Exhibit 10.1

SENIOR SECURED TERM LOAN AGREEMENT

DATED AS OF AUGUST 23, 2011

AMONG

TERRENO REALTY LLC,

AS BORROWER

AND

KEYBANK NATIONAL ASSOCIATION

AS ADMINISTRATIVE AGENT

KEYBANC CAPITAL MARKETS

AS LEAD ARRANGER

AND

THE SEVERAL LENDERS

FROM TIME TO TIME PARTIES HERETO,

AS LENDERS

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SENIOR SECURED TERM LOAN AGREEMENT

This Senior Secured Term Loan Agreement (“Agreement”), dated as of August 23,
2011 is among Terreno Realty LLC, a limited liability company organized under
the laws of the State of Delaware (the “Borrower”), KeyBank National
Association, a national banking association, both individually as a “Lender” and
as “Administrative Agent”, KeyBanc Capital Markets as “Lead Arranger,” and the
several banks, financial institutions and other entities which may from time to
time become parties to this Agreement as additional “Lenders”.

RECITALS

A. Borrower is primarily engaged in the business of purchasing, owning,
operating, leasing and managing industrial properties.

B. Borrower’s sole member, Terreno Realty Corporation, a Maryland corporation
(“Parent Guarantor”) is qualified as a real estate investment trust under
Section 856 of the Code.

C. Borrower desires to obtain a senior secured term loan to provide interim
financing with respect to two of Borrower’s Projects secured by Borrower’s
indirect ownership interests in such Projects and Lenders are willing to do so
on the terms and conditions set forth herein.

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

ARTICLE I.

DEFINITIONS

As used in this Agreement:

“Adjusted EBITDA” means, as of any date, an annualized amount determined by
multiplying two (2) times the Consolidated EBITDA for the most recent fiscal
quarter of Borrower for which financial results have been reported and the
immediately preceding fiscal quarter (or until Borrower has been existence for
two full fiscal quarters, by multiplying four (4) times the Consolidated EBITDA
for the most recent such fiscal quarter) and deducting from such annualized
amount an annual amount for capital expenditures equal to $0.15 per square foot
times the weighted daily average rentable area of Projects owned by the
Consolidated Group or any Investment Affiliate (but only deducting the
applicable Consolidated Group Pro Rata Share of such amount with respect to such
Investment Affiliate) during the applicable calculation period for such
annualized Consolidated EBITDA.

“Administrative Agent” means KeyBank National Association in its capacity as
agent for the Lenders pursuant to Article X, and not in its individual capacity
as a Lender, and any successor Administrative Agent appointed pursuant to
Article X.

“Advance” means a borrowing hereunder consisting of the aggregate amount of the
several Loans made by one or more of the Lenders to Borrower of the same Type
and, in the case of LIBOR Advances, for the same LIBOR Interest Period.

“Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person

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if the controlling Person owns 10% or more of any class of voting securities (or
other ownership interests) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.

“Agreement” means this Senior Secured Term Loan Agreement, as it may be amended
or modified and in effect from time to time.

“Agreement Execution Date” means the date this Agreement has been fully executed
and delivered by all parties hereto.

“Anti-Terrorism Laws” is defined in Section 5.28.

“Applicable Margin” means, as applicable, the Base Rate Applicable Margin or the
LIBOR Applicable Margin which are used in calculating the interest rate
applicable to the various Types of Advances.

“Article” means an article of this Agreement unless another document is
specifically referenced.

“Authorized Officer” means any of the Chief Executive Officer, President, Chief
Financial Officer, Chief Accounting Officer or Vice President of Borrower or
Parent Guarantor, acting singly.

“Bankruptcy Code” means the Bankruptcy Code of the United States of America, as
amended from time to time.

“Base Rate” means, for any day, a rate per annum equal to the Floor Base Rate
for such day plus the Base Rate Applicable Margin for such day, in each case
changing as and when the Floor Base Rate changes.

“Base Rate Advance” means an Advance that bears interest at the Base Rate.

“Base Rate Applicable Margin” means, as of any date with respect to any Base
Rate Advance, the per annum amount then in effect pursuant to Section 2.3
hereof.

“Base Rate Loan” means a Loan that bears interest at the Base Rate.

“Borrower” means Terreno Realty LLC, a limited liability company organized under
the laws of the State of Delaware, and its successors and assigns.

“Borrowing Date” means the date on which the initial disbursement is made
hereunder.

“Borrowing Notice” is defined in Section 2.9.

“Business Day” means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Cleveland, Ohio and New York, New York for the
conduct of substantially all of their commercial lending activities and on which
dealings in United States dollars are carried on in the London interbank market
and (ii) for all other purposes, a day (other than a Saturday or Sunday) on
which banks generally are open in Cleveland, Ohio and New York, New York for the
conduct of substantially all of their commercial lending activities.

 

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

“Capitalized Lease” of a Person means any lease of Property imposing obligations
on such Person, as lessee thereunder, which are required in accordance with GAAP
to be capitalized on a balance sheet of such Person.

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

“Cash Equivalents” means, as of any date:

(i) securities issued or directly and fully guaranteed or insured by the United
States Government or any agency or instrumentality thereof having maturities of
not more than one year from such date;

(ii) mutual funds organized under the United States Investment Company Act rated
AAm or AAm-G by S&P and P-1 by Moody’s;

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

(iv) certificates of deposit or other interest-bearing obligations of the
Administrative Agent (or an Affiliate thereof) or a bank or trust company which
is a member in good standing of the Federal Reserve System having a short term
unsecured debt rating of not less than A-1+ by S&P, and not less than P-1 by
Moody’s and which has a long term unsecured debt rating of not less than A1 by
Moody’s (or in each case, if no bank or trust company is so rated, the highest
comparable rating then given to any bank or trust company, but in such case only
for funds invested overnight or over a weekend) provided that such investments
shall mature or be redeemable upon the option of the holders thereof on or prior
to a date three months from the date of their purchase;

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

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

 

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

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

“Change of Control” means (i) any transfer of ownership resulting in Parent
Guarantor owning less than 100% of the equity interests in Borrower or (ii) any
change in the membership of Parent Guarantor’s Board of Directors which results
in (x) those board members having served for such Board of Directors throughout
the preceding twelve (12) month period (or since the date of Parent Guarantor’s
organization in the case of the first twelve (12) months after Parent
Guarantor’s organization) (“Existing Directors”) and (y) directors approved by
Existing Directors as of any date constituting less than 50% of the total board
members at such time.

“Change in Management” means the failure of at least one of the Parent
Guarantor’s Chief Executive Officer and the Guarantor’s President and Chief
Financial Officer as of the Agreement Execution Date (or any successor to either
such individual hereafter approved by the Administrative Agent) to continue to
be active on a daily basis in the management of Borrower provided that if both
of such individuals shall die or become disabled or otherwise cease to be active
in the management of Borrower, Borrower shall have one hundred twenty (120) days
to retain a replacement executive of comparable experience which is reasonably
satisfactory to the Administrative Agent.

“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

“Collateral” means all of the property, rights and interests of Borrower and its
Subsidiaries that are subject to the security interests and Liens created by the
Security Documents.

“Collateral Assets” means the two (2) Projects commonly described as the
warehouse distribution facility located at 14100 NW 60th Avenue, Miami Lakes,
Florida and the multi-tenant industrial building located at 215 SE 10th Avenue,
Hialeah, Florida, each of which is legally described on Exhibit A attached
hereto and made a part hereof.

“Collateral Assignment” means the Collateral Assignment of Interests in the form
of Exhibit K attached hereto from Borrower to the Administrative Agent, for the
benefit of the Lenders, as the same may be modified, amended or restated,
pursuant to which there shall be granted to the Administrative Agent on behalf
of the Lenders a first priority lien and security interest in the applicable
Pledged Equity Interests and the other interests of Borrower in the Collateral
described therein, and any further assignments, certificates, powers, consents,
acknowledgments, estoppels or UCC-1 financing statements that may be delivered
in connection therewith.

“Collateral Inclusion Conditions” means, with respect to each Collateral Asset:
(A) a written opinion of the Borrower’s counsel addressed to the Lenders in a
form reasonably satisfactory to the Administrative Agent regarding the
Subsidiary Guaranty and the Collateral Assignment related thereto, (B) evidence
that the applicable title company has committed to issue a title insurance
policy insuring the applicable Subsidiary Guarantor’s title to the real property
constituting the Project in a form, and with such coverages and endorsements, as
are all reasonably satisfactory to the

 

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Administrative Agent, including without limitation a so-called “mezzanine
endorsement” in favor of the Administrative Agent for the benefit of the Lenders
in an amount not less than 60% of the cost value basis of such Collateral Asset
to the extent such an endorsement is authorized to be issued in the state in
which such Project is located; provided, however, Administrative Agent may waive
the mezzanine endorsement requirement if such Project is located in a state in
which the cost of issuing such mezzanine endorsement is more than nominal (in
Administrative Agent’s sole discretion), and (C) UCC-1 financing statements
evidencing and perfecting the security interest granted in the applicable
Pledged Equity Interests.

“Collateral Pool Implied DSCR” means, as of any date, the then-current
Collateral Pool NOI divided by the then-current Implied Facility Debt Service.

“Collateral Pool NOI” means, as of any date, the amount determined by
multiplying four (4) times the aggregate Net Operating Income attributable to
the Collateral Assets for the most recent fiscal quarter of Borrower for which
financial results have been reported but excluding any portion of such Net
Operating Income attributable to a tenant who is an Excluded Tenant as of such
date.

“Consolidated EBITDA” means, for any period without duplication an amount equal
to the net income or loss of the Consolidated Group determined in accordance
with GAAP (before minority interests and excluding losses attributable to the
sale or other disposition of assets and the adjustment for so-called
“straight-line rent accounting”) for such period, plus (x) the following to the
extent deducted in computing such Consolidated Net Income for such period:
(i) Consolidated Total Interest Expense for such period, (ii) real estate
depreciation and amortization for such period, (iii) other non-cash charges for
such period and (iv) acquisition costs for such period with respect to all
Projects acquired by Borrower or another member of the Consolidated Group; and
minus (y) all gains attributable to the sale or other disposition of assets or
debt restructurings in such period, adjusted to include the Consolidated Group
Pro Rata Share of the net income or loss of all Investment Affiliates for such
period, determined and adjusted in the same manner as provided above in this
definition with respect to the Consolidated Group’s net income or loss.
Notwithstanding the foregoing, until Consolidated Gross Asset Value is equal to
or greater than $600,000,000, the amount of the Consolidated Group’s general and
administrative expense for any period to be used in any calculations made under
this definition shall be capped at eight percent (8%) of the aggregate Net
Operating Income of all Projects owned by Borrower or another member of the
Consolidated Group for all or any portion of such period.

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

“Consolidated Gross Asset Value” means, as of any date, (i) the aggregate Net
Operating Income for the two (2) most recent full fiscal quarters of Borrower
for which financial results have

 

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been reported attributable to Projects owned by Borrower or another member of
the Consolidated Group as of the last day of such period (excluding both
Development Projects and 100% of the aggregate Net Operating Income attributable
to any Projects not so owned for such two (2) most recent full fiscal quarters),
multiplied by two (2), with the product thereof divided by the Capitalization
Rate, plus (ii) the cost basis value for any such Projects first acquired by
Borrower or a member of the Consolidated Group during such two (2) consecutive
full fiscal quarters, plus (iii) Cash and Cash Equivalents owned by the
Consolidated Group on the last day of such most recent fiscal quarter, plus
(iv) the Consolidated Group’s Pro Rata Share of the aggregate Net Operating
Income for the two (2) most recent full fiscal quarters of Borrower for which
financial results have been reported attributable to Projects owned by
Investment Affiliates on the last day of such period (excluding Development
Projects and 100% of the aggregate Net Operating Income attributable to any
Projects not so owned for such two (2) most recent full fiscal quarters)
multiplied by two (2), with the product divided by the Capitalization Rate, plus
(v) the Consolidated Group Pro Rata Share of such the cost value basis of any
Projects not so owned for such two (2) most recent full fiscal quarters by an
Investment Affiliate, plus (vi) the cost value basis of all Development Projects
of Borrower or any other member of the Consolidated Group, as of the last day of
such most recent fiscal quarter, plus (vii) the cost value basis of any
Unimproved Land owned by Borrower or any other member of the Consolidated Group
as of the last day of such most recent fiscal quarter. Notwithstanding the
foregoing, for purposes of calculating the amount of Net Operating Income to be
used in clauses (i) and (iv) of the preceding sentence of this definition,
(A) no Project shall be deemed to have Net Operating Income of less than zero
for any period and (B) if any Project is subject to a Lease which has commenced
but provides for an initial period of rent abatement or reduction that falls in
whole or in part within the period on which Net Operating Income is being
calculated, the Net Operating Income attributable to such Project for such
initial abatement or reduction period shall be determined as if the rental
income for such Project included rents paid at the rental rate that will be
payable under such Lease during the first full calendar month immediately
following such period, provided that (i) no such period of deemed increase shall
continue for longer than the first twenty percent (20%) of the initial term of
such Lease and (ii) the portion of Consolidated Gross Asset Value attributable
to Projects which have Net Operating Income then deemed to be increased under
this clause (B) shall not at any time constitute more than fifteen percent
(15%) of total Consolidated Gross Asset Value.

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

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

“Consolidated Interest Expense” means, for any period without duplication, the
sum of (a) the aggregate amount of interest required to be paid, accrued,
expensed or, to the extent it could be expensed, capitalized in accordance with
GAAP of the Consolidated Group for such period attributable to Consolidated
Outstanding Indebtedness during such period (including the Loans, obligations
under Capitalized Leases (to the extent Consolidated EBITDA has not been reduced
by such Capitalized Lease obligations in the applicable period), any
Subordinated Indebtedness, original issue discount and amortization of prepaid
interest, if any, but excluding any Preferred Distributions)

 

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plus (b) all amounts available for borrowing, or for drawing under letters of
credit, if any, issued for the account of any member of the Consolidated Group,
but only if such interest was or is required to be reflected as an item of
expense, plus (c) all commitment fees, agency fees, facility fees, balance
deficiency fees and similar fees and expenses in connection with the borrowing
of money plus (d) the Consolidated Group Pro Rata Share of any such interest
items, as similarly calculated and determined in accordance with GAAP, of any
Investment Affiliate, for such period, whether recourse or non-recourse.

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

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

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

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

“Controlled Group” means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.

“Conversion/Continuation Notice” is defined in Section 2.10.

 

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“Default” means an event described in Article VII.

“Defaulting Lender” means any Lender which fails or refuses to perform its
obligations under this Agreement within the time period specified for
performance of such obligation, or, if no time frame is specified, if such
failure or refusal continues for a period of five Business Days after written
notice from the Administrative Agent; provided that if such Lender cures such
failure or refusal, such Lender shall cease to be a Defaulting Lender.

“Default Rate” means the interest rate which may apply during the continuance of
a Default pursuant to Section 2.10.

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

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

“Eligible Assignee” means (a) another Lender, (b) with respect to any Lender,
any Affiliate of that Lender, (c) any commercial bank having a combined capital
and surplus of $5,000,000,000 or more, (d) the central bank of any country which
is a member of the Organization for Economic Cooperation and Development,
(e) any savings bank, savings and loan association or similar financial
institution and, unless a Default shall have occurred and be continuing,
approved by Borrower (such approval not to be unreasonably withheld or delayed)
which (A) has a net worth of $500,000,000 or more, (B) is engaged in the
business of lending money and extending credit under credit facilities
substantially similar to those extended under this Agreement and (C) is
operationally and procedurally able to meet the obligations of a Lender
hereunder to the same degree as a commercial bank, and (f) any other financial
institution (including a mutual fund or other fund) approved by the
Administrative Agent and, unless a Default shall have occurred and be
continuing, Borrower (such approval not to be unreasonably withheld or delayed)
having total assets of $500,000,000 or more which meets the requirements set
forth in subclauses (B) and (C) of clause (e) above; provided that each Eligible
Assignee must either (a) be organized under the Laws of the United States of
America, any State thereof or the District of Columbia or (b) be organized under
the Laws of the Cayman Islands or any country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of such a country, and (i) act hereunder through a branch, agency or
funding office located in the United States of America and (ii) be exempt from
withholding of tax on interest.

 

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“Eligible Collateral Asset Documents” means, with respect to each Collateral
Asset:

(a) A current rent roll and operating statement for such Project;

(b) A certificate from the Borrower showing the cost value basis of such
Project;

(c) A certification from the Borrower that such Project is free from all
material environmental and structural issues; and

(d) Other documents that may be reasonably requested by the Administrative Agent
including, but not limited to copies of rent rolls, ARGUS runs, Leases,
estoppels from all tenants under the Leases (to the extent obtainable after
commercially reasonable collection efforts), current title insurance commitment
and/or title search, together with copies of all title exceptions, current ALTA
survey, current property condition reports and current environmental
assessments.

“Entity Acquisition” means any transaction, or any series of related
transactions, consummated on or after the Agreement Execution Date, by which any
of Parent Guarantor, Borrower or any of Borrower’s Subsidiaries (i) acquires any
going business or all or substantially all of the assets of any firm,
corporation or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership,
limited liability company or other entity.

“Environmental Laws” means any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect, in each case to the extent the
foregoing are applicable to Borrower or any Subsidiary or any of their
respective assets or Projects.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rule or regulation issued thereunder.

“Excluded Taxes” means, in the case of each Lender or applicable Lending
Installation and the Administrative Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it, by any jurisdiction with taxing
authority over the Lender.

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

“Executive Order” is defined in Section 5.28.

“Facility Obligations” means all Obligations other than the Related Swap
Obligations.

 

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“Federal Funds Effective Rate” shall mean, for any day, the rate per annum
(rounded upward to the nearest one 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.”

“Fee Letter” is defined in Section 2.6.

“Floor Base Rate” means, for any day, a rate of interest per annum equal to the
highest of (i) the sum of the Prime Rate for such day plus 1% per annum,
(ii) the sum of the Federal Funds Effective Rate for such day plus 1/2% per
annum and (iii) the LIBOR Rate (which includes the LIBOR Applicable Margin) that
would apply if such day were the first day of a LIBOR Interest Period of one
month.

“Funds From Operations” shall have the meaning determined from time to time by
the National Association of Real Estate Investment Trusts to be the meaning most
commonly used by its members, but in no event shall Funds From Operations for
any period be reduced on account of any deduction or amortization of acquisition
costs incurred with respect to Projects acquired by Borrower or another member
of the Consolidated Group.

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time, applied in a manner consistent with that
used in preparing the financial statements referred to in Section 6.1.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Guarantee Obligation” means, as to any Person (the “guaranteeing person”), any
obligation (determined without duplication) of (a) the guaranteeing person or
(b) another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counter-indemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the “primary obligations”) of any other third Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business or environmental or similar indemnities or customary so-called
non-recourse carveout guarantees. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the maximum stated amount of the
primary obligation relating to such Guarantee Obligation (or, if less, the
maximum stated liability set forth in the instrument embodying such Guarantee
Obligation),

 

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provided, that in the absence of any such stated amount or stated liability, the
amount of such Guarantee Obligation shall be such guaranteeing person’s maximum
reasonably anticipated liability in respect thereof as determined by Borrower in
good faith.

“Implied Debt Service” means, as of any date, an imputed annual amount of
principal and interest that would be due on the then-current Outstanding Loan
Amount if such Outstanding Loan Amount were a fully amortizing loan with equal
monthly payments of principal and interest over a period of thirty years at a
per annum interest rate equal to the greater of (a) 7.00% and (b) the
then-current weighted daily average interest rate applicable to all Advances
outstanding hereunder on such date.

“Indebtedness” of any Person at any date means without duplication all
obligations, contingent or otherwise, which should be classified or the
obligor’s balance sheet as liabilities, or to which reference should be made by
footnotes thereto, all in accordance with GAAP, including, in any event, the sum
of (without double-counting), (i) all accounts payable of such obligor on such
date, and (ii) all Indebtedness outstanding on such date, in each case whether
Recourse, Indebtedness, Non-Recourse Indebtedness or contingent, provided,
however, that amounts not drawn as Loans hereunder on such date shall not be
included in calculating Consolidated Total Indebtedness, and provided, further,
that (without double-counting), each of the following shall be included in
Indebtedness: (a) all Guarantee Obligations of such Person (excluding in any
calculation of consolidated Indebtedness of the Consolidated Group, Guarantee
Obligations of one member of the Consolidated Group in respect of primary
obligations of any other member of the Consolidated Group); (b) all
reimbursement obligations of such Person for letters of credit and other
contingent liabilities (excluding in any calculation of consolidated
Indebtedness of the Consolidated Group, Guarantee Obligations of one member of
the Consolidated Group in respect of primary obligations of any other member of
the Consolidated Group); (c) all amounts of bonds posted by such obligor
guaranteeing performance or payment obligations; (d) all lease obligations
(under Capitalized Leases) (e) all liabilities of such obligor as a partner,
member or the like for liabilities (whether such liabilities are Recourse,
Indebtedness, Non-Recourse Indebtedness or contingent obligations of the
applicable partnership or other Person) of Investment Affiliates or other Person
in which any of them have an equity interest, which liabilities are for borrowed
money or any of the matters listed in clauses (a), (b), (c) or (d) above;
(f) any Net Mark-to-Market Exposure and (g) all liabilities secured by any lien
(other than liens for taxes not yet due and payable) on any property owned by
such Person even though such Person has not assumed or otherwise become liable
for the payment thereof. For purposes hereof, the amount of borrowed money shall
equal the sum of (1) the amount of borrowed money as determined in accordance
with GAAP plus (2) the amount of those contingent liabilities for borrowed money
set forth in subsections (a) through (d) above, but shall exclude any adjustment
for so-called “straight-line interest accounting”.

“Intellectual Property” is defined in Section 5.21.

“Interest Reserve Fund” is defined in Section 2.22.

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

 

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

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

“Leasing Commission Reserve Fund” is defined in Section 2.21.

“Lenders” means the lending institutions listed on the signature pages of this
Agreement, their respective successors and assigns, any other lending
institutions that subsequently become parties to this Agreement.

“Lending Installation” means, with respect to a Lender, any office, branch,
subsidiary or affiliate of such Lender.

“Leverage Ratio” means, as of any date, the ratio of Consolidated Total
Indebtedness to Consolidated Gross Asset Value.

“LIBOR Advance” means an Advance that bears interest at the LIBOR Rate.

“LIBOR Applicable Margin” means, as of any date with respect to any LIBOR
Interest Period, the applicable per annum amount then in effect pursuant to
Section 2.3 hereof.

“LIBOR Base Rate” means, the rate (rounded upwards to the nearest 1/1000th) with
respect to a LIBOR Advance for the relevant LIBOR Interest Period, the
applicable British Bankers’ Association LIBOR rate for deposits in U.S. dollars
as reported by any generally recognized financial information service as of
11:00 a.m. (London time) two Business Days prior to the first day of such LIBOR
Interest Period, and having a maturity equal to such LIBOR Interest Period,
provided that, if no such British Bankers’ Association LIBOR rate is available
to the Administrative Agent, the applicable LIBOR Base Rate for the relevant
LIBOR Interest Period shall instead be the rate determined by the Administrative
Agent to be the rate at which KeyBank or one of its Affiliate banks offers to
place deposits in U.S. dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such LIBOR Interest Period, in the approximate amount of KeyBank’s
relevant LIBOR Loan and having a maturity equal to such LIBOR Interest Period.

“LIBOR Interest Period” means, with respect to each amount bearing interest at a
LIBOR based rate, a period of one, two or three months, commencing on a Business
Day, as selected by Borrower; provided, however, that (i) any LIBOR Interest
Period which would otherwise end on a day which is not a Business Day shall
continue to and end on the next succeeding Business Day, unless the result would
be that such LIBOR Interest Period would be extended to the next succeeding
calendar month, in which case such LIBOR Interest Period shall end on the next
preceding Business Day and (ii) any LIBOR Interest Period which begins on a day
for which there is no numerically corresponding date in the calendar month in
which such LIBOR Interest Period would otherwise end shall instead end on the
last Business Day of such calendar month.

“LIBOR Loan” means a Loan which bears interest at a LIBOR Rate.

 

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“LIBOR Rate” means, for any LIBOR Interest Period, the sum of (A) the LIBOR Base
Rate applicable thereto and (B) the LIBOR Applicable Margin.

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

“Loan” means, with respect to a Lender, such Lender’s portion of any Advance.

“Loan Amount” means $10,050,000.

“Loan Documents” means this Agreement, the Notes, the Parent Guaranty, the
Subsidiary Guaranty, the Collateral Assignment and any other document from time
to time evidencing or securing indebtedness incurred by Borrower under this
Agreement, as any of the foregoing may be amended or modified from time to time.

““Loan Maturity Date” means [                    , 2013], being a date eighteen
(18) months after the Agreement Execution Date, subject to extension as provided
in Section 2.3 hereof.

“Loan Parties” means, collectively, Borrower, the Parent Guaranty, the
Subsidiary Guarantors and any other party which executes and delivers, or joins
in, the Collateral Assignment or any future Collateral Assignment as provided
herein.

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

“Material Adverse Effect” means, in the Administrative Agent’s reasonable
discretion, a material adverse effect on (i) the business, Property or condition
(financial or otherwise) of Borrower and its Subsidiaries taken as a whole,
(ii) the ability of Borrower to perform its obligations under the Loan
Documents, or (iii) the validity or enforceability of any of the Loan Documents.

“Materials of Environmental Concern” means any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or
toxic substances, materials or wastes, defined or regulated as such in or under
any Environmental Law, including, without limitation, asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.

“Maximum Legal Rate” means the maximum nonusurious interest rate, if any, that
at any time or from time to time may be contracted for, taken, reserved, charged
or received on the indebtedness evidenced by the Note and as provided for herein
or in the Note or other Loan Documents, under the laws of such state or states
whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which Borrower or any member of the
Controlled Group is a party to which more than one employer is obligated to make
contributions.

 

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

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

“Non-Recourse Indebtedness” means any Indebtedness with respect to which the
liability of the obligor is limited to the obligor’s interest in specified
assets securing such Indebtedness, subject to customary limited exceptions for
certain acts or types of liability.

“Non-U.S. Lender” is defined in Section 3.5(iv).

“Note” means a promissory note, in substantially the form of Exhibit B hereto,
duly executed by Borrower and payable to the order of a Lender in the amount of
its portion of the Loan, including any amendment, modification, renewal or
replacement of such promissory note.

“Notice of Assignment” is defined in Section 12.3(ii).

“Obligations” means the Advances, the Related Swap Obligations and all accrued
and unpaid fees and all other obligations of Borrower to the Administrative
Agent or the Lenders arising under this Agreement or any of the other Loan
Documents.

“Occupancy Percentage” means, as of any date, with respect to any Project or
group of Projects, the percentage of the total rentable area of such Project or
Projects that is then demised under a Lease to tenants who are not an Affiliate
of the Borrower and who took initial occupancy of their demised spaces under
such Leases (even if any such space is then vacant), but excluding from such
calculation space demised to any tenant who is then an Excluded Tenant.

“Other Taxes” is defined in Section 3.5(ii).

“Outstanding Loan Amount” means, at any time, the sum of all then outstanding
Advances.

“Parent Guarantor” means Terreno Realty Corporation, a Maryland corporation
organized under the laws of the State of Delaware, and its successors and
assigns.

“Parent Guaranty” means the guaranty to be executed and delivered by the Parent
Guarantor substantially in the form of Exhibit G, as the same may be amended,
supplemented or otherwise modified from time to time.

 

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“Participants” is defined in Section 12.2(i).

“Payment Date” means, with respect to the payment of interest accrued on any
Advance, the first day of each calendar month.

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Percentage” means for each Lender the ratio that such Lender’s portion of the
Loan bears to the Loan Amount, expressed as a percentage and as shown on the
signature pages hereto.

“Permitted Acquisitions” are defined in Section 6.15.

“Permitted Liens” are defined in Section 6.16.

“Person” means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.

“Plan” means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
as to which Borrower or any member of the Controlled Group may have any
liability.

“Pledged Equity Interests” means, as of any date, collectively, 100% of the
applicable legal, beneficial ownership interests in each Subsidiary Guarantor
which owns one or more of the then-current Collateral Assets, which as of the
Agreement Execution Date, consist of the ownership interests shown on the
Subsidiary Guaranty attached hereto, as pledged under the Collateral Assignment
from time to time.

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

“Prime Rate” means a rate per annum equal to the prime rate of interest publicly
announced from time to time by KeyBank or its parent as its prime rate (which is
not necessarily the lowest rate charged to any customer), changing when and as
said prime rate changes. In the event that there is a successor to the
Administrative Agent by merger, or the Administrative Agent assigns its duties
and obligations to an Affiliate, then the term “Prime Rate” as used in this
Agreement shall mean the prime rate, base rate or other analogous rate of the
new Administrative Agent.

“Prohibited Person” is defined in Section 5.28.

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

“Property” of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

“Qualified Ground Lease” means a ground lease that has (i) a remaining term of
at least twenty-five (25) years including, for this purpose, any renewal option
exercisable at the sole option of the ground lessee thereunder, with no veto or
approval rights by the ground lessor or any lender to

 

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such ground lessor, (ii) can be mortgaged without the consent of the ground
lessor thereunder, (iii) contains customary leasehold mortgagee protection
rights reasonably satisfactory to the Administrative Agent; (iv) can be
transferred without the consent of the ground lessor thereunder (or if consent
of such ground lessor is required, such consent is subject to either an express
reasonableness standard or an objective financial standard for the transferee
that is reasonably satisfactory to the Administrative Agent); and (v) that the
tenant under the ground lease is entitled to all insurance proceeds and
condemnation awards (other than the amount attributable to landlord’s fee
interest in the land if an adjustment in rent is provided for in connection
therewith).

“Recourse Indebtedness” means any Indebtedness of Borrower or any other member
of the Consolidated Group with respect to which the liability of the obligor is
not limited to the obligor’s interest in specified assets securing such
Indebtedness, subject to customary limited exceptions for certain acts or types
of liability.

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.

“Related Swap Obligations” means, as of any date, all of the obligations of
Borrower arising under any then outstanding Swap Contracts entered into between
Borrower and any Lender or Affiliate of any Lender.

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA
and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.

“Required Lenders” means Lenders in the aggregate holding at least 66 2/3% of
the aggregate Outstanding Loan Amount.

“Reserve Funds” is defined in Section 2.23.

“Revolving Credit Facility” means the revolving line of credit extended to the
Borrower pursuant to that certain Amended and Restated Senior Revolving Credit
Agreement dated as of December 31, 2010, as amended by First Amendment to
Amended and Restated Senior Revolving Credit Agreement dated as of June 30, 2011
by and among the Administrative Agent, the Lead Arranger, KeyBank National
Association, and certain other lenders and the Borrower

“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

 

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“Secured Indebtedness” means any Indebtedness of Borrower or any other member of
the Consolidated Group which is secured by a Lien on a Project, any ownership
interests in any Person or any other assets which had, in the aggregate, a value
in excess of the amount of such Indebtedness at the time such Indebtedness was
incurred.

“Security Documents” means the Collateral Assignment (and each joinder therein
and each additional Collateral Assignment subsequently delivered pursuant to
this Agreement) and any further collateral assignments to the Administrative
Agent for the benefit of the Lenders, including, without limitation, any UCC-1
financing statements delivered or authorized to be filed by the Administrative
Agent in connection therewith.

“Single Employer Plan” means a Plan maintained by Borrower or any member of the
Controlled Group for employees of Borrower or any member of the Controlled
Group.

“S&P” means Standard & Poor’s Ratings Group and its successors.

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

“Subsidiary Guarantor” means each Wholly-Owned Subsidiary of Borrower which owns
a Collateral Asset and therefore has executed the Subsidiary Guaranty.

“Subsidiary Guaranty” means the guaranty to be executed and delivered by those
Subsidiaries of Borrower listed on Schedule 6, substantially in the form of
Exhibit F, as the same may be amended, supplemented or otherwise modified from
time to time.

“Substantial Portion” means, with respect to the Property of Borrower and its
Subsidiaries, Property which represents more than 10% of then-current
Consolidated Gross Asset Value.

“Swap Contract” means (a) 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, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap

 

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Contracts, (a) for any date on or after the date such Swap Contracts have been
closed out and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced in
clause (a), the amount(s) determined as the mark-to-market value(s) for such
Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts
(which may include a Lender or any Affiliate of a Lender).

“Taxes” means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.

“Tenant Improvement Reserve Fund” is defined in Section 2.20.

“Transferee” is defined in Section 12.4.

“Type” means, with respect to any Advance, its nature as a Base Rate Advance or
LIBOR Advance.

“Unfunded Liabilities” means the amount (if any) by which the present value of
all vested nonforfeitable benefits under all Single Employer Plans exceeds the
fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans.

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

“Unmatured Default” means an event which but for the lapse of time or the giving
of notice, or both, would constitute a Default.

“Unsecured Indebtedness” means all Consolidated Total Indebtedness that is not
Secured Indebtedness.

“Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, association, joint venture or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

 

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ARTICLE II.

THE LOAN

2.1. Generally. Subject to the terms and conditions of this Agreement, Lenders
severally agree to each make one initial Loan through the Administrative Agent
to Borrower on the Agreement Execution Date in an aggregate amount equal to the
Loan Amount.

The Advances hereunder may be made and continued hereunder as either ratable
Base Rate Advances or ratable LIBOR Advances. This is a term loan and if
Borrower shall repay any portion of the Loan Amount Borrower shall not be
entitled to reborrow any portion of the Loan Amount.

2.2. Extension of Maturity Date Borrower shall have one (1) option to extend the
Loan Maturity Date for a period of six (6) months ending on August     , 2013,
being the day immediately prior to the second anniversary of the Agreement
Execution Date, upon satisfaction of the following conditions precedent:

(i) As of the date of Borrower’s delivery of notice of its intent to exercise
such option, and as of the initial Loan Maturity Date, no Event of Default shall
have occurred and be continuing and Borrower shall so certify in writing;

(ii) Borrower shall provide Administrative Agent with written notice of the
Borrower’s intent to exercise such option not less than sixty (60) days prior to
the initial Loan Maturity Date;

(iii) As of the date of Borrower’s delivery of notice of its intent to exercise
such option and as of the initial Loan Maturity Date, the Collateral Pool
Implied DSCR is not less than 1.25 to 1.0, or, if the Collateral Pool Implied
DSCR is less than 1.25 to 1.0 as of the date of delivery of such notice, then
not later than the initial Maturity Date Borrower shall have made sufficient
repayments of the Loan so that such criteria is satisfied; and

(iv) Borrower shall pay to the Administrative Agent for the account of the
Lenders, along with Borrower’s notice of exercise of such option, an extension
fee equal to one quarter of one percent (0.25%) of the then-current Outstanding
Loan Amount.

 

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2.3. Applicable Margins. The interest due hereunder with respect to the Advances
shall vary from time to time and shall be determined by reference to the Type of
Advance and the then-current Collateral Pool Implied DSCR. Any such change in
the Applicable Margin shall be made on the fifth (5th) day subsequent to the
date on which the Administrative Agent receives a compliance certificate
pursuant to Section 6.1(iv) with respect to the performance of the Collateral
Assets for the preceding calendar month, provided that the Administrative Agent
does not object to the information provided in such certificate. Such changes
shall be given prospective effect only, and no recalculation shall be done with
respect to interest accrued prior to the date of such change in the Applicable
Margin. If any such compliance certificate shall later be determined to be
incorrect and as a result a higher Applicable Margin should have been in effect
for any period, Borrower shall pay to the Administrative Agent for the benefit
of the Lenders all additional interest which would have accrued if the original
compliance certificate had been correct, as shown on an invoice to be prepared
by the Administrative Agent and delivered to Borrower, on the next Payment Date
following delivery of such invoice. The per annum Applicable Margins that will
be either added to the Floor Base Rate to determine the Base Rate or added to
LIBOR Base Rate (as adjusted for any Reserve Requirement) to determine the LIBOR
Rate for any LIBOR Interest Period shall be determined as follows:

 

Collateral Pool Implied DSCR

   LIBOR Applicable Margin   Base Rate
Applicable Margin

< 1.25 to 1

   3.50%   0

> 1.25 to 1

   2.75%   0

2.4. Final Principal Payment. Any outstanding Advances and all other unpaid
Obligations shall be paid in full by Borrower on the Loan Maturity Date.

2.5. Other Fees. Borrower agrees to pay all fees payable to the Administrative
Agent pursuant to Borrower’s letter agreement with the Administrative Agent
dated as of July 6, 2011 (the “Fee Letter”).

2.6. Principal Payments. Borrower may from time to time pay, without penalty or
premium, all or any part of outstanding Base Rate Advances on not less than one
(1) Business Day prior notice to the Administrative Agent. A LIBOR Advance may
be paid on the last day of the LIBOR applicable LIBOR Interest Period or, if and
only if Borrower pays any amounts due to the Lenders under Section 3.4 as a
result of such prepayment, on a day prior to such last day.

2.7. Method of Selecting Types and Interest Periods for New Advances. Each
Advance hereunder shall consist of Loans made from the several Lenders ratably
in proportion to the ratio their respective portions of the Loan bear to the
aggregate Loan Amount. Borrower shall select the Type of Advance and, in the
case of each LIBOR Advance, the LIBOR Interest Period applicable thereto from
time to time. Borrower shall give the Administrative Agent irrevocable notice (a
“Borrowing Notice”) in the form attached as Exhibit I (i) not later than 3:00
p.m. Cleveland time on the Business Day immediately preceding the Borrowing Date
of each Base Rate Advance, and (ii) not later than 10:00 a.m. Cleveland time, at
least three (3) Business Days before the Borrowing Date for each LIBOR Advance,
which shall specify:

(i) the Borrowing Date, which shall be a Business Day, of such Advance;

(ii) the aggregate amount of such Advance;

(iii) the Type of Advance selected; and

(iv) in the case of each LIBOR Advance, the LIBOR Interest Period applicable
thereto.

The Administrative Agent shall promptly give each Lender notice of the contents
of each Borrowing Notice received from Borrower. Each Lender shall make
available its Loan or Loans, in funds immediately available in Cleveland to the
Administrative Agent at its address specified pursuant to Article XIII on each
Borrowing Date not later than noon (Cleveland time). The Administrative Agent
will make the funds so received from the Lenders available to Borrower at the
Administrative Agent’s aforesaid address.

 

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No LIBOR Interest Period may end after the Loan Maturity Date and, unless the
Lenders otherwise agree in writing, in no event may there be more than three
(3) different LIBOR Interest Periods for LIBOR Advances outstanding at any one
time.

2.8. Conversion and Continuation of Outstanding Advances. Base Rate Advances
shall continue as Base Rate Advances unless and until such Base Rate Advances
are converted into LIBOR Advances. Each LIBOR Advance shall continue as a LIBOR
Advance until the end of the then applicable LIBOR Interest Period therefor, at
which time such LIBOR Advance shall be automatically converted into a Base Rate
Advance unless Borrower shall have given the Administrative Agent a
Conversion/Continuation Notice requesting that, at the end of such LIBOR
Interest Period, such LIBOR Advance either continue as a LIBOR Advance for the
same or another Interest Period or be converted to an Advance of another Type.
Borrower may elect from time to time to convert all or any part of an Advance of
any Type into any other Type or Types of Advances; provided that any conversion
of any LIBOR Advance shall be made on, and only on, the last day of the LIBOR
Interest Period applicable thereto. Borrower shall give the Administrative Agent
irrevocable notice (a “Conversion/Continuation Notice”) of each conversion of an
Advance to a LIBOR Advance or continuation of a LIBOR Advance not later than
10:00 a.m. (Cleveland time), at least three Business Days, in the case of a
conversion into or continuation of a LIBOR Advance, prior to the date of the
requested conversion or continuation, specifying:

(i) the requested date which shall be a Business Day, of such conversion or
continuation;

(ii) the aggregate amount and Type of the Advance which is to be converted or
continued; and

(iii) the amount and Type(s) of Advance(s) into which such Advance is to be
converted or continued and, in the case of a conversion into or continuation of
a LIBOR Advance, the duration of the LIBOR Interest Period applicable thereto.

2.9. Changes in Interest Rate, Etc. Each Base Rate Advance shall bear interest
on the outstanding principal amount thereof, for each day from and including the
date such Advance is made or is converted from a LIBOR Advance into a Base Rate
Advance pursuant to Section 2.8 to but excluding the date it becomes due or is
converted into a LIBOR Advance pursuant to Section 2.8 hereof, at a rate per
annum equal to the Base Rate for such day. Changes in the rate of interest on
that portion of any Advance maintained as a Base Rate Advance will take effect
simultaneously with each change in the Base Rate. Each LIBOR Advance shall bear
interest from and including the first day of the LIBOR Interest Period
applicable thereto to (but not including) the last day of such LIBOR Interest
Period at the interest rate determined as applicable to such LIBOR Advance.

2.10. Rates Applicable After Default. Notwithstanding anything to the contrary
contained in Section 2.7 or 2.8, during the continuance of a Default the
Required Lenders may, at their option, by notice to Borrower (which notice may
be revoked at the option of the Required Lenders notwithstanding any provision
of Section 8.2 requiring unanimous consent of the Lenders to changes in interest
rates), declare that no Advance may be made as, converted into or continued as a
LIBOR Rate Advance. During the continuance of a Default the Required Lenders
may, at their option, by notice to Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that (i) each LIBOR Advance shall bear interest for the remainder of the
applicable LIBOR Interest Period at the rate otherwise applicable to such LIBOR
Interest Period plus

 

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3% per annum and (ii) each Base Rate Advance shall bear interest at a rate per
annum equal to the Base Rate otherwise applicable to the Base Rate Advance plus
3% per annum; provided, however, that the Default Rate shall become applicable
automatically if a Default occurs under Section 7.1 or 7.2, unless waived by the
Required Lenders.

2.11. Method of Payment. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Administrative Agent at the Administrative Agent’s address specified
pursuant to Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to
Borrower, by noon (local time) on the date when due and shall be applied ratably
by the Administrative Agent among the Lenders. As provided elsewhere herein, all
Lenders’ interests in the Advances and the Loan Documents shall be ratable
undivided interests and none of such Lenders’ interests shall have priority over
the others. Each payment delivered to the Administrative Agent for the account
of any Lender or amount to be applied or paid by the Administrative Agent to any
Lender shall be paid promptly (on the same day as received by the Administrative
Agent if received prior to noon (local time) on such day and otherwise on the
next Business Day) by the Administrative Agent to such Lender in the same type
of funds that the Administrative Agent received at its address specified
pursuant to Article XIII or at any Lending Installation specified in a notice
received by the Administrative Agent from such Lender. Payments received by the
Administrative Agent but not timely funded to the Lenders shall bear interest
payable by the Administrative Agent at the Federal Funds Effective Rate from the
date due until the date paid. The Administrative Agent is hereby authorized to
charge the account of Borrower maintained with KeyBank for each payment of
principal, interest and fees as it becomes due hereunder.

2.12. Notes; Telephonic Notices. Each Lender is hereby authorized to record the
principal amount of each of its Loans and each repayment on the schedule
attached to its Note, provided, however, that the failure to so record shall not
affect Borrower’s obligations under such Note. Borrower hereby authorizes the
Lenders and the Administrative Agent to extend, convert or continue Advances,
effect selections of Types of Advances and to transfer funds based on telephonic
notices made by any Authorized Officer. Borrower agrees to deliver promptly to
the Administrative Agent a written confirmation, if such confirmation is
requested by the Administrative Agent or any Lender, of each telephonic notice
signed by an Authorized Officer. If the written confirmation differs in any
material respect from the action taken by the Administrative Agent and the
Lenders, the records of the Administrative Agent and the Lenders shall govern
absent manifest error. Upon a Lender’s furnishing to Borrower an affidavit to
such effect, if a Note is mutilated, destroyed, lost or stolen, Borrower shall
deliver to such Lender, in substitution therefore, a new note containing the
same terms and conditions as such Note being replaced.

2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued on each
Advance shall be payable on each Payment Date, commencing with the first such
date to occur after the date hereof, at maturity, whether by acceleration or
otherwise, and upon any repayment of the Outstanding Loan Amount in its
entirety. Interest and all fees shall be calculated for actual days elapsed on
the basis of a 360-day year. Interest shall be payable for the day an Advance is
made but not for the day of any payment on the amount paid if payment is
received prior to noon (local time) at the place of payment. If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.

 

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2.14. Notification of Advances, Interest Rates and Prepayments. The
Administrative Agent will notify each Lender of the contents of each Borrowing
Notice, Conversion/Continuation Notice, and repayment notice received by it
hereunder not later than the close of business on the Business Day such notice
is received by the Administrative Agent. The Administrative Agent will notify
each Lender of the interest rate applicable to each LIBOR Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Floor Base Rate.

2.15. Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written or telex notice to
Administrative Agent and Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.

2.16. Non-Receipt of Funds by the Administrative Agent. Unless Borrower or a
Lender, as the case may be, notifies the Administrative Agent prior to the time
at which it is scheduled to make payment to the Administrative Agent of (i) in
the case of a Lender, the proceeds of a Loan or (ii) in the case of Borrower, a
payment of principal, interest or fees to the Administrative Agent for the
account of the Lenders, that it does not intend to make such payment, the
Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or Borrower, as the case may be, has not in fact made such payment
to the Administrative Agent, the recipient of such payment shall, on demand by
the Administrative Agent, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by
Borrower, the interest rate applicable to the relevant Loan. If such Lender so
repays such amount and interest thereon to the Administrative Agent within one
Business Day after such demand, all interest accruing on the Loan not funded by
such Lender during such period shall be payable to such Lender when received
from Borrower.

2.17. Replacement of Lenders under Certain Circumstances. Borrower shall be
permitted to replace any Lender which (a) is not capable of receiving payments
without any deduction or withholding of United States federal income tax
pursuant to Section 3.5, or (b) cannot maintain its LIBOR Loans at a suitable
Lending Installation pursuant to Section 3.3, with a replacement bank or other
financial institution; provided that (i) such replacement does not conflict with
any applicable legal or regulatory requirements affecting the Lenders, (ii) no
Default shall have occurred and be continuing at the time of such replacement,
(iii) Borrower shall repay (or the replacement bank or institution shall
purchase), at par all Loans and other amounts owing to such replaced Lender
prior to the date of replacement, (iv) Borrower shall be liable to such replaced
Lender under Sections 3.4 and 3.6 if any LIBOR Loan owing to such replaced
Lender shall be prepaid (or purchased) other than on the last day of the LIBOR
Interest Period relating thereto, (v) the replacement bank or institution, if
not already a Lender, and the terms and conditions of such replacement, shall be
reasonably satisfactory to the Administrative Agent, (vi) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 12.3 (provided that Borrower shall be obligated to pay the processing
fee referred to therein), (vii) until such time as such replacement shall be
consummated, Borrower shall pay all additional amounts (if any) required
pursuant to Section 3.5 and (viii) any such replacement shall not be deemed to
be a waiver of any rights which Borrower, the Administrative Agent or any other
Lender shall have against the replaced Lender.

 

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2.18. Usury. This Agreement and each Note are subject to the express condition
that at no time shall Borrower be obligated or required to pay interest on the
principal balance of the Loan at a rate which could subject any Lender to either
civil or criminal liability as a result of being in excess of the Maximum Legal
Rate. If by the terms of this Agreement or the Loan Documents, Borrower is at
any time required or obligated to pay interest on the principal balance due
hereunder at a rate in excess of the Maximum Legal Rate, the interest rate or
the Default Rate, as the case may be, shall be deemed to be immediately reduced
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal and
not on account of the interest due hereunder. All sums paid or agreed to be paid
to Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.

2.19. Collateral Pool. The obligations of Borrower under the Loan Documents
shall be secured by a perfected first priority security interest to be held by
the Administrative Agent for the benefit of the Lenders in the Collateral,
including the Pledged Equity Interests with respect to those Collateral Assets.
Such security interest shall be evidenced from time to time by the Collateral
Assignment and the other Security Documents. The Security Documents with respect
to the Collateral Assets shall be executed, delivered and filed not later than
the Agreement Execution Date.

2.20 Tenant Improvement Reserve Fund. Borrower has deposited $491,243 with
Administrative Agent on the date hereof to be used to pay tenant improvement
costs in connection with the Collateral Assets, up to $296,132 with respect to
the Collateral Asset in Hialeah and up to $195,111 with respect to the
Collateral Asset in Miami Springs, provided that any unused amount at one
Collateral Asset shall not be available for use at the other Collateral Asset.
The amount so deposited shall hereinafter be referred to as the “Tenant
Improvement Reserve Fund”. Administrative Agent shall make disbursements from
the Tenant Improvement Reserve Fund to Borrower or to such payees as Borrower
may direct in writing to pay for tenant improvement obligations incurred by
Borrower. All such expenses shall be approved by Administrative Agent in its
reasonable discretion. Administrative Agent shall make disbursements as
requested by Borrower upon receipt of a certification by the inspecting
architect that all such work has been satisfactorily completed pursuant to a
Lease entered into in accordance with the requirements set forth herein, in
increments of no less than $5,000.00 upon delivery by Borrower of Administrative
Agent’s standard form of draw request accompanied by copies of paid invoices for
the amounts requested and, if required by Administrative Agent, lien waivers and
releases from all parties furnishing materials and/or services in connection
with the requested payment, provided that Borrower shall not be obligated to
provide lien waivers from those parties whose contract payments, in the
aggregate, amount to less than $100,000. Disbursements for tenant improvement
costs shall be limited to a maximum of $1.00 per square foot leased.

2.21 Leasing Commission Reserve Fund. Borrower has deposited $533,024 with
Administrative Agent on the date hereof to be used to pay leasing commissions in
connection with the Collateral Assets, up to $242,828 with respect to the
Collateral Asset in Hialeah and up to $290,196 with respect to the Collateral
Asset in Miami Springs, provided that any unused amount at one Collateral Asset
shall not be available for use at the other Collateral Asset. The amount so

 

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deposited shall hereinafter be referred to as the “Leasing Commission Reserve
Fund”. Administrative Agent shall make disbursements from the Leasing Commission
Reserve Fund to Borrower or to such payees as Borrower may direct in writing to
pay for leasing commissions at such Collateral Assets as incurred by Borrower.
All such expenses shall be approved by Administrative Agent in its reasonable
discretion. Administrative Agent shall make disbursements as requested by
Borrower upon receipt of documentation satisfactory to Administrative Agent.
Disbursements for leasing commissions on any single lease shall be limited to a
maximum of 20% of the pro forma first year’s rent under such lease.

2.22 Interest Reserve Fund. Borrower has deposited $175,000 with Administrative
Agent on the Agreement Execution Date which shall not be available to Borrower
and may be used to pay interest on the Loan at the election of the
Administrative Agent at any time that an Event of Default has occurred and is
continuing. The amount so deposited shall hereinafter be referred to as the
“Interest Reserve Fund”. Administrative Agent shall not be obligated to make
disbursements from the Interest Reserve Fund to pay interest as it becomes due
hereunder prior to an Event of Default and all such interest payments shall be
made by Borrower from Borrower’s own funds.

2.23 Reserve Funds Generally.

(a) Borrower grants to Administrative Agent a first-priority perfected security
interest in the Tenant Improvement Reserve Fund, the Leasing Commission Reserve
Fund and the Interest Reserve Fund (each a “Reserve Fund”) and any and all
monies now or hereafter deposited in each Reserve Fund as additional security
for payment of the Obligations. Until expended or applied in accordance
herewith, the Reserve Funds shall constitute additional security for the
Obligations. At any time after the date that the Collateral Pool Implied DSCR
exceeds 1.25 to 1, the Administrative Agent shall, within two (2) Business Days
after receipt of a written request from Borrower for the release of the
remaining unfunded Reserve Funds accompanied by a certificate and any supporting
documentation reasonably required by Administrative Agent, release and deliver
the Reserve Funds to the Borrower.

(b) Upon the occurrence of an Event of Default, Administrative Agent may, in
addition to any and all other rights and remedies available to Administrative
Agent, apply any sums then present in any or all of the Reserve Funds to the
payment of the Obligations in any order in its sole discretion.

(c) The Reserve Funds shall not constitute trust funds and may be commingled
with other monies held by Administrative Agent. Borrower shall not be entitled
to interest on any of the Reserve Funds.

(d) Borrower shall not, without obtaining the prior written consent of
Administrative Agent, further pledge, assign or grant any security interest in
any Reserve Fund or the monies deposited therein or permit any lien or
encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1
Financing Statements, except those naming Administrative Agent as the secured
party, to be filed with respect thereto.

(e) Borrower shall indemnify Administrative Agent and the Lenders and hold
Administrative Agent and the Lenders harmless from and against any and all
actions, suits, claims, demands, liabilities, losses, damages, obligations and
costs and expenses (including litigation costs and reasonable attorneys fees and
expenses) arising from or in any way connected with the Reserve Funds or the
performance of the obligations for which the Reserve Funds were established,
except to

 

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the extent arising from the gross negligence or willful misconduct of
Administrative Agent or any of the Lenders or their respective agents or
employees. Borrower shall assign to Administrative Agent for the benefit of the
Lenders all rights and claims Borrower may have against all Persons supplying
labor, materials or other services which are to be paid from or secured by the
Reserve Funds; provided, however, that Administrative Agent may not pursue any
such right or claim unless an Event of Default has occurred and remains uncured.

ARTICLE III.

CHANGE IN CIRCUMSTANCES

3.1. Yield Protection. Subject to the provisions of Section 3.6, if, on or after
the date of this Agreement, the adoption of any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any change in the interpretation or
administration thereof by any governmental or quasi-governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender or applicable Lending
Installation with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency:

(i) subjects any Lender or any applicable Lending Installation party hereto to
any Taxes, or changes the basis of taxation of payments (other than with respect
to Excluded Taxes) to any Lender in respect of its LIBOR Loans, or

(ii) imposes or increases or makes applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender or any applicable
Lending Installation, or

(iii) imposes any other condition the result of which is to increase the cost to
any Lender or any applicable Lending Installation of making, funding or
maintaining its LIBOR Loans, or reduces any amount receivable by any Lender or
any applicable Lending Installation in connection with its LIBOR Loans, or
requires any Lender or any applicable Lending Installation to make any payment
calculated by reference to the amount of LIBOR Loans, by an amount deemed
material by such Lender as the case may be,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation, as the case may be, of making or maintaining
its LIBOR Loans or to reduce the return received by such Lender or applicable
Lending Installation in connection with such LIBOR Loans then, subject to the
provisions of Section 3.6, Borrower shall pay such Lender such additional amount
or amounts as will compensate such Lender for such increased cost or reduction
in amount received.

3.2. Changes in Capital Adequacy Regulations. If a Lender in good faith
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation controlling
such Lender is increased as a result of a Change (as hereinafter defined), then,
within 15 days of demand by such Lender, Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender in good faith determines is
attributable to this Agreement, its outstanding credit exposure hereunder or its
obligation to make Loans hereunder (after taking into account such Lender’s
policies as to capital adequacy). “Change” means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines (as hereinafter defined)
or (ii) any adoption

 

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of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender. “Risk-Based
Capital Guidelines” means (i) the risk-based capital guidelines in effect in the
United States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the June 2006 report of the Basel
Committee on Banking Regulation and Supervisory Practices Entitled “Basel II:
International Convergence of Capital Measurements and Capital Standards: A
Revised Framework,” including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.

3.3. Availability of Types of Advances. If any Lender in good faith determines
that maintenance of any of its LIBOR Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, the Administrative Agent shall, with written notice to
Borrower, suspend the availability of the affected Type of Advance and require
any LIBOR Advances of the affected Type to be repaid; or if the Required Lenders
in good faith determine that (i) deposits of a type or maturity appropriate to
match fund LIBOR Advances are not available, the Administrative Agent shall,
with written notice to Borrower, suspend the availability of the affected Type
of Advance with respect to any LIBOR Advances made after the date of any such
determination, or (ii) an interest rate applicable to a Type of Advance does not
accurately reflect the cost of making a LIBOR Advance of such Type, then, if for
any reason whatsoever the provisions of Section 3.1 are inapplicable, the
Administrative Agent shall, with written notice to Borrower, suspend the
availability of the affected Type of Advance with respect to any LIBOR Advances
made after the date of any such determination. If Borrower is required to so
repay a LIBOR Advance, Borrower may concurrently with such repayment borrow from
the Lenders, in the amount of such repayment, a Base Rate Advance.

3.4. Funding Indemnification. If any payment of a LIBOR Advance occurs on a date
which is not the last day of the applicable LIBOR Interest Period, whether
because of acceleration, prepayment or otherwise, or a ratable LIBOR Advance is
not made on the date specified by Borrower for any reason other than default by
the Lenders or as a result of unavailability pursuant to Section 3.3, Borrower
will indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost (incurred or expected
to be incurred) in liquidating or employing deposits acquired to fund or
maintain the LIBOR Advance and shall pay all such losses or costs within fifteen
(15) days after written demand therefor.

3.5. Taxes.

(i) All payments by Borrower to or for the account of any Lender or the
Administrative Agent hereunder or under any Note shall be made free and clear of
and without deduction for any and all Taxes. If Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent, (a) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.5) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (b) Borrower shall make
such deductions, (c) Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) Borrower shall furnish to
the Administrative Agent the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.

 

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(ii) In addition, Borrower hereby agrees to pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any Note or from the
execution or delivery of, or otherwise with respect to, this Agreement or any
Note (“Other Taxes”).

(iii) Borrower hereby agrees to indemnify the Administrative Agent and each
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Administrative Agent or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Administrative Agent or such Lender makes demand therefor pursuant
to Section 3.6.

(iv) Each Lender that is not incorporated under the laws of the United States of
America or a state thereof (each a “Non-U.S. Lender”) agrees that it will, not
more than ten Business Days after the date of this Agreement, (i) deliver to
each of Borrower and the Administrative Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in
either case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, and (ii) deliver to each of Borrower and the Administrative Agent a
United States Internal Revenue Form W-8 or W-9, as the case may be, and certify
that it is entitled to an exemption from United States backup withholding tax.
Each Non-U.S. Lender further undertakes to deliver to each of Borrower and the
Administrative Agent (x) renewals or additional copies of such form (or any
successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by Borrower or the Administrative Agent.
All forms or amendments described in the preceding sentence shall certify that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises Borrower and the Administrative Agent that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax.

(v) For any period during which a Non-U.S. Lender has failed to provide Borrower
with an appropriate form pursuant to clause (iv), above (unless such failure is
due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States.

(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate following receipt of such documentation.

 

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(vii) If the U.S. Internal Revenue Service or any other governmental authority
of the United States or any other country or any political subdivision thereof
asserts a claim that the Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Administrative Agent of a change in circumstances which rendered its
exemption from withholding ineffective, or for any other reason), such Lender
shall indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax, withholding therefor, or
otherwise, including penalties and interest, and including taxes imposed by any
jurisdiction on amounts payable to the Administrative Agent under this
subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Administrative Agent, which
attorneys may be employees of the Administrative Agent). The obligations of the
Lenders under this Section 3.5(vii) shall survive the payment of the Obligations
and termination of this Agreement and any such Lender obligated to indemnify the
Administrative Agent shall not be entitled to indemnification from Borrower with
respect to such amounts, whether pursuant to this Article or otherwise, except
to the extent Borrower participated in the actions giving rise to such
liability.

3.6. Lender Statements; Survival of Indemnity. If any Lender becomes entitled to
claim any additional amounts pursuant to Sections 3.1, 3.2 or 3.5, Borrower
shall not be required to pay the same unless they are the result of requirements
imposed generally on lenders similar to such Lender and not the result of some
specific reserve or similar requirement imposed on such Lender as a result of
such Lender’s special circumstances. If any Lender becomes entitled to claim any
additional amounts pursuant to Sections 3.1, 3.2 or 3.5, such Lender shall
provide Borrower with not less than thirty (30) days written notice (with a copy
to the Administrative Agent) specifying in reasonable detail the event by reason
of which it has become so entitled and the additional amount required to fully
compensate Lender for such additional cost or reduced amount; provided that
Borrower is not required to compensate Lender pursuant to Sections 3.1, 3.2 or
3.5 for any increased costs or reductions incurred more than ninety (90) days
prior to the date that such Lender notifies Borrower of the events giving rise
to such increased costs or reductions and of such Lender’s intention to claim
compensation therefore. To the extent reasonably possible, each Lender shall
designate an alternate Lending Installation with respect to its LIBOR Loans to
reduce any liability of Borrower to such Lender under Sections 3.1, 3.2 and 3.5
or to avoid the unavailability of LIBOR Advances under Section 3.3, so long as
such designation is not, in the reasonable judgment of such Lender,
disadvantageous to such Lender. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a LIBOR Loan shall be calculated as though each Lender funded
its LIBOR Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the LIBOR Base
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by Borrower of such written
statement. The obligations of Borrower under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this Agreement.

 

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ARTICLE IV.

CONDITIONS PRECEDENT

4.1. Initial Advance. The Lenders shall not be required to make the initial
Advance hereunder unless (a) Borrower shall, prior to or concurrently with such
Advance or issuance, have paid all fees due and payable to the Lenders and the
Administrative Agent hereunder, and (b) Borrower shall have furnished to the
Administrative Agent, with sufficient copies for the Lenders, the following:

(i) The duly executed originals of the Loan Documents, including the Notes,
payable to the order of each of the Lenders, this Agreement, the Subsidiary
Guaranty, the Parent Guaranty, the Collateral Assignment and the other Security
Documents;

(ii)(A) Certificates of good standing for Borrower, the Parent Guarantor and
each Subsidiary Guarantor, from the State of Delaware for Borrower and the
states of organization of the Parent Guarantor and each Subsidiary Guarantor,
certified by the appropriate governmental officer and dated not more than sixty
(60) days prior to the Agreement Execution Date, and (B) foreign qualification
certificates for each Subsidiary Guarantor, certified by the appropriate
governmental officer and dated not more than sixty (60) days prior to the
Agreement Execution Date, for each other jurisdiction where the failure of such
Subsidiary Guarantor to so qualify or be licensed (if required) is reasonably
expected to have a Material Adverse Effect;

(iii) Copies of the formation documents (including code of regulations, if
appropriate) of Borrower, the Parent Guarantor and the Subsidiary Guarantors,
certified by an officer of Borrower, Parent Guarantor or such Subsidiary
Guarantor, as appropriate, together with all amendments thereto, provided that a
certificate of no change from Borrower may be delivered if no changes have
occurred in such documents since their delivery under the Original Credit
Agreement;

(iv) Incumbency certificates, executed by officers of Borrower, Parent Guarantor
and the Subsidiary Guarantors, which shall identify by name and title and bear
the signature of the Persons authorized to sign the Loan Documents and to make
borrowings hereunder on behalf of Borrower, upon which certificate the
Administrative Agent and the Lenders shall be entitled to rely until informed of
any change in writing by Borrower, Parent Guarantor or any such Subsidiary
Guarantor and provided further that a certificate of no change from Borrower may
be delivered if no changes have occurred in such certificates since their
delivery under the Original Credit Agreement;

(v) Copies, certified by a Secretary or an Assistant Secretary of Borrower,
Parent Guarantor and each Subsidiary Guarantor, of the Board of Directors’
resolutions (and resolutions of other bodies, if any are reasonably deemed
necessary by counsel for any Lender) authorizing the Advances provided for
herein, with respect to Borrower, and the execution, delivery and performance of
the Loan Documents to be executed and delivered by Borrower, Parent Guarantor
and each Subsidiary Guarantor hereunder;

(vi) A written opinion of Borrower’s, Parent Guarantor’s and Subsidiary
Guarantors’ counsel, addressed to the Lenders in form and substance as the
Administrative Agent may reasonably approve;

 

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(vii) A certificate, signed by an officer of Borrower, stating that on the
initial Borrowing Date no Default or Unmatured Default has occurred and is
continuing and that all representations and warranties of Borrower are true and
correct as of the initial Borrowing Date provided that such certificate is in
fact true and correct;

(viii) The most recent financial statements of Borrower;

(ix) Copies of the UCC financing statement, judgment, and tax lien searches with
respect to Borrower, Parent Guarantor and each Subsidiary Guarantor from their
respective states of organization;

(x) Written money transfer instructions, in substantially the form of Exhibit E
hereto, addressed to the Administrative Agent and signed by an Authorized
Officer, together with such other related money transfer authorizations as the
Administrative Agent may have reasonably requested;

(xi) Evidence that all upfront fees due to each of the Lenders under the terms
of their respective commitment letters have been paid, or will be paid out of
the proceeds of the initial Advance hereunder;

(xii) Delivery of all Eligible Collateral Asset Documents and the satisfaction
of all Collateral Inclusion Conditions with respect to the Collateral Assets;
and

(xiii) Such other documents as any Lender or its counsel may have reasonably
requested, the form and substance of which documents shall be reasonably
acceptable to the parties and their respective counsel.

Administrative Agent’s execution of this Agreement and delivery of a fully
executed copy to Borrower shall evidence the Administrative Agent’s
acknowledgement that either Borrower has satisfied each such condition or such
condition has been waived.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to the Lenders that:

5.1. Existence. Borrower is a limited liability company duly organized and
validly existing under the laws of the State of Delaware and is duly qualified,
properly licensed (if required), in good standing and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to be so qualified, licensed and in good
standing and to have the requisite authority would not have a Material Adverse
Effect. Each of Parent Guarantor and Borrower’s Subsidiaries is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.

5.2. Authorization and Validity. Borrower has the corporate power and authority
and legal right to execute and deliver the Loan Documents and to perform its
obligations thereunder. The execution and delivery by Borrower of the Loan
Documents and the performance of its obligations thereunder have been duly
authorized by proper proceedings, and the Loan Documents constitute legal, valid
and binding obligations of Borrower enforceable against Borrower in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights
generally.

 

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5.3. No Conflict; Government Consent. Neither the execution and delivery by
Borrower of the Loan Documents, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate any law,
rule, regulation, order, writ, judgment, injunction, decree or award binding on
Borrower or any of its Subsidiaries or Borrower’s or any Subsidiary’s limited
liability company agreements, or the provisions of any indenture, instrument or
agreement to which Borrower or any of its Subsidiaries is a party or is subject,
or by which it, or its Property, is bound, or conflict with or constitute a
default thereunder, except where such violation, conflict or default is not
reasonably expected to have a Material Adverse Effect, or result in the creation
or imposition of any Lien in, of or on the Property of Borrower or a Subsidiary
pursuant to the terms of any such indenture, instrument or agreement. No order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, any of the Loan
Documents other than the filing of a copy of this Agreement.

5.4. Financial Statements; Material Adverse Effect. All consolidated financial
statements of Parent Guarantor, Borrower and Borrower’s Subsidiaries heretofore
or hereafter delivered to the Lenders were prepared in accordance with GAAP in
effect on the preparation date of such statements and fairly present in all
material respects the consolidated financial condition and operations of
Borrower and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended, subject, in the case of interim financial
statements, to normal and customary year-end adjustments. From the preparation
date of the most recent financial statements delivered to the Lenders through
the Agreement Execution Date, there was no change in the business, properties,
or condition (financial or otherwise) of Parent Guarantor, Borrower and
Borrower’s Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.

5.5. Taxes. Parent Guarantor, Borrower and Borrower’s Subsidiaries have filed
all United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by Parent Guarantor, Borrower or any of
Borrower’s Subsidiaries except such taxes, if any, as are being contested in
good faith and as to which adequate reserves have been provided. No tax liens
have been filed and no claims are being asserted with respect to such taxes. The
charges, accruals and reserves on the books of Parent Guarantor, Borrower and
Borrower’s Subsidiaries in respect of any taxes or other governmental charges
are adequate.

5.6. Litigation and Guarantee Obligations. Except as set forth on Schedule 3
hereto or as set forth in written notice to the Administrative Agent from time
to time, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting Parent Guarantor, Borrower or any of Borrower’s
Subsidiaries which is reasonably be expected to have a Material Adverse Effect.
Borrower has no material contingent obligations not provided for or disclosed in
the financial statements referred to in Section 6.1 or as set forth in written
notices to the Administrative Agent given from time to time after the Agreement
Execution Date on or about the date such material contingent obligations are
incurred.

5.7. Subsidiaries; Investment Affiliates. Schedule 1 hereto contains, an
accurate list of all Subsidiaries of Parent Guarantor, setting forth their
respective jurisdictions of incorporation or

 

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formation and the percentage of their respective capital stock or partnership or
membership interest owned by Parent Guarantor, Borrower or other Subsidiaries.
All of the issued and outstanding shares of capital stock of such Subsidiaries
that are corporations have been duly authorized and issued and are fully paid
and non-assessable. There are no outstanding subscriptions, options, warrants,
commitments, preemptive rights or agreements of any kind (including, without
limitation, any stockholders’ or voting trust agreements) for the issuance,
sale, registration or voting of, or outstanding securities convertible into, any
additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, any such Subsidiary.

5.8. ERISA. The Unfunded Liabilities of all Single Employer Plans do not in the
aggregate exceed $1,000,000. Neither Parent Guarantor, Borrower nor any other
member of the Controlled Group has incurred, or is reasonably expected to incur,
any withdrawal liability to Multiemployer Plans in excess of $250,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither Borrower nor any other members of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan.

5.9. Accuracy of Information. No information, exhibit or report furnished by
Parent Guarantor, Borrower or any of Borrower’s Subsidiaries to the
Administrative Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents contained any material misstatement of fact
or omitted to state a material fact or any fact necessary to make the statements
contained therein not misleading.

5.10. Regulation U. Borrower has not used the proceeds of any Advance to buy or
carry any margin stock (as defined in Regulation U) in violation of the terms of
this Agreement.

5.11. Material Agreements. Neither Parent Guarantor, Borrower nor any Subsidiary
of Borrower is a party to any agreement or instrument or subject to any charter
or other corporate restriction which is reasonably be expected to have a
Material Adverse Effect. Neither Parent Guarantor, Borrower nor any Subsidiary
of Borrower is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in (i) any agreement to
which it is a party, which default is reasonably expected to have a Material
Adverse Effect, or (ii) any agreement or instrument evidencing or governing
Indebtedness, which default would constitute a Default hereunder.

5.12. Compliance With Laws. Borrower and its Subsidiaries have complied with all
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property, except for any non-compliance which would not have a
Material Adverse Effect. Neither Borrower nor any Subsidiary of Borrower has
received any notice to the effect that its operations are not in material
compliance with any of the requirements of applicable federal, state and local
environmental, health and safety statutes and regulations or the subject of any
federal or state investigation evaluating whether any remedial action is needed
to respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could have a Material
Adverse Effect.

5.13. Ownership of Properties. Except as set forth on Schedule 2 hereto, on the
date of this Agreement, Borrower and Borrower’s Subsidiaries will have good and
marketable title, free of all Liens other than those permitted by Section 6.16,
to all of the Property and assets reflected in the financial statements as owned
by it.

 

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5.14. Investment Company Act. Neither Parent Guarantor, nor Borrower nor any
Subsidiary of Borrower or Parent Guarantor is an “investment company” or a
company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended.

5.15. Affiliate Transactions. Except as permitted by Section 6.17, neither
Parent Guarantor, Borrower, nor any of Borrower’s Subsidiaries is a party to or
bound by any agreement or arrangement (whether oral or written) to which any
Affiliate of Borrower or any of Borrower’s Subsidiaries is a party.

5.16. Solvency.

(i) Immediately after the Agreement Execution Date and immediately following the
making of each Loan and after giving effect to the application of the proceeds
of such Loans, (a) the fair value of the assets of Parent Guarantor, Borrower
and Borrower’s Subsidiaries on a consolidated basis, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or otherwise, of
Parent Guarantor, Borrower and Borrower’s Subsidiaries on a consolidated basis;
(b) the present fair saleable value of the Property of Parent Guarantor,
Borrower and Borrower’s Subsidiaries on a consolidated basis will be greater
than the amount that will be required to pay the probable liability of Parent
Guarantor, Borrower and Borrower’s Subsidiaries on a consolidated basis on their
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) Parent Guarantor,
Borrower and Borrower’s Subsidiaries on a consolidated basis will be able to pay
their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) Parent Guarantor,
Borrower and Borrower’s Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in which they
are engaged as such businesses are now conducted and are proposed to be
conducted after the date hereof.

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

5.17. Insurance. Borrower and its Subsidiaries carry insurance on their Projects
with financially sound and reputable insurance companies, in such amounts, with
such deductibles and covering such risks as are required pursuant to the
insurance requirements attached hereto as Exhibit J and made a part hereof:

5.18. REIT Status. Parent Guarantor is qualified as a real estate investment
trust under Section 856 of the Code, is a self-directed and self-administered
real estate investment trust and currently is in compliance in all material
respects with all provisions of the Code applicable to the qualification of
Parent Guarantor as a real estate investment trust.

 

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5.19. Environmental Matters. Each of the following representations and
warranties is true and correct on and as of the Agreement Execution Date except
as disclosed in environmental reports delivered to the Administrative Agent or
on Schedule 4 attached hereto and to the extent that the facts and circumstances
giving rise to any such failure to be so true and correct, in the aggregate, are
not reasonably be expected to have a Material Adverse Effect:

(a) To the best knowledge of Borrower, the Projects of Borrower and its
Subsidiaries do not contain any Materials of Environmental Concern in amounts or
concentrations which constitute a violation of, or could reasonably give rise to
liability of Borrower or any such Subsidiary under, Environmental Laws.

(b) To the best knowledge of Borrower, (i) the Projects of Borrower and its
Subsidiaries and all operations at such Projects are in compliance with all
applicable Environmental Laws, and (ii) with respect to all Projects owned by
Borrower and/or its Subsidiaries (x) for at least two (2) years, have in the
last two years, or (y) for less than two (2) years, have for such period of
ownership, been in compliance in all material respects with all applicable
Environmental Laws.

(c) Neither Borrower nor any of its Subsidiaries has received any notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Projects, nor does Borrower have knowledge or reason to
believe that any such notice will be received or is being threatened.

(d) To the best knowledge of Borrower, Materials of Environmental Concern have
not been transported or disposed of from the Projects of Borrower and its
Subsidiaries in violation of, or in a manner or to a location which could
reasonably give rise to liability of Borrower or any such Subsidiary under,
Environmental Laws, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Projects of
Borrower and its Subsidiaries in violation of, or in a manner that could give
rise to liability of Borrower or any such Subsidiary under, any applicable
Environmental Laws.

(e) No judicial proceedings or governmental or administrative action is pending,
or, to the knowledge of Borrower, threatened, under any Environmental Law to
which Borrower or any of its Subsidiaries is or, to Borrower’s knowledge, will
be named as a party with respect to the Projects of Borrower and its
Subsidiaries, nor are there any consent decrees or other decrees, consent
orders, administrative order or other orders, or other administrative of
judicial requirements outstanding under any Environmental Law with respect to
the Projects of Borrower and its Subsidiaries.

(f) To the best knowledge of Borrower, there has been no release or threat of
release of Materials of Environmental Concern at or from the Projects of
Borrower and its Subsidiaries, or arising from or related to the operations of
Borrower and its Subsidiaries in connection with such Projects in violation of
or in amounts or in a manner that could give rise to liability under
Environmental Laws.

5.20. Collateral Assets. As of the Agreement Execution Date:

(a) Each of the Collateral Assets is not located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made available under
the

 

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National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, as amended, or any successor law or, if any portion of the industrial
buildings on such Properties are located within any such area, the applicable
Subsidiary Guarantor has obtained and will maintain through the Loan Maturity
Date the insurance prescribed in Section 5.17 hereof.

(b) To Borrower’s knowledge, each of the Collateral Assets and the present use
and occupancy thereof are in material compliance with all material zoning
ordinances (without reliance upon adjoining or other properties), health, fire
and building codes, land use laws (including those regulating parking) and
Environmental Laws (except as disclosed on the environmental assessments
delivered to the Administrative Agent pursuant to this Agreement) and other
similar laws (“Applicable Laws”).

(c) Each of the Collateral Assets is served by all utilities required for the
current or contemplated use thereof.

(d) To Borrower’s knowledge, all public roads and streets necessary for service
of and access to each of the Collateral Assets for the current or contemplated
use thereof have been completed, and are open for use by the public, or
appropriate insured private easements are in place.

(e) Except as disclosed in any property condition reports delivered by the
Administrative Agent, Borrower is not aware of any material latent or patent
structural or other significant deficiency of the Collateral Assets. Each of the
Collateral Assets is free of damage and waste that would materially and
adversely affect the value of such Collateral Asset, is in good condition and
repair and to Borrower’s knowledge there is no deferred maintenance other than
ordinary wear and tear. Each of the Collateral Assets is free from damage caused
by fire or other casualty.

(f) To Borrower’s knowledge, all liquid and solid waste disposal, septic and
sewer systems located on the Collateral Assets are in a good and safe condition
and repair and to Borrower’s knowledge, in material compliance with all
Applicable Laws with respect to such systems.

(g) To Borrower’s knowledge, all improvements on each Collateral Asset lie
within the boundaries and building restrictions of the legal description of
record of such Collateral Asset, no improvements encroach upon easements
benefiting the Collateral Assets other than encroachments that do not materially
adversely affect the use or occupancy of the Collateral Assets and no
improvements on adjoining properties encroach upon the Collateral Assets or upon
easements benefiting the Collateral Assets other than encroachments that do not
materially adversely affect the use or occupancy of the Collateral Assets.

(h) To Borrower’s knowledge, all Leases are in full force and effect. Borrower
is not in default under any Lease and Borrower has disclosed to Lenders in
writing any material default, of which Borrower has knowledge, under any Lease
which demises any material portion of the related Collateral Asset.

 

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(i) There are no material delinquent taxes, ground rents, water charges, sewer
rents, assessments, insurance premiums, leasehold payments, or other outstanding
charges affecting the Collateral Assets except to the extent such items are
being contested in good faith by appropriate proceedings and as to which
adequate reserves have been provided and there is no risk of loss, forfeiture,
or sale of any interest in the Collateral Assets during such proceedings. Each
of the Collateral Assets is taxed separately without regard to any other
property not included in the Collateral.

(j) No condemnation proceeding or eminent domain action is pending or threatened
against any of the Collateral Assets which would impair the use, value, sale or
occupancy of such Collateral Asset (or any portion thereof) in any material
manner.

(k) Each of the Collateral Assets is not, nor is any direct or indirect interest
of Borrower or any Subsidiary Guarantor in any Collateral Asset or in the
Pledged Equity Interest with respect to any owner of a Collateral Asset, subject
to any Lien other than Permitted Liens set forth in clauses (i) through (iv) of
Section 6.14 or to any Negative Pledge (other than the Liens and Negative
Pledges created pursuant to this Agreement to secure the obligations of Borrower
and the Subsidiary Guarantors).

(l) The Collateral Assignment creates a valid first priority security interest
in the Pledged Equity Interests, subject only to Permitted Liens.

5.21. Intellectual Property.

(i) Parent Guarantor, Borrower and each of Borrower’s Subsidiaries owns or has
the right to use, under valid license agreements or otherwise, all material
patents, licenses, franchises, trademarks, trademark rights, trade names, trade
name rights, trade secrets and copyrights (collectively, “Intellectual
Property”) used in the conduct of their respective businesses as now conducted
and as contemplated by the Loan Documents, without known conflict with any
patent, license, franchise, trademark, trade secret, trade name, copyright, or
other proprietary right of any other Person.

(ii) Parent Guarantor, Borrower and each of Borrower’s Subsidiaries have taken
all such steps as they deem reasonably necessary to protect their respective
rights under and with respect to such Intellectual Property.

(iii) No claim has been asserted by any Person with respect to the use of any
Intellectual Property by Parent Guarantor, Borrower or any of Borrower’s
Subsidiaries, or challenging or questioning the validity or effectiveness of any
Intellectual Property.

(iv) The use of such Intellectual Property by Parent Guarantor, Borrower and
each of Borrower’s Subsidiaries does not infringe on the rights of any Person,
subject to such claims and infringements as do not, in the aggregate, give rise
to any liabilities on the part of Borrower or any of Borrower’s Subsidiaries
that could be reasonably expected to have a Material Adverse Effect.

5.22. Broker’s Fees. No broker’s or finder’s fee, commission or similar
compensation will be payable with respect to the transactions contemplated
hereby. Except as provided in the Fee

 

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Letter, no other similar fees or commissions will be payable by any Lender for
any other services rendered to Parent Guarantor, Borrower, any of the
Subsidiaries of Borrower or any other Person ancillary to the transactions
contemplated hereby.

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

5.24. 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 Parent Guarantor, Borrower or the
Subsidiary Guarantors 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.

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

5.26. Subordination. Borrower is not a party to or bound by any agreement,
instrument or indenture that may require the subordination in right or time of
payment of any of the Obligations to any other indebtedness or obligation of any
such Persons.

5.27. Tax Shelter Representation. Borrower does not intend to treat the Loans,
and/or related transactions as being a “reportable transaction” (within the
meaning of United States Treasury Regulation Section 1.6011-4). In the event
Borrower determines to take any action inconsistent with such intention, it will
promptly notify the Administrative Agent thereof. If Borrower so notifies the
Administrative Agent, Borrower acknowledges that one or more of the Lenders may
treat its Loans as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain the
lists and other records required by such Treasury Regulation.

5.28. Anti-Terrorism Laws.

(i) None of Parent Guarantor, Borrower and Borrower’s Subsidiaries is in
violation of any laws or regulations relating to terrorism or money laundering
(“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001 (the “Executive Order”) and the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, Public Law 107-56.

 

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(ii) None of Parent Guarantor, Borrower and Borrower’s Subsidiaries, or any of
their brokers or other agents acting with respect to or benefiting from this
Agreement is a Prohibited Person. A “Prohibited Person” is any of the following:

(1) a person or entity that is listed in the Annex to, or is otherwise subject
to the provisions of, the Executive Order;

(2) a person or entity owned or controlled by, or acting for or on behalf of,
any person or entity that is listed in the Annex to, or is otherwise subject to
the provisions of, the Executive Order;

(3) a person or entity with whom any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;

(4) a person or entity who commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order; or

(5) a person or entity that is named as a “specially designated national and
blocked person” on the most current list published by the U.S. Treasury
Department Office of Foreign Asset Control at its official website or any
replacement website or other replacement official publication of such list.

(iii) None of Parent Guarantor, Borrower and Borrower’s Subsidiaries
(1) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Prohibited Person,
(2) deals in, or otherwise engages in any transaction relating to, any property
or interests in property blocked pursuant to the Executive Order, or
(iii) engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law.

None of Parent Guarantor, Borrower and Borrower’s Subsidiaries shall (1) conduct
any business or engage in making or receiving any contribution of funds, goods
or services to or for the benefit of any Prohibited Person, (ii) deal in, or
otherwise engage in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order or any other Anti-Terrorism
Law, or (iii) engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law (and Borrower shall
deliver to Administrative Agent any certification or other evidence requested
from time to time by Administrative Agent in its reasonable discretion,
confirming Borrower’s compliance herewith).

5.29. Survival. All statements contained in any certificate, financial statement
or other instrument delivered by or on behalf of Parent Guarantor, Borrower or
any of Borrower’s Subsidiaries to the Administrative Agent or any Lender
pursuant to or in connection with this Agreement or any of the other Loan
Documents (including, but not limited to, any such statement made in or in
connection with any amendment thereto or any statement contained in any
certificate, financial statement or other instrument delivered by or on behalf
of Parent Guarantor, Borrower or any of Borrower’s Subsidiaries prior to the
Agreement Execution Date and delivered to the Administrative Agent or any Lender
in connection with closing the transactions contemplated hereby) shall
constitute representations and warranties made by Borrower under this Agreement.
All such representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the Loan Documents and the making of
the Loan.

 

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ARTICLE VI.

COVENANTS

During the term of this Agreement, unless the Required Lenders shall otherwise
consent in writing:

6.1. Financial Reporting. Borrower will maintain, for itself and each
Subsidiary, on a consolidated basis with Parent Guarantor, a system of
accounting established and administered in accordance with GAAP, and furnish to
the Lenders:

(i) As soon as available, but in any event not later than 45 days after the
close of each of the first three fiscal quarters of each year, for the
Consolidated Group, an unaudited consolidated balance sheet as of the close of
each such period and the related unaudited consolidated statements of income and
retained earnings and of cash flows of the Consolidated Group for such period
and the portion of the fiscal year through the end of such period, setting forth
in each case in comparative form the figures for the previous year, all
certified by an Authorized Officer;

(ii) As soon as available, but in any event not later than 45 days after the
close of each fiscal quarter, for the Consolidated Group, the following reports
in form and substance reasonably satisfactory to the Administrative Agent, all
certified by the Parent Guarantor’s chief financial officer or chief accounting
officer: an updated rent roll and operating statement for each Collateral Asset
and such other information on the Collateral Assets as may be reasonably
requested;

(iii) As soon as available, but in any event not later than 90 days after the
close of each fiscal year, for the Consolidated Group audited financial
statements, including a consolidated balance sheet as at the end of such year
and the related consolidated statements of income and retained earnings and of
cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, without a “going concern” or like qualification
or exception, or qualification arising out of the scope of the audit, prepared
by independent certified public accountants of nationally recognized standing
reasonably acceptable to Administrative Agent;

(iv) Together with the quarterly and annual financial statements required
hereunder, a compliance certificate in substantially the form of Exhibit C
hereto signed by an Authorized Officer showing the calculations and computations
necessary to determine compliance with this Agreement and stating that, to such
officer’s knowledge, no Default or Unmatured Default exists, or if, to such
officer’s knowledge, any Default or Unmatured Default exists, stating the nature
and status thereof;

(v) As soon as possible and in any event within 10 days after receipt by an
Authorized Officer of Borrower, a copy of (a) any notice or claim to the effect
that Borrower or any of its Subsidiaries is or may be liable to any Person as a
result of the release by Borrower, any of its Subsidiaries, or any other Person
of any toxic or hazardous waste or substance into the environment, and (b) any
notice alleging any violation of any federal, state or local environmental,
health or safety law or regulation by Borrower or any of its Subsidiaries,
which, in either case, is reasonably expected to have a Material Adverse Effect;

 

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(vi) Promptly upon becoming aware of the same and to the extent Parent
Guarantor, Borrower, or any of its Subsidiaries, are aware of the same, notice
of the commencement of any proceeding or investigation by or before any
Governmental Authority and any action or proceeding in any court or other
tribunal or before any arbitrator against or in any other way relating adversely
to, or adversely affecting, Parent Guarantor, Borrower, any of its Subsidiaries
or any of their respective properties, assets or businesses which involve claims
individually or in the aggregate in excess of $5,000,000, and notice of the
receipt of notice that any United States income tax returns of Parent Guarantor,
Borrower or any of its Subsidiaries are being audited;

(vii) Promptly upon becoming available, a copy of any amendment to a formation
document of Borrower;

(viii) Promptly upon becoming aware of the same, notice of any change in the
senior management of Parent Guarantor, Borrower, or any of its Subsidiaries, any
change in the business, assets, liabilities, financial condition, results of
operations or business prospects of Borrower, or any of its Subsidiaries which
has or is reasonably be expected to have a Material Adverse Effect, or any other
event or circumstance which has had or is reasonably be expected to have a
Material Adverse Effect;

(ix) Promptly upon becoming aware of entry of the same, notice of any order,
judgment or decree in excess of $5,000,000 having been entered against Parent
Guarantor, Borrower, or any of its Subsidiaries or any of their respective
properties or assets;

(x) Promptly upon receipt of the same, notice if Parent Guarantor, Borrower, or
any of its Subsidiaries shall receive any notification from any Governmental
Authority alleging a violation of any Applicable Law or any inquiry which is
reasonably be expected to have a Material Adverse Effect; and

(xi) Such other information (including, without limitation, financial statements
for Parent Guarantor, Borrower and non-financial information) as the
Administrative Agent or any Lender may from time to time reasonably request.

6.2. Use of Proceeds. Borrower will use the proceeds of the Advances to finance
its investment in the Collateral Assets, to finance Borrower’s or its
Subsidiaries’ acquisitions of Projects or for general corporate working capital
purposes. Borrower will not, nor will it permit any Subsidiary to, use any of
the proceeds of the Advances (i) to purchase or carry any “margin stock” (as
defined in Regulation U) if such usage could constitute a violation of
Regulation U by any Lender, (ii) to fund any purchase of, or offer for, any
Capital Stock of any Person, unless such Person has consented to such offer
prior to any public announcements relating thereto, or (iii) to make any Entity
Acquisition other than a Permitted Acquisition.

6.3. Notice of Default. Borrower will give, and will cause each of its
Subsidiaries to give, prompt notice in writing to the Administrative Agent and
the Lenders of the occurrence of any Default or Unmatured Default and of any
other development, financial or otherwise, which could reasonably be expected to
have a Material Adverse Effect.

 

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6.4. Conduct of Business. Parent Guarantor and Borrower will do, and will cause
each of their respective Subsidiaries to do, all things necessary to remain duly
incorporated or duly qualified, validly existing and in good standing as a real
estate investment trust, corporation, general partnership or limited
partnership, as the case may be, in its jurisdiction of incorporation/formation
(except with respect to mergers permitted hereunder and Permitted Acquisitions)
and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, in each jurisdiction in which
any Project owned (or leased pursuant to an Qualified Ground Lease) by it is
located, and in each other jurisdiction in which the character of its properties
or the nature of its business requires such qualification and authorization and
where the failure to be so authorized and qualified is reasonably be expected to
have a Material Adverse Effect, and to carry on and conduct their businesses in
substantially the same manner as they are presently conducted where the failure
to do so is reasonably be expected to have a Material Adverse Effect and,
specifically, neither Parent Guarantor, Borrower nor Borrower’s Subsidiaries may
undertake any business other than the acquisition, development, ownership,
management, operation and leasing of industrial properties, and ancillary
businesses specifically related to industrial properties. Parent Guarantor and
Borrower shall, and shall cause each of their respective Subsidiaries, to
develop and implement such programs, policies and procedures as are necessary to
comply with the USA Patriot Act and shall promptly advise the Administrative
Agent in writing in the event that any of such Persons shall determine that any
investors in such Persons are in violation of such act.

6.5. Taxes. Parent Guarantor and Borrower will pay, and will cause each of their
respective Subsidiaries to pay, when due all taxes, assessments and governmental
charges and levies upon them of their income, profits or Projects, except those
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside.

6.6. Insurance. Borrower will, and will cause each of its Subsidiaries to,
maintain insurance which is consistent with the representation contained in
Section 5.17 on all their Projects and Borrower will furnish to any Lender upon
reasonable request full information as to the insurance carried.

6.7. Compliance with Laws. Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which they may be subject, the
violation of which is reasonably be expected to have a Material Adverse Effect.

6.8. Maintenance of Properties. Borrower will, and will cause each of its
Subsidiaries to, do all things necessary to maintain, preserve, protect and keep
their respective Projects in good repair, working order and condition, ordinary
wear and tear excepted.

6.9. Inspection. Borrower will, and will cause each of its Subsidiaries to,
permit the Lenders upon reasonable advance notice, by their respective
representatives and agents, to inspect during regular business hours any of the
Projects, corporate books and financial records of Borrower and each of their
respective Subsidiaries, to examine and make copies of the books of accounts and
other financial records of Parent Guarantor, Borrower and each of their
respective Subsidiaries, and to discuss the affairs, finances and accounts of
Parent Guarantor, Borrower and each of its Subsidiaries with officers thereof,
and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Lenders may designate.

6.10. Maintenance of Status; Modification of Formation Documents. Parent
Guarantor shall at all times maintain its status as a self-directed,
self-administered real estate investment trust in

 

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compliance with all applicable provisions of the Code relating to such status.
Neither Parent Guarantor nor Borrower shall amend any of its articles of
incorporation, limited liability company agreements, or by-laws, as applicable,
without the prior written consent of the Administrative Agent in a manner that
is reasonably expected to have a Material Adverse Effect. Parent Guarantor and
Borrower shall not, and shall not permit any Subsidiary of Borrower to, enter
into any amendment or modification of any formation documents of Borrower or
such Subsidiary which would have a Material Adverse Effect.

6.11. Dividends. Provided there is no then-existing Default hereunder with
respect to the payment of any of the Obligations, Parent Guarantor shall be
permitted to declare and pay dividends on its Capital Stock from time to time in
amounts determined by Parent Guarantor, provided, however, that in no event
shall Parent Guarantor declare or pay dividends on its Capital Stock or make
distributions with respect thereto (including dividends paid and distributions
actually made with respect to gains on property sales and any Preferred
Dividends as Parent Guarantor may be contractually required to make from time to
time) if such dividends and distributions paid on account of any fiscal year of
Parent Guarantor, in the aggregate for such period, would exceed (A) 110% of
Funds from Operations for the first fiscal year of Parent Guarantor ending after
the Agreement Execution Date, (B) 100% of Funds from Operations for the second
fiscal year of Parent Guarantor ending after the Agreement Execution Date and
(C) 95% of Funds From Operations for each fiscal year of Parent Guarantor
thereafter. Notwithstanding anything to the contrary contained in this
Agreement, including, without limitation, this Section 6.11, Parent Guarantor
shall be permitted at all times to distribute whatever amount of dividends is
necessary to maintain its tax status as a real estate investment trust.

6.12. Merger; Sale of Assets. Borrower will not, nor will it permit any of its
Subsidiaries to, without prior notice to the Administrative Agent and without
providing a certification of compliance with the Loan Documents enter into any
merger (other than mergers in which such entity is the survivor and mergers of
Subsidiaries (but not Borrower) as part of transactions that are Permitted
Acquisitions provided that following such merger the target entity becomes a
Wholly-Owned Subsidiary of Borrower), consolidation, reorganization or
liquidation or transfer or otherwise dispose of all or a Substantial Portion of
their Properties, except for (a) such transactions that occur between
Wholly-Owned Subsidiaries or between Borrower and a Wholly-Owned Subsidiary and
(b) mergers solely to change the jurisdiction of organization of a Subsidiary
Guarantor, provided that, in any event, approval in advance by the Required
Lenders shall be required for transfer or disposition in any quarter of assets
with an aggregate value greater than 15% of Consolidated Gross Asset Value, or
any merger of the Parent Guarantor, Company or Subsidiary into another operating
entity which would result in an increase to the Consolidated Gross Asset Value
of more than 50%.

6.13. Subsidiary Guarantors. Borrower shall cause each of its existing
Wholly-Owned Subsidiaries which owns a Collateral Asset, as identified on
Schedule 5 attached hereto and made a part hereof, to execute and deliver to the
Administrative Agent the Subsidiary Guaranty.

6.14. Sale and Leaseback. Borrower will not, nor will it permit any of its
Subsidiaries to, sell or transfer a Collateral Asset in order to concurrently or
subsequently lease such Property as lessee.

 

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6.15. Acquisitions and Investments. Borrower will not, nor will it permit any
Subsidiary of Borrower to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries of Borrower), or commitments therefor, or become or remain a
partner in any partnership or joint venture, or to make any Entity Acquisition
of any Person, except:

(i) Cash Equivalents;

(ii) Investments in existing Subsidiaries of Borrower, Investments in
Subsidiaries of Borrower formed for the purpose of developing or acquiring
industrial properties, or Investments in existing or newly formed joint ventures
and partnerships engaged solely in the business of purchasing, developing,
owning, operating, leasing and managing industrial properties;

(iii) transactions permitted pursuant to Section 6.12;

(iv) Investments permitted pursuant to Section 6.23; and

(v) Entity Acquisitions of Persons whose primary operations consist of the
ownership, development, operation and management of industrial properties;

provided that, after giving effect to such Entity Acquisitions and Investments,
Borrower continues to comply with all its covenants herein. Entity Acquisitions
permitted pursuant to this Section 6.15 shall be deemed to be “Permitted
Acquisitions”.

6.16. Liens. Borrower will not, nor will it permit any of its Subsidiaries to,
create, incur, or suffer to exist any Lien in, of or on the Property of Borrower
or any of its Subsidiaries, except:

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

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

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

(iv) Easements, restrictions and such other encumbrances or charges against real
property as are of a nature generally existing with respect to properties of a
similar character and which do not in any material way affect the marketability
of the same or interfere with the use thereof in the business of Borrower or its
Subsidiaries; and

(v) Liens other than Liens described in subsections (i) through (iv) above
arising in connection with any Indebtedness permitted hereunder to the extent
such Liens will not result in a Default in any of Borrower’s covenants herein.

Liens permitted pursuant to this Section 6.16 shall be deemed to be “Permitted
Liens”.

 

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6.17. Affiliates. Borrower will not, nor will it permit any of its Subsidiaries
to, enter into any transaction (including, without limitation, the purchase or
sale of any Property or service) with, or make any payment or transfer to, any
Affiliate except in the ordinary course of business and pursuant to the
reasonable requirements of Borrower’s or such Subsidiary’s business and upon
fair and reasonable terms no less favorable to Borrower or such Subsidiary than
Borrower or such Subsidiary would obtain in a comparable arms-length
transaction.

6.18. Swap Contracts. Borrower will not enter into or remain liable upon, nor
will it permit any Subsidiary to enter into or remain liable upon, any Swap
Contract, except to the extent required to protect Borrower and its Subsidiaries
against increases in interest payable by them under variable interest
Indebtedness.

6.19. Variable Interest Indebtedness. Borrower and its Subsidiaries shall not at
any time permit the outstanding principal balance of Consolidated Total
Indebtedness which bears interest at an interest rate that is not fixed through
the maturity date of such Indebtedness to exceed twenty-five percent (25%) of
Consolidated Gross Asset Value, unless all of such Indebtedness in excess of
such amount is subject to a Swap Contract approved by the Administrative Agent
that effectively converts the interest rate on such excess to a fixed rate.

6.20. Consolidated Tangible Net Worth. Borrower on a consolidated basis with
Parent Guarantor and Borrower’s Subsidiaries shall maintain a Consolidated
Tangible Net Worth of not less than $145,000,000 plus eighty percent (80%) of
the equity contributions or sales of Capital Stock received by Parent Guarantor,
Borrower or any of Borrower’s Subsidiaries after the Agreement Execution Date.

6.21. Indebtedness and Cash Flow Covenants. Borrower on a consolidated basis
with Parent Guarantor and Borrower’s Subsidiaries shall not permit:

(i) Intentionally omitted;

(ii) Intentionally omitted;

(iii) Consolidated Total Indebtedness to be more than 0.60 times Consolidated
Gross Asset Value at any time;

(iv) Adjusted EBITDA to be less than 1.75 times Consolidated Fixed Charges at
any time;

(v) any Recourse Indebtedness to exist, other than the Obligations under this
Agreement and up to $50,000,000 in the aggregate of other Recourse Indebtedness;

6.22. Environmental Matters. Borrower and its Subsidiaries shall:

(a) Comply with, and use all reasonable efforts to ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply with and maintain, and use all reasonable efforts to ensure
that all tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except to the extent that failure to do so is not
be reasonably expected to have a Material Adverse Effect; provided that in no
event shall Borrower or its Subsidiaries be required to modify the terms of
leases, or renewals thereof, with existing tenants

 

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(i) at Projects owned by Borrower or its Subsidiaries as of the date hereof, or
(ii) at Projects hereafter acquired by Borrower or its Subsidiaries as of the
date of such acquisition, to add provisions to such effect.

(b) Conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws, except to the
extent that (i) the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings is not be reasonably expected
to have a Material Adverse Effect, or (ii) Borrower has determined in good faith
that contesting the same is not in the best interests of Borrower and its
Subsidiaries and the failure to contest the same is not be reasonably expected
to have a Material Adverse Effect.

(c) Defend, indemnify and hold harmless Administrative Agent and each Lender,
and their respective officers and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature known or unknown, contingent or otherwise, arising
out of, or in any way relating to the violation of, noncompliance with or
liability under any Environmental Laws applicable to the operations of Borrower,
its Subsidiaries or their Projects (excluding loss arising from actions taken by
the owner of any Collateral Asset [or any other person who is not an Affiliate
of the Borrower] from and after the date on which the Pledged Equity Interests
in the Subsidiary Guarantor owing such Collateral Asset have been sold pursuant
to the exercise of the Lenders’ rights under the Collateral Assignment) or any
orders, requirements or demands of Governmental Authorities related thereto,
including, without limitation, attorney’s and consultant’s fees, investigation
and laboratory fees, response costs, court costs and litigation expenses, except
to the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. This indemnity
shall continue in full force and effect regardless of the termination of this
Agreement.

(d) Prior to the acquisition of a new Project after the Agreement Execution
Date, perform or cause to be performed an environmental investigation which
investigation shall include preparation of a “Phase I” report and, if
appropriate in Borrower’s reasonable discretion, a “Phase II” report, in each
case prepared by a recognized environmental engineer in accordance with
customary standards which discloses that the such Project is not in violation of
the representations and covenants set forth in this Agreement, unless such
violation has been disclosed in writing to the Administrative Agent and
remediation actions satisfactory to the Administrative Agent are being taken and
at a minimum comply with all the specifications and procedures attached hereto
as Exhibit H. In connection with any such investigation, Borrower shall cause to
be prepared a report of such investigation, to be made available to any Lenders
upon reasonable request, for informational purposes and to assure compliance
with the specifications and procedures.

 

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6.23. Permitted Investments.

(a) The Consolidated Group’s aggregate Investment in Investment Affiliates and
(valued at the greater of the cash investment in that entity by the Consolidated
Group or the portion of Consolidated Gross Asset Value attributable to such
entity or its assets, as the case may be) shall not at any time exceed fifteen
percent (15%) of Consolidated Gross Asset Value.

(b) The Consolidated Group’s aggregate Investment in Construction in Progress
(with each asset valued at its cost basis) shall not at any time exceed ten
percent (10%) of Consolidated Gross Asset Value.

(c) The Consolidated Group’s aggregate Investment in Unimproved Land (with each
asset valued at its cost basis) shall not at any time exceed five percent
(5%) of Consolidated Gross Asset Value.

(d) The Consolidated Group’s aggregate Investment in Unimproved Land and Drop
Lots (with each asset valued at its cost basis), in the aggregate, shall not at
any time exceed fifteen percent (15%) of Consolidated Gross Asset Value.

(e) Notwithstanding the foregoing individual limitations by type of asset, the
Consolidated Group’s Investment in the above items (a)-(d) in the aggregate
shall not at any time exceed twenty percent (20%) of Consolidated Gross Asset
Value.

6.24. Lease Approvals. Provided no Default shall have occurred and be continuing
hereunder, Borrower may permit any Subsidiary of Borrower to enter into, modify
or amend any Lease without the prior written consent of any Lender, provided
such proposed Lease (a) provides for rental rates and terms comparable to
existing local market rates and terms (taking into account the type and quality
of the tenant, the length of term and the location and the amount of space
rented) as of the date of such Lease is executed by the applicable Subsidiary
and (b) is an arm’s length transaction with a bona fide independent third-party
tenant whose identity and creditworthiness are appropriate for a property
comparable to the applicable Project. Borrower may also permit any Subsidiary of
Borrower to modify, amend or terminate any Lease without the prior approval of
any Lender, provided, however, in the event that any such Subsidiary terminates
a Lease, any termination fee shall be reserved by such Subsidiary and used for
future leasing commission and tenant inducement costs in connection with
reletting such space.

6.25. Prohibited Encumbrances. Borrower agrees that neither Borrower nor any
other member of the Consolidated Group shall (i) create a Lien against any
Project other than a single first-priority mortgage or deed of trust,
(ii) create a Lien on any Capital Stock or other ownership interests in any
member of the Consolidated Group or any Investment Affiliate (other than
(A) Liens securing the Facility Obligations as provided herein or (B) Liens
against the Capital Stock or other ownership interests in any Subsidiary which
owns only one or more Projects encumbered by a Lien permitted under clause
(i) of this Section 6.25 in favor of the holder of the Lien against such
Project), or (iii) enter into or be subject to any agreement governing any
Indebtedness which constitutes a Negative Pledge (other than restrictions on
further subordinate Liens on Projects or ownership interests therein permitted
to be encumbered under clauses (i) or (ii) of this Section 6.25).

6.26. Further Assurances; Changes to Covenants. Borrower shall, at Borrower’s
cost and expense and upon request of the Administrative Agent, execute and
deliver or cause to be executed and delivered, to the Administrative Agent such
further instruments, documents and certificates, and do and cause to be done
such further acts that may be reasonably necessary or advisable in the

 

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reasonable opinion of the Administrative Agent to carry out more effectively the
provisions and purposes of this Agreement and the other Loan Documents. Borrower
and the Administrative Agent acknowledge and agree that the financial covenants
contained herein regarding Borrower are currently the same as those that apply
to the Revolving Credit Facility. In the event of any changes in such covenants
in the future, so long as the Administrative Agent is acting as agent both under
this Agreement and the Revolving Credit Facility, the Administrative Agent shall
recommend to the Lenders that such financial covenants remain the same under
both facilities, with the understanding that the then-current lenders under such
facilities will have final approval rights over any such changes to the
financial covenants.

6.27. Distribution of Income to Borrower. Borrower shall cause all of its
Subsidiaries to promptly distribute to Borrower (but not less frequently than
once each fiscal quarter of Borrower unless otherwise approved by the
Administrative Agent), whether in the form of dividends, distributions or
otherwise, all profits, proceeds or other income relating to or arising from
such Subsidiaries’ use, operation, financing, refinancing, sale or other
disposition of their respective assets and properties after (a) the payment by
each such Subsidiary of its debt service and operating expenses 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 to be
made to such Subsidiary’s assets and properties approved by such Subsidiary in
the ordinary course of business consistent with its past practices or
(c) funding of reserves required by the terms of any deed of trust, mortgage or
similar lien encumbering any Projects of such Subsidiary.

ARTICLE VII.

DEFAULTS

The occurrence of any one or more of the following events shall constitute a
Default:

7.1. Nonpayment of any principal payment on any Note when due.

7.2. Nonpayment of interest upon any Note or of any facility fee or other
payment Obligations under any of the Loan Documents within five (5) Business
Days after the same becomes due.

7.3. The breach of any of the terms or provisions of Article VI.

7.4. Any representation or warranty made or deemed made by or on behalf of
Parent Guarantor, Borrower or any of Borrower’s Subsidiaries to the Lenders or
the Administrative Agent under or in connection with this Agreement, any Loan,
or any material certificate or information delivered in connection with this
Agreement or any other Loan Document shall be false on the date as of which made
the result of which is reasonably expected to have a Material Adverse Effect;
provided, however, if such untrue representation and warranty is susceptible of
being cured, upon the same not being cured within thirty (30) days of receipt of
notice from the Administrative Agent.

7.5. The breach by Borrower (other than a breach which constitutes a Default
under Section 7.1, 7.2, 7.3 or 7.4) of any of the terms or provisions of this
Agreement which is not remedied within fifteen (15) days after written notice
from the Administrative Agent, or if such breach is not susceptible of being so
remedied using commercially reasonable efforts within such fifteen (15)day
period and so long as Borrower shall have commenced and shall thereafter
diligently pursue cure of the same, such fifteen (15) day period shall be
extended for such time as is reasonably necessary for Borrower to remedy such
breach, such additional period not to exceed ninety (90) days.

 

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7.6. Failure of Parent Guarantor, Borrower or any of Borrower’s Subsidiaries to
pay when due any Recourse Indebtedness in excess of $1,000,000 in the aggregate
or any other Consolidated Outstanding Indebtedness (other than the Obligations
hereunder and Indebtedness under Swap Contracts) in excess of $10,000,000 in the
aggregate (collectively, “Material Indebtedness”); or the default by Parent
Guarantor, Borrower or any of Borrower’s Subsidiaries in the performance of any
term, provision or condition contained in any agreement, or any other event
shall occur or condition exist, which causes or permits any such Material
Indebtedness to be due and payable or required to be prepaid (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or, under any
Swap Contract, the occurrence of an “Early Termination Date” (as defined in such
Swap Contract) resulting from (A) any event of default under such Swap Contract
as to which Parent Guarantor, Borrower or any Subsidiary of Borrower is the
Defaulting Party (as defined in such Swap Contract) or (B) any “Termination
Event” (as so defined) under such Swap Contract as to which Parent Guarantor,
Borrower or any Subsidiary of Borrower is an Affected Party (as so defined) and,
in either event, the Swap Termination Value owed by Parent Guarantor, Borrower
or such Subsidiary of Borrower as a result thereof is greater than $1,000,000.

7.7. Parent Guarantor, Borrower, or any Subsidiary of Borrower shall (i) have an
order for relief entered with respect to it under the Federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it as a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate action to authorize or effect any of
the foregoing actions set forth in this Section 7.7, (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.8 or (vii) admit
in writing its inability to pay its debts generally as they become due.

7.8. A receiver, trustee, examiner, liquidator or similar official shall be
appointed for Parent Guarantor, Borrower or any Subsidiary of Borrower or for
any Substantial Portion of the Property of Parent Guarantor, Borrower or such
Subsidiary, or a proceeding described in Section 7.7(iv) shall be instituted
against Parent Guarantor, Borrower or any such Subsidiary and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of ninety (90) consecutive days.

7.9. Parent Guarantor, Borrower or any of the Subsidiary Guarantors shall fail
within sixty (60) days to pay, bond or otherwise discharge any judgments,
warrants, writs of attachment, execution or similar process or orders for the
payment of money in an amount which, when added to all other judgments,
warrants, writs, executions, processes or orders outstanding against Parent
Guarantor, Borrower or any of the Subsidiary Guarantors would exceed $10,000,000
in the aggregate, which have not been stayed on appeal or otherwise
appropriately contested in good faith.

7.10. Borrower or any other member of the Controlled Group shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred withdrawal
liability to such Multiemployer Plan in an amount which, when aggregated with
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Multiemployer Plans by Borrower or any other member of the Controlled Group as
withdrawal liability (determined as of the date of such notification), exceeds
$1,000,000 or requires payments exceeding $500,000 per annum.

7.11. Borrower or any other member of the Controlled Group shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate annual
contributions of Borrower and the other members of the Controlled Group (taken
as a whole) to all Multiemployer Plans which are then in reorganization or being
terminated have been or will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years of each such Multiemployer
Plan immediately preceding the plan year in which the reorganization or
termination occurs by an amount exceeding $500,000.

7.12. Failure to remediate within the time period permitted by law or
governmental order, after all administrative hearings and appeals have been
concluded (or within a reasonable time in light of the nature of the problem if
no specific time period is so established), environmental problems at Properties
owned by Borrower or any of its Subsidiaries or Investment Affiliates that are
reasonably expected to have a Material Adverse Effect.

7.13. The occurrence of any “Default” as defined in any Loan Document or the
breach of any of the terms or provisions of any Loan Document, which default or
breach continues beyond any period of grace therein provided.

7.14. Any Change of Control shall occur.

7.15. Any Change in Management shall occur.

7.16. A federal tax lien shall be filed against Parent Guarantor, Borrower or
any of Borrower’s Subsidiaries under Section 6323 of the Code or a lien of the
PBGC shall be filed against Parent Guarantor, Borrower or any of Borrower’s
Subsidiaries under Section 4068 of ERISA and in either case such lien shall
remain undischarged (or otherwise unsatisfied) for a period of sixty (60) days
after the date of filing.

ARTICLE VIII.

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

8.1. Acceleration. If any Default described in Sections 7.7 or 7.8 occurs with
respect to Borrower, the Facility Obligations shall immediately become due and
payable without any election or action on the part of the Administrative Agent
or any Lender. If any other Default occurs, so long as a Default exists Lenders
may declare the Facility Obligations to be due and payable, whereupon if the
Required Lenders elected to accelerate (i) the Facility Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which Borrower hereby expressly waives and (ii) if any
automatic or optional acceleration has occurred, the Administrative Agent, as
directed by the Required Lenders (or if no such direction is given within 30
days after a request for direction, as the Administrative Agent deems in the
best interests of the Lenders, in its sole discretion), shall use its good faith
efforts to collect, including without limitation, by filing and diligently
pursuing judicial action, all amounts owed by Borrower and any Subsidiary
Guarantor under the Loan Documents.

 

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If, within 10 days after acceleration of the maturity of the Facility
Obligations as a result of any Default (other than any Default as described in
Sections 7.7 or 7.8 with respect to Borrower) and before any judgment or decree
for the payment of the Facility Obligations due shall have been obtained or
entered, all of the Lenders (in their sole discretion) shall so direct, the
Administrative Agent shall, by notice to Borrower, rescind and annul such
acceleration.

8.2. Amendments. Subject to the provisions of this Article VIII the Required
Lenders (or the Administrative Agent with the consent in writing of the Required
Lenders) and Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement or
waiver shall, without the consent of all Lenders:

(i) Extend the Loan Maturity Date, or forgive all or any portion of the
principal amount of any Loan or accrued interest thereon or reduce the
Applicable Margins (or modify any definition herein which would have the effect
of reducing the Applicable Margins) or the underlying interest rate options or
extend the time of payment of any such principal, interest or fees.

(ii) Release any Pledged Equity Interest, release the Parent Guarantor from the
Parent Guaranty or release any Subsidiary Guarantor from the Subsidiary
Guaranty.

(iii) Reduce the percentage specified in the definition of Required Lenders.

(iv) Increase the Loan Amount.

(v) Permit Borrower to assign its rights under this Agreement.

(vi) Amend Sections 8.1, 8.2 or 11.2.

No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent.

8.3. Preservation of Rights. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default or
the inability of Borrower to satisfy the conditions precedent to such Loan shall
not constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Administrative Agent and the Lenders until the Obligations have
been paid in full.

 

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8.4. Application of Funds. After the acceleration of the Facility Obligations as
provided for in Section 8.1 (or after the Facility Obligations have
automatically become immediately due and payable as set forth in Section 8.1),
any amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:

(i) to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including attorney costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;

(ii) to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including fees, charges and disbursements of counsel to the respective
Lenders and amounts payable under Article III), ratably among them in proportion
to the amounts described in this clause (ii) payable to them;

(iii) to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and other Obligations, ratably among the Lenders in
proportion to the respective amounts described in this clause (iii) payable to
them;

(iv) to payment of that portion of the Obligations constituting unpaid principal
of the Loans, ratably among the Lenders, in proportion to the respective amounts
described in this clause (iv) held by them;

(v) to payment of that portion of the Obligations constituting Related Swap
Obligations ratably among the Lenders and Affiliates of Lenders holding such
Related Swap Obligations in proportion to the respective amounts described in
this clause (v) held by them; and

(vi) the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to Borrower or as otherwise required by Law.

ARTICLE IX.

GENERAL PROVISIONS

9.1. Survival of Representations. All representations and warranties of Borrower
contained in this Agreement shall survive delivery of the Notes and the making
of the Loans herein contemplated.

9.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.

9.3. Taxes. Any taxes (excluding taxes on the overall net income of any Lender)
or other similar assessments or charges made by any governmental or revenue
authority in respect of the Loan Documents shall be paid by Borrower, together
with interest and penalties, if any.

9.4. Headings. Section headings in the Loan Documents are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of the Loan Documents.

9.5. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among Borrower, the Administrative Agent and the Lenders and
supersede all prior commitments, agreements and understandings among Borrower,
the Administrative Agent and the Lenders relating to the subject matter thereof.

 

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9.6. Several Obligations; Benefits of this Agreement. The respective obligations
of the Lenders hereunder are several and not joint and no Lender shall be the
partner or agent of any other (except to the extent to which the Administrative
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns.

9.7. Expenses; Indemnification. Borrower shall reimburse the Administrative
Agent for any costs, internal charges and out-of-pocket expenses (including,
without limitation, all reasonable fees for consultants and fees and reasonable
expenses for attorneys for the Administrative Agent, which attorneys may be
employees of the Administrative Agent) paid or incurred by the Administrative
Agent in connection with the amendment, modification, and enforcement of the
Loan Documents. Borrower also agrees to reimburse the Administrative Agent and
the Lenders for any reasonable costs, internal charges and out-of-pocket
expenses (including, without limitation, all fees and reasonable expenses for
attorneys for the Administrative Agent and the Lenders, which attorneys may be
employees of the Administrative Agent or the Lenders) paid or incurred by the
Administrative Agent or any Lender in connection with the collection and
enforcement of the Loan Documents (including, without limitation, any workout).
Borrower further agrees to indemnify the Administrative Agent, each Lender and
their Affiliates, and their directors and officers against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all fees and reasonable expenses for attorneys of the indemnified
parties, all expenses of litigation or preparation therefor whether or not the
Administrative Agent, or any Lender is a party thereto) which any of them may
pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the Projects, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Loan
hereunder, except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification therefor.
The obligations of Borrower under this Section shall survive the termination of
this Agreement.

9.8. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.

9.9. Accounting. Except as provided to the contrary herein, all accounting terms
used herein shall be interpreted and all accounting determinations hereunder
shall be made in accordance with GAAP.

9.10. Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.

9.11. Nonliability of Lenders. The relationship between Borrower, on the one
hand, and the Lenders and the Administrative Agent, on the other, shall be
solely that of borrower and lender. Neither the Administrative Agent nor any
Lender shall have any fiduciary responsibilities to Borrower. Neither the
Administrative Agent nor any Lender undertakes any responsibility to Borrower to
review or inform Borrower of any matter in connection with any phase of
Borrower’s business or operations.

 

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9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

9.13. CONSENT TO JURISDICTION. BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR OHIO STATE COURT
SITTING IN CLEVELAND IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY LOAN DOCUMENTS AND BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY BORROWER AGAINST
THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE
AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN CLEVELAND, OHIO.

9.14. WAIVER OF JURY TRIAL. BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.

ARTICLE X.

THE ADMINISTRATIVE AGENT

10.1. Appointment. KeyBank National Association, is hereby appointed
Administrative Agent hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Administrative Agent to act as the agent
of such Lender. The Administrative Agent agrees to act as such upon the express
conditions contained in this Article X. Notwithstanding the use of the defined
term “Administrative Agent,” it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any Lender
by reason of this Agreement or any other Loan Document and that the
Administrative Agent is merely acting as the contractual representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders’ contractual
representative, the Administrative Agent (i) does not hereby assume any
fiduciary duties to any of the Lenders, (ii) is a “representative” of the
Lenders within the meaning of the term “secured party” as defined in the Ohio
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Administrative Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.

 

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10.2. Powers. The Administrative Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Administrative
Agent by the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Administrative Agent shall have no implied duties to the
Lenders, or any obligation to the Lenders to take any action thereunder except
any action specifically provided by the Loan Documents to be taken by the
Administrative Agent.

10.3. General Immunity. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to Borrower, the
Lenders or any Lender for (i) any action taken or omitted to be taken by it or
them hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct; or
(ii) any determination by the Administrative Agent that compliance with any law
or any governmental or quasi-governmental rule, regulation, order, policy,
guideline or directive (whether or not having the force of law) requires the
Advances hereunder to be classified as being part of a “highly leveraged
transaction”.

10.4. No Responsibility for Loans, Recitals, etc. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (iii) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered to the Administrative Agent;
(iv) the validity, effectiveness or genuineness of any Loan Document or any
other instrument or writing furnished in connection therewith; (v) the value,
sufficiency, creation, perfection, or priority of any interest in any collateral
security; or (vi) the financial condition of Borrower or any Subsidiary
Guarantor. Except as otherwise specifically provided herein, the Administrative
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by Borrower to the Administrative Agent at such time,
but is voluntarily furnished by Borrower to the Administrative Agent (either in
its capacity as Administrative Agent or in its individual capacity).

10.5. Action on Instructions of Lenders. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and under any other
Loan Document in accordance with written instructions signed by the Required
Lenders, and such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge
that the Administrative Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.

10.6. Employment of Agents and Counsel. The Administrative Agent may execute any
of its duties as Administrative Agent hereunder and under any other Loan
Document by or through employees, agents, and attorneys-in-fact and shall not be
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money or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Administrative Agent shall be entitled to advice of counsel
concerning all matters pertaining to the agency hereby created and its duties
hereunder and under any other Loan Document.

10.7. Reliance on Documents; Counsel. The Administrative Agent shall be entitled
to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.

10.8. Administrative Agent’s Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Administrative Agent ratably in proportion
to their respective portion of the Loan (i) for any amounts not reimbursed by
Borrower for which the Administrative Agent is entitled to reimbursement by
Borrower under the Loan Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents, if not paid by Borrower and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of the Loan Documents or any other document delivered in
connection therewith or the transactions contemplated thereby (including without
limitation, for any such amounts incurred by or asserted against the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders), or the enforcement
of any of the terms thereof or of any such other documents, provided that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct or a breach of the Administrative
Agent’s express obligations and undertakings to the Lenders which is not cured
after written notice and within the period described in Section 10.3, The
obligations of the Lenders and the Administrative Agent under this Section 10.8
shall survive payment of the Obligations and termination of this Agreement.

10.9. Rights as a Lender. In the event the Administrative Agent is a Lender, the
Administrative Agent shall have the same rights and powers hereunder and under
any other Loan Document as any Lender and may exercise the same as though it
were not the Administrative Agent, and the term “Lender” or “Lenders” shall, at
any time when the Administrative Agent is a Lender, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with Borrower
or any of its Subsidiaries in which Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Administrative Agent,
in its individual capacity, is not obligated to remain a Lender.

10.10. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Documents.
Each Lender also acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.

 

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10.11. Successor Administrative Agent. Except as otherwise provided below,
KeyBank National Association shall at all times serve as the Administrative
Agent during the term of this Facility. The Administrative Agent may resign at
any time by giving written notice thereof to the Lenders and Borrower, such
resignation to be effective upon the appointment of a successor Administrative
Agent or, if no successor Administrative Agent has been appointed, forty-five
days after the retiring Administrative Agent gives notice of its intention to
resign. If the Administrative Agent shall be grossly negligent in the
performance of its obligations hereunder, the Administrative Agent may be
removed by written notice received by the Administrative Agent from all Lenders
holding 66 2/3% of that portion of the Outstanding Loan Amount not held by the
Administrative Agent, such removal to be effective on the date specified by the
other Lenders. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint, on behalf of Borrower and the Lenders, a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders within thirty days after the resigning
Administrative Agent’s giving notice of its intention to resign, then the
resigning Administrative Agent may appoint, on behalf of Borrower and the
Lenders, a successor Administrative Agent. Notwithstanding the previous
sentence, the Administrative Agent may at any time without the consent of
Borrower or any Lender, appoint any of its Affiliates which is a commercial bank
as a successor Administrative Agent hereunder. If the Administrative Agent has
resigned or been removed and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and Borrower shall make all payments in respect of the Obligations to
the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank
having capital and retained earnings of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation or removal of an Administrative Agent, the provisions of this
Article X shall continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents.

10.12. Notice of Defaults. If a Lender becomes aware of a Default or Unmatured
Default, such Lender shall notify the Administrative Agent of such fact provided
that the failure to give such notice shall not create liability on the part of a
Lender. Upon receipt of such notice that a Default or Unmatured Default has
occurred, the Administrative Agent shall notify each of the Lenders of such
fact.

10.13. Requests for Approval. If the Administrative Agent requests in writing
the consent or approval of a Lender, such Lender shall respond and either
approve or disapprove definitively in writing to the Administrative Agent within
ten (10) Business Days (or sooner if such notice specifies a shorter period for
responses based on Administrative Agent’s good faith determination that
circumstances exist warranting its request for an earlier response) after such
written request from the Administrative Agent. Notwithstanding anything to the
contrary contained herein, the failure of a Lender to respond with such a
written approval or disapproval within such time period shall not result in such
Lender becoming a Defaulting Lender.

 

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10.14. Defaulting Lenders. At such time as a Lender becomes a Defaulting Lender,
such Defaulting Lender’s right to vote on matters which are subject to the
consent or approval of the Required Lenders, each affected Lender or all Lenders
shall be immediately suspended until such time as the Lender is no longer a
Defaulting Lender, except that the amount of the Commitment of the Defaulting
Lender may not be changed without its consent. If a Defaulting Lender has failed
to fund its pro rata share of any Advance and until such time as such Defaulting
Lender subsequently funds its pro rata share of such Advance, all Obligations
owing to such Defaulting Lender hereunder shall be subordinated in right of
payment, as provided in the following sentence, to the prior payment in full of
all principal of, interest on and fees relating to the Loans funded by the other
Lenders in connection with any such Advance in which the Defaulting Lender has
not funded its pro rata share (such principal, interest and fees being referred
to as “Senior Loans” for the purposes of this section). All amounts paid by
Borrower or the Guarantor and otherwise due to be applied to the Obligations
owing to such Defaulting Lender pursuant to the terms hereof shall be
distributed by the Administrative Agent to the other Lenders in accordance with
their respective pro rata shares (recalculated for the purposes hereof to
exclude the Defaulting Lender) until all Senior Loans have been paid in full.
After the Senior Loans have been paid in full equitable adjustments will be made
in connection with future payments by Borrower to the extent a portion of the
Senior Loans had been repaid with amounts that otherwise would have been
distributed to a Defaulting Lender but for the operation of this Section 10.14.
This provision governs only the relationship among the Administrative Agent,
each Defaulting Lender and the other Lenders; nothing hereunder shall limit the
obligation of Borrower to repay all Loans in accordance with the terms of this
Agreement. The provisions of this section shall apply and be effective
regardless of whether a Default occurs and is continuing, and notwithstanding
(i) any other provision of this Agreement to the contrary, (ii) any instruction
of Borrower as to its desired application of payments or (iii) the suspension of
such Defaulting Lender’s right to vote on matters which are subject to the
consent or approval of the Required Lenders or all Lenders.

ARTICLE XI.

SETOFF; RATABLE PAYMENTS

11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if Borrower becomes insolvent, however evidenced,
or any Default occurs, any and all deposits (including all account balances,
whether provisional or final and whether or not collected or available) and any
other Indebtedness at any time held or owing by any Lender or any of its
Affiliates to or for the credit or account of Borrower may be offset and applied
toward the payment of the Obligations owing to such Lender at any time prior to
the date that such Default has been fully cured, whether or not the Obligations,
or any part hereof, shall then be due.

11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Sections 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.

 

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ARTICLE XII.

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

12.1. Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of Borrower and the Lenders and
their respective successors and assigns, except that (i) Borrower shall not have
the right to assign its rights or obligations under the Loan Documents and
(ii) any assignment by any Lender must be made in compliance with Section 12.3.
The parties to this Agreement acknowledge that clause (ii) of this Section 12.1
relates only to absolute assignments and does not prohibit assignments creating
security interests, including, without limitation, (x) any pledge or assignment
by any Lender of all or any portion of its rights under this Agreement and any
Note to a Federal Reserve Bank or (y) in the case of a Lender which is a fund,
any pledge or assignment of all or any portion of its rights under this
Agreement and any Note to its trustee in support of its obligations to its
trustee; provided, however, that no such pledge or assignment creating a
security interest shall release the transferor Lender from its obligations
hereunder unless and until the parties thereto have complied with the provisions
of Section 12.3. The Administrative Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided, however, that the
Administrative Agent may in its discretion (but shall not be required to) follow
instructions from the Person which made any Loan or which holds any Note to
direct payments relating to such Loan or Note to another Person. Any assignee of
the rights to any Loan or any Note agrees by acceptance of such assignment to be
bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of the rights to any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder or assignee of the rights to such Loan.

12.2. Participations.

(i) Permitted Participants; Effect. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time sell to one or
more banks, financial institutions, pension funds, or any other funds or
entities (“Participants”) participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Portion of the Loan of such Lender or
any other interest of such Lender under the Loan Documents. In the event of any
such sale by a Lender of participating interests to a Participant, such Lender’s
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by Borrower under this
Agreement shall be determined as if such Lender had not sold such participating
interests, and Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under the Loan Documents.

(ii) Voting Rights. Each Lender shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver of any
provision of the Loan Documents other than any amendment, modification or waiver
with respect to any Loan in which such Participant has an interest which would
require consent of all the Lenders pursuant to the terms of Section 8.2 or of
any other Loan Document.

 

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(iii) Benefit of Setoff. Borrower agrees that each Participant which has
previously advised Borrower in writing of its purchase of a participation in a
Lender’s interest in its Loans shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the Loan
Documents. Each Lender shall retain the right of setoff provided in Section 11.1
with respect to the amount of participating interests sold to each Participant,
provided that such Lender and Participant may not each setoff amounts against
the same portion of the Obligations, so as to collect the same amount from
Borrower twice. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 11.1, agrees
to share with each Lender, any amount received pursuant to the exercise of its
right of setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender.

12.3. Assignments.

(i) Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to any
Eligible Assignee all or any portion (greater than or equal to $2,000,000 for
each assignee, so long as the hold position of the assigning Lender is not less
than $2,000,000) of its rights and obligations under the Loan Documents. Such
assignment shall be substantially in the form of Exhibit D hereto or in such
other form as may be agreed to by the parties thereto. The consent of the
Administrative Agent shall be required prior to an assignment becoming effective
with respect to an Eligible Assignee which is not a Lender or an Affiliate
thereof. Such consent shall not be unreasonably withheld.

(ii) Effect; Effective Date. Upon (i) delivery to the Administrative Agent of a
notice of assignment, substantially in the form attached as Exhibit “I” to
Exhibit D hereto (a “Notice of Assignment”), together with any consents required
by Section 12.3(i), and (ii) payment of a $3,500 fee by the assignor or assignee
to the Administrative Agent for processing such assignment, such assignment
shall become effective on the effective date specified in such Notice of
Assignment. The Notice of Assignment shall contain a representation by the
Eligible Assignee to the effect that none of the consideration used to make the
purchase of the portion of the Loans under the applicable assignment agreement
are “plan assets” as defined under ERISA and that the rights and interests of
the Eligible Assignee in and under the Loan Documents will not be “plan assets”
under ERISA. On and after the effective date of such assignment, such Eligible
Assignee shall for all purposes be a Lender party to this Agreement and any
other Loan Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if it
were an original party hereto, and no further consent or action by Borrower, the
Lenders or the Administrative Agent shall be required to release the transferor
Lender, and the transferor Lender shall automatically be released on the
effective date of such assignment, with respect to the percentage of the
Outstanding Loan Amount assigned to such Eligible Assignee. Upon the
consummation of any assignment to a Eligible Assignee pursuant to this
Section 12.3.2, the transferor Lender, the Administrative Agent and Borrower
shall make appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are
issued to such Eligible Assignee, in each case in principal amounts reflecting
their respective portions of the Loan, as adjusted pursuant to such assignment.

 

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12.4. Dissemination of Information. Borrower authorizes each Lender to disclose
to any Participant or Eligible Assignee or any other Person acquiring an
interest in the Loan Documents by operation of law (each a “Transferee”) and any
prospective Transferee any and all information in such Lender’s possession
concerning the creditworthiness of Borrower and its Subsidiaries, subject to
Section 9.11 of this Agreement.

12.5. Tax Treatment. If any interest in any Loan Document is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5.

ARTICLE XIII.

NOTICES

13.1. Giving Notice. Except as otherwise permitted by Section 2.12 with respect
to certain notices, all notices and other communications provided to any party
hereto under this Agreement or any other Loan Document shall be in writing or by
facsimile or by email (if confirmed in writing as provided below) and addressed
or delivered to such party at its address set forth below its signature hereto
or at such other address (or to counsel for such party) as may be designated by
such party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by facsimile, shall be deemed given when transmitted and any
notice, if transmitted by email, shall be deemed given when transmitted
(provided a copy of such notice is also sent by overnight delivery service on
the date of such email).

13.2. Change of Address. Borrower, the Administrative Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.

ARTICLE XIV.

COUNTERPARTS

This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by Borrower and the Lenders and each party
has notified the Administrative Agent by telex or telephone, that it has taken
such action.

(Remainder of page intentionally left blank.)

 

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IN WITNESS WHEREOF, Borrower, the Administrative Agent and the Lenders have
executed this Agreement as of the date first above written.

 

TERRENO REALTY LLC, a Delaware limited liability company

 

By:   TERRENO REALTY CORPORATION, a   Maryland corporation, its sole member

 

By:   /s/ Jaime Cannon Print Name: Jaime Cannon Title: Vice President

 

Address for Notices:

 

16 Maiden Lane, Fifth Floor

San Francisco, CA 94108

 

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PERCENTAGE: 100%   KEYBANK NATIONAL ASSOCIATION,     Individually and as
Administrative Agent     By: /s/ Joshua Mayers     Print Name: Joshua Mayers    
Title: Vice President     127 Public Square, 8th Floor     OH-01-27-0839    
Cleveland, Ohio 44114     Phone: 216-689-0213     Facsimile: 216-689-5819    
Attention: Joshua Mayers     Email: Joshua_Mayers@KeyBank.com  

With a copy to:

  KeyBank National Association     800 Superior, 6th Floor     Cleveland, Ohio
44114     Phone: 216-828-7904     Facsimile: 216-828-7523     Attention: John
Hyland  

 

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