, finders or similar fees which may
be made relating to the Mortgaged Properties, any other Real Estate or the
Loans, (b) any condition of the Mortgaged Properties or any other Real Estate,
(c) any actual or proposed use by the Borrower of the proceeds of any of the
Loans or Letters of Credit, (d) any actual or alleged infringement of any
patent, copyright, trademark, service mark or similar right of the Borrower, any
Guarantor or any of their respective Subsidiaries, (e) the Borrower and the
Guarantors entering into or performing this Agreement or any of the other Loan
Documents, (f) any actual or alleged violation of any law, ordinance, code,
order, rule, regulation, approval, consent, permit or license relating to the
Mortgaged Properties or any other Real Estate, (g) with respect to the Borrower,
the Guarantors and their respective Subsidiaries and their respective properties
and assets, the violation of any Environmental Law, the Release or threatened
Release of any Hazardous Substances or any action, suit, proceeding or
investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury, nuisance or damage to property), and (h) any use of Intralinks, SyndTrak
or any other system for the dissemination and sharing of documents and
information, in each case including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding; provided, however, that the Borrower shall not
be obligated under this §16 to indemnify any Person for liabilities arising from
such Person’s own gross negligence or willful misconduct as determined by a
court of competent jurisdiction after the exhaustion of all applicable appeal
periods.  In litigation, or the preparation therefor, the Lenders and the Agent
shall be entitled to select a single law firm as their own counsel and an
additional single local counsel in each applicable local jurisdiction for all
such parties (and, to the extent reasonably necessary in the case of an actual
or perceived conflict of interest, one additional counsel) and, in addition to
the foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees
and expenses of such counsel.  No person indemnified hereunder shall be liable
for any damages arising from the use by unintended recipients of any information
or other materials distributed by it through telecommunications, electronic or
other information

112

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

 

transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby.  If, and to the
extent that the obligations of the Borrower under this §16 are unenforceable for
any reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law.  The provisions of this §16 shall survive the repayment of the
Loans and the termination of the obligations of the Lenders hereunder.

§17.

SURVIVAL OF COVENANTS, ETC.

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

§18.

ASSIGNMENT AND PARTICIPATION.

§18.1 Conditions to Assignment by Lenders.  Except as provided herein, each
Lender may assign to one or more banks or other entities (but not to any natural
person) all or a portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitment Percentage and
Commitment and the same portion of the Loans at the time owing to it and the
Notes held by it); provided that (a) the Agent, the Issuing Lender and, so long
as no Default or Event of Default exists hereunder, the Borrower shall have each
given its prior written consent to such assignment, which consent shall not be
unreasonably withheld or delayed, and if the Borrower does not respond to any
such request for consent within five (5) Business Days, the Borrower shall be
deemed to have consented (provided that such consent shall not be required for
any assignment to another Lender, to a Related Fund, to a lender or an Affiliate
of a Lender which controls, is controlled by or is under common control with the
assigning Lender or to a wholly-owned Subsidiary of such Lender), (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Commitment, (c) the parties to such assignment shall execute and deliver to
the Agent, for recording in the Register (as hereinafter defined) an assignment
and acceptance agreement in the form of Exhibit H attached hereto (an
“Assignment and Acceptance Agreement”), together with any Notes subject to such
assignment, (d) in no event shall any assignment be to any Person controlling,
controlled by or under common control with, or which is not otherwise free from
influence or control by the Borrower or any Guarantor or be to a

113

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

 

Defaulting Lender or an Affiliate of a Defaulting Lender, (e) such assignee of a
portion of the Revolving Credit Loans shall have a net worth or unfunded
commitment as of the date of such assignment of not less than $100,000,000.00
(unless otherwise approved by the Agent and, so long as no Default or Event of
Default exists hereunder, the Borrower), (f) such assignee shall acquire an
interest in the Loans of not less than $5,000,000.00 and integral multiples of
$1,000,000.00 in excess thereof (or if less, the remaining Loans of the
assignor), unless waived by the Agent, and so long as no Default or Event of
Default exists hereunder, the Borrower and (g) if such assignment is less than
the assigning Lender’s entire Commitment, the assigning Lender shall retain an
interest in the Loans of not less than $5,000,000.00.  Upon execution, delivery,
acceptance and recording of such Assignment and Acceptance Agreement, (i) the
assignee thereunder shall be a party hereto and all other Loan Documents
executed by the Lenders and, to the extent provided in such Assignment and
Acceptance Agreement, have the rights and obligations of a Lender hereunder,
(ii) the assigning Lender shall, upon payment to the Agent of the registration
fee referred to in §18.2, be released from its obligations under this Agreement
arising after the effective date of such assignment with respect to the assigned
portion of its interests, rights and obligations under this Agreement, and
(iii) the Agent may unilaterally amend Schedule 1.1 to reflect such
assignment.  In connection with each assignment, the assignee shall represent
and warrant to the Agent, the assignor and each other Lender as to whether such
assignee is controlling, controlled by, under common control with or is not
otherwise free from influence or control by, the Borrower and/or any Guarantor
and whether such assignee is a Defaulting Lender or an Affiliate of a Defaulting
Lender.  In connection with any assignment of rights and obligations of any
Defaulting Lender, no such assignment shall be effective unless and until, in
addition to the other conditions thereto set forth herein, the parties to the
assignment shall make such additional payments to the Agent in an aggregate
amount sufficient, upon distribution thereof as appropriate (which may be
outright payment, purchases by the assignee of participations or actions,
including funding, with the consent of the Borrower and the Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Agent or any Lender hereunder (and
interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro
rata share of all Loans and participations in Letters of Credit and Swing Loans
in accordance with its Commitment Percentage.  Notwithstanding the foregoing, in
the event that any assignment of rights and obligations of any Defaulting Lender
hereunder shall become effective under applicable law without compliance with
the provisions of this paragraph, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs.

§18.2 Register.  The Agent, acting for this purpose as a non-fiduciary agent for
Borrower, shall maintain on behalf of the Borrower a copy of each assignment
delivered to it and a register or similar list (the “Register”) for the
recordation of the names and addresses of the Lenders and the Commitment
Percentages of and principal amount of the Loans owing to the Lenders from time
to time.  The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Guarantors, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement.  The Register shall be available for
inspection by the Borrower and the Lenders at any reasonable time and from time
to time upon reasonable prior notice.  Upon each such recordation, the assigning
Lender agrees to pay to the Agent a registration fee in the sum of $3,500.00.

114

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

 

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

§18.4 Participations.  Each Lender may, without the consent of Agent or
Borrower, sell participations to one or more Lenders or other entities (but not
to any natural person) in all or a portion of such Lender’s rights and
obligations under this Agreement and the other Loan Documents; provided that
(a) any such sale or participation shall not affect the rights and duties of the
selling Lender hereunder, (b) such participation shall not entitle such
participant to any rights or privileges under this Agreement or any Loan
Documents, including without limitation, rights granted to the Lenders under
§§4.8, 4.9, 4.10 and 13, (c) such participation shall not entitle the
participant to the right to approve waivers, amendments or modifications,
(d) such participant shall have no direct rights against the Borrower, (e) such
sale is effected in accordance with all applicable laws, and (f) such
participant shall not be a Person controlling, controlled by or under common
control with, or which is not otherwise free from influence or control by the
Borrower and/or any Guarantor and shall not be a Defaulting Lender or an
Affiliate of a Defaulting Lender; provided, however, such Lender may agree with
the participant that it will not, without the consent of the participant, agree
to (i) increase, or extend the term or extend the time or waive any requirement
for the reduction or termination of, such Lender’s Commitment, (ii) extend the
date fixed for the payment of principal of or interest on the Loans or portions
thereof owing to such Lender (other than pursuant to an extension of the
Maturity Date pursuant to §2.12), (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable thereon or
(v) release any Guarantor or any material Collateral (except as otherwise
permitted under this Agreement).  Each Lender that sells a participation shall,
acting solely for this purpose as an agent of the Borrower, maintain a register
on which it enters the name and address of each Participant and the principal
amounts (and stated interest) of each participant’s interest in the Loans or
other obligations under the Loan Documents (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register (including the identity of any participant or any
information relating to a participant’s interest in any Commitments, Loans, or
its other obligations under any Loan Document) to any Person except to the
extent that such disclosure is necessary to establish that such Commitment,
Loan, or other obligation is in registered form under Section 5f.103-1(c) of the
United States Treasury Regulations.  The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary.  For the avoidance of doubt, the Agent (in its capacity as Agent)
shall have no responsibility for maintaining a Participant Register.

115

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

 

§18.5 Pledge by Lender.  Any Lender may at any time pledge all or any portion of
its interest and rights under this Agreement (including all or any portion of
its Note) to any of the twelve Federal Reserve Banks organized under Section 4
of the Federal Reserve Act, 12 U.S.C.  §341, any other central bank having
jurisdiction over such Lender, or to such other Person as the Agent may approve
to secure obligations of such Lender.  No such pledge or the enforcement thereof
shall release the pledgor Lender from its obligations hereunder or under any of
the other Loan Documents.

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

§18.7 Disclosure.  The Borrower agrees to promptly cooperate with any Lender in
connection with any proposed assignment or participation of all or any portion
of its Commitment.  The Borrower agrees that in addition to disclosures made in
accordance with standard banking practices any Lender may disclose information
obtained by such Lender pursuant to this Agreement to assignees or participants
and potential assignees or participants hereunder.  Each Lender agrees for
itself that it shall use reasonable efforts in accordance with its customary
procedures to hold confidential all non-public information obtained from the
Borrower or any Guarantor that has been identified in writing as confidential by
any of them, and shall use reasonable efforts in accordance with its customary
procedures to not disclose such information to any other Person, it being
understood and agreed that, notwithstanding the foregoing, a Lender may make
(a) disclosures to its participants (provided such Persons are advised of the
provisions of this §18.7), (b) disclosures to its directors, officers,
employees, Affiliates, accountants, appraisers, legal counsel and other
professional advisors of such Lender (provided that such Persons who are not
employees of such Lender are advised of the provision of this §18.7),
(c) disclosures customarily provided or reasonably required by any potential or
actual bona fide assignee, transferee or participant or their respective
directors, officers, employees, Affiliates, accountants, appraisers, legal
counsel and other professional advisors in connection with a potential or actual
assignment or transfer by such Lender of any Loans or any participations therein
(provided such Persons are advised of the provisions of this §18.7),
(d) disclosures to bank regulatory authorities or self-regulatory bodies with
jurisdiction over such Lender, or (e) disclosures required or requested by any
other Governmental Authority or representative thereof or pursuant to legal
process; provided that, unless specifically prohibited by applicable law or
court order, each Lender shall notify the Borrower of any request by any
Governmental Authority or representative thereof prior to disclosure (other than
any such request in connection with any examination of such Lender by such
Governmental Authority) for disclosure of any such non-public information prior
to disclosure of such information.  In addition, each Lender may make disclosure
of such information to any contractual counterparty in swap agreements or such
contractual counterparty’s professional advisors (so long as such contractual
counterparty or professional advisors agree to be bound by the provisions of
this §18.7).  In addition, the Agent and the Lenders may disclose the existence
of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry and service
providers to the Agent and the Lenders in connection with the administration of
this Agreement, the other Loan Documents, and the Commitments.  Non-public
information shall not include any information which is or subsequently becomes
publicly available other than as a result of a disclosure of such information by
a Lender, or prior to the

116

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

 

delivery to such Lender is within the possession of such Lender if such
information is not known by such Lender to be subject to another confidentiality
agreement with or other obligations of secrecy to the Borrower or the
Guarantors, or is disclosed with the prior approval of the Borrower.  Nothing
herein shall prohibit the disclosure of non-public information to the extent
necessary to enforce the Loan Documents.

§18.8 Mandatory Assignment.  In the event the Borrower requests that certain
amendments, modifications or waivers be made to this Agreement or any of the
other Loan Documents which request requires approval of the Required Lenders,
all of the Lenders or all of the Lenders directly affected thereby but is not
approved by one or more of the Lenders (any such non-consenting Lender shall
hereafter be referred to as the “Non-Consenting Lender”), then, within thirty
(30) Business Days after the Borrower’s receipt of notice of such disapproval by
such Non-Consenting Lender, the Borrower shall have the right as to such
Non-Consenting Lender, to be exercised by delivery of written notice delivered
to the Agent and the Non-Consenting Lender within thirty (30) Business Days of
receipt of such notice, to elect to cause the Non-Consenting Lender to transfer
its Commitment.  The Agent shall promptly notify the remaining Lenders that each
of such Lenders shall have the right, but not the obligation, to acquire a
portion of the Commitment, pro rata based upon their relevant Commitment
Percentages, of the Non-Consenting Lender (or if any of such Lenders does not
elect to purchase its pro rata share, then to such remaining Lenders in such
proportion as approved by the Agent).  In the event that the Lenders do not
elect to acquire all of the Non-Consenting Lender’s Commitment, then the Agent
shall endeavor to find a new Lender or Lenders to acquire such remaining
Commitment.  Upon any such purchase of the Commitment of the Non-Consenting
Lender, the Non-Consenting Lender’s interests in the Obligations and its rights
hereunder and under the Loan Documents shall terminate at the date of purchase,
and the Non-Consenting Lender shall promptly execute and deliver any and all
documents reasonably requested by the Agent to surrender and transfer such
interest, including, without limitation, an Assignment and Acceptance Agreement
and such Non-Consenting Lender’s original Note.  Notwithstanding anything in
this §18.8 to the contrary, any Lender or other Lender assignee acquiring some
or all of the assigned Commitment of the Non-Consenting Lender must consent to
the proposed amendment, modification or waiver.  The purchase price for the
Non-Consenting Lender’s Commitment shall equal any and all amounts outstanding
and owed by the Borrower to the Non-Consenting Lender, including principal and
all accrued and unpaid interest or fees, plus any applicable amounts payable
pursuant to §4.7 which would be owed to such Non-Consenting Lender if the Loans
were to be repaid in full on the date of such purchase of the Non-Consenting
Lender’s Commitment (provided that the Borrower may pay to such Non-Consenting
Lender any interest, fees or other amounts (other than principal) owing to such
Non-Consenting Lender).

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

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

117

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

 

§19.

NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATIONS. 

(a) Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement (hereinafter in this §19 referred to as
“Notice”), but specifically excluding to the maximum extent permitted by law any
notices of the institution or commencement of foreclosure proceedings, must be
in writing and shall be deemed to have been properly given or served by personal
delivery or by sending same by overnight courier or by depositing same in the
United States Mail, postpaid and registered or certified, return receipt
requested, or as expressly permitted herein, by telecopy (with a copy sent by
overnight mail) and addressed as follows:

If to the Agent or KeyBank:

KeyBank National Association

1200 Abernathy Road, N.E., Suite 1550

Atlanta, Georgia  30328

Attn:  Jennifer Power

Telecopy No.:  (770) 510-2195

and

KeyBank National Association

1200 Abernathy Road, N.E., Suite 1550

Atlanta, Georgia  30328

Attn:  Shelly West

Telecopy No.:  (770) 510-2195

and

Dentons US LLP

Suite 5300

303 Peachtree Street, N.E.

Atlanta, Georgia  30308

Attn:  William F.  Timmons, Esq.

Telecopy No.:  (404) 527-4198

If to the Borrower:

GTJ Realty, LP

60 Hempstead Avenue, Suite 718

West Hempstead, New York  11552

Attn:  Paul Cooper

Telecopy No.:  516-693-5501

With a copy to:

Schiff Hardin LLP

666 Fifth Avenue, Suite 1700

118

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

 

New York, New York  10103

Attn:  Christine A. McGuinness

Telecopy No.:  (212) 753-5044

to any other Lender which is a party hereto, at the address for such Lender set
forth on its signature page hereto, and to any Lender which may hereafter become
a party to this Agreement, at such address as may be designated by such
Lender.  Each Notice shall be effective upon being personally delivered or upon
being sent by overnight courier or upon being deposited in the United States
Mail as aforesaid, or if transmitted by telecopy is permitted, upon being sent
and confirmation of receipt.  The time period in which a response to such Notice
must be given or any action taken with respect thereto (if any), however, shall
commence to run from the date of receipt if personally delivered or sent by
overnight courier, or if so deposited in the United States Mail, the earlier of
three (3) Business Days following such deposit or the date of receipt as
disclosed on the return receipt.  Rejection or other refusal to accept or the
inability to deliver because of changed address for which no notice was given
shall be deemed to be receipt of the Notice sent.  By giving at least fifteen
(15) days prior Notice thereof, the Borrower, a Lender or the Agent shall have
the right from time to time and at any time during the term of this Agreement to
change their respective addresses and each shall have the right to specify as
its address any other address within the United States of America.

(b) Loan Documents and notices under the Loan Documents may, with Agent’s
approval, be transmitted and/or signed by facsimile and by signatures delivered
in “PDF” format by electronic mail.  The effectiveness of any such documents and
signatures shall, subject to applicable law, have the same force and effect as
an original copy with manual signatures and shall be binding on the Borrower,
the Guarantors, Agent and Lenders.  Agent may also require that any such
documents and signature delivered by facsimile or  “PDF” format by electronic
mail be confirmed by a manually-signed original thereof; provided, however, that
the failure to request or deliver any such manually-signed original shall not
affect the effectiveness of any facsimile or “PDF” document or signature.

(c) Notices and other communications to the Agent, the Lenders and the Issuing
Lender hereunder may be delivered or furnished by electronic communication
(including e‑mail and Internet or intranet websites) pursuant to procedures
approved by the Agent, provided that the foregoing shall not apply to notices to
any Lender or Issuing Lender pursuant to §2 if such Lender or Issuing Lender, as
applicable, has notified the Agent that it is incapable of receiving notices
under such Section by electronic communication.  The Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.  Unless the Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient, at its e‑mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses (i)
and (ii) above, if such notice, e‑mail or other communication is not sent during
the normal business

119

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

 

hours of the recipient, such notice or communication shall be deemed to have
been sent at the opening of business on the next business day for the recipient.

§20.

RELATIONSHIP.

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

§21.

GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.

THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED HEREIN OR THEREIN, SHALL, PURSUANT TO NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5- 1401, BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.  THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN ANY COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK (INCLUDING ANY FEDERAL COURT SITTING
THEREIN).  THE BORROWER FURTHER ACCEPTS, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT AND
IRREVOCABLY (a) AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY WITH RESPECT
TO THIS AGREEMENT AND ANY OF THE OTHER LOAN DOCUMENTS AND (b) WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT OR THAT SUCH A COURT IS AN INCONVENIENT FORUM.  THE
BORROWER FURTHER AGREES THAT SERVICE OF PROCESS IN ANY SUCH SUIT MAY BE MADE
UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN §19.  IN ADDITION TO THE
COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN, THE AGENT
OR ANY LENDER MAY BRING ACTION(S) FOR ENFORCEMENT ON A NONEXCLUSIVE BASIS WHERE
ANY COLLATERAL OR OTHER ASSETS OF THE BORROWER AND THE GUARANTORS EXIST AND THE
BORROWER CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN §19.

§22.

HEADINGS.

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

120

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

 

§23.

COUNTERPARTS. 

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

§24.

ENTIRE AGREEMENT, ETC.

This Agreement and the Loan Documents is intended by the parties as the final,
complete and exclusive statement of the transactions evidenced by this Agreement
and the Loan Documents.  All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superseded by this
Agreement and the Loan Documents, and no party is relying on any promise,
agreement or understanding not set forth in this Agreement and the Loan
Documents.  Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in §27.

§25.

WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.

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

§26.

DEALINGS WITH THE BORROWER.

The Agent, the Lenders and their affiliates may accept deposits from, extend
credit to, invest in, act as trustee under indentures of, serve as financial
advisor of, and generally engage in any kind of banking, trust or other business
with the Borrower, the Guarantors and their

121

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

 

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

§27.

CONSENTS, AMENDMENTS, WAIVERS, ETC.

Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower or the Guarantors
of any terms of this Agreement or such other instrument or the continuance of
any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Required Lenders.  Notwithstanding the
foregoing, none of the following may occur without the written consent of each
Lender directly affected thereby:  (a) a reduction in the rate of interest on
the Notes (other than a reduction or waiver of default interest); (b) an
increase in the amount of the Commitments of the Lenders (except as provided in
§18.1); (c) a forgiveness, reduction or waiver of the principal of any unpaid
Loan or any interest thereon (other than a reduction or waiver of default
interest) or fee payable under the Loan Documents; (d) a change in the amount of
any fee payable to a Lender hereunder; (e) the postponement of any date fixed
for any payment of principal of or interest on the Loan; (f) an extension of the
Maturity Date (except as provided in §2.12); (g) a change in the manner of
distribution of any payments to the Lenders or the Agent; (h) the release of the
Borrower, any Guarantor or any Collateral except as otherwise provided in this
Agreement; (i) an amendment of the definition of Required Lenders or of any
requirement for consent by all of the Lenders; (j) any modification to require a
Lender to fund a pro rata share of a request for an advance of the Revolving
Credit Loan made by the Borrower other than based on its Commitment Percentage;
(k) an amendment to this §27; or (l) an amendment of any provision of this
Agreement or the Loan Documents which requires the approval of all of the
Lenders or the Required Lenders to require a lesser number of Lenders to approve
such action.  The provisions of §14 may not be amended without

122

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

 

the written consent of the Agent.  There shall be no amendment, modification or
waiver of any provision in the Loan Documents with respect to Swing Loans
without the consent of the Swing Loan Lender, nor any amendment, modification or
waiver of any provision in the Loan Documents with respect to Letters of Credit
without the consent of the Issuing Lender.  Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder (and any amendment, waiver
or consent which by its terms requires the consent of all Lenders or each
affected Lender may be effected with the consent of the applicable Lenders other
than Defaulting Lenders, except that (x) the Commitment of any Defaulting Lender
may not be increased without the consent of such Lender and (y) any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender more adversely than other
affected Lenders shall require the consent of such Defaulting Lender.  The
Borrower agrees to enter into such modifications or amendments of this Agreement
or the other Loan Documents as reasonably may be requested by KeyBank and the
Arranger in connection with the syndication of the Loan, provided that no such
amendment or modification materially affects or increases any of the obligations
of the Borrower hereunder.  No waiver shall extend to or affect any obligation
not expressly waived or impair any right consequent thereon.  No course of
dealing or delay or omission on the part of the Agent or any Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto.  No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.

§28.

SEVERABILITY.

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

§29.

TIME OF THE ESSENCE.

Time is of the essence with respect to each and every covenant, agreement and
obligation of the Borrower and the Guarantors under this Agreement and the other
Loan Documents.

§30.

NO UNWRITTEN AGREEMENTS.

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

§31.

REPLACEMENT NOTES.

Upon receipt of evidence reasonably satisfactory to the Borrower of the loss,
theft, destruction or mutilation of any Note, and in the case of any such loss,
theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory to the Borrower or, in the case of any

123

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

 

such mutilation, upon surrender and cancellation of the applicable Note, the
Borrower will execute and deliver, in lieu thereof, a replacement Note,
identical in form and substance to the applicable Note and dated as of the date
of the applicable Note and upon such execution and delivery all references in
the Loan Documents to such Note shall be deemed to refer to such replacement
Note.

§32.

NO THIRD PARTIES BENEFITED.

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

§33.

PATRIOT ACT.

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

[Remainder of page intentionally left blank.]

 

 

 

124

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

 

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

 

BORROWER:

 

GTJ REALTY, LP, a Delaware limited partnership

 

 

 

By:

 

GTJ GP, LLC, a Maryland limited liability company, its general partner

 

 

 

 

 

By:

 

GTJ REIT, Inc., a Maryland corporation, its sole member

 

 

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(SEAL)

 

[Signatures Continued on Next Page]

 

 

 

 

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

 

 

AGENT AND LENDERS:

 

KEYBANK NATIONAL ASSOCIATION,
individually as a Lender and as the Agent

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

1