Exhibit 10.1

Execution Copy

 

 

 

CREDIT AGREEMENT

Dated as of September 16, 2010

among

COLONY FINANCIAL, INC.,

as a Borrower,

and

THE SUBSIDIARIES OF

COLONY FINANCIAL, INC.

FROM TIME TO TIME PARTY HERETO,

as Borrowers

BANK OF AMERICA, N.A.,

as Administrative Agent

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Bookrunner

 

 

 

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TABLE OF CONTENTS

 

Section

         Page ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS    1

1.01

   Defined Terms    1

1.02

   Other Interpretive Provisions    24

1.03

   Accounting Terms    25

1.04

   Rounding    25

1.05

   Times of Day    26 ARTICLE II. THE COMMITMENTS AND LOANS    26

2.01

   Revolving Loans    26

2.02

   Borrowings, Conversions and Continuations of Loans    26

2.03

   Prepayments    27

2.04

   Termination or Reduction of Commitments    29

2.05

   Term Loan Conversion; Repayment of Converted Term Loans    29

2.06

   Interest    30

2.07

   Fees    30

2.08

   Computation of Interest and Fees    31

2.09

   Evidence of Debt    31

2.10

   Payments Generally; Administrative Agent’s Clawback    31

2.11

   Sharing of Payments by Lenders    33

2.12

   Extension of Revolver Maturity Date    34

2.13

   Increase in Commitments    35

2.14

   Defaulting Lenders    37

2.15

   Collateral; Borrowing Base; Borrowing Base Accounts; Additional Joint Venture
Investments    38 ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY    43

3.01

   Taxes    43

3.02

   Illegality    47

3.03

   Inability to Determine Rates    48

3.04

   Increased Costs; Reserves on Eurodollar Rate Loans    48

3.05

   Compensation for Losses    49

3.06

   Mitigation Obligations; Replacement of Lenders    50

3.07

   Survival    50 ARTICLE IV. CONDITIONS PRECEDENT    51

4.01

   Conditions of Effectiveness    51

4.02

   Conditions to all Revolving Loans    54 ARTICLE V. REPRESENTATIONS AND
WARRANTIES    54

5.01

   Existence, Qualification and Power    54

5.02

   Authorization; No Contravention    55

5.03

   Governmental Authorization; Other Consents    55

 

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5.04

   Binding Effect    55

5.05

   Financial Statements; No Material Adverse Effect    55

5.06

   Litigation    56

5.07

   No Default    56

5.08

   Ownership of Property; Liens    56

5.09

   Environmental Compliance    56

5.10

   Insurance    57

5.11

   Taxes    58

5.12

   ERISA Compliance    58

5.13

   Subsidiaries; Equity Interests    59

5.14

   Margin Regulations; Investment Company Act    59

5.15

   Disclosure    59

5.16

   Compliance with Laws    60

5.17

   Taxpayer Identification Number    60

5.18

   Intellectual Property; Licenses, Etc.    60

5.19

   Solvency    60

5.20

   Casualty, Etc.    60

5.21

   Labor Matters    60

5.22

   Collateral Documents    61

5.23

   Anti-Money Laundering and Economic Sanctions Laws    61

5.24

   REIT Status; Stock Exchange Listing    61 ARTICLE VI. AFFIRMATIVE COVENANTS
   62

6.01

   Financial Statements    62

6.02

   Certificates; Other Information    63

6.03

   Notices    64

6.04

   Payment of Obligations    65

6.05

   Preservation of Existence, Etc.    65

6.06

   Maintenance of Properties    65

6.07

   Maintenance of Insurance    66

6.08

   Compliance with Laws    66

6.09

   Books and Records    66

6.10

   Inspection Rights    66

6.11

   Use of Proceeds    66

6.12

   Additional Collateral; Additional Loan Parties    66

6.13

   Compliance with Environmental Laws    68

6.14

   Further Assurances    68

6.15

   Maintenance of REIT Status; New York Stock Exchange Listing    68

6.16

   Information Regarding Collateral    68

6.17

   Lien Searches    69

6.18

   Material Contracts    69

6.19

   Organization Documents of Affiliated Investors    69 ARTICLE VII. NEGATIVE
COVENANTS    69

7.01

   Liens    69

7.02

   Investments    70

7.03

   Indebtedness    70

 

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7.04

   Fundamental Changes    71

7.05

   Dispositions    71

7.06

   Restricted Payments    72

7.07

   Change in Nature of Business    72

7.08

   Transactions with Affiliates    72

7.09

   Burdensome Agreements    73

7.10

   Use of Proceeds    73

7.11

   Amendments, Waivers and Terminations of Certain Agreements    73

7.12

   Financial Covenants    74

7.13

   Creation or Acquisition of New Subsidiaries    74

7.14

   Accounting or Tax Changes    74 ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
   74

8.01

   Events of Default    74

8.02

   Remedies Upon Event of Default    76

8.03

   Application of Funds    77 ARTICLE IX. ADMINISTRATIVE AGENT    77

9.01

   Appointment and Authority    77

9.02

   Rights as a Lender    78

9.03

   Exculpatory Provisions    78

9.04

   Reliance by Administrative Agent    79

9.05

   Delegation of Duties    79

9.06

   Resignation of Administrative Agent    79

9.07

   Non-Reliance on Administrative Agent and Other Lenders    80

9.08

   No Other Duties, Etc.    80

9.09

   Administrative Agent May File Proofs of Claim    80

9.10

   Collateral and Guaranty Matters    81 ARTICLE X. MISCELLANEOUS    81

10.01

   Amendments, Etc.    81

10.02

   Notices; Effectiveness; Electronic Communication    83

10.03

   No Waiver; Cumulative Remedies; Enforcement    84

10.04

   Expenses; Indemnity; Damage Waiver    85

10.05

   Payments Set Aside    87

10.06

   Successors and Assigns    87

10.07

   Treatment of Certain Information; Confidentiality    91

10.08

   Right of Setoff    92

10.09

   Interest Rate Limitation    92

10.10

   Counterparts; Integration; Effectiveness    92

10.11

   Survival of Representations and Warranties    93

10.12

   Severability    93

10.13

   Replacement of Lenders    93

10.14

   Governing Law; Jurisdiction; Etc.    94

10.15

   Waiver of Jury Trial    95

10.16

   No Advisory or Fiduciary Responsibility    95

10.17

   Electronic Execution of Assignments and Certain Other Documents    96

 

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10.18

   USA PATRIOT Act    96

10.19

   Borrowing Base Asset Review    96

10.20

   Joint and Several Liability    96

10.21

   ENTIRE AGREEMENT    97         SIGNATURES   

 

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SCHEDULES

 

I

   Guarantors

II

   Initial Eligible Investment Assets

III

   Designated Joint Ventures

2.01

   Commitments and Applicable Percentages

5.05

   Supplement to Interim Financial Statements

5.12(d)

   Pension Plans

5.13

   Subsidiaries; Equity Interests

10.02

   Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

 

     Form of

A

   Loan Notice

B

   Note

C

   Compliance Certificate

D-1

   Assignment and Assumption

D-2

   Administrative Questionnaire

E

   Guaranty

F

   Borrowing Base Certificate

G

   Pledge and Security Agreement

H-1

   Perfection Certificate

H-2

   Perfection Certificate Supplement

I

   Solvency Certificate

J

   United States Tax Compliance Certificate

K

   Joint Venture Organization Documents

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of September 16, 2010,
among COLONY FINANCIAL, INC., a Maryland corporation (the “REIT”), CFI MEZZ
FUNDING, LLC, a Delaware limited liability company (“CFI Mezz Funding”), CFI RE
HOLDCO, LLC, a Delaware limited liability company (“CFI RE Holdco”), ColFin ESH
Funding, LLC, a Delaware limited liability company (“ColFin ESH Funding”), each
Wholly-Owned Subsidiary of the REIT that, in accordance with Section 6.12(c),
becomes a co-borrower hereunder after the Closing Date (together with the REIT,
CFI Mezz Funding, CFI RE Holdco and ColFin ESH Funding, each a “Borrower” and
collectively, the “Borrowers”),each lender from time to time party hereto
(collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA,
N.A., as Administrative Agent.

The Borrowers have requested that the Lenders provide a revolving credit
facility, and the Lenders have agreed to do so on the terms and conditions set
forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Adjusted Net Income” means, with respect to any period, the net income of the
REIT and its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP, excluding any non-cash impairment charges, write-downs or
losses.

“Administrative Agent” means Bank of America in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent
duly appointed or serving under the terms of this Agreement.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify to the REIT and
the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in
substantially the form of Exhibit D-2 or any other form approved by the
Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

“Affiliated Investor” means a Pledged Affiliate or any other Person that holds
an Investment Asset and in which a Loan Party, directly or indirectly, owns
Equity Interests.

“Aggregate Commitments” means the Commitments of all the Lenders.

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“Agreement” means this Credit Agreement.

“Annualized Cash Income” means, for any month with respect to any Eligible
Investment Asset, the Cash Income from such Eligible Investment Asset during
such month, multiplied by 12.

“Anti-Money Laundering Laws” means any and all laws, judgments, orders,
executive orders, decrees, ordinances, rules, regulations, statutes, case law or
treaties applicable to a Loan Party, its Subsidiaries or Affiliates, related to
terrorism financing or money laundering including any applicable provision of
Title III of the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) of 2001
(Title III of Pub. L. 107-56) and The Currency and Foreign Transactions
Reporting Act (also known as the “Bank Secrecy Act”, 31 U.S.C. §§ 5311-5330 and
12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time, subject to adjustment as
provided in Section 2.14. If the commitment of each Lender to make Revolving
Loans has been terminated or if the Aggregate Commitments have expired, then the
Applicable Percentage of each Lender shall be, at any time, a fraction
(expressed as a percentage carried out to the ninth decimal place), the
numerator of which is the aggregate principal amount of Loans owed to such
Lender at such time and the denominator of which is the aggregate principal
amount of Loans owed to all Lenders at such time, subject to adjustment as
provided in Section 2.14. The initial Applicable Percentage of each Lender is
set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.

“Applicable Rate” means (a) 2.50% for Base Rate Loans and (b) 4.00% for
Eurodollar Rate Loans.

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

“Arranger” means Banc of America Securities LLC, in its capacity as sole lead
arranger and sole bookrunner.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by, and otherwise in compliance with, Section 10.06(b)), and accepted by the
Administrative Agent, in substantially the form of Exhibit D-1 or any other form
approved by the Administrative Agent.

“Audited Financial Statements” means the audited consolidated balance sheet of
the REIT and its Consolidated Subsidiaries for the fiscal year ended
December 31, 2009, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year of the REIT
and its Consolidated Subsidiaries, including the notes thereto.

 

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“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Revolver Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.04, and (c) the date of
termination of the commitment of all Lenders to make Revolving Loans pursuant to
Section 8.02.

“Bank of America” means Bank of America, N.A. and its successors.

“BAS” means Banc of America Securities LLC and its successors.

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its
“prime rate,” and (c) the Eurodollar Rate plus 1.50%. The “prime rate” is a rate
set by Bank of America based upon various factors including Bank of America’s
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in such prime rate announced by Bank of
America shall take effect at the opening of business on the day specified in the
public announcement of such change.

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

“Book Value Amount” means, on any date with respect to any Eligible Investment
Asset, the product of (x) the net book value of such Eligible Investment Asset
on such date determined in accordance with GAAP, multiplied by (y) the Value
Percentage of such Eligible Investment Asset on such date.

“Borrower” and “Borrowers” have the meaning specified in the introductory
paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a borrowing consisting of simultaneous Revolving Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by each of the Lenders pursuant to Section 2.01.

“Borrowing Base” means, at any time, an amount equal to:

(a) if at such time there are at least fifteen (15) individual Eligible
Investment Assets in the Borrowing Base, of which no individual Eligible
Investment Asset represents more than 10% of the aggregate Borrowing Base, the
lesser of (i) 40% of the aggregate Book Value Amounts of all Eligible Investment
Assets at such time and (ii) 3.0 times the aggregate Annualized Cash Income from
all Eligible Investment Assets for the then most recently ended month; and

 

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(b) at all other times, the sum of the following amounts determined with respect
to each individual Eligible Investment Asset: the lesser of: (x) 40% of the Book
Value Amount of such Eligible Investment Asset at such time and (y) 3.0 times
Annualized Cash Income from such Eligible Investment Asset for the then most
recently ended month.

“Borrowing Base Account” has the meaning specified in Section 2.15.

“Borrowing Base Asset Review” has the meaning specified in Section 10.19.

“Borrowing Base Certificate” means a certificate executed by a Responsible
Officer of the REIT, substantially in the form of Exhibit F (or another form
acceptable to the Administrative Agent) setting forth the calculation of the
Borrowing Base, in such detail as shall be reasonably satisfactory to the
Administrative Agent. All calculations of the Borrowing Base in connection with
the preparation of any Borrowing Base Certificate shall originally be made by
the Borrowers and certified to the Administrative Agent; provided, that the
Administrative Agent shall have the right to review and make reasonable
adjustments to any such calculation (x) to reflect any discrepancies in any of
the components of the amounts set forth therein with any Borrowing Base Asset
Review conducted on behalf of the Lenders or any other information received by
the Administrative Agent or the Lenders and (y) to the extent the Administrative
Agent reasonably determines that such calculation contains errors or is not
otherwise in accordance with this Agreement.

“Borrowing Base Eligibility Criteria” has the meaning specified in Section 2.15.

“Borrowing Base Report” means, for any fiscal quarter of the REIT, a detailed
written report, certified by a Responsible Officer of the REIT, of the Eligible
Investment Assets included in the Borrowing Base during such fiscal quarter,
including the loan loss results, loan loss reserves and adjustments with respect
to such Eligible Investment Assets, all material developments with respect to
such Eligible Investment Assets, the amount of cash income received by the
applicable Affiliated Investors and the amount of Cash Income received by the
Loan Parties from such Eligible Investment Assets for each month during such
fiscal quarter, and such other information as reasonably requested by the
Administrative Agent or any Lender, which report shall be in form, scope and
substance satisfactory to the Administrative Agent.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day that is also a
London Banking Day.

“Cash Equivalents” means:

(a) United States dollars (including such dollars as are held as overnight bank
deposits and demand deposits with banks);

(b) marketable direct obligations issued by, or unconditionally guaranteed by,
the United States Government or issued by any agency or instrumentality thereof
and backed by the full faith and credit of the United States of America, in each
case maturing within one year from the date of acquisition thereof;

 

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(c) marketable direct obligations issued by any State of the United States of
America or any political subdivision of any such State or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having a rating of at least A-2 from
S&P or at least P-2 of Moody’s;

(d) commercial paper maturing no more than one year from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-2 from
S&P or at least P-2 from Moody’s;

(e) time deposits, demand deposits, certificates of deposit, Eurodollar time
deposits, time deposit accounts, term deposit accounts or bankers’ acceptances
maturing within one year from the date of acquisition thereof or overnight bank
deposits, in each case, issued by any bank organized under the laws of the
United States of America or any State thereof or the District of Columbia or any
U.S. branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $500.0 million; and

(f) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (a) through (e) above.

“Cash Income” means, for any month with respect to any Eligible Investment
Asset, the income (without duplication) received in cash or accrued under GAAP
by one or more Loan Parties from such Eligible Investment Asset during such
month in the form of (i) cash interest, (ii) cash dividends, (iii) the portion
of principal amortization included as taxable income (on performing loans
acquired at a discount to par) and (iv) other recurring investment distributions
received in cash or accrued under GAAP, in each case excluding in any event
gains from asset sales. The items referred to in this definition with respect to
any Eligible Investment Asset owned by a Loan Party or an Affiliated Investor
during any month will be calculated on a pro forma or “grossed-up” basis to
include a full month’s Cash Income from such Eligible Investment Asset for such
month.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.

“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

 

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“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time (such right, an “option right”)), directly or
indirectly, of 33% or more of the equity securities of the REIT entitled to vote
for members of the board of directors or equivalent governing body of the REIT
on a fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right);

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of the REIT cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors);

(c) the passage of thirty days from the date upon which any Person or two or
more Persons acting in concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon consummation
thereof, will result in its or their acquisition of the power to exercise,
directly or indirectly, a controlling influence over the management or policies
of the REIT, or control over the equity securities of the REIT entitled to vote
for members of the board of directors or equivalent governing body of the REIT
on a fully-diluted basis (and taking into account all such securities that such
Person or group has the right to acquire pursuant to any option right)
representing 33% or more of the combined voting power of such securities; or

(d) the REIT shall cease to own, directly or indirectly, 100% of the Equity
Interests of each of the Loan Parties, free and clear of all Liens (other than
Liens in favor of the Administrative Agent for the benefit of the Secured
Parties), except for the Disposition of a Loan Party expressly permitted under
this Agreement.

 

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“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means all of the “Collateral” referred to in the Collateral
Documents and all of the other property that is, or is required under the terms
of the Loan Documents to be, subject to Liens in favor of the Administrative
Agent for the benefit of the Secured Parties.

“Collateral Documents” means, collectively, the Pledge and Security Agreement,
any Control Agreement and each of the other agreements, instruments or documents
that creates or perfects or purports to create or perfect a Lien in favor of the
Administrative Agent for the benefit of the Secured Parties.

“Colonial Investment” means the Investment Asset owned by Coral Partners in the
credit facility extended to Inmobiliara Colonial, S.A.

“Colony Funds Sants” means Colony Funds Sants S.a.r.l., a Luxembourg company.

“Commitment” means, as to each Lender, its obligation to make Revolving Loans to
the Borrowers pursuant to Section 2.01 in an aggregate principal amount at any
one time outstanding not to exceed the amount set forth opposite such Lender’s
name on Schedule 2.01 or in the Assignment and Assumption or New Lender Joinder
Agreement pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be increased by such Lender pursuant to Section 2.13 or
otherwise adjusted from time to time in accordance with this Agreement.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

“Consolidated Cash Interest Expense” means, for any period, Consolidated
Interest Expense for such period, excluding any portion thereof not payable in
cash in such period.

“Consolidated Fixed Charge Coverage Ratio” means the ratio as of the last day of
any fiscal quarter of the REIT of (i) EBITDA for such fiscal quarter to
(ii) Consolidated Fixed Charges for such fiscal quarter.

“Consolidated Fixed Charges” means, for any period, the sum, without
duplication, of the amounts determined for the REIT and its Consolidated
Subsidiaries on a consolidated basis equal to (i) Consolidated Cash Interest
Expense, (ii) scheduled payments of principal on Consolidated Total Debt and
(iii) the amount of dividends or distributions paid or required to be paid by
the REIT during such period in respect of any of its preferred Equity Interests.

“Consolidated Interest Expense” means, for any period, total interest expense of
the REIT and its Consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (i) Consolidated Total Debt as of such date to (ii) the Total Asset Value as
of such date.

 

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“Consolidated Subsidiaries” means, as to any Person, all Subsidiaries of such
Person which are consolidated with such Person for financial reporting purposes
under GAAP.

“Consolidated Tangible Net Worth” means, as of any date of determination, for
the REIT and its Consolidated Subsidiaries on a consolidated basis,
Shareholders’ Equity of the REIT and its Consolidated Subsidiaries on that date
minus the Intangible Assets of the REIT and its Consolidated Subsidiaries on
that date; provided, however, that there shall be excluded from the calculation
of “Consolidated Tangible Net Worth” any effects resulting from the application
of FASB ASC No. 715: Compensation - Retirement Benefits.

“Consolidated Total Debt” means, as at any date of determination, the aggregate
amount of all Indebtedness of the REIT and its Consolidated Subsidiaries that
would be reflected on a consolidated balance sheet of the REIT and its
Consolidated Subsidiaries as of such date prepared in accordance with GAAP.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Control Agreement” means a deposit account control agreement or securities
account control agreement, as applicable, executed by a Loan Party, the
Administrative Agent and the applicable depository bank or securities
intermediary granting the Administrative Agent control over the applicable
deposit account or securities account, which agreement shall be in form and
substance satisfactory to the Administrative Agent.

“Converted Term Loan” has the meaning specified in Section 2.05(a).

“Converted Term Loan Maturity Date” means the date occurring one year after the
Revolver Maturity Date.

“Coral Partners” means Coral Partners (Lux) S.a.r.l., a Luxembourg company.

“Core Earnings” means, for any period, the consolidated net income (loss) of the
REIT, computed in accordance with GAAP, excluding (i) non-cash equity
compensation expense, (ii) real estate depreciation and amortization expense,
(iii) any unrealized gains or losses from mark to market valuation changes
(other than permanent impairment) that are included in net income and
(iv) extraordinary or non-recurring non-cash gains or losses.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

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“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate applicable to Base Rate Loans plus (iii) 2% per annum.

“Defaulting Lender” means, subject to Section 2.14(b), any Lender that, as
determined by the Administrative Agent, (a) has failed to perform any of its
funding obligations hereunder, including in respect of its Loans, within three
Business Days of the date required to be funded by it hereunder, (b) has
notified the Borrowers, the Administrative Agent or any Lender that it does not
intend to comply with its funding obligations or has made a public statement to
that effect with respect to its funding obligations hereunder or under other
agreements in which it commits to extend credit, (c) has failed, within three
Business Days after request by the Administrative Agent, to confirm in a manner
satisfactory to the Administrative Agent that it will comply with its funding
obligations, or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or a custodian appointed for it, or (iii) taken any action in
furtherance of, or indicated its consent to, approval of or acquiescence in any
such proceeding or appointment; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority.

“Designated Joint Venture” means (x) each of the entities listed on Schedule III
and their respective Subsidiaries and (y) any other corporation, partnership,
joint venture, limited liability company or other business entity designated as
a “Designated Joint Venture” in a written notice executed by a Responsible
Officer of the REIT and delivered to the Administrative Agent, so long as, in
the case of each of clauses (x) and (y), (i) the REIT and/or its Wholly-Owned
Subsidiaries do not, directly, indirectly or beneficially own more than 50% of
the Equity Interests of such Person having ordinary voting power for the
election of directors or members of any other governing body of such Person (or
otherwise have the power and authority to elect or appoint more than a majority
of the directors or members of any other governing body of such Person) and
(ii) the REIT and/or its Wholly-Owned Subsidiaries do not have voting, approval,
veto or other similar rights with respect to matters involving the management,
operations or actions of such Person that are more expansive than those of the
REIT and its Wholly-Owned Subsidiaries set forth in the Organization Documents
(as in effect on the Closing Date) of the entities listed on Schedule III.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“Distributions” means (a) any and all dividends, distributions or other payments
or amounts made, or required to be paid or made to a Loan Party by any
Affiliated Investor who owns any Investment Assets that are included in the
Borrowing Base, including, without limitation, any distributions of payments to
such Loan Party in respect of principal, interest or

 

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other amounts relating to Investment Assets owned by such Affiliated Investor
and (b) any and all amounts owing to such Loan Party from the disposition,
dissolution or liquidation of such Affiliated Investor or from the issuance or
sale of Equity Interests of such Affiliated Investor.

“Dollar” and “$” mean lawful money of the United States.

“EBITDA” means, for any period, Core Earnings for such period excluding
(i) Consolidated Cash Interest Expense, (ii) provisions for taxes based on
income of the REIT and its Consolidated Subsidiaries and (iii) reasonable and
customary out-of-pocket expenses incurred by the REIT and its Consolidated
Subsidiaries in connection with the issuance of any debt or Equity Interests
permitted to be issued hereunder.

“Economic Sanctions Laws” means any and all laws, judgments, orders, executive
orders, decrees, ordinances, rules, regulations, statutes, case law or treaties
applicable to a Loan Party, its Subsidiaries or Affiliates relating to economic
sanctions and terrorism financing, including any applicable provisions of the
Trading with the Enemy Act (50 U.S.C. App. §§ 5(b) and 16, as amended), the
International Emergency Economic Powers Act, (50 U.S.C. §§ 1701-1706, as
amended) and Executive Order 13224 (effective September 24, 2001), as amended.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.06 (subject to such consents, if any, as may be
required under Section 10.06(b)(iii)).

“Eligible Investment Assets” means, collectively, the Initial Eligible
Investment Assets and any other Investment Asset which, in each case at all
times satisfies each of the Borrowing Base Eligibility Criteria.

“Embargoed Person” means any party that (i) is publicly identified on the most
current list of “Specially Designated Nationals and Blocked Persons” published
by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or
(ii) resides, is organized or chartered, or has a place of business in a country
or territory that is the subject of OFAC sanctions programs.

“Environment” means ambient air, indoor air, surface water, groundwater,
drinking water, soil, surface and subsurface strata, and natural resources such
as wetlands, flora and fauna.

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, agreements or governmental restrictions relating to pollution or the
protection of the Environment or of human health (to the extent related to
exposure to Hazardous Materials), including those relating to the manufacture,
generation, handling, transport, storage, treatment, Release or threat of
Release of Hazardous Materials.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrowers, any other Loan Party or any of
their respective Subsidiaries directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the Release or threatened Release
of any Hazardous Materials or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

 

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“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with any Loan Party within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) the incurrence by the Borrowers or any of their ERISA Affiliates of
liability as a result of the withdrawal of any of the Borrowers or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which such entity was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such
a withdrawal under Section 4062(e) of ERISA; (c) the incurrence by the Borrowers
or any of their ERISA Affiliates of liability as a result of a complete or
partial withdrawal by any of the Borrowers or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate or the
treatment of a Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA; (e) receipt by the Borrowers or any ERISA Affiliates from the
PBGC of any notice relating to the intention to terminate a Pension Plan;
(f) any event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (g) the determination by the
relevant Pension Plan’s actuary that any Pension Plan is considered an at-risk
plan or a plan in endangered or critical status within the meaning of Sections
430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; (h) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower
or any ERISA Affiliate; or (i) a failure by any of the Borrowers or any ERISA
Affiliate to meet all applicable requirements under the Pension Funding Rules in
respect of a Pension Plan, whether or not waived, or the failure by any Borrower
or any ERISA Affiliate to make any required contribution to a Multiemployer
Plan.

 

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“Eurodollar Rate” means:

(a) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per
annum equal to the greater of (x) 1.00% and (y) (i) the British Bankers
Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or such other
commercially available source providing quotations of BBA LIBOR as may be
designated by the Administrative Agent from time to time) at approximately 11:00
a.m., London time, two London Banking Days prior to the commencement of such
Interest Period, for Dollar deposits (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period or, (ii) if such
rate is not available at such time for any reason, the rate per annum determined
by the Administrative Agent to be the rate at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Rate Loan being made, continued or
converted and with a term equivalent to such Interest Period would be offered by
Bank of America’s London Branch to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m. (London time) two
London Banking Days prior to the commencement of such Interest Period; and

(b) for any interest calculation with respect to a Base Rate Loan on any date,
the rate per annum equal to the greater of (x) 1.00% and (y) (i) BBA LIBOR, at
approximately 11:00 a.m., London time determined two London Banking Days prior
to such date for Dollar deposits being delivered in the London interbank market
for a term of one month commencing that day or (ii) if such published rate is
not available at such time for any reason, the rate per annum determined by the
Administrative Agent to be the rate at which deposits in Dollars for delivery on
the date of determination in same day funds in the approximate amount of the
Base Rate Loan being made or maintained and with a term equal to one month would
be offered by Bank of America’s London Branch to major banks in the London
interbank Eurodollar market at their request at the date and time of
determination.

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on
clause (a) of the definition of “Eurodollar Rate.”

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of any Loan Party hereunder or under any other Loan Documents, (a) taxes imposed
on or measured by net income (however denominated), and franchise taxes imposed
on it (in lieu of net income taxes), by a jurisdiction (or any political
subdivision thereof) as a result of such recipient being organized or having its
principal office in such jurisdiction or, in the case of any Lender, in having
its applicable Lending Office in such jurisdiction or solely as a result of a
present or former connection between such Lender and such jurisdiction (other
than any such connection arising from such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced any of the
Loan Documents), (b) any taxes in the nature of the branch profits tax within
the meaning of Section 884 of the Code imposed by any jurisdiction described in
clause (a), (c) other than an assignee pursuant to a request by the Borrowers
under Section 10.13,

 

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any United States federal withholding tax that is imposed on amounts payable to
such Person pursuant to any Laws in effect at the time such Person becomes a
party hereto (or designates a new Lending Office), except to the extent that
such Person (or its assignor, if any) was entitled, at the time of designation
of a new Lending Office (or assignment), to receive additional amounts from any
Loan Party with respect to such withholding tax pursuant to Section 3.01(a)(ii)
or (c), (d) any withholding tax that is attributable to such Person’s failure to
comply with Section 3.01(e) hereto, and (e) any United States federal
withholding tax that would not have been imposed but for a failure by a Lender
(or any financial institution through which any payment is made to such Lender)
to comply with the procedures, certifications, information reporting,
disclosure, or other related requirements of newly enacted Sections 1471-1474 of
the Code and any amended or successor version.

“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

“Fee Letter” means the letter agreement, dated July 14, 2010, among the REIT,
the Administrative Agent and the Arranger.

“Foreign Lender” means any Lender that is organized under the Laws of a
jurisdiction other than that in which a Borrower is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

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

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

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“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Guarantors” means, collectively, each Subsidiary of the REIT listed on Schedule
I and each other Wholly-Owned Subsidiary of the REIT that becomes a guarantor of
the Obligations in accordance with Section 6.12(b).

“Guaranty” means the Guaranty made by the Guarantors in favor of the
Administrative Agent and the Lenders, substantially in the form of Exhibit E.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances or wastes, including petroleum or
petroleum distillates, natural gas, natural gas liquids, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas, toxic mold,
infectious or medical wastes and all other substances, wastes, chemicals,
pollutants, contaminants or compounds of any nature in any form regulated
pursuant to any Environmental Law.

 

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“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than (i) trade accounts payable in the ordinary
course of business and, in each case, not past due for more than 60 days after
the date on which such trade account payable was created and (ii) the deferred
underwriting discounts and commissions in the aggregate amount of $11,500,000
payable to the Manager and the underwriters in connection with the initial
public offering of the REIT);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f) capital leases and Synthetic Lease Obligations;

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Initial Eligible Investment Assets” means those Eligible Investment Assets set
forth on Schedule II hereto which have been approved by the Administrative Agent
and the Lenders as of the Closing Date for inclusion in the Borrowing Base.

 

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“Initial Revolver Maturity Date” means September 16, 2011.

“Intangible Assets” means assets that are considered to be intangible assets
under GAAP, including customer lists, goodwill, computer software, copyrights,
trade names, trademarks, patents, franchises, licenses, unamortized deferred
charges, unamortized debt discount and capitalized research and development
costs.

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the last Business Day of each March, June,
September and December and the Maturity Date.

“Interest Period” means (a) as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of
any Eurodollar Rate Loan) converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months thereafter, or, if
consented to by all Lenders, twelve months thereafter, as selected by the
Borrowers in their Loan Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

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

(iii) no Interest Period shall extend beyond the Maturity Date.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests or other securities of another Person, (b) a
loan, advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

“Investment Asset” means any commercial mortgage loan or other commercial real
estate-related debt investment owned by any Loan Party or any other Person in
which a Loan Party, directly or indirectly, owns Equity Interests.

 

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“Investment Asset Payment” means, with respect to any Investment Asset, any
payment made, directly or indirectly, to a Loan Party (whether as a direct or
indirect payment, dividend or other distribution from the Affiliated Investor
that owns such Investment Asset, or otherwise) representing proceeds of an
amortization payment made in respect of such Investment Asset.

“IP Rights” has the meaning specified in Section 5.18.

“IRS” means the United States Internal Revenue Service.

“Joint Venture Investment” means, with respect to any Affiliated Investor that
owns any Investment Asset that is included in the Borrowing Base (which, for
purposes of this definition, shall include Colony Funds Sants so long as Coral
Partners owns any Investment Assets that are included in the Borrowing Base),
(a) any loan, advance, extension of credit (by way of guaranty or otherwise) or
capital contribution made by any Person to such Affiliated Investor, (b) any
purchase by, or issuance to, any Person of any Equity Interests, bonds, notes,
debentures or other debt securities of such Affiliated Investor or (c) any other
investment made by any Person in such Affiliated Investor.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“Lender” has the meaning specified in the introductory paragraph hereto.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrowers and the
Administrative Agent.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, easement, right-of-way or other encumbrance on title
to real property, lien (statutory or other), charge, or preference, priority or
other security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, and any financing lease having substantially
the same economic effect as any of the foregoing).

“Liquidity” means, at any time, the sum of (i) the aggregate amount of
unrestricted cash and Cash Equivalents of the Loan Parties held in Borrowing
Base Accounts at such time, plus (ii) an amount equal to (x) the Borrowing Base
at such time, minus (y) Total Outstandings at such time.

“Loan” means a Revolving Loan or a Converted Term Loan, as applicable.

“Loan Documents” means this Agreement, each Note, the Fee Letter, the Collateral
Documents, the Management Subordination Agreement and the Guaranty.

 

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“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from
one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant
to Section 2.02(a), which, if in writing, shall be substantially in the form of
Exhibit A.

“Loan Parties” means, collectively, the Borrowers and Guarantors.

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.

“Management Agreement” means the Management Agreement, dated September 29, 2009,
among the Manager, the REIT and Colony Financial TRS, LLC, as amended to date,
and as the same may be amended, restated, supplemented, modified or replaced
after the date of this Agreement solely to the extent such amendment,
restatement, supplement, modification or replacement is permitted under
Section 7.11(b).

“Management Subordination Agreement” means the Management Subordination
Agreement, dated as of the date hereof, among the REIT, Colony Financial TRS,
LLC, the Manager and the Administrative Agent.

“Manager” means Colony Financial Manager, LLC, a Delaware limited liability
company.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the business, assets, liabilities or financial condition of
the REIT or the Borrowers and their Subsidiaries taken as a whole; (b) a
material impairment of the ability of any Loan Party to perform its obligations
under any Loan Document to which it is a party; (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against any Loan
Party of any Loan Document to which it is a party; or (d) a material adverse
effect upon (x) the Collateral, (y) the Investment Assets and the Collateral,
taken as a whole, or (z) the validity, enforceability, perfection or priority of
the Administrative Agent’s Liens on the Collateral.

“Material Contract” means, with respect to any Person, each contract to which
such Person is a party which involves aggregate consideration payable to or by
such Person of $500,000 or more in any year or otherwise material to the
business, assets or financial condition of such Person.

“Maturity Date” means the later of (a) the Revolver Maturity Date or (b) if any
Revolving Loans are converted to Converted Term Loans in accordance with
Section 2.05(a), the Converted Term Loan Maturity Date.

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

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.

 

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“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including any Loan Party or any ERISA Affiliate) at least two of whom
are not under common control, as such a plan is described in Section 4064 of
ERISA.

“Net Cash Proceeds” means (a) with respect to any issuance and sale by the REIT
of any its Equity Interests, the excess of (i) the sum of the cash and cash
equivalents received by the REIT in connection with such issuance and sale, less
(ii) the underwriting discounts and commissions, and other out-of-pocket
expenses, incurred by the REIT in connection with such issuance or sale and
(b) with respect to any Investment Asset Payment, the cash proceeds received by
the applicable Loan Party in respect thereof.

“New Lender Joinder” has the meaning specified in Section 2.13(c).

“Non-Controlled Subsidiary” means each Subsidiary in which the REIT and/or its
Wholly-Owned Subsidiaries (i) directly, indirectly or beneficially own more than
50% but less than 75% of the Equity Interests of such Subsidiary having ordinary
voting power for the election of directors or members of any other governing
body of such Subsidiary, (ii) do not have the power and authority to elect or
appoint more than a majority of the directors or members of any other governing
body of such Subsidiary and (iii) do not have voting, approval, veto or other
similar rights with respect to matters involving the management, operations or
actions of such Person that are more expansive than those of the REIT and its
Wholly-Owned Subsidiaries set forth in the Organization Documents (as in effect
on the Closing Date) of the entities listed on Schedule III. In addition, in
order for any Subsidiary to constitute a Non-Controlled Subsidiary, the
Administrative Agent shall have received a certificate signed by a Responsible
Officer of the REIT designating such Subsidiary as a “Non-Controlled Subsidiary”
and certifying that each of the provisions set forth in clauses (i) – (iii) of
the prior sentence of this definition are true and correct with respect to such
Subsidiary.

“Non-Recourse Indebtedness” means Indebtedness of a Person as to which no Loan
Party (a) provides any Guarantee or credit support of any kind (including any
undertaking, Guarantee, indemnity, agreement or instrument that would constitute
Indebtedness) or (b) is directly or indirectly liable (as a guarantor or
otherwise), in each case subject to typical and customary exceptions for certain
acts or types of liability including for “bad acts”.

“Note” means a promissory note made by the Borrowers in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit B.

“NPL” means the National Priorities List under CERCLA.

“Obligations” means, collectively, (i) all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding and (ii) all indebtedness, liabilities,
duties, indemnities and obligations of any

 

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Loan Party owing to Bank of America or any Affiliate of Bank of America in
connection with or relating to any Borrowing Base Account maintained by such
Loan Party at Bank of America or such Affiliate, including, without limitation,
those arising under all instruments, agreements or other documents executed in
connection therewith or relating thereto.

“OFAC” has the meaning set forth in the definition of “Embargoed Person.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

“Outstanding Amount” means with respect to Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Loans occurring on such date.

“Participant” has the meaning specified in Section 10.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Act” means the Pension Protection Act of 2006.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each
as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431,
432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

“Pension Plan” means any employee pension benefit plan as defined in
Section 3(2) of ERISA (including a Multiple Employer Plan or a Multiemployer
Plan) that is maintained or is contributed to by a Borrower and any ERISA
Affiliate and is either subject to Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Code.

“Perfection Certificate” shall mean a certificate in the form of Exhibit H-1 or
any other form approved by the Administrative Agent, as the same shall be
supplemented from time to time by a Perfection Certificate Supplement or
otherwise.

 

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“Perfection Certificate Supplement” shall mean a certificate supplement in the
form of Exhibit H-2 or any other form approved by the Administrative Agent.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan), maintained for employees of a Loan Party or
any ERISA Affiliate or any such Plan to which a Loan Party or any ERISA
Affiliate is required to contribute on behalf of any of its employees.

“Platform” has the meaning specified in Section 6.02.

“Pledge and Security Agreement” means the Pledge and Security Agreement between
the Loan Parties and the Administrative Agent, substantially in the form of
Exhibit G.

“Pledged Affiliate” means a corporation, limited liability company, partnership
or other legal entity in which a Borrower directly owns all or a portion of its
equity interests, in each case so long as all of the equity interests owned by
such Borrower in such Person are pledged as Collateral in favor of the
Administrative Agent, for the benefit of the Secured Parties, pursuant to the
Collateral Documents.

“Quarterly Payment Date” means each date occurring three (3) months after the
Revolver Maturity Date (or if such date is not a Business Day, the immediately
preceding Business Day).

“Register” has the meaning specified in Section 10.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees and advisors
of such Person and of such Person’s Affiliates.

“Release” means any release, spill, emission, discharge, deposit, disposal,
leaking, pumping, pouring, dumping, emptying, injection or leaching into the
Environment, or into, from or through any building, structure or facility.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Revolving Loans has been terminated, Lenders holding in the aggregate more
than 50% of the Total Outstandings; provided that the Commitment of, and the
portion of the Total Outstandings held or deemed held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders.

“Responsible Officer” means the chief executive officer, president, vice
president, chief financial officer, treasurer, assistant treasurer or controller
of a Loan Party and, solely for purposes of the delivery of incumbency
certificates pursuant to Section 4.01, the secretary or any

 

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assistant secretary of a Loan Party. Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of the REIT or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to the REIT’s stockholders, partners or members (or the
equivalent Person thereof).

“Revolver Maturity Date” means the later of (a) the Initial Revolver Maturity
Date and (b) if the Initial Revolver Maturity Date is extended pursuant to
Section 2.12, such extended maturity date as determined pursuant to such
Section; provided, however, that, in each case, if such date is not a Business
Day, the Revolver Maturity Date shall be the next preceding Business Day.

“Revolving Loan” has the meaning specified in Section 2.01.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
each co-agent or sub-agent appointed by the Administrative Agent from time to
time pursuant to Section 9.05, and the other Persons the Obligations owing to
which are or are purported to be secured by the Collateral under the terms of
the Collateral Documents.

“Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the REIT and its Consolidated Subsidiaries as of that
date determined in accordance with GAAP.

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature, (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital, and
(e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

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“Solvency Certificate” means a Solvency Certificate of the chief financial
officer of REIT substantially in the form of Exhibit I.

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

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
Controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person; provided, however, that notwithstanding the foregoing, no
Designated Joint Venture shall constitute a Subsidiary of the REIT hereunder.
Unless otherwise specified, all references herein to a “Subsidiary” or to
“Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the REIT.

“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.

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

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

“Threshold Amount” means $ 15,000,000.

“Total Asset Value” means, as of any date, the book value of the total assets of
the REIT and its Consolidated Subsidiaries on such date as determined in
accordance with GAAP.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans.

 

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“Type” means with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in any applicable United
States jurisdiction.

“United States” and “U.S.” mean the United States of America.

“Value Percentage” means, at any time, (i) with respect to any Eligible
Investment Asset owned by a Pledged Affiliate, the percentage of the equity
interests of such Pledged Affiliate owned by the Loan Parties at such time and
(ii) with respect to the Colonial Investment, the product of (x) the percentage
of the equity interests of Colony Funds Sants owned by the REIT at such time,
multiplied by (y) the percentage of the equity interests of Coral Partners owned
by Colony Funds Sants at such time.

“Wholly-Owned Subsidiary” shall mean, as to any Person, (a) any corporation 100%
of whose Equity Interests (other than directors’ qualifying shares) is at the
time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
person and (b) any partnership, association, joint venture, limited liability
company or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person have a 100% equity interest at such time.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “hereto,” “herein,”
“hereof” and “hereunder,” and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its entirety and
not to any particular provision thereof, (iv) all references in a Loan Document
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

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(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein. Notwithstanding the foregoing, for
purposes of determining compliance with any covenant (including the computation
of any financial covenant) contained herein, Indebtedness of the REIT and its
Subsidiaries shall be deemed to be carried at 100% of the outstanding principal
amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial
liabilities shall be disregarded.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrowers or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrowers shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Borrowers shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

(c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of the REIT and its Subsidiaries or to the
determination of any amount for the REIT and its Subsidiaries on a consolidated
basis or any similar reference shall, in each case, be deemed to include each
variable interest entity that the REIT is required to consolidate pursuant to
FASB ASC 810 as if such variable interest entity were a Subsidiary as defined
herein.

1.04 Rounding. Any financial ratios required to be maintained by the Borrowers
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

 

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1.05 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

ARTICLE II. THE COMMITMENTS AND LOANS

2.01 Revolving Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make revolving loans (each such loan, a “Revolving
Loan”) to the Borrowers from time to time, on any Business Day during the
Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender’s Commitment; provided, however, that
after giving effect to any Borrowing, (i) the Total Outstandings shall not
exceed the lesser of (x) the Borrowing Base and (y) the Aggregate Commitments
and (ii) the aggregate Outstanding Amount of the Revolving Loans of any Lender
shall not exceed such Lender’s Commitment. Within the limits of each Lender’s
Commitment, and subject to the other terms and conditions hereof, the Borrowers
may borrow under this Section 2.01, prepay under Section 2.03, and reborrow
under this Section 2.01. Revolving Loans may be Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.

2.02 Borrowings, Conversions and Continuations of Loans.

(a) Each Borrowing, each conversion of Loans from one Type to the other, and
each continuation of Eurodollar Rate Loans shall be made upon the Borrowers’
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than
(i) 12:00 noon three Business Days prior to the requested date of any Borrowing
of, conversion to or continuation of Eurodollar Rate Loans or of any conversion
of Eurodollar Rate Loans to Base Rate Loans, and (ii) 11:00 a.m. on the
requested date of any Borrowing of Base Rate Loans; provided, however, that if
the Borrowers wish to request Eurodollar Rate Loans having an Interest Period of
twelve months in duration as provided in the definition of “Interest Period,”
the applicable notice must be received by the Administrative Agent not later
than 12:00 noon four Business Days prior to the requested date of such
Borrowing, conversion or continuation, whereupon the Administrative Agent shall
give prompt notice to the Lenders of such request and determine whether the
requested Interest Period is acceptable to all of them. Not later than 12:00
noon, three Business Days before the requested date of such Borrowing,
conversion or continuation, the Administrative Agent shall notify the Borrowers
(which notice may be by telephone) whether or not the requested Interest Period
has been consented to by all the Lenders. Each telephonic notice by the
Borrowers pursuant to this Section 2.02(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Loan Notice, appropriately
completed and signed by a Responsible Officer of each Borrower. Each Borrowing
of, conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $3,000,000 or a whole multiple of $100,000 in excess
thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Loan Notice (whether telephonic or written) shall specify (i) whether the
Borrowers are requesting a Borrowing, a conversion of Loans from one Type to the
other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of
the Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued, (iv) the Type of Loans to be borrowed or to which existing Loans are
to be converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Borrowers fail to specify a Type of

 

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Loan in a Loan Notice or if the Borrowers fail to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made
as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans. If the Borrowers
request a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans
in any such Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month.

(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Applicable Percentage of the applicable
Loans, and if no timely notice of a conversion or continuation is provided by
the Borrowers, the Administrative Agent shall notify each Lender of the details
of any automatic conversion to Base Rate Loans described in the preceding
subsection. In the case of a Borrowing, each Lender shall make the amount of its
Revolving Loan available to the Administrative Agent in immediately available
funds at the Administrative Agent’s Office not later than 1:00 p.m. on the
Business Day specified in the applicable Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the Borrowers in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrowers on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrowers.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans without the consent of the Required
Lenders.

(d) The Administrative Agent shall promptly notify the Borrowers and the Lenders
of the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrowers and the Lenders
of any change in Bank of America’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

(e) After giving effect to all Borrowings, all conversions of Loans from one
Type to the other, and all continuations of Loans as the same Type, there shall
not be more than six Interest Periods in effect with respect to Committed Loans.

2.03 Prepayments.

(a) Optional. The Borrowers may, upon notice to the Administrative Agent, at any
time or from time to time voluntarily prepay Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 12:00 noon (A) three Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $3,000,000 or a whole multiple of $100,000 in
excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a
principal amount of $500,000

 

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or a whole multiple of $100,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding. Each such notice shall specify
the date and amount of such prepayment and the Type(s) of Loans to be prepaid
and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such
Loans. The Administrative Agent will promptly notify each Lender of its receipt
of each such notice, and of the amount of such Lender’s Applicable Percentage of
such prepayment. If such notice is given by the Borrowers, the Borrowers shall
make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein. Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05. Subject
to Section 2.14, each such prepayment shall be applied to the Loans of the
Lenders in accordance with their respective Applicable Percentages.

(b) Mandatory. (i) If for any reason the Total Outstandings at any time
(x) prior to the Revolver Maturity Date exceeds the lesser of (A) the Borrowing
Base at such time and (B) the Aggregate Commitments then in effect, the
Borrowers shall immediately prepay Revolving Loans in an aggregate amount equal
to such excess and (y) on or after the Revolver Maturity Date exceeds the
Borrowing Base at such time, the Borrowers shall immediately prepay the
Converted Term Loans in an aggregate amount equal to such excess.

(ii) Upon the issuance and sale by the REIT of any of its Equity Interests, the
REIT shall prepay the Loans in an amount equal to 100% of the Net Cash Proceeds
received by the REIT in respect thereof; provided, however, that so long as no
Default or Event of Default shall have occurred and be continuing, the REIT may
use all or a portion of such Net Cash Proceeds to (A) pay operating expenses of
the Loan Parties due and payable at the time of, or anticipated to become due
and payable within sixty (60) days of, such sale or issuance of its Equity
Interests and/or (B) make dividends or other distributions in an amount not to
exceed the amount required for the REIT to eliminate 105% of its taxable income
at the time of such sale or issuance of its Equity Interests or otherwise
required for the REIT to maintain its tax status as a real estate investment
trust, in the case of each of clauses (A) and (B), so long as (x) the REIT
delivers to the Administrative Agent a certificate signed by a Responsible
Officer of the REIT certifying the amount of such Net Cash Proceeds permitted to
be used for the purposes set forth in clauses (A) and (B), together with a
detailed calculation thereof and (y) such Net Cash Proceeds are used for such
purposes within sixty (60) days after the date of such sale or issuance of its
Equity Interests.

(iii) Upon receipt by any Loan Party of any Net Cash Proceeds from an Investment
Asset Payment, the Borrowers shall prepay the Loans in an amount equal to 100%
of such Net Cash Proceeds; provided, however, that so long as no Default or
Event of Default shall have occurred and be continuing, the REIT may use all or
a portion of such Net Cash Proceeds to (A) pay operating expenses of the Loan
Parties due and payable at the time of, or anticipated to become due and payable
within one hundred-twenty (120) days of, such Investment Asset Payment and/or
(B) make dividends or other distributions in an amount not to exceed the amount
required for the REIT to eliminate 105% of its taxable income at the time of
such Investment Asset Payment or otherwise required for the REIT to maintain its
tax status as a real estate investment trust, in the case of each of clauses
(A) and (B), so long as (x) the REIT delivers to the

 

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Administrative Agent a certificate signed by a Responsible Officer of the REIT
certifying the amount of such Net Cash Proceeds permitted to be used for the
purposes set forth in clauses (A) and (B) together with a detailed calculation
thereof and (y) such Net Cash Proceeds are used for such purposes within one
hundred-twenty (120) days after the date of such Investment Asset Payment.

2.04 Termination or Reduction of Commitments. The Borrowers may, upon written
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided that (i) any
such notice shall be received by the Administrative Agent not later than 12:00
noon five Business Days prior to the date of termination or reduction, (ii) any
such partial reduction shall be in an aggregate amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Outstandings would exceed
the lesser of (x) the Borrowing Base and (y) the Aggregate Commitments and
(iv) the Borrowers shall pay any amounts required to be paid under Section 3.05
resulting from any prepayment of Revolving Loans made in connection with such
termination or reduction of Commitments. The Administrative Agent will promptly
notify the Lenders of any such notice of termination or reduction of the
Aggregate Commitments. Any reduction of the Aggregate Commitments shall be
applied to the Commitment of each Lender according to its Applicable Percentage.
All fees accrued until the effective date of any termination of the Aggregate
Commitments shall be paid on the effective date of such termination.

2.05 Term Loan Conversion; Repayment of Converted Term Loans.

(a) Conversion of Revolving Loans to Converted Term Loan. In the event that
there are any Revolving Loans outstanding on the Revolver Maturity Date, such
Revolving Loans shall automatically convert to term loans (each, a “Converted
Term Loan”) on such date and the Commitments shall automatically terminate. Upon
the conversion of the Revolving Loans to Converted Term Loans, each Lender shall
be deemed to hold its Applicable Percentage of each of the Converted Term Loans.
Each Converted Term Loan shall continue to bear interest at the same rate as,
and contain such other terms that are identical to, the Revolving Loan from
which such Converted Term Loan was converted (including, in the case of a
Converted Term Loan that was converted from a Revolving Loan that was a
Eurodollar Rate Loan at the time of conversion, the same Interest Period
applicable to such Revolving Loan at the time of conversion); provided, however
that (i) amounts paid or prepaid in respect of Converted Term Loans may not be
reborrowed and (ii) the Borrowers shall be required to repay the principal
amount of the Converted Term Loans in the amounts, and at such times, as
provided in Section 2.05(b).

(b) Amortization of Converted Term Loans. The Borrowers shall make a scheduled
repayment of the aggregate outstanding principal amount of the Converted Term
Loans on each Quarterly Payment Date, in an amount equal to 25% of the aggregate
principal amount of Converted Term Loans outstanding on the Revolver Maturity
Date (after giving effect to the conversion of Revolving Loans to Converted Term
Loans on such date). To the extent not previously paid, all Converted Term Loans
shall be due and payable on the Converted Term loan Maturity Date.

 

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2.06 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate and; (ii) each Base Rate Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date (or, in the case of a Converted Term Loan, the conversion date)
at a rate per annum equal to the Base Rate plus the Applicable Rate.

(b) (i) If any amount of principal of any Loan is not paid when due, whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws until such
amount is paid in full.

(ii) If any amount (other than principal of any Loan) payable by any Borrower
under any Loan Document is not paid when due, whether at stated maturity, by
acceleration or otherwise, then upon the request of the Required Lenders, such
amount shall thereafter bear interest at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws until such amount is paid in full.

(iii) Upon the request of the Required Lenders, while any Event of Default
exists, the Borrowers shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws until such Event of Default is cured or waived by the requisite
Lenders.

(iv) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.07 Fees. In addition to certain fees described in Section 2.12(b)(iii):

(a) Commitment Fee. The Borrowers shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a
commitment fee equal to 0.50% times the actual daily amount by which the
Aggregate Commitments exceed the sum of the Outstanding Amount of Revolving
Loans. The commitment fee shall accrue at all times during the Availability
Period, including at any time during which one or more of the conditions in
Article IV is not met, and shall be due and payable quarterly in arrears on the
last Business Day of each March, June, September and December, commencing with
the first such date to occur after the Closing Date, and on the last day of the
Availability Period. The commitment fee shall be calculated quarterly in
arrears.

 

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(b) Other Fees. (i) The Borrowers shall pay to BAS and the Administrative Agent
for their own respective accounts fees in the amounts and at the times specified
in the Fee Letter. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.

(ii) The Borrowers shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.

2.08 Computation of Interest and Fees. All computations of interest for Base
Rate Loans (including Base Rate Loans determined by reference to the Eurodollar
Rate) shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.10(a),
bear interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

2.09 Evidence of Debt. The Loans made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Loans made by the Lenders to the Borrowers and the
interest and payments thereon. Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the Borrowers
hereunder to pay any amount owing with respect to the Obligations. In the event
of any conflict between the accounts and records maintained by any Lender and
the accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error. Upon the request of any Lender made through the
Administrative Agent, the Borrowers shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender’s
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.

2.10 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrowers
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent’s
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender’s Lending Office. All payments received by the Administrative Agent after
2:00 p.m. shall be deemed received on the

 

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next succeeding Business Day and any applicable interest or fee shall continue
to accrue. If any payment to be made by a Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day,
and such extension of time shall be reflected in computing interest or fees, as
the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such
Lender has made such share available in accordance with and at the time required
by Section 2.02) and may, in reliance upon such assumption, make available to
the Borrowers a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrowers jointly and severally agree
to pay to the Administrative Agent forthwith on demand such corresponding amount
in immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrowers to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, plus any administrative, processing or similar
fees customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by the Borrowers, the
interest rate applicable to Base Rate Loans. If the Borrowers and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrowers the amount of such interest paid by the Borrowers for such period. If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Revolving Loan
included in such Borrowing. Any payment by the Borrowers shall be without
prejudice to any claim the Borrowers may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

(ii) Payments by Borrowers; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders hereunder that the Borrowers will not make such payment, the
Administrative Agent may assume that the Borrowers have made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if the Borrowers have
not in fact made such payment, then each of the Lenders severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender in immediately available funds with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.

 

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A notice of the Administrative Agent to any Lender or the Borrowers with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Revolving Loan to be made by such Lender
as provided in the foregoing provisions of this Article II, and such funds are
not made available to the Borrowers by the Administrative Agent because the
conditions to the Revolving Loans set forth in Article IV are not satisfied or
waived in accordance with the terms hereof, the Administrative Agent shall
promptly return such funds (in like funds as received from such Lender) to such
Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Revolving Loans and to make payments pursuant to Section 10.04(c) are
several and not joint. The failure of any Lender to make any Revolving Loan or
to make any payment under Section 10.04(c) on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such
date, and no Lender shall be responsible for the failure of any other Lender to
so make its Revolving Loan, or to make its payment under Section 10.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Revolving Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Revolving Loan in any particular place or manner.

2.11 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Loans made by it resulting in such
Lender’s receiving payment of a proportion of the aggregate amount of such Loans
and accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them,
provided that:

(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest; and

(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by or on behalf of the Borrowers pursuant to and in accordance with
the express terms of this Agreement (including the application of funds arising
from the existence of a Defaulting Lender), or (y) any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans to any assignee or participant, other than an assignment to the
REIT or any Affiliate thereof (as to which the provisions of this Section shall
apply).

 

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Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of such Borrower in the amount of
such participation.

2.12 Extension of Revolver Maturity Date.

(a) Requests for Extension. The Borrowers may, by written notice to the
Administrative Agent (such notice, an “Extension Notice”) not earlier than 60
days and not later than 30 days prior to the Initial Revolver Maturity Date,
request that the Lenders extend the Revolver Maturity Date for an additional
twelve (12) months from the Initial Revolver Maturity Date. The Administrative
Agent shall distribute any such Extension Notice promptly following its receipt
thereof.

(b) Conditions Precedent to Effectiveness of Revolver Maturity Date Extension.
As conditions precedent to such extension, the Borrowers shall, on or prior to
the Initial Revolver Maturity Date, satisfy each of the following requirements
for such extension to become effective:

(i) The Administrative Agent shall have received an Extension Notice within the
period required under clause (a) above;

(ii) On the date of such Extension Notice and both immediately before and
immediately after giving effect to such extension of the Revolver Maturity Date,
no Default or Event of Default shall have occurred and be continuing;

(iii) The Borrowers shall have paid to the Administrative Agent, for the pro
rata benefit of the Lenders based on their respective Applicable Percentage as
of such date, an extension fee in an amount equal to 0.35% of the Aggregate
Commitments as in effect on Initial Revolver Maturity Date (it being agreed that
such Extension Fee shall be fully earned when paid and shall not be refundable
for any reason);

(iv) The Administrative Agent shall have received evidence satisfactory to it
that the greater of (x) the REIT’s equity market capitalization (based on the
average closing price per share of the capital stock of the REIT on the New York
Stock Exchange (including any preferred capital stock of the REIT solely to the
extent such preferred capital stock is traded on the New York Stock Exchange)
during the ten (10) Business Day period ending on the date that is thirty
(30) days prior to the Initial Revolver Maturity Date) or (y) the Total Asset
Value as of the then most recently ended fiscal quarter of the REIT for which
financial statements have been delivered to the Administrative Agent pursuant to
Section 6.01(a) or (b), calculated on a pro forma basis to give effect to any
net cash proceeds received by the REIT from the sale and issuance of any of its
capital stock during the period commencing on the day following the last day of
such fiscal quarter and ending on the date that is thirty (30) days prior to the
Initial Revolver Maturity Date, is greater than 150% of the Total Asset Value as
of March 31, 2010;

 

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(v) The Administrative Agent shall have received a certificate of each Loan
Party dated as of the Initial Revolver Maturity Date signed by a Responsible
Officer of such Loan Party (i) certifying and attaching the resolutions adopted
by such Loan Party approving or consenting to such extension and (ii) in the
case of the Borrowers, certifying that, before and after giving effect to such
extension, (A) the representations and warranties contained in Article V and the
other Loan Documents are true and correct in all material respects on and as of
the Initial Revolver Maturity Date, except (x) to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, (y) any representation
or warranty that is already by its terms qualified as to “materiality”,
“Material Adverse Effect” or similar language shall be true and correct in all
respects as of such date after giving effect to such qualification and (z) for
purposes of this Section 2.12, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to subsections (a) and (b), respectively,
of Section 6.01, and (B) no Default exists;

(vi) The REIT shall have delivered to the Administrative Agent a certificate
executed by a Responsible Officer of the REIT certifying that the condition
precedent set forth in Section 2.12(b)(iv) above has been satisfied (and
containing a reasonably detailed calculation thereof);

(vii) The REIT shall have delivered to the Administrative Agent a Solvency
Certificate executed on behalf of each of the Loan Parties (with respect to the
Solvency of each such Loan Party both before and after giving effect to such
extension); and

(viii) The Borrowers and the other Loan Parties shall have delivered to the
Administrative Agent such reaffirmations of their respective obligations under
the Loan Documents (after giving effect to the extension), and acknowledgments
and certifications that they have no claims, offsets or defenses with respect to
the payment or performance of any of the Obligations, including, without
limitation, reaffirmations of each of the Pledge and Security Agreement and
Guaranty, executed by the Loan Parties party thereto.

2.13 Increase in Commitments.

(a) Request for Increase. Provided there exists no Default, upon written notice
to the Administrative Agent, the Borrowers may from time to time request an
increase in the Aggregate Commitments by an amount (in the aggregate for all
such requests) not exceeding $75,000,000; provided that (i) any such request for
an increase shall be in a minimum amount of $10,000,000, (ii) the Borrowers may
make a maximum of three such requests and (iii) the written consent of the
Administrative Agent (which consent shall be determined in the Administrative
Agent’s sole discretion) shall be required for any such increase in the
Aggregate Commitments. If the Administrative Agent consents to the Borrowers’
request for an increase in the Aggregate Commitments, the Administrative Agent
shall promptly inform the Lenders of such request made by the Borrowers. On or
prior to the time that the Administrative Agent informs the Lenders of the
Borrowers’ request for an increase in the Aggregate Commitments, the Borrowers
(in consultation with the Administrative Agent) shall specify the time period
within which each Lender is requested to respond (which shall in no event be
less than ten Business Days from the date of delivery of such notice to the
Lenders).

 

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(b) Lender Elections to Increase. Each Lender shall notify the Administrative
Agent within such time period whether or not it agrees to increase its
Commitment and, if so, whether by an amount equal to, greater than, or less than
its Applicable Percentage of such requested increase. Any Lender not responding
within such time period shall be deemed to have declined to increase its
Commitment.

(c) Notification by Administrative Agent; Additional Lenders. The Administrative
Agent shall notify the Borrowers and each Lender of the Lenders’ responses to
each request made hereunder. To achieve the full amount of a requested increase
and subject to the approval of the Administrative Agent, the Borrowers may also
invite additional Eligible Assignees to become Lenders pursuant to a joinder
agreement in form and substance satisfactory to the Administrative Agent and its
counsel (a “New Lender Joinder Agreement”).

(d) Effective Date and Allocations. If the Aggregate Commitments are increased
in accordance with this Section, the Administrative Agent and the Borrowers
shall determine the effective date (the “Increase Effective Date”) and the final
allocation of such increase. The Administrative Agent shall promptly notify the
Borrowers and the Lenders of the final allocation of such increase and the
Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As conditions precedent to such
increase, (i) the Borrowers shall deliver to the Administrative Agent a
certificate of each Loan Party dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a Responsible Officer of such Loan
Party (x) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (y) in the case of the Borrowers,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article V and the other Loan
Documents are true and correct on and as of the Increase Effective Date, except
to the extent that (1) such representations and warranties specifically refer to
an earlier date, in which case they are true and correct as of such earlier
date, (2) any representation or warranty that is already by its terms qualified
as to “materiality”, “Material Adverse Effect” or similar language shall be true
and correct in all respects as of such date after giving effect to such
qualification and (3) that for purposes of this Section 2.13, the
representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01, and (B) no
Default exists and (ii) the Administrative Agent shall have received (x) a New
Lender Joinder Agreement duly executed by the Borrowers and each Eligible
Assignee that is becoming a Lender in connection with such increase, which New
Lender Joinder Agreement shall be acknowledged by the Administrative Agent and
(y) written confirmation from each existing Lender, if any, participating in
such increase of the amount by which its Commitment will be increased. The
Borrowers shall prepay any Loans outstanding on the Increase Effective Date (and
pay any additional amounts required pursuant to Section 3.05) to the extent
necessary to keep the outstanding Revolving Loans ratable with any revised
Applicable Percentages arising from any nonratable increase in the Commitments
under this Section.

 

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(f) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.11 or 10.01 to the contrary.

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

(i) Waivers and Amendments. That Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 10.01.

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by the Administrative Agent for the account of that Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or
otherwise, and including any amounts made available to the Administrative Agent
by that Defaulting Lender pursuant to Section 10.08), shall be applied at such
time or times as may be determined by the Administrative Agent as follows:
first, to the payment of any amounts owing by that Defaulting Lender to the
Administrative Agent hereunder; second, as the Borrowers may request (so long as
no Default or Event of Default exists), to the funding of any Revolving Loan in
respect of which that Defaulting Lender has failed to fund its portion thereof
as required by this Agreement, as determined by the Administrative Agent; third,
if so determined by the Administrative Agent and the Borrowers, to be held in a
non-interest bearing deposit account and released in order to satisfy
obligations of that Defaulting Lender to fund Revolving Loans under this
Agreement; fourth, to the payment of any amounts owing to the Lenders as a
result of any judgment of a court of competent jurisdiction obtained by any
Lender against that Defaulting Lender as a result of that Defaulting Lender’s
breach of its obligations under this Agreement; fifth, so long as no Default or
Event of Default exists, to the payment of any amounts owing to the Borrowers as
a result of any judgment of a court of competent jurisdiction obtained by the
Borrowers against that Defaulting Lender as a result of that Defaulting Lender’s
breach of its obligations under this Agreement; and sixth, to that Defaulting
Lender or as otherwise directed by a court of competent jurisdiction; provided
that if (x) such payment is a payment of the principal amount of any Loans in
respect of which that Defaulting Lender has not fully funded its appropriate
share and (y) such Loans were made at a time when the conditions set forth in
Section 4.02 were satisfied or waived, such payment shall be applied solely to
pay the Loans of all non-Defaulting Lenders on a pro rata basis prior to being
applied to the payment of any Loans of that Defaulting Lender. Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are
applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed
paid to and redirected by that Defaulting Lender, and each Lender irrevocably
consents hereto.

(iii) Certain Fees. That Defaulting Lender shall not be entitled to receive any
commitment fee pursuant to Section 2.07(a) for any period during which that
Lender is a Defaulting Lender (and the Borrowers shall not be required to pay
any such fee that otherwise would have been required to have been paid to that
Defaulting Lender).

 

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(b) Defaulting Lender Cure. If the Borrowers and the Administrative Agent agree
in writing in their sole discretion that a Defaulting Lender should no longer be
deemed to be a Defaulting Lender, the Administrative Agent will so notify the
parties hereto, whereupon as of the effective date specified in such notice and
subject to any conditions set forth therein that Lender will, to the extent
applicable, purchase that portion of outstanding Loans of the other Lenders or
take such other actions as the Administrative Agent may determine to be
necessary to cause the Loans to be held on a pro rata basis by the Lenders in
accordance with their Applicable Percentages, whereupon that Lender will cease
to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrowers while that Lender was a Defaulting Lender; and provided, further,
that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

2.15 Collateral; Borrowing Base; Borrowing Base Accounts; Additional Joint
Venture Investments.

(a) Collateral. The obligations of the Borrowers and Guarantors under the Loan
Documents shall be secured by a perfected first priority security interest in
favor of the Administrative Agent, for the benefit of the Secured Parties, in
the Collateral.

(b) Requirements for Investment Assets to be Included in the Borrowing Base.
Prior to any Investment Asset being included in the Borrowing Base, each of the
following requirements shall have been satisfied with respect to such Investment
Asset (such requirements being referred to herein as the “Borrowing Base
Eligibility Criteria”):

(i) The Borrowers shall have provided the Administrative Agent and the Lenders
with a written request for such Investment Asset to be admitted into the
Borrowing Base, which request shall be accompanied by (x) a reasonably detailed
investment package describing such Investment Asset, (y) a credit memorandum
regarding such Investment Asset, in a form similar to the credit memoranda
provided to the Administrative Agent prior to the Closing Date with respect to
the Initial Borrowing Base Assets and (z) such additional documents and
information as reasonably requested by the Administrative Agent (on behalf of
itself or a Lender) (such written request, together with the accompanying
materials specified herein, is referred to herein as the “Borrowing Base
Inclusion Request”).

(ii) The Administrative Agent and the Required Lenders shall have approved the
inclusion of such Investment Asset in the Borrowing Base (such approval not to
be unreasonably withheld, conditioned or delayed); it being agreed that if the
Administrative Agent or any Lender fails to respond to any such approval
requested in a Borrowing Base Inclusion Request within ten (10) Business Days
after its receipt thereof, the Administrative or such Lender, as applicable,
shall be deemed to have approved such request.

 

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(iii) Unless otherwise consented to in writing by the Administrative Agent and
the Required Lenders in their sole discretion, such Investment Asset shall be
owned by the REIT or by a Pledged Affiliate; provided, that the Colonial
Investment may be included in the Borrowing Base to the extent that, after
giving effect thereto and at all times thereafter, the Colonial Investment does
not account for more than 3% of the Borrowing Base.

(iv) Such Investment Asset shall be free and clear of all Liens and negative
pledges, and the Affiliated Investor that owns such Investment Asset shall not
have any Indebtedness or other material liabilities and shall be Solvent and not
subject to any proceedings under any Debtor Relief Law.

(v) After giving effect to the inclusion of such Investment Asset in the
Borrowing Base, on an aggregate basis the weighted average (on a cost basis)
time to maturity of all Eligible Investment Assets, taken together, shall be at
least three years six months.

(vi) Such Investment Asset shall not have a cash payment past due for more than
thirty (30) days.

(vii) Such Investment Asset shall not be subject to a payment, bankruptcy,
acceleration or other material default (as reasonably determined by the
Administrative Agent), and the Administrative Agent, in the exercise of its
reasonable judgment, shall not have determined that an event or other
circumstance exists that would impair the prospects of the payment and other
obligations being performed in respect of such Investment Asset by the
obligor(s) thereon.

(viii) Such Investment Asset shall be a U.S.-based Investment Asset and shall be
denominated in U.S. dollars; provided, that with the prior written consent of
the Administrative Agent and the Required Lenders, an Investment Asset that is a
European-based Investment Asset and/or that is denominated in Euros, Pounds
Sterling or Swiss Francs may be included in the Borrowing Base so long as, after
giving effect thereto and at all times thereafter, the aggregate amount of all
European-based Eligible Investment Assets and Eligible Investment Assets
denominated in Euros, Pounds Sterling or Swiss Francs do not account for more
than 20% of the Borrowing Base.

(ix) If such Investment Asset is part of a portfolio containing two or more
Investment Assets, a material portion (as reasonably determined by the
Administrative Agent) of such portfolio shall not consist of Investment Assets
that do not satisfy the other Borrowing Base Eligibility Criteria set forth
herein.

(x) Except as set forth in Part (b) of Schedule 5.13 or otherwise consented to
in writing by the Administrative Agent and the Required Lenders in their sole
discretion, none of the Borrowers shall have any obligation to make any
Investments (whether as a result of a capital call or otherwise) in the
Affiliated Investor that owns such Investment Asset (or, in the case of the
Colonial Investment, in Colony Funds Sants) following the date on which such
Investment Asset is included in the Borrowing Base.

 

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(xi) The Administrative Agent and the Lenders shall have received a Borrowing
Base Certificate presenting the REIT’s computation of the Borrowing Base after
giving effect to the inclusion of such Investment Asset in the Borrowing Base.

(xii) The Administrative Agent and the Lenders shall have received a copy of the
limited liability company operating agreement, partnership agreement, bylaws or
other similar organizational documents of the Affiliated Investor who owns such
Investment Asset, which organizational documents shall be (x) in form and
substance satisfactory to the Administrative Agent (it being agreed that, solely
in the case of such organizational documents of an Affiliated Investor that is
not a Subsidiary, the form of Organization Documents attached as Exhibit K
hereto is satisfactory to the Administrative Agent) and (y) certified by a
Responsible Officer of the REIT as being true, correct and complete.

(xiii) The Administrative Agent shall have received such additional information
regarding such Investment Asset as reasonably requested by the Administrative
Agent (on behalf of itself or any Lender).

(c) Removal of Investment Assets from the Borrowing Base by Administrative Agent
or Required Lenders. The Administrative Agent or the Required Lenders (by notice
to the Administrative Agent) shall have the right, in their sole discretion, to
revoke their prior approval of any Investment Asset as an Eligible Investment
Asset (i) which the Administrative Agent or the Required Lenders reasonably
determine no longer satisfies any of the Borrowing Base Eligibility Criteria set
forth in Section 2.15(b)(iii) through (x) or (ii) if any event or circumstance
occurs in respect of such Investment Asset (or the obligor(s) thereon) following
the inclusion of such Investment Asset in the Borrowing Base that the
Administrative Agent or the Required Lenders reasonably determine to be
materially adverse to such Investment Asset or the applicable Affiliated
Investor. The Administrative Agent shall promptly provide the Borrowers and the
Lenders with notice of any such revocation. If, after giving effect to any such
revocation and the removal of the applicable Investment Asset from the Borrowing
Base, the Total Outstandings exceed the Borrowing Base, the Borrowers shall
immediately repay the Loans in an amount necessary to eliminate such excess.

(d) Sale and Releases of Investment Assets Included in the Borrowing Base.
Provided that no Default or Event of Default has occurred and is continuing (or
would exist immediately after giving effect to the transactions contemplated by
this Section 2.15(d)), a Borrower or Guarantor may (i) sell an Investment Asset
included in the Borrowing Base (whereupon such Investment Asset would be removed
from the Borrowing Base), (ii) sell all (but not less than all) of the equity
interests held, directly or indirectly, by the Loan Parties in any Affiliated
Investor that holds one or more Investment Assets included in the Borrowing Base
(whereupon the Investment Assets held by such Affiliated Investor would be
removed by the Borrowing Base) or (iii) request that an Investment Asset be
removed from the Borrowing Base (each such transaction being referred to herein
as a “Borrowing Base Release Transaction”) upon the completion of the following
conditions precedent to the satisfaction of the Administrative Agent:

(i) The Borrowers shall have delivered to the Administrative Agent and the
Lenders written notice of their desire to consummate such Borrowing Base Release
Transaction on or prior to the date that is seven (7) Business Days prior to the
date on which such Borrowing Base Release Transaction is to be effected.

 

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(ii) On or before the date that is three (3) Business Days prior to the date of
the proposed Borrowing Base Release Transaction, the Borrowers shall have
submitted to the Administrative Agent and the Lenders (x) a Borrowing Base
Certificate giving pro forma effect to the proposed Borrowing Base Release
Transaction and (y) a certificate executed by a Responsible Officer of the REIT
certifying to the Administrative Agent and the Lenders that immediately before
and after giving effect to such Borrowing Base Release Transaction, no Default
or Event of Default has occurred and is continuing. If, after giving effect to
the proposed Borrowing Base Release Transaction, the Total Outstandings would
exceed the lesser of (x) the Aggregate Commitments at such time and (y) the
Borrowing Base at such time, the Borrowers shall, simultaneously with or prior
to the consummation of such Borrowing Base Release Transaction, repay the Loans
in an amount necessary to eliminate such excess.

(e) Borrowing Base Accounts.

(i) Each Borrower shall irrevocably instruct each Affiliated Investor who owns
any Investment Assets that are included in the Borrowing Base to make any and
all Distributions from such Affiliated Investor to such Borrower into one or
more deposit accounts or securities accounts, as applicable, that is subject to
a Control Agreement and maintained by such Borrower at Bank of America or an
Affiliate thereof (each such deposit account and securities account, a
“Borrowing Base Account). If, despite such instructions, any Distribution is
received by a Borrower in contravention of the prior sentence, such Borrower
shall receive such Distribution in trust for the benefit of the Administrative
Agent, shall segregate such Distribution from all other funds of such Borrower,
and shall immediately cause such Distribution to be deposited into a Borrowing
Base Account.

(ii) The REIT shall irrevocably instruct Colony Funds Sants to make any and all
Distributions from Colony Funds Sants to the REIT into a Borrowing Base Account
of the REIT. If, despite such instructions, any Distribution is received by the
REIT in contravention of the prior sentence, the REIT shall receive such
Distribution in trust for the benefit of the Administrative Agent, shall
segregate such Distribution from all other funds of the REIT, and shall
immediately cause such Distribution to be deposited into a Borrowing Base
Account of the REIT.

(iii) Each Borrower that owns any Investment Asset included in the Borrowing
Base shall immediately deposit any and all payments and other amounts received
by such Borrower relating to such Investment Asset (including, without
limitation, all payments of principal, interest, fees, indemnities or premiums
in respect of such Investment Asset, and all proceeds from the sale or other
disposition of, or from any exercise of any rights or remedies with respect to,
such Investment Asset) into a Borrowing Base Account.

 

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(iv) If, within thirty (30) days prior to the Converted Term Loan Maturity Date,
the REIT has not provided the Administrative Agent with evidence satisfactory to
the Administrative Agent that the Borrowers (i) will have sufficient cash on
hand to repay all of the Converted Terms Loans and other outstanding Obligations
on the Converted Term Loan Maturity Date and/or (ii) have obtained a commitment,
from a financing source reasonably acceptable to the Administrative Agent and
containing conditions which are reasonably satisfactory to the Administrative
Agent, providing the Borrowers with sufficient funds to repay all of the
Converted Terms Loans and other outstanding Obligations on the Converted Term
Loan Maturity Date, then control of all Borrowing Base Accounts will come under
the sole discretion of the Administrative Agent and the Loan Parties’ access to
amounts on deposit in the Borrowing Base Accounts will at all times thereafter
be subject to the sole discretion of the Administrative Agent until payment in
full in cash of all of the Obligations and termination of this Agreement.

(f) Additional Joint Venture Investments. Each Borrower hereby agrees that,
following the date on which any Investment Asset of an Affiliated Investor is
included in the Borrowing Base, no additional Joint Venture Investments shall be
made in such Affiliated Investor by any Person unless each of the following
conditions precedent are satisfied:

(i) Within ten (10) Business Days prior to any such additional Joint Venture
Investment being made, the Administrative Agent and the Lenders shall have
received (x) a written notice, executed by a Responsible Officer of the REIT,
describing such Joint Venture Investment in reasonable detail (including,
without limitation, the Person(s) making such Joint Venture Investment, the
amount and form thereof and the intended use of the proceeds thereof) and (y) a
Borrowing Base Certificate giving pro forma effect to such Joint Venture
Investment (including, without limitation, (A) any adjustments to the Borrowing
Base resulting from the Loan Parties’ percentage ownership of the Equity
Interests of such Affiliated Investor being increased or decreased in connection
therewith and/or (B) the removal from the Borrowing Base of all Investment
Assets of such Affiliated Investor, to the extent such Joint Venture Investment
is in the form of a loan to such Affiliated Investor or otherwise results in
such Affiliated Investor owing any Indebtedness to any Person).

(ii) The Administrative Agent and the Required Lenders shall have the right, in
their reasonable discretion, to make adjustments to the calculation of the
Borrowing Base set forth in the pro forma Borrowing Base Certificate delivered
pursuant to Section 2.15(f)(i) above to reflect (x) any actual or potential
reduction or dilution in the Loan Parties’ percentage ownership of such
Affiliated Investor resulting from such Joint Venture Investment and/or (y) any
other effects of such Joint Venture Investment that have, or could result in, a
reduction or dilution of the Loan Parties right to receive Distributions from,
or any of their other rights or interests in, such Affiliated Investor
(including, without limitation, the effects of any such Joint Venture Investment
in the form of an equity investment with a liquidation preference or a preferred
rate of return), in each case to the extent not otherwise already reflected in
such Borrowing Base Certificate. Any such

 

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adjustments to the calculation of the Borrowing Base shall be provided by the
Administrative Agent to the REIT within five (5) Business Days after the
Administrative Agent’s and Lenders’ receipt of the pro forma Borrowing Base
Certificate delivered pursuant to Section 2.15(f)(i) above (whereupon, the
Borrowers shall, on or prior to the consummation of such Joint Venture
Investment, deliver an updated pro forma Borrowing Base Certificate reflecting
such adjustments).

(iii) If, after giving effect to such Joint Venture Investment, the Total
Outstandings would exceed the lesser of (x) the Aggregate Commitments at such
time and (y) the Borrowing Base at such time (giving effect to any adjustments
made by the Administrative Agent and/or the Required Lenders pursuant to
Section 2.15(f)(ii) above), the Borrowers shall, simultaneously with or prior to
the consummation of such Joint Venture Investment, repay the Loans in an amount
necessary to eliminate such excess.

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes. (i) Any and all payments by or on account of any obligation of any Loan
Party hereunder or under any other Loan Document shall be made free and clear of
and without reduction or withholding for any Indemnified Taxes or Other Taxes.
If, however, applicable Laws require the applicable withholding agent to
withhold or deduct any Indemnified Taxes (including Other Taxes), such Tax shall
be withheld or deducted in accordance with such Laws as determined in good faith
by the applicable withholding agent.

(ii) If the applicable withholding agent shall be required by applicable Laws to
withhold or deduct any Indemnified Taxes or Other Taxes, from any payment, then
(A) the applicable withholding agent shall withhold or make such deductions,
(B) the applicable withholding agent shall timely pay the full amount withheld
or deducted to the relevant Governmental Authority in accordance with applicable
Laws, and (C) the sum payable by the applicable Loan Party shall be increased as
necessary so that after any required withholding or all required deductions
(including deductions applicable to additional sums payable under this Section)
have been made, the Administrative Agent or Lender, as the case may be, receives
an amount equal to the sum it would have received had no such withholding or
deduction been made.

(b) Payment of Other Taxes by the Loan Parties. Without limiting the provisions
of subsection (a) above, the relevant Loan Party shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable Laws.

(c) Tax Indemnifications. (i) Without limiting the provisions of subsection
(a) or (b) above, each Borrower shall, and does hereby, indemnify the
Administrative Agent and each Lender, and shall make payment in respect thereof
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other

 

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Taxes imposed or asserted on or attributable to amounts payable under this
Section) payable by the Administrative Agent or such Lender, as the case may be,
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Each Borrower shall also, and does hereby, indemnify the Administrative Agent,
and shall make payment in respect thereof within 10 days after demand therefor,
for any amount which a Lender for any reason fails to pay indefeasibly to the
Administrative Agent as required by clause (ii) of this subsection. A
certificate as to the amount of any such payment or liability delivered to the
Borrowers by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(ii) To the extent required by any applicable Law, the Administrative Agent may
deduct or withhold from any payment to any Lender an amount equivalent to any
applicable withholding tax. Without limiting the provisions of subsection (a)
or (b) above, if any Governmental Authority asserts a claim that any Borrower or
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,
was not properly executed or because such Lender failed to notify the Borrowers
or the Administrative Agent of a change in circumstances that rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason), then each Lender shall, and does hereby, indemnify and hold harmless
the Borrowers and the Administrative Agent, and shall make payment in respect
thereof within 10 days after demand therefor, fully for all amounts paid,
directly or indirectly, by the Administrative Agent as Taxes or otherwise, and
any and all related losses, claims, liabilities, penalties, interest and
expenses (including the fees, charges and disbursements of any counsel for the
Borrowers or the Administrative Agent), whether or not such Tax was correctly or
legally asserted. A certificate as to the amount of such payment or liability
delivered to any Lender by the Administrative Agent shall be conclusive absent
manifest error. Each Lender hereby authorizes the Administrative Agent to set
off and apply any and all amounts at any time owing to such Lender under this
Agreement or any other Loan Document against any amount due to the
Administrative Agent under this clause (ii). The agreements in this
clause (ii) shall survive the resignation and/or replacement of the
Administrative Agent, any assignment of rights by, or the replacement of, a
Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all other Obligations.

(d) Evidence of Payments. As soon as practicable, after any payment of
Indemnified Taxes or Other Taxes paid by a Loan Party to a Governmental
Authority as provided in this Section 3.01, such Loan Party shall deliver to the
Administrative Agent, the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of any return
required by applicable Laws to report such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.

(e) Status of Lenders. Each Lender shall, at such times as are reasonably
requested by the Borrowers or the Administrative Agent, provide the Borrowers
and the Administrative Agent with any documentation prescribed by Law, or
reasonably requested by the Borrowers or

 

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the Administrative Agent, certifying as to any entitlement of such Lender to an
exemption from, or reduction in, any withholding Tax with respect to any
payments to be made to such Lender under the Loan Documents. Each such Lender
shall, whenever a lapse in time or change in circumstances renders such
documentation expired, obsolete or inaccurate in any material respect, deliver
promptly to the Borrowers and the Administrative Agent updated or other
appropriate documentation (including any new documentation reasonably requested
by the applicable withholding agent) or promptly notify the Borrowers and the
Administrative Agent of its inability to do so. Unless the applicable
withholding agent has received forms or other documents satisfactory to it
indicating that payments under any Loan Document to or for a Lender are not
subject to withholding tax or are subject to such Tax at a rate reduced by an
applicable tax treaty, the Borrowers, Administrative Agent or other applicable
withholding agent shall withhold amounts required to be withheld by applicable
Law from such payments at the applicable statutory rate.

Without limiting the generality of the foregoing:

(i) Each Lender that is a United States person (as defined in
Section 7701(a)(30) of the Code) shall deliver to the Borrowers and the
Administrative Agent on or before the date on which it becomes a party to this
Agreement two properly completed and duly signed original copies of Internal
Revenue Service Form W-9 (or any successor form) certifying that such Lender is
exempt from U.S. federal backup withholding.

(ii) Each Lender that is not a United States person (as defined in
Section 7701(a)(30) of the Code) shall deliver to the Borrowers and the
Administrative Agent on or before the date on which it becomes a party to this
Agreement (and from time to time thereafter when required by Law or upon the
reasonable request of the Borrowers or the Administrative Agent) whichever of
the following is applicable:

(I) two duly completed copies of Internal Revenue Service Form W-8BEN (or any
successor forms) claiming eligibility for a complete exemption from United
States withholding taxes pursuant to the benefits of an income tax treaty to
which the United States of America is a party,

(II) two duly completed copies of Internal Revenue Service Form W-8ECI (or any
successor forms),

(III) in the case of a Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate, in
substantially the form of Exhibit J (any such certificate a “United States Tax
Compliance Certificate”), or any other form approved by the Administrative
Agent, to the effect that such Lender is not (A) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code, and that no
payments in connection with the Loan Documents are effectively connected with
such Lender’s conduct of a U.S. trade or business and (y) two duly completed
copies of Internal Revenue Service Form W-8BEN (or any successor forms),

 

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(IV) to the extent a Lender is not the beneficial owner (for example, where the
Lender is a partnership, or is a Lender that has granted a participation),
Internal Revenue Service Form W-8IMY (or any successor forms) of the Lender,
accompanied by a Form W-8ECI, W-8BEN evidencing a complete exemption from United
States withholding taxes, United States Tax Compliance Certificate, Form W-9,
Form W-8IMY (or other successor forms) or any other required information from
each beneficial owner, as applicable (provided that, if the Lender is a
partnership (and not a participating Lender) and one or more beneficial owners
are claiming the portfolio interest exemption, the United States Tax Compliance
Certificate shall be provided by such Lender on behalf of such beneficial
owner(s)),

(V) any other form prescribed by applicable requirements of U.S. federal income
tax Law as a basis for claiming a complete exemption from U.S. federal
withholding tax duly completed together with such supplementary documentation as
may be prescribed by applicable requirements of Law to permit the Borrowers and
the Administrative Agent to determine the withholding or deduction required to
be made, or

(VI) any certificate, report, disclosure, document or agreement required by
Sections 1471-1474 of the Code or any amended or successor version of such
provisions (including evidence of any agreement of any Lender or the
Administrative Agent (or any financial institution through which any payment is
made to such Lender or the Administrative Agent) required under such
provisions).

Each Lender shall, from time to time after the initial delivery by such Lender
of the forms described above, whenever a lapse in time or change in such
Lender’s circumstances renders such forms, certificates or other evidence so
delivered expired, obsolete or inaccurate, promptly (1) deliver to the Borrowers
and the Administrative Agent (in such number of copies as shall be requested by
the recipient) renewals, amendments or additional or successor forms, properly
completed and duly executed by such Lender, together with any other certificate
or statement of exemption required in order to confirm or establish such
Lender’s status or that such Lender is entitled to an exemption from or
reduction in U.S. federal withholding tax or (2) notify Administrative Agent and
the Borrowers of its inability to deliver any such forms, certificates or other
evidence.

Notwithstanding any other provision of this clause (e), a Lender shall not be
required to deliver any form that such Lender is not legally eligible to
deliver.

(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time
shall the Administrative Agent have any obligation to file for or otherwise
pursue on behalf of a Lender, or have any obligation to pay to any Lender, any
refund or credit of Taxes withheld or deducted from funds paid for the account
of such Lender, as the case may be. If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of, or credit
with respect to, any Indemnified Taxes or Other Taxes as to which it has been
indemnified by a Loan Party or with respect to which a Loan Party has paid
additional amounts

 

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pursuant to this Section (a “Tax Benefit”), it shall pay to such Loan Party an
amount equal to such Tax Benefit (but only to the extent of indemnity payments
made, or additional amounts paid, by such Loan Party under this Section with
respect to the Indemnified Taxes or Other Taxes giving rise to such Tax
Benefit), net of all out-of-pocket expenses (including Taxes) incurred by the
Administrative Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such Tax Benefit net of any Taxes payable by the Administrative Agent
or Lender), provided that the applicable Loan Party, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
such Loan Party (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such Tax
Benefit to such Governmental Authority. This subsection shall not be construed
to require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to the Borrowers or any other Person.

(g) Payments made by Administrative Agent. For the avoidance of doubt, any
payments made by the Administrative Agent to any Lender shall be treated as
payments made by the applicable Loan Party.

3.02 Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Loans whose interest
is determined by reference to the Eurodollar Rate, or to determine or charge
interest rates based upon the Eurodollar Rate, or any Governmental Authority has
imposed material restrictions on the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the London interbank market, then, on
notice thereof by such Lender to the Borrowers through the Administrative Agent,
(i) any obligation of such Lender to make or continue Eurodollar Rate Loans or
to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and
(ii) if such notice asserts the illegality of such Lender making or maintaining
Base Rate Loans the interest rate on which is determined by reference to the
Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate
Loans of such Lender shall, if necessary to avoid such illegality, be determined
by the Administrative Agent without reference to the Eurodollar Rate component
of the Base Rate, in each case until such Lender notifies the Administrative
Agent and the Borrowers that the circumstances giving rise to such determination
no longer exist. Upon receipt of such notice, (x) the Borrowers shall, upon
demand from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans
(the interest rate on which Base Rate Loans of such Lender shall, if necessary
to avoid such illegality, be determined by the Administrative Agent without
reference to the Eurodollar Rate component of the Base Rate), either on the last
day of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such
notice asserts the illegality of such Lender determining or charging interest
rates based upon the Eurodollar Rate, the Administrative Agent shall during the
period of such suspension compute the Base Rate applicable to such Lender
without reference to the Eurodollar Rate component thereof until the
Administrative is advised in writing by such Lender that it is no longer illegal
for such Lender to determine or charge interest rates based upon the Eurodollar
Rate. Upon any such prepayment or conversion, the Borrowers shall also pay
accrued interest on the amount so prepaid or converted.

 

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3.03 Inability to Determine Rates. If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan or in
connection with an existing or proposed Base Rate Loan, or (c) the Eurodollar
Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, the Administrative Agent will promptly so notify the
Borrowers and each Lender. Thereafter, (x) the obligation of the Lenders to make
or maintain Eurodollar Rate Loans shall be suspended, and (y) in the event of a
determination described in the preceding sentence with respect to the Eurodollar
Rate component of the Base Rate, the utilization of the Eurodollar Rate
component in determining the Base Rate shall be suspended, in each case until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Borrowers may revoke any pending
request for a Borrowing of, conversion to or continuation of Eurodollar Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans in the amount specified therein.

3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement);

(ii) subject any Lender to any change in the basis of taxation of payments to
such Lender in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 3.01 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender); or

(iii) impose on any Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or Eurodollar Rate Loans made by such
Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan the interest on which is determined by
reference to the Eurodollar Rate (or, in the case of clause (ii) above, any
Loan), or of maintaining its obligation to make any such Loan, or to reduce the
amount of any sum received or receivable by such Lender hereunder (whether of
principal, interest or any other amount) then, upon request of such Lender the
Borrowers will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.

 

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(b) Capital Requirements. If any Lender determines that any Change in Law
affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the capital
of such Lender’s holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by, such Lender, to a level
below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrowers shall be conclusive absent manifest error. The
Borrowers shall pay such Lender the amount shown as due on any such certificate
within 15 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of such Lender’s right to demand such compensation, provided
that the Borrowers shall not be required to compensate a Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender
notifies the Borrowers of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).

(e) Reserves on Eurodollar Rate Loans. The Borrowers shall pay to each Lender,
as long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs
of such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan, provided
the Borrowers shall have received at least 15 days’ prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender. If a
Lender fails to give notice 15 days prior to the relevant Interest Payment Date,
such additional interest shall be due and payable 15 days from receipt of such
notice.

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrowers shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

 

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(b) any failure by the Borrowers (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrowers; or

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Borrowers pursuant
to Section 10.13;

including any loss (other than lost profit) or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrowers shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrowers to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.

3.06 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrowers are required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall, as applicable, use reasonable efforts to
designate a different Lending Office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need
for the notice pursuant to Section 3.02, as applicable, and (ii) in each case,
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, the Borrowers may replace such Lender in accordance with
Section 10.13.

3.07 Survival. All of the Borrowers’ obligations under this Article III shall
survive termination of the Aggregate Commitments, repayment of all other
Obligations hereunder, and resignation of the Administrative Agent.

 

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ARTICLE IV. CONDITIONS PRECEDENT

4.01 Conditions of Effectiveness. The effectiveness of this Agreement and
obligation of each Lender to make Revolving Loans hereunder is subject to
satisfaction of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals, e-mail copies (in a .pdf format) or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party, each dated the Closing Date (or, in the case
of certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Administrative Agent
and each of the Lenders:

(i) executed counterparts of this Agreement and the Guaranty, sufficient in
number for distribution to the Administrative Agent, each Lender and the REIT;

(ii) a Note duly executed by the Borrowers in favor of each Lender requesting a
Note;

(iii) the Pledge and Security Agreement, duly executed by each Loan Party,
together with:

(A) certificates or instruments representing the Certificated Securities (as
defined in the Pledge and Security Agreement) accompanied by all endorsements
and/or powers required by the Pledge and Security Agreement,

(B) acknowledgment copies or stamped receipt copies of proper financing
statements, duly filed under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary or desirable in order to
perfect the Liens created under the Pledge and Security Agreement, covering the
Collateral described in the Pledge and Security Agreement,

(C) completed requests for information listing all effective financing
statements filed in the jurisdictions referred to in clause (B) above that name
any Loan Party as debtor, together with copies of such other financing
statements,

(D) evidence of the completion of all other actions, recordings and filings of
or with respect to the Pledge and Security Agreement that the Administrative
Agent may deem necessary or desirable in order to perfect the Liens created
thereby,

(E) Control Agreements with respect to each Borrowing Base Account of a Loan
Party, duly executed by each of the parties thereto,

(F) evidence that all other action that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created under the Pledge
and Security Agreement have been taken (including receipt of duly executed
payoff letters and UCC-3 terminations, if any); and

 

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(G) a Perfection Certificate, in substantially the form of Exhibit H-1, duly
executed by each of the Loan Parties;

(iv) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to which such
Loan Party is a party;

(v) such documents and certifications as the Administrative Agent may reasonably
require to evidence that each Loan Party is duly organized or formed, and that
each Loan Party is validly existing, in good standing and qualified to engage in
business in each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, except to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;

(vi) a favorable opinion of Orrick, Herrington & Sutcliffe LLP, counsel to the
Loan Parties, addressed to the Administrative Agent and each Lender, as to such
matters concerning the Loan Parties and the Loan Documents as the Administrative
Agent may reasonably request;

(vii) a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party and
the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;

(viii) a certificate signed by a Responsible Officer of the Borrower
(x) certifying (A) that the conditions specified in Sections 4.02(a) have been
satisfied and (B) that there has not occurred a material adverse change in the
business, assets or financial condition of any of the Borrowers, Guarantors or
any of their respective Subsidiaries, or any of the entities in which they have
invested directly or indirectly, or in the facts and information regarding any
such entities as heretofore disclosed to the Administrative Agent and the
Lenders and (y) attaching copies of the operating agreements, partnership
agreements or other applicable organizational documents of (A) each Affiliated
Investor in which all or a portion of its Equity Interests are owned directly by
a Loan Party, (B) Colony Funds Sants and (C) Coral Partners;

(ix) evidence that all insurance required to be maintained pursuant to the Loan
Documents has been obtained and is in effect;

(x) a Borrowing Base Certificate, as of the Closing Date;

(xi) completion of all due diligence with respect to the Borrowers, Guarantors,
Affiliated Investors, Investment Assets and Collateral in scope and
determination satisfactory to the Administrative Agent and Lenders in their sole
discretion, including a sampling review of the credit and legal files of the
Borrowers, the Guarantors and the

 

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Affiliated Investors, review of financial statements and projections, review of
governance provisions and review of each Borrower’s underwriting criteria and
closing processes as well as its on-going valuation and monitoring
methodologies, and other items that Administrative Agent may request;

(xii) the absence of any action, suit, investigation or proceeding, pending or
threatened, in any court or before any arbitrator or governmental authority that
purports to materially affect any of the Loan Parties, any of their respective
Subsidiaries, any Affiliated Investor that has an Investment Asset included in
the Borrowing Base or whose Equity Interests are owned (in whole or in part)
directly by a Loan Party, or any transaction contemplated hereby, or that could
have a material adverse effect on any of the Loan Parties, or any of their
respective Subsidiaries, or any Affiliated Investor that has an Investment Asset
included in the Borrowing Base or whose Equity Interests are owned (in whole or
in part) directly by a Loan Party, or any transaction contemplated hereby or on
the ability of any of the Borrowers or Guarantors to perform its obligations
under the Loan Documents;

(xiii) the completion of a review and verification, by an independent consultant
engaged by the Lenders, of the accuracy and reliability of the REIT’s
calculation and reporting of the book value and Cash Income of the Initial
Eligible Investment Assets, which review and verification shall be in form,
scope and substance satisfactory to the Administrative Agent and the Lenders;

(xiv) a Solvency Certificate from the Loan Parties demonstrating that each Loan
Party is Solvent;

(xv) the Management Subordination Agreement; duly executed by each of the
parties thereto; and

(xvi) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent or the Required Lenders reasonably may require.

(b) Any fees required to be paid on or before the Closing Date shall have been
paid.

(c) Unless waived by the Administrative Agent, the Borrowers shall have paid all
fees, charges and disbursements of counsel to the Administrative Agent and BAS
(directly to such counsel if requested by the Administrative Agent) to the
extent invoiced prior to or on the Closing Date, plus such additional amounts of
such fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrowers and the
Administrative Agent).

Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received written notice from such Lender prior to the proposed
Closing Date specifying its objection thereto.

 

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4.02 Conditions to all Revolving Loans. The obligation of each Lender to honor
any Loan Notice (other than a Loan Notice requesting only a conversion of Loans
to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the
following conditions precedent:

(a) The representations and warranties of the Borrowers and each other Loan
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct on and as of the date of such Revolving
Loan, except (i) to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, (ii) any representation or warranty that is
already by its terms qualified as to “materiality”, “Material Adverse Effect” or
similar language shall be true and correct in all respects as of such date after
giving effect to such qualification and (iii) for purposes of this Section 4.02,
the representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01.

(b) No Default shall exist, or would result from such proposed Revolving Loan or
from the application of the proceeds thereof.

(c) The Administrative Agent shall have received a Loan Notice in accordance
with the requirements hereof.

Each Loan Notice (other than a Loan Notice requesting only a conversion of Loans
to the other Type or a continuation of Eurodollar Rate Loans) submitted by the
Borrowers shall be deemed to be a representation and warranty that the
conditions specified in Sections 4.02(a) and (b) have been satisfied on and as
of the date of the applicable Loan.

ARTICLE V. REPRESENTATIONS AND WARRANTIES

Each Borrower represents and warrants to the Administrative Agent and the
Lenders that:

5.01 Existence, Qualification and Power. Each Loan Party and each Subsidiary
thereof (a) is duly organized or formed, validly existing and, as applicable, in
good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own or
lease its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents to which it is a party, and (c) is duly
qualified and is licensed and, as applicable, in good standing under the Laws of
each jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (b)(i) or (c), to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.

 

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5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law.

5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, (b) the
grant by any Loan Party of the Liens granted by it pursuant to the Collateral
Documents, (c) the perfection or maintenance of the Liens created under the
Collateral Documents (including the first priority nature thereof), except for
filings and recordings required under the UCC or (d) the exercise by the
Administrative Agent or any Lender in compliance with applicable Laws of its
rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents.

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, administration or
other laws affecting creditors’ rights generally, or general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.

5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the REIT
and its Consolidated Subsidiaries as of the date thereof and their results of
operations, cash flows and changes in shareholders’ equity for the period
covered thereby in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein; and
(iii) show all material indebtedness and other liabilities, direct or
contingent, of the REIT and its Consolidated Subsidiaries as of the date
thereof, including liabilities for Taxes, material commitments and Indebtedness.

(b) The unaudited consolidated balance sheets of the REIT and its Consolidated
Subsidiaries dated June 30, 2010, and the related consolidated statements of
income or operations and cash flows for the fiscal quarter ended on that date
(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, and
(ii) fairly present the financial condition of the REIT and its Consolidated
Subsidiaries as of the date thereof and their results of operations and cash
flows for the period covered thereby, subject, in the case of clauses (i) and
(ii), to the absence of footnotes and to normal year-end audit adjustments.
Schedule 5.05 sets forth all material indebtedness and other liabilities, direct
or contingent, of the REIT and its Consolidated Subsidiaries as of the date of
such financial statements, including liabilities for Taxes, material commitments
and Indebtedness.

 

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(c) Since the date of the balance sheet included in the Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.

(d) The consolidated forecasted balance sheet and statements of income and cash
flows of the REIT and its Consolidated Subsidiaries delivered pursuant to
Section 6.01(c) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in light of the conditions existing
at the time of delivery of such forecasts, and represented, at the time of
delivery, the REIT’s best estimate of its future financial condition and
performance.

5.06 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of such Borrower after investigation, threatened,
at law, in equity, in arbitration or before any Governmental Authority, by or
against such Borrower or any of its Subsidiaries or against any of their
properties or revenues that (a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions contemplated hereby, or
(b) either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect.

5.07 No Default. Neither any Loan Party nor any Subsidiary thereof is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.

5.08 Ownership of Property; Liens. Each Loan Party and each of its Subsidiaries
has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
property of each Loan Party and its Subsidiaries is subject to no Liens, other
than Liens permitted by Section 7.01.

5.09 Environmental Compliance. (a) The Loan Parties and their Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof such Borrower has reasonably concluded
that such Environmental Laws and claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

(b) None of the properties currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries is listed or formally proposed for listing on
the NPL or on the CERCLIS or any analogous foreign, state or local list or, to
the knowledge of the Borrowers, is adjacent to any such property; and except as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, there are no and to the best

 

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knowledge of the Loan Parties and their Subsidiaries never have been any
underground or above-ground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are being or have
been treated, stored or disposed on any property currently owned or operated by
any Loan Party or any of its Subsidiaries or, to the best of the knowledge of
the Loan Parties, on any property formerly owned or operated by any Loan Party
or any of its Subsidiaries; and except as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, there is no
asbestos or asbestos-containing material on, at or in any property currently
owned or operated by any Loan Party or any of its Subsidiaries; and Hazardous
Materials have not been Released on, at, under or from any property currently or
formerly owned or operated by any Loan Party or any of its Subsidiaries in a
manner, form or amount which could reasonably be expected to result in material
Environmental Liability of any Loan Party or any Subsidiary.

(c) Neither any Loan Party nor any of its Subsidiaries is undertaking, and has
not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened Release of Hazardous Materials at,
on, under, or from any site, location or operation, either voluntarily or
pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law, other than such investigations, assessments and remedial and
response actions as could not reasonably be expected to have a Material Adverse
Effect; and to the knowledge of the Borrowers and the other Loan Parties, all
Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
any Loan Party or any of its Subsidiaries have been disposed of in a manner
which could not reasonably expected to result in material Environmental
Liability to any Loan Party or any of its Subsidiaries.

(d) The Loan Parties and their respective Subsidiaries: (i) are, and within the
period of all applicable statutes of limitation have been, in material
compliance with all applicable Environmental Laws; (ii) hold all Environmental
Permits (each of which is in full force and effect) required for any of their
current or intended operations or for any property owned, leased, or otherwise
operated by any of them, except for such Environmental Permits the absence of
which could not reasonably be expected to result in a Material Adverse Effect;
(iii) are, and within the period of all applicable statutes of limitation have
been, in material compliance with all of their Environmental Permits; and
(iv) to the extent within the control of the Loan Parties and their respective
Subsidiaries, each of their Environmental Permits have been timely renewed and
complied with, and the Loan Parties and their respective Subsidiaries have no
reason to believe that any additional Environmental Permits that may be required
of any of them will not be timely obtained and complied with, without material
expense, or that compliance with any Environmental Permit that is or is expected
to become applicable to any of them will not be timely attained and maintained,
without material expense.

5.10 Insurance. The properties of the REIT and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the REIT,
in such amounts with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the REIT or the applicable Subsidiary operates.

 

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5.11 Taxes. The REIT and each of its Subsidiaries have timely filed all federal
and state income and other material tax returns and reports required to be
filed, and have timely paid all federal, state and other material Taxes (whether
or not shown on a tax return), including in its capacity as a withholding agent,
levied or imposed upon it or its properties, income or assets otherwise due and
payable, except those Taxes which are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
have been provided in accordance with GAAP. There is no proposed material tax
assessment or other claim against, and no material tax audit with respect to,
any Loan Party or any Subsidiary. Neither any Loan Party nor any Subsidiary
thereof is party to any tax sharing agreement. Except as could not be reasonably
expected to, individually or in the aggregate, result in a Material Adverse
Effect, neither any Loan Party nor any of its Subsidiaries has ever
“participated” in a “listed transaction” within the meaning of Treasury
Regulation Section 1.6011-4.

5.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state laws. Each Plan that is
intended to be a qualified plan under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service to the effect
that the form of such Plan is qualified under Section 401(a) of the Code and the
trust related thereto has been determined by the Internal Revenue Service to be
exempt from federal income tax under Section 501(a) of the Code, or an
application for such a letter is currently being processed by the Internal
Revenue Service. To the best knowledge of such Borrower, nothing has occurred
that would prevent or cause the loss of such tax-qualified status.

(b) There are no pending or, to the best knowledge of such Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred, and neither such Borrower nor any ERISA
Affiliate is aware of any fact, event or circumstance that could reasonably be
expected to constitute or result in an ERISA Event with respect to any Pension
Plan or Multiemployer Plan; (ii) as of the most recent valuation date for any
Pension Plan, the adjusted funding target attainment percentage (as defined in
Section 436(j)(2) of the Code) is 60% or higher and neither such Borrower nor
any ERISA Affiliate knows of any facts or circumstances that could reasonably be
expected to cause the adjusted funding target attainment percentage for any such
plan to drop below 60% as of the most recent valuation date; (iii) neither such
Borrower nor any ERISA Affiliate has incurred any liability to the PBGC other
than for the payment of premiums, and there are no premium payments which have
become due that are delinquent; (iv) neither such Borrower nor any ERISA
Affiliate has engaged in a transaction that is subject to Section 4069 or
Section 4212(c) of ERISA; and (v) no Pension Plan has been terminated by the
plan administrator thereof nor by the PBGC.

(d) Neither such Borrower nor any ERISA Affiliate maintains or contributes to,
or has any unsatisfied obligation to contribute to, or liability under, any
active or terminated Pension Plan other than (A) on the Closing Date, those
listed on Schedule 5.12(d) hereto and (B) thereafter, Pension Plans not
otherwise prohibited by this Agreement.

 

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5.13 Subsidiaries; Equity Interests. As of the Closing Date, no Loan Party has
any Subsidiaries or directly owns Equity Interests in any Affiliated Investor or
other Person, except as specifically disclosed in Part (a) of Schedule 5.13, and
all of the outstanding Equity Interests in such Subsidiaries, Affiliated
Investors and other Persons have been validly issued and (x) except as disclosed
in Part (b) of Schedule 5.13, no additional Investments (whether as a result of
a capital call or otherwise) are required by any Loan Party in such
Subsidiaries, Affiliated Investors or other Persons and, to the extent
applicable, all of the outstanding Equity Interests in such Subsidiaries,
Affiliated Investors and other Persons are fully paid and nonassessable and
(y) are owned by a Loan Party or a Subsidiary thereof in the amounts specified
on Part (a) of Schedule 5.13 free and clear of all Liens. All of the outstanding
Equity Interests in each Loan Party have been validly issued and, except as
disclosed in Part (b) of Schedule 5.13 and to the extent applicable, are fully
paid and nonassessable. Set forth on Part (c) of Schedule 5.13 is a complete and
accurate list, as of the Closing Date, of (i) all Loan Parties, (ii) all
Affiliated Investors that own Investment Assets included in the Borrowing Base
and/or whose Equity Interests are owned, in whole or in part, directly by a Loan
Party and (iii) the jurisdiction of organization and the address of the
principal place of business of each of the Loan Parties, each of the Affiliated
Investors referenced in clause (ii) of this sentence, Colony Funds Sants and
Coral Partners. Part (d) of Schedule 5.13 sets forth, as of the Closing Date,
(i) the percentage of the Equity Interests of Colony Funds Sants owned by the
Loan Parties and (ii) the percentage of the Equity Interests of Coral Partners
owned by Colony Funds Sants. As of the Closing Date, the copy of the
Organization Documents of each Loan Party and each amendment thereto provided
pursuant to Section 4.01(a)(v) is a true and correct copy of each such document,
each of which is valid and in full force and effect.

5.14 Margin Regulations; Investment Company Act.

(a) Such Borrower is not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. Following the application of
the proceeds of each Borrowing not more than 25% of the value of the assets
(either of such Borrower only or of the Borrowers and their Subsidiaries on a
consolidated basis) subject to the provisions of Section 7.01 or Section 7.05 or
subject to any restriction contained in any agreement or instrument between such
Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness
and within the scope of Section 8.01(e) will be margin stock.

(b) None of the REIT, any Person Controlling the REIT, or any Subsidiary of the
REIT is or is required to be registered as an “investment company” under the
Investment Company Act of 1940.

5.15 Disclosure. Such Borrower has disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. No report, financial

 

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statement, certificate or other information furnished (whether in writing or
orally) by or at the direction of any Loan Party to the Administrative Agent or
any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, such Borrower represents only that
such information was prepared in good faith based upon assumptions believed by
the preparer thereof to be reasonable at the time.

5.16 Compliance with Laws. Each Loan Party and each Subsidiary thereof is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

5.17 Taxpayer Identification Number. Each Loan Party’s true and correct
U.S. taxpayer identification number (or the equivalent thereof, in the case of a
Loan Party that is not organized under the laws of the United States, any State
thereof or the District of Columbia) is set forth on Schedule 10.02.

5.18 Intellectual Property; Licenses, Etc. The REIT and its Subsidiaries own, or
possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, “IP Rights”) that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of such Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the REIT or any Subsidiary
thereof infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of such Borrower, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

5.19 Solvency. Each Loan Party is individually, and together with its
Subsidiaries on a consolidated basis, Solvent.

5.20 Casualty, Etc. Neither the businesses nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

5.21 Labor Matters. There are no collective bargaining agreements or
Multiemployer Plans covering the employees of the REIT, any of its Subsidiaries
or any ERISA Affiliates as of the Closing Date and neither the REIT nor any
Subsidiary thereof has suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five years.

 

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5.22 Collateral Documents. The provisions of the Collateral Documents are
effective to create in favor of the Administrative Agent for the benefit of the
Secured Parties a legal, valid and enforceable first priority Lien (subject to
Liens permitted by Section 7.01) on all right, title and interest of the
respective Loan Parties in the Collateral described therein. Except for filings
completed prior to the Closing Date and as contemplated hereby and by the
Collateral Documents, no filing or other action will be necessary to perfect or
protect such Liens.

5.23 Anti-Money Laundering and Economic Sanctions Laws.

(a) No Loan Party, none of its Subsidiaries and, to the knowledge of each Loan
Party, none of its Affiliates and none of the respective officers, directors,
brokers or agents of such Loan Party, such Subsidiary or Affiliate (i) has
violated or is in violation of any applicable Anti-Money Laundering Law or
(ii) has engaged or engages in any transaction, investment, undertaking or
activity that conceals the identity, source or destination of the proceeds from
any category of offenses designated in any applicable law, regulation or other
binding measure implementing the “Forty Recommendations” and “Nine Special
Recommendations” published by the Organisation for Economic Cooperation and
Development’s Financial Action Task Force on Money Laundering.

(b) No Loan Party, none of its Subsidiaries and, to the knowledge of each Loan
Party, none of its Affiliates and none of the respective officers, directors,
brokers or agents of such Loan Party, such Subsidiary or such Affiliate that is
acting or benefiting in any capacity in connection with the Loans is an
Embargoed Person.

(c) Except as otherwise authorized by OFAC, no Loan Party, none of its
Subsidiaries and, to the knowledge of each Loan Party, none of its Affiliates
and none of the respective officers, directors, brokers or agents of such Loan
Party, such Subsidiary or such Affiliate acting or benefiting in any capacity in
connection with the Loans (i) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any Embargoed Person, (ii) deals in, or otherwise engages in any transaction
related to, any property or interests in property blocked pursuant to any
applicable Economic Sanctions Laws 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 applicable prohibitions set forth
in any Economic Sanctions Laws.

5.24 REIT Status; Stock Exchange Listing. The REIT is qualified as a Real Estate
Investment Trust. The shares of common Equity Interests of the REIT are listed
on the New York Stock Exchange.

 

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ARTICLE VI. AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, each Borrower shall,
and shall (except in the case of the covenants set forth in Sections 6.01, 6.02,
and 6.03) cause each Subsidiary thereof to:

6.01 Financial Statements. Deliver to the Administrative Agent and each Lender,
in form and detail satisfactory to the Administrative Agent and the Required
Lenders:

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of the REIT (or, if earlier, 15 days after the date required to be
filed with the SEC (without giving effect to any extension permitted by the
SEC)) (commencing with the fiscal year ended December 31, 2010), a consolidated
balance sheet of the REIT and its Consolidated Subsidiaries as at the end of
such fiscal year, and the related consolidated statements of income or
operations, changes in shareholders’ equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and prepared in accordance with GAAP, such
consolidated statements to be audited and accompanied by a report and opinion of
an independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and shall not
be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit;

(b) as soon as available, but in any event within 60 days after the end of each
of the first three fiscal quarters of each fiscal year of the REIT (or, if
earlier, 5 days after the date required to be filed with the SEC (without giving
effect to any extension permitted by the SEC)) (commencing with the fiscal
quarter ending September 30, 2010), a consolidated balance sheet of the REIT and
its Consolidated Subsidiaries as at the end of such fiscal quarter, the related
consolidated statements of income or operations for such fiscal quarter and for
the portion of the REIT’s fiscal year then ended, and the related consolidated
statements of cash flows for the portion of the REIT’s fiscal year then ended,
in each case setting forth in comparative form, as applicable, the figures for
the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail,
such consolidated statements to be certified by the chief executive officer,
chief financial officer, treasurer or controller of the REIT as fairly
presenting the financial condition, results of operations and cash flows of the
REIT and its Consolidated Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes; and

(c) as soon as available, but in any event at least 15 days before the end of
each fiscal year of the REIT, forecasts prepared by management of the REIT, in
form satisfactory to the Administrative Agent and the Required Lenders, of
consolidated balance sheets and statements of income or operations and cash
flows of the REIT and its Consolidated Subsidiaries on a quarterly basis for the
immediately following fiscal year (including the fiscal year in which the
Maturity Date occurs).

As to any information contained in materials furnished pursuant to
Section 6.02(d), the Borrowers shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrowers to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.

 

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6.02 Certificates; Other Information. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

(a) concurrently with the delivery of the financial statements referred to in
Section 6.01(a), a certificate of its independent certified public accountants
certifying such financial statements and stating that in making the examination
necessary therefor no knowledge was obtained of any Default under the financial
covenants set forth herein or, if any such Default shall exist, stating the
nature and status of such event;

(b) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b) (commencing with the delivery of the financial
statements for the fiscal quarter ending September 30, 2010), a duly completed
Compliance Certificate signed by the chief executive officer, chief financial
officer, treasurer or controller of the REIT (which delivery may, unless the
Administrative Agent, or a Lender requests executed originals, be by electronic
communication including fax or email and shall be deemed to be an original
authentic counterpart thereof for all purposes);

(c) promptly after any request by the Administrative Agent or any Lender, copies
of any detailed audit reports, management letters or recommendations submitted
to the board of directors (or the audit committee of the board of directors) of
the REIT by independent accountants in connection with the accounts or books of
the REIT or any Subsidiary, or any audit of any of them;

(d) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of the REIT, and copies of all annual, regular, periodic and special reports and
registration statements which the REIT may file or be required to file with the
SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not
otherwise required to be delivered to the Administrative Agent pursuant hereto;

(e) in the case of any debt securities of any Loan Party or Subsidiary thereof
that has an aggregate outstanding principal amount in excess of the Threshold
Amount, promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of such debt securities pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to Section 6.01 or any other clause of this
Section 6.02;

(f) promptly, and in any event within five Business Days after receipt thereof
by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
any Loan Party or any Subsidiary thereof;

(g) promptly, such additional information regarding the business, financial or
corporate affairs of any Loan Party or any Subsidiary or Affiliated Investor
thereof, or compliance with the terms of the Loan Documents, or any information
with respect to the Investment Assets, in each case as the Administrative Agent
or any Lender may from time to time reasonably request;

 

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(h) concurrently with the delivery of the financial statements referred to in
Section 6.01(b) and within 45 days after the last fiscal quarter of each fiscal
year of the REIT, a Borrowing Base Report; and

(i) on a monthly basis (and in any case within 10 Business Days after the last
day of each month), or more frequently if requested by the Administrative Agent
upon the occurrence and during the continuance of a Default, a Borrowing Base
Certificate, together with (x) a calculation (certified by a Responsible Officer
of the REIT) of the weighted average (on a cost basis) time to maturity of all
Investment Assets included in the Borrowing Base, (y) a calculation of the
percentage of the Borrowing Base consisting of Investment Assets that are
European-based and/or denominated in Euros, Pounds Sterling or Swiss Francs and
(z) a calculation of the percentage of the Borrowing Base consisting of the
Colonial Investment.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
REIT posts such documents, or provides a link thereto on the REIT’s website on
the Internet at the website address listed on Schedule 10.02; or (ii) on which
such documents are posted on the REIT’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrowers shall deliver paper
copies of such documents to the Administrative Agent or any Lender upon its
request to the Borrowers to deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrowers shall notify the Administrative Agent and each
Lender (by telecopier or electronic mail) of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. The Administrative Agent shall have no
obligation to request the delivery of or to maintain paper copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrowers with any such request by a Lender for
delivery, and each Lender shall be solely responsible for requesting delivery to
it or maintaining its copies of such documents.

Each Borrower hereby acknowledges that the Administrative Agent and/or the
Arranger will make available to the Lenders materials and/or information
provided by or on behalf of the Borrowers hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”).

6.03 Notices. Promptly notify the Administrative Agent and each Lender:

(a) of the occurrence of any Default or Event of Default;

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of any Borrower or any Subsidiary
thereof; (ii) any dispute, litigation,

 

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investigation, proceeding or suspension between any Borrower or any Subsidiary
thereof and any Governmental Authority; or (iii) the commencement of, or any
material adverse development in, any litigation or proceeding affecting any
Borrower or any Subsidiary thereof, including pursuant to any applicable
Environmental Laws (but excluding administrative proceedings before any
Governmental Authority in the ordinary course of business, such as permit
renewals and issuances);

(c) of the occurrence of any ERISA Event; and

(d) of any material change in accounting policies or financial reporting
practices by any Loan Party or any Subsidiary thereof.

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of
a Responsible Officer of the REIT setting forth details of the occurrence
referred to therein and stating what action the Borrowers have taken and propose
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

6.04 Payment of Obligations. (a) Pay and discharge as the same shall become due
and payable, all its obligations and liabilities, including (i) all Tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted (which proceedings have the effect
of preventing the forfeiture or sale of the property or assets subject to any
such Lien) and adequate reserves in accordance with GAAP are being maintained by
the Borrower or such Subsidiary; (ii) all lawful claims which, if unpaid, would
by law become a Lien (other than Liens permitted under Section 7.01) upon its
property; and (iii) all Indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness; and (b) timely file all material tax returns
required to be filed.

6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.

6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.

 

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6.07 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of the Borrowers, insurance with respect to
its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar circumstances
by such other Persons.

6.08 Compliance with Laws. Comply in all material respects with the requirements
of all Laws and all orders, writs, injunctions and decrees applicable to it or
to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.

6.09 Books and Records. (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of such Borrower or such Subsidiary, as the case may be, and
each Affiliated Investor; and (b) maintain such books of record and account in
material conformity with all applicable requirements of any Governmental
Authority having regulatory jurisdiction over such Borrower or such Subsidiary,
as the case may be.

6.10 Inspection Rights. Permit representatives and independent contractors of
the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrowers and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrowers; provided, however, that when an Event of
Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrowers at any time during normal business
hours and without advance notice; and provided, further, that so long as no
Event of Default exists, the Administrative Agent and each Lender shall each be
permitted to make only one(1) such office visit per fiscal year of the
Borrowers.

6.11 Use of Proceeds. Use the proceeds of the Loans only to finance the
investment activities of the Borrowers, to provide working capital and for other
general corporate purposes not in contravention of any Law or of any Loan
Document.

6.12 Additional Collateral; Additional Loan Parties.

(a) Additional Collateral. With respect to any property acquired after the
Closing Date that is intended to be subject to the Lien created by any of the
Collateral Documents but is not so subject (including, without limitation,
(x) all Equity Interests held by any Loan Party in any newly-formed or acquired
Subsidiary of the REIT and (y) all Equity Interests held by any Loan Party in
any Affiliated Investor), promptly (and in any event within 10 days after the
acquisition thereof) (i) execute and deliver to the Administrative Agent such
amendments or supplements to the relevant Collateral Documents or such other
documents as the Administrative Agent shall reasonably deem necessary or
advisable to grant to the Administrative Agent, for its benefit and for the
benefit of the other Secured Parties, a Lien on such property subject to no

 

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Liens other than Permitted Liens, and (ii) take all actions necessary to cause
such Lien to be duly perfected in accordance with all applicable Laws,
including, without limitation, the delivery of the certificates representing any
Equity Interests acquired (together with undated stock powers or other
appropriate instruments of transfer executed and delivered in blank by a duly
authorized officer of the holder(s) of such Equity Interests) and the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent. Borrower shall otherwise take such actions and execute
and/or deliver to the Administrative Agent such documents as the Administrative
Agent shall reasonably require to confirm the validity, perfection and priority
of the Lien of the Collateral Documents on such after-acquired properties.

(b) Additional Guarantors. With respect to any Person that is or becomes a
Wholly-Owned Subsidiary of a Loan Party after the Closing Date (to the extent
such Person is not at such time required to become a Borrower in accordance with
Section 6.12(c) below), promptly (and in any event within 10 days after such
Person becomes a Wholly-Owned Subsidiary) (i) deliver to the Administrative
Agent the certificates, if any, representing all of the Equity Interests of such
Wholly-Owned Subsidiary, together with undated stock powers or other appropriate
instruments of transfer executed and delivered in blank by a duly authorized
officer of the holder(s) of such Equity Interests, (ii) cause such new
Wholly-Owned Subsidiary to execute a joinder agreement to the Guaranty and to
the Pledge and Security Agreement, in each case in form and substance reasonably
satisfactory to the Administrative Agent, (iii) deliver to the Administrative
Agent the items referenced in Section 4.01(a)(iii), (iv), (v) and (vi) with
respect to such new Wholly-Owned Subsidiary¸ (iv) provide the Administrative
Agent with the U.S. taxpayer identification for such Wholly-Owned Subsidiary (or
the equivalent thereof, in the event such Wholly-Owned Subsidiary is not
organized under the laws of the United States, any State thereof or the District
of Columbia) and (v) take all other actions reasonably necessary or advisable in
the opinion of the Administrative Agent to cause the Lien created by the Pledge
and Security Agreement to be duly perfected in accordance with all applicable
Laws.

(c) Additional Borrowers. With respect to any Wholly-Owned Subsidiary of a Loan
Party that, after the Closing Date, (x) owns any Investment Assets that are
included in the Borrowing Base and/or (y) has invested, directly or indirectly,
in any Person that owns Investment Assets that are included in the Borrowing
Base, on or prior to such time as such Investment Assets are included in the
Borrowing Base (to the extent any such actions have not previously been taken)
(i) deliver to the Administrative Agent the certificates, if any, representing
all of the Equity Interests of such Wholly-Owned Subsidiary, together with
undated stock powers or other appropriate instruments of transfer executed and
delivered in blank by a duly authorized officer of the holder(s) of such Equity
Interests, (ii) cause such Wholly-Owned Subsidiary to execute a joinder
agreement to this Agreement and to the Pledge and Security Agreement, in each
case in form and substance reasonably satisfactory to the Administrative Agent,
(iii) deliver to the Administrative Agent the items referenced in
Section 4.01(a)(iii), (iv), (v) and (vi) with respect to such Wholly-Owned
Subsidiary (iv) provide the Administrative Agent with the U.S. taxpayer
identification for such Wholly-Owned Subsidiary (or the equivalent thereof, in
the event such Wholly-Owned Subsidiary is not organized under the laws of the
United States, any State thereof or the District of Columbia) and (v) take all
other actions reasonably necessary or advisable in the opinion of the
Administrative Agent to cause the Lien created by the Pledge and Security
Agreement to be duly perfected in accordance with all applicable Laws.

 

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6.13 Compliance with Environmental Laws. Comply, and cause all lessees and other
Persons operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental Permits;
obtain and renew all Environmental Permits necessary for its operations and
properties; and conduct any investigation, study, sampling and testing, and
undertake any cleanup, response or other corrective action necessary to address
all Hazardous Materials at, on, under or emanating from any of properties owned,
leased or operated by it in accordance with the requirements of all
Environmental Laws; provided, however, that neither such Borrower nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal, remedial
or other action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances in accordance with GAAP.

6.14 Further Assurances. Promptly upon the reasonable request by the
Administrative Agent, or any Lender through the Administrative Agent, do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, certificates, assurances and
other instruments as the Administrative Agent, or any Lender through the
Administrative Agent, may reasonably require from time to time in order to
(i) carry out more effectively the purposes of the Loan Documents, (ii) to the
full extent permitted by applicable Law, subject any Loan Party’s or any of its
Subsidiaries’ properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents,
(iii) perfect and maintain the validity, effectiveness and priority of any of
the Collateral Documents and any of the Liens intended to be created thereunder
and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm
more effectively unto the Secured Parties the rights granted or now or hereafter
intended to be granted to the Secured Parties under any Loan Document or under
any other instrument executed in connection with any Loan Document to which any
Loan Party or any of its Subsidiaries is or is to be a party, and cause each of
its Subsidiaries to do so.

6.15 Maintenance of REIT Status; New York Stock Exchange Listing. The REIT will
at all times maintain its status as a self-directed, self-administered real
estate investment trust in compliance with all applicable provisions of the Code
relating to such status. The REIT will also at all times be listed on the New
York Stock Exchange.

6.16 Information Regarding Collateral.

(a) Not effect any change (i) in any Loan Party’s legal name, (ii) in the
location of any Loan Party’s chief executive office, (iii) in any Loan Party’s
identity or organizational structure, (iv) in any Loan Party’s Federal Taxpayer
Identification Number (or equivalent thereof) or organizational identification
number, if any, or (v) in any Loan Party’s jurisdiction of organization (in each
case, including by merging with or into any other entity, reorganizing,
dissolving, liquidating, reorganizing or organizing in any other jurisdiction),
until (A) it shall have given the Administrative Agent not less than ten
(10) Business Days’ prior written notice (in the form of certificate signed by a
Responsible Officer), or such lesser notice period agreed to by the
Administrative Agent, of its intention so to do, clearly describing such change
and providing such other information in connection therewith as the
Administrative Agent may reasonably request and (B) it shall have taken all
action reasonably satisfactory to the Administrative Agent to maintain the
perfection and priority of the security interest of the Administrative Agent for
the benefit of the Secured Parties in the Collateral, if applicable. Each
Borrower agrees to promptly provide the Administrative Agent with certified
Organization Documents reflecting any of the changes described in the preceding
sentence.

 

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(b) Concurrently with each delivery of financial statements pursuant to
Section 6.01(a) or (b), deliver to the Administrative Agent a Perfection
Certificate Supplement and a certificate of a Responsible Officer and the chief
legal officer of the REIT certifying that all UCC financing statements or other
appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations, containing a description of the Collateral
have been filed of record in each governmental, municipal or other appropriate
office in each jurisdiction necessary to protect and perfect the security
interests and Liens under the Collateral Documents for a period of not less than
18 months after the date of such certificate (except as noted therein with
respect to any continuation statements to be filed within such period).

6.17 Lien Searches. Promptly following receipt of the acknowledgment copy of any
financing statements filed under the Uniform Commercial Code in any jurisdiction
by or on behalf of the Secured Parties, deliver to the Administrative Agent
completed requests for information listing such financing statement and all
other effective financing statements filed in such jurisdiction that name the
REIT or any other Loan Party as debtor, together with copies of such other
financing statements.

6.18 Material Contracts. Perform and observe all the material terms and
provisions of each Material Contract to be performed or observed by it or any
other Loan Party or Subsidiary thereof, except to the extent the failure to so
perform or observe would not have a Material Adverse Effect.

6.19 Organization Documents of Affiliated Investors. Cause the Organization
Documents of each Affiliated Investor to be in form and substance satisfactory
to the Administrative Agent (it being agreed that, solely in the case of
Organization Documents of an Affiliated Investor that is not a Subsidiary, the
form of the Organization Documents attached as Exhibit K hereto is satisfactory
to the Administrative Agent).

ARTICLE VII. NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, each Borrower shall
not, nor shall it permit any of its Subsidiaries to, directly or indirectly:

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

(a) Liens pursuant to any Loan Document;

(b) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

 

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(c) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

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

(e) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, do not materially detract from
the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person;

(f) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h);

(g) Liens securing Indebtedness permitted under Section 7.03(b); provided that
(i) such Liens do not at any time encumber any Collateral or any Investment
Assets included in the Borrowing Base, (ii) such Liens do not at any time
encumber any property other than the property financed by such Indebtedness and
(iii) the Indebtedness secured thereby does not exceed the cost or fair market
value, whichever is lower, of the property being acquired on the date of
acquisition; and

(h) Liens securing assets or property of any Non-Controlled Subsidiary;

provided, that notwithstanding the foregoing clauses of this Section 7.01, in no
event shall any Liens (other than Liens permitted by clause (a) above) encumber
any of the Collateral or any of the Investment Assets included in the Borrowing
Base.

7.02 Investments. Make any Investments, except:

(a) Investments held by a Borrower or a Subsidiary in the form of Cash
Equivalents;

(b) Investments of (i) a Borrower in any other Borrower or in any Guarantor,
(ii) a Guarantor in any Borrower or any other Guarantor or (iii) a Borrower or
Guarantor, directly or indirectly, in any Affiliated Investor so long as the
proceeds thereof are used by such Affiliated Investor solely for the purpose of
acquiring an Investment Asset and paying costs and expenses related thereto; and

(c) Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in order
to prevent or limit loss.

7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

(a) Indebtedness under the Loan Documents;

(b) Non-Recourse Indebtedness of (i) the Loan Parties and their Subsidiaries
(other than Non-Controlled Subsidiaries) in an aggregate outstanding principal
amount at any time not to exceed 20% of the Total Asset Value as determined on
the date of incurrence of such Non-Recourse Indebtedness and after giving effect
thereto and (ii) the Non-Controlled Subsidiaries;

 

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(c) intercompany loans and advances to the extent expressly permitted under
Section 7.02(b); provided that all such intercompany Indebtedness owed by any
Loan Party shall be unsecured and subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of any applicable
promissory notes or an intercompany subordination agreement, in each case, in
form and substance reasonably satisfactory to Administrative Agent; and

(d) unsecured Swap Contracts entered into in the ordinary course of business
(and not for purposes of speculation) to hedge or mitigate risks related to
interest rates or currency exchange rates to which any Loan Party, Subsidiary or
Affiliated Investor is exposed in the conduct of its business or the management
of its liabilities;

provided, that notwithstanding the foregoing clauses of this Section 7.03, in no
event shall any Collateral or any Investment Assets included in the Borrowing
Base be subject to or provide support for any Indebtedness (other than
Indebtedness permitted under clause (a) above).

7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:

(a) any Wholly-Owned Subsidiary of the REIT may merge with (i) a Borrower,
provided that such Borrower shall be the continuing or surviving Person or
(ii) any one or more other Wholly-Owned Subsidiaries, provided that when any
Guarantor is merging with another Subsidiary (other than a Borrower), such
Guarantor shall be the continuing or surviving Person;

(b) any Wholly-Owned Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to another
Wholly-Owned Subsidiary; provided that (i) if the transferor in such a
transaction is a Guarantor, then the transferee must either be a Borrower or a
Guarantor and (ii) if the transferor is a Borrower, then the transferee must be
a Borrower; and

(c) Dispositions permitted by Section 2.15(d), Section 7.05(e) and
Section 7.05(f) shall be permitted.

7.05 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, or, in the case of a Wholly-Owned Subsidiary of the REIT, issue,
sell or otherwise dispose of any of such Wholly-Owned Subsidiary’s Equity
Interests to any Person, except:

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

(b) Dispositions of property by any Subsidiary to a Borrower or to a Guarantor;
provided that (x) if the transferor of such property is a Borrower, then the
transferee thereof must be a Borrower and (y) if the transferor of such property
is a Guarantor, the transferee thereof must either be the Borrower or a
Guarantor;

 

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(c) Dispositions permitted by Section 7.04;

(d) Dispositions permitted by Section 2.15(d);

(e) Dispositions of assets (other than Equity Interests of a Wholly-Owned
Subsidiary of the REIT) not constituting (i) an Investment Asset included in the
Borrowing Base or (ii) Equity Interests of any Affiliated Investor (or of any
Person that owns any Equity Interests of any Affiliated Investor) who owns any
Investment Asset included in the Borrowing Base; and

(f) the sale or other Disposition of all, but not less than all, of the issued
and outstanding Equity Interests of any Wholly-Owned Subsidiary of the REIT that
does not own (i) any Investment Asset included in the Borrowing Base or
(ii) Equity Interests, directly or indirectly, of any Affiliated Investor that
owns any Investment Asset included in the Borrowing Base.

7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that the following shall be permitted:

(a) each Subsidiary of the REIT may make Restricted Payments to the Borrowers
and the Guarantors;

(b) the REIT and each Subsidiary thereof may declare and make dividend payments
or other distributions payable solely in the common stock or other common Equity
Interests of such Person;

(c) the REIT and each Subsidiary thereof may purchase, redeem or otherwise
acquire Equity Interests issued by it with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
Equity Interests; and

(d) so long as no Event of Default under Section 8.01(a), (f) or (g) shall have
occurred and be continuing or would result therefrom, the REIT shall be
permitted to declare and pay dividends on its Equity Interests or make
distributions with respect thereto in an amount for any fiscal year of the REIT
equal to the greater of (i) 95% of the aggregate cumulative Adjusted Net Income
of the REIT for such fiscal year and (ii) such amount as may be required to
eliminate 105% of the REIT’s taxable income as a real estate investment trust or
such other amount as is necessary for the REIT to maintain its status as a real
estate investment trust under the Code.

7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.

7.08 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
such Borrower or such Subsidiary as would be

 

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obtainable by such Borrower or such Subsidiary at the time in a comparable arm’s
length transaction with a Person other than an Affiliate, provided that the
foregoing restriction shall not apply to (i) transactions between or among the
Loan Parties, (ii) Investments and Restricted Payments expressly permitted
hereunder and (iii) so long as no Event of Default under Section 8.01(a), (f) or
(g) shall have occurred and be continuing or would result therefrom, and to the
extent permitted under the Management Subordination Agreement, the payment of
management fees to the Manager pursuant to the Management Agreement.

7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than
this Agreement or any other Loan Document) that (a) limits the ability (i) of
any Subsidiary or Affiliated Investor to make Restricted Payments to the
Borrower, any Guarantor or any Subsidiary or to otherwise transfer property to
the Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee the
Indebtedness of the Borrowers under this Agreement or (iii) of a Borrower or any
Subsidiary to create, incur, assume or suffer to exist Liens on property of such
Person; provided, however, that this clause (iii) shall not prohibit any
negative pledge incurred or provided in favor of any holder of Indebtedness
permitted under Section 7.03(b) solely to the extent any such negative pledge
relates to the property (which in any event shall not include Collateral or any
Investment Asset included in the Borrowing Base) financed by or the subject of
such Indebtedness.

7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

7.11 Amendments, Waivers and Terminations of Certain Agreements.

(a) Directly or indirectly, consent to, approve, authorize or otherwise suffer
or permit any amendment, change, cancellation, termination or waiver in any
respect of (i) the terms of any material Contractual Obligation of a Loan Party
or a Subsidiary thereof or (ii) the terms of any Organization Document of any
Loan Party, Subsidiary thereof or any Affiliated Investor, in each case other
than amendments and modifications that are not adverse in any material respect
to the REIT, any of the other Loan Parties, any Subsidiary, the Administrative
Agent or the Lenders.

(b) Directly or indirectly, consent to, approve, authorize or otherwise suffer
or permit any (i) cancellation, termination or replacement of the Management
Agreement, without the prior written consent of the Administrative Agent and the
Required Lenders or (ii) amendment, modification or waiver in any respect any of
the terms or provisions of the Management Agreement that results in (x) (A) the
Manager no longer serving as the “Manager” thereunder, (B) an increase in the
amount of any fees payable to the Manager thereunder or (C) any other change in
the fee structure set forth in the Management Agreement that is adverse in any
respect to the REIT or any of its Subsidiaries, in the case of each of
subclauses (A), (B) and (C) of this clause (x), without the prior written
consent of the Administrative Agent and the Required Lenders or (y) any other
change to the terms and provisions of the Management Agreement that is adverse
in any material respect to the REIT or any of its Subsidiaries, without the
prior written consent of the Administrative Agent.

 

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7.12 Financial Covenants.

(a) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth at
any time to be less than the sum of (i) $205,173,750 and (ii) 80% of Net Cash
Proceeds received by the REIT from issuances or sales of Equity Interests of the
REIT occurring after the Closing Date.

(b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Coverage Ratio as of the end of any fiscal quarter of the REIT to be less than
2.75 to 1.00.

(c) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio at any
time to be greater than or equal to 0.40 to 1.00.

(d) Minimum Liquidity. Permit Liquidity at any time to be less than the lesser
of (i) $15,000,000 and (y) 5% of the Total Asset Value at such time.

7.13 Creation or Acquisition of New Subsidiaries. Create, form or acquire any
Subsidiary that is not a Wholly-Owned Subsidiary of a Borrower or Guarantor,
unless (i) the REIT and/or its Wholly-Owned Subsidiaries own not more than 89%
of the issued and outstanding Equity Interests of such Subsidiary or (ii) such
Subsidiary becomes a Borrower or Guarantor, as applicable, under the Loan
Documents.

7.14 Accounting or Tax Changes. Make any change in (a) accounting policies or
reporting practices, except in accordance with GAAP or required by any
governmental or regulatory authority, or (b) fiscal year, in each case except
with the written consent of the Administrative Agent.

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. Any Borrower or any other Loan Party fails to pay (i) when and
as required to be paid herein, any amount of principal of any Loan, or
(ii) within three days after the same becomes due, any interest on any Loan, or
any fee due hereunder, or (iii) within five days after the same becomes due, any
other amount payable hereunder or under any other Loan Document; or

(b) Specific Covenants. Any Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 2.15(e), 6.01, 6.02, 6.03,
6.05, 6.10, 6.11, 6.12 or 6.15 or Article VII, or any of the Loan Parties fails
to perform or observe any term, covenant or agreement contained in the Pledge
and Security Agreement; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

 

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(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of a Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or

(e) Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
the Threshold Amount, or (B) fails to observe or perform any other agreement or
condition relating to any Indebtedness or Guarantee having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary thereof
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
thereof becomes unable or admits in writing its inability or fails generally to
pay its debts as they become due, or (ii) any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or

(h) Judgments. There is entered against any Loan Party or any Subsidiary thereof
(i) one or more final judgments or orders for the payment of money in an
aggregate amount (as to all such judgments or orders) exceeding the Threshold
Amount (to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 15 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or

 

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(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the REIT or any Subsidiary thereof to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) any Loan Party or any ERISA Affiliate fails to pay when due,
after the expiration of any applicable grace period, any installment payment
with respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
Affiliate thereof contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or

(k) Change of Control. There occurs any Change of Control; or

(l) Collateral Documents. Any Collateral Document after delivery thereof shall
for any reason cease to create a valid and perfected first priority Lien
(subject to Liens permitted by Section 7.01) on the Collateral purported to be
covered thereby; or

(m) REIT. The REIT shall, for any reason, fail to maintain its status as a real
estate investment trust under the Code; or

(n) Management Agreement. The Management Agreement for any reason fails to be in
full force and effect.

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Revolving Loans to be
terminated, whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by each Borrower; and

(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it, the Lenders under the Loan Documents;

 

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provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Revolving Loans shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable, without further act of the Administrative Agent or any Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable as set forth in the proviso to Section 8.02), any amounts received on
account of the Obligations shall, subject to the provisions of Section 2.14, be
applied by the Administrative Agent in the following order:

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

Second, 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 respective amounts described in this clause Second payable to them;

Third, 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 Third payable to
them;

Fourth, 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 Fourth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrowers or as otherwise required by Law.

ARTICLE IX. ADMINISTRATIVE AGENT

9.01 Appointment and Authority. Each of the Lenders hereby irrevocably appoints
Bank of America to act on its behalf as the Administrative Agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article
are solely for the benefit of the Administrative Agent and the Lenders, and
neither the Borrowers nor any other Loan Party shall have rights as a third
party beneficiary of any of such provisions; provided, that for the avoidance of
doubt, the REIT shall have the right to consent to the appointment of successor
Administrative Agents hereunder as and to the extent provided in Section 9.06.

 

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9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the REIT or any Subsidiary or other Affiliate thereof
as if such Person were not the Administrative Agent hereunder and without any
duty to account therefor to the Lenders.

9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable laws; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower or
a Lender.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

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

9.05 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

9.06 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders and the Borrowers. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, with the prior written consent of the REIT (such consent not to be
unreasonably withheld or delayed, or required following the occurrence and
during the continuance of an Event of Default), to appoint a successor, which
shall be a bank with an office in the United States, or an Affiliate of any such
bank with an office in the United States. If no such successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if the Administrative Agent shall notify the
Borrowers and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents and (2) all payments, communications and determinations provided to be
made by, to or through the Administrative Agent shall instead be made by or to
each Lender directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
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duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrowers to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, the
Arranger shall not have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent or a Lender hereunder.

9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrowers) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Sections 2.07 and 10.04) allowed in such judicial
proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
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of such payments directly to the Lenders, to pay to the Administrative Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of the Administrative Agent and its agents and counsel, and any other amounts
due the Administrative Agent under Sections 2.07 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender to authorize the Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

9.10 Collateral and Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations), (ii) that is sold or to be sold as part of or in connection with
any sale permitted hereunder or under any other Loan Document to a Person that
is not a Loan Party, or (iii) subject to Section 10.01, if approved, authorized
or ratified in writing by the Required Lenders; and

(b) to release any Borrower or Guarantor from its obligations under this
Agreement or the Guaranty, as applicable, if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder.

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release any Guarantor
from its obligations under the Guaranty pursuant to this Section 9.10.

ARTICLE X. MISCELLANEOUS

10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by the Borrowers or
any other Loan Party therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrowers or the applicable Loan Party, as the case
may be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (i) the Administrative Agent
may, without the consent of any Lender, waive any Borrower’s or other Loan
Party’s compliance with any covenant or other provision contained in this
Agreement or any Loan Document that is of a technical nature if the
Administrative Agent determines in its sole discretion that such waiver does not
materially and adversely affect the Lenders or any of their respective rights or
remedies under this Agreement or the other Loan Documents and
(ii) notwithstanding the foregoing provisions of this Section 10.01 (including
the first proviso above), no such amendment, waiver or consent shall:

(a) waive any condition set forth in Section 4.01(a) without the written consent
of each Lender;

 

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(b) extend (except as provided in Section 2.12) or increase the Commitment of
any Lender (or reinstate any Commitment terminated pursuant to Section 8.02)
without the written consent of such Lender;

(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment (excluding mandatory prepayments) of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan, or (subject to clause (ii) of the second proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Required Lenders shall be necessary to
amend the definition of “Default Rate” or to waive any obligation of the
Borrowers to pay interest at the Default Rate;

(e) change any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

(f) release any Borrower or Guarantor from its obligations under this Agreement
or any other Loan Document, without the written consent of each Lender, except
as expressly provided in the Loan Documents; or

(g) release all or substantially all of the Collateral in any transaction or
series of related transactions, without the written consent of each Lender;

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document and (ii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder (and any amendment, waiver or consent which by its
terms requires the consent of all Lenders or each affected Lender may be
effected with the consent of the applicable Lenders other than Defaulting
Lenders), except that (x) the Commitment of any Defaulting Lender may not be
increased or extended without the consent of such Lender and (y) any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender more adversely than other
affected Lenders shall require the consent of such Defaulting Lender.

10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i) if to a Loan Party or the Administrative Agent, to the address, telecopier
number, electronic mail address or telephone number specified for such Person on
Schedule 10.02; and

 

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(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire
(including, as appropriate, notices delivered solely to the Person designated by
a Lender on its Administrative Questionnaire then in effect for the delivery of
notices that may contain material non-public information relating to the
Borrowers).

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient). Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II and Section 10.14(d) if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article or Section, as applicable, by electronic communication. The
Administrative Agent or the Borrowers may, in their discretion, agree to accept
notices and other communications to them hereunder by electronic communications
pursuant to procedures approved by them, provided that approval of such
procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR

 

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ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN
CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the
Administrative Agent or any of its Related Parties (collectively, the “Agent
Parties”) have any liability to any Loan Party, any Lender or any other Person
for losses, claims, damages, liabilities or expenses of any kind (whether in
tort, contract or otherwise) arising out of any Loan Party’s or the
Administrative Agent’s transmission of Borrower Materials through the Internet;
provided, however, that in no event shall any Agent Party have any liability to
any Loan Party, any Lender or any other Person for indirect, special,
incidental, consequential or punitive damages (as opposed to direct or actual
damages).

(d) Change of Address, Etc. Each of the Borrowers and the Administrative Agent
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the Borrowers and the Administrative
Agent. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan Notices) purportedly given by or on behalf of a Loan Party even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrowers shall indemnify the Administrative Agent,
each Lender and the Related Parties of each of them from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice given in a manner prescribed in this Section 10.02 by or on behalf of a
Loan Party. All telephonic notices to and other telephonic communications with
the Administrative Agent may be recorded by the Administrative Agent, and each
of the parties hereto hereby consents to such recording.

10.03 No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Loan Parties or any of them shall be vested
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and proceedings at law in connection with such enforcement shall be instituted
and maintained exclusively by, the Administrative Agent in accordance with
Section 8.02 for the benefit of all the Lenders; provided, however, that the
foregoing shall not prohibit (a) the Administrative Agent from exercising on its
own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Administrative Agent) hereunder and under the other Loan Documents,
(b) any Lender from exercising setoff rights in accordance with Section 10.08
(subject to the terms of Section 2.11), or (c) any Lender from filing proofs of
claim or appearing and filing pleadings on its own behalf during the pendency of
a proceeding relative to any Loan Party under any Debtor Relief Law; and
provided, further, that if at any time there is no Person acting as
Administrative Agent hereunder and under the other Loan Documents, then (i) the
Required Lenders shall have the rights otherwise ascribed to the Administrative
Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in
clauses (b) and (c) of the preceding proviso and subject to Section 2.11, any
Lender may, with the consent of the Required Lenders, enforce any rights and
remedies available to it and as authorized by the Required Lenders.

10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrowers shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Arranger and their respective
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent and the Arranger), in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses
incurred by the Administrative Agent or any Lender (including the fees, charges
and disbursements of any counsel for the Administrative Agent or any Lender),
and shall pay all fees and time charges for attorneys who may be employees of
the Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans.

(b) Indemnification by the Borrowers. The Borrowers hereby indemnify the
Administrative Agent (and any sub-agent thereof), the Arranger, each Lender and
each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses (including the
fees, charges and disbursements of any counsel for any Indemnitee), and shall
indemnify and hold harmless each Indemnitee from all fees and time charges and
disbursements for attorneys who may be employees of any Indemnitee, incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by any
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder, the consummation of the transactions contemplated hereby or thereby,
or, in the case of the Administrative Agent (and any sub-agent thereof) and its
Related Parties only, the administration of this Agreement and the other Loan
Documents (including in respect of any

 

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matters addressed in Section 3.01), (ii) any Loan or the use or proposed use of
the proceeds therefrom, (iii) any actual or alleged presence or Release of
Hazardous Materials at, on, under or emanating from any property owned, leased
or operated by any Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to any Borrower or any of its Subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by any Borrower or any other Loan
Party or any Borrower’s or such Loan Party’s directors, shareholders or
creditors, and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by a Borrower or any other
Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if such Borrower or such
other Loan Party has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction

(c) Reimbursement by Lenders. To the extent that any of the Borrowers for any
reason fails to indefeasibly pay any amount required under subsection (a) or
(b) of this Section to be paid by it to the Administrative Agent (or any
sub-agent thereof), the Arranger or any Related Party of the Administrative
Agent or the Arranger, each Lender severally agrees to pay to the Administrative
Agent (or any such sub-agent), the Arranger or such Related Party, as the case
may be, such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent (or any such sub-agent) or the
Arranger or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent) or the Arranger. The obligations of
the Lenders under this subsection (c) are subject to the provisions of
Section 2.10(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, no party to this Agreement shall assert, and each party to this
Agreement hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or the use of the proceeds thereof. No Indemnitee referred to in subsection
(b) above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed to such unintended
recipients by such Indemnitee through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

 

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(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

10.05 Payments Set Aside. To the extent that any payment by or on behalf of any
Loan Party is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect. The obligations of
the Lenders under clause (b) of the preceding sentence shall survive the payment
in full of the Obligations and the termination of this Agreement.

10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Borrower may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an assignee in accordance with the provisions of subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section; or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) of this Section
(and any other attempted assignment or transfer by any party hereto shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
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(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $2,500,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the REIT
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met.

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the REIT (such consent not to be unreasonably withheld) shall
be required unless (1) an Event of Default has occurred and is continuing at the
time of such assignment or (2) such assignment is to a Lender, an Affiliate of a
Lender or an Approved Fund; provided that the REIT shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Administrative Agent within five (5) Business Days after having
received notice thereof; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required if such assignment is to a Person that is
not a Lender.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

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(v) No Assignment to Certain Persons. No such assignment shall be made (A) to
the REIT or any of the REIT’s Affiliates or Subsidiaries, or (B) to any
Defaulting Lender or any of its Affiliates, or any Person who, upon becoming a
Lender hereunder, would constitute any of the foregoing Persons described in
this clause (B), or (C) to a natural person.

(vi) Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations, or other compensating actions, including
funding, with the consent of the REIT and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent or any Lender
hereunder (and interest accrued thereon) and (y) acquire (and fund as
appropriate) its full pro rata share of all Loans in accordance with its
Applicable Percentage. Notwithstanding the foregoing, in the event that any
assignment of rights and obligations of any Defaulting Lender hereunder shall
become effective under applicable Law without compliance with the provisions of
this paragraph, then the assignee of such interest shall be deemed to be a
Defaulting Lender for all purposes of this Agreement until such compliance
occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment; provided, that notwithstanding the foregoing, the assignment by a
Defaulting Lender of any of its rights or obligations hereunder pursuant to an
Assignment and Assumption shall not constitute a release of such Defaulting
Lender from any claims or liability resulting from the failure of such
Defaulting Lender to perform any of its obligations under this Agreement while
it held such rights or obligations. Upon request, the Borrowers (at their
expense) shall execute and deliver a Note to the assignee Lender. Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as a
non-fiduciary agent of the Borrowers (and such agency being solely for tax
purposes), shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
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Commitments of, and principal amounts (and related interest amounts) of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive absent manifest
error and the Borrowers, the Administrative Agent and the Lenders shall treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. In addition, the Administrative Agent shall maintain on the
Register information regarding the designation, and revocation of designation,
of any Lender as a Defaulting Lender. The Register shall be available for
inspection by the Borrowers and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrowers or the Administrative Agent, sell participations to any
Person (other than a natural person, a Defaulting Lender or any Borrower or any
Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, each Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 (subject to the requirements and
limitations of such Sections) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.11 as though it were a Lender.

Each Lender that sells a participation shall, acting solely for this purpose as
a non-fiduciary agent of the Borrowers, maintain a register on which it enters
the name and address of each Participant and the principal amounts (and related
interest amounts) of each participant’s interest in the Loans or other
obligations under this Agreement (the “Participant Register”). The entries in
the Participant Register shall be conclusive, absent manifest error, and such
Lender shall treat each person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, except to the extent such entitlement to receive a
greater payment results from a Change in Law that occurs after the Participant
acquired the applicable participation.

 

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(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below) and to use the Information solely in
accordance with its usual and customary practices for using confidential
information of such nature, except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, trustees, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or any
Eligible Assignee invited to be a Lender pursuant to Section 2.10(c) or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to any Loan Party and its obligations, (g) with the consent
of the REIT or (h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent, any Lender, or any of their respective Affiliates on a
nonconfidential basis from a source other than a Borrower or a Subsidiary
thereof. For purposes of this Section, “Information” means all information
received from any Borrower any Subsidiary thereof or the Manager relating to any
Borrower, any Subsidiary thereof, any Affiliated Investor or any of their
respective businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by a Borrower or any Subsidiary thereof, provided that, in the case
of information received from a Borrower or any Subsidiary thereof after the date
hereof, such information is clearly identified at the time of delivery as
confidential Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning a Borrower or
a Subsidiary thereof, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it will
handle such material non-public information in accordance with applicable Law,
including United States Federal and state securities Laws.

 

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10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such
Affiliate to or for the credit or the account of any Loan Party against any and
all of the obligations of such Loan Party now or hereafter existing under this
Agreement or any other Loan Document to such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement or any other
Loan Document and although such obligations of such Loan Party may be contingent
or unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness;
provided, that in the event that any Defaulting Lender shall exercise any such
right of setoff, (x) all amounts so set off shall be paid over immediately to
the Administrative Agent for further application in accordance with the
provisions of Section 2.14 and, pending such payment, shall be segregated by
such Defaulting Lender from its other funds and deemed held in trust for the
benefit of the Administrative Agent and the Lenders, and (y) the Defaulting
Lender shall provide promptly to the Administrative Agent a statement describing
in reasonable detail the Obligations owing to such Defaulting Lender as to which
it exercised such right of setoff. The rights of each Lender and their
respective Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender or their respective
Affiliates may have. Each Lender agrees to notify the REIT and the
Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrowers. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic imaging means
shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

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10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of making any Loan, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid
or unsatisfied.

10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without limiting the foregoing provisions of this
Section 10.12, if and to the extent that the enforceability of any provisions in
this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief
Laws, as determined in good faith by the Administrative Agent, then such
provisions shall be deemed to be in effect only to the extent not so limited.

10.13 Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, if any Lender is a Defaulting Lender or if any other
circumstance exists hereunder that gives the Borrowers the right to replace a
Lender as a party hereto, then the Borrowers may, at their sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 10.06), all
of its interests, rights and obligations under this Agreement and the related
Loan Documents to an assignee designated by the Borrowers that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:

(a) the Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to 100% of the
outstanding principal of its Loans and, other than in the case of a Defaulting
Lender, any premium thereon (assuming for this purpose that the Loans of such
Lender were being prepaid) from the assignee and any amounts payable by the
Borrowers pursuant to Section 3.01, 3.04 or 3.05 from the Borrowers (it being
understood that the Assignment and Assumption relating to such assignment shall
provide that any interest and fees that accrued prior to the effective date of
the assignment shall be for the account of the replaced Lender and such amounts
that accrue on and after the effective date of the assignment shall be for the
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(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(d) such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply. Each Lender agrees that, if the Borrowers elect to replace such
Lender in accordance with this Section 10.13, it shall promptly execute and
deliver to the Administrative Agent an Assignment and Assumption to evidence the
assignment and shall deliver to the Administrative Agent any Note (if Notes have
been issued in respect of such Lender’s Loans) subject to such Assignment and
Assumption; provided that the failure of any such Lender to execute an
Assignment and Assumption shall not render such assignment invalid and such
assignment shall be recorded in the Register.

10.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

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(c) WAIVER OF VENUE. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
each Borrower acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i) (A) the arranging and other services regarding this
Agreement provided by the Administrative Agent, the Arranger and the Lenders are
arm’s-length commercial transactions between the Borrowers and its Affiliates,
on the one hand, and the Administrative Agent, the Arranger and the Lenders, on
the other hand, (B) each Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and
(C) each Borrower is capable of evaluating, and understands and accepts, the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents; (ii) (A) the Administrative Agent, the Arranger and each
Lender each is and has been acting solely as a principal and, except as
expressly agreed in writing by the relevant parties, has not been, is not, and
will not be acting as an advisor, agent or fiduciary for any Borrower or any of
its Affiliates, or any other Person and (B) none of the Administrative Agent,
the Arranger or any of the Lenders has any obligation to any Borrower or any of
its Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents; and
(iii) the Administrative Agent, the Arranger, the Lenders and their respective
Affiliates may be engaged in a broad range of

 

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transactions that involve interests that differ from those of the Borrowers and
their respective Affiliates, and none of the Administrative Agent, the Arranger
or any of the Lenders have any obligation to disclose any of such interests to
the Borrowers or any of their respective Affiliates. To the fullest extent
permitted by law, each Borrower hereby waives and releases any claims that it
may have against the Administrative Agent, the Arranger and each Lenders with
respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.

10.17 Electronic Execution of Assignments and Certain Other Documents. The words
“execution,” “signed,” “signature,” and words of like import in any Assignment
and Assumption or in any amendment or other modification hereof (including
waivers and consents) shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use
of a paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

10.18 USA PATRIOT Act. Each Lender that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrowers that pursuant to the requirements of the
USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is required to obtain, verify and record information that
identifies each Loan Party, which information includes the name and address of
such Loan Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify such Loan Party in accordance
with the Act. Each Borrower shall, promptly following a request by the
Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender requests in order to
comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Act.

10.19 Borrowing Base Asset Review. The Administrative Agent may engage, on
behalf of the Lenders, an independent consultant to complete a review and
verification of the accuracy and reliability of the REIT’s calculation and
reporting of the book value and Cash Income of the Eligible Investment Assets
(together with review conducted pursuant to Section 4.01(a)(xiii)), each, a
Borrowing Base Asset Review”) bi-annually, and more frequently as determined by
the Administrative Agent upon the occurrence and during the continuance of an
Event of Default, each such Borrowing Base Asset Review to be in form, scope and
substance satisfactory to the Administrative Agent and the Lenders. The
Borrowers agree, jointly and severally, to pay the Administrative Agent, on
demand, the cost of each such Borrowing Base Asset Review.

10.20 Joint and Several Liability. Each of the Borrowers shall be jointly and
severally liable with the other Borrowers for the Obligations, and each of the
Obligations shall be secured by all of the Collateral. Each Borrower
acknowledges that it is a co-borrower hereunder and is jointly and severally
liable under this Agreement and the other Loan Documents. Any payment made by a
Borrower in respect of Obligations owing by one or more Borrowers shall be
deemed a payment of such Obligations by and on behalf of all Borrowers. All
Loans extended to any

 

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Borrower or requested by any Borrower shall be deemed to be Loans extended for
each of the Borrowers, and each Borrower hereby authorizes each other Borrower
to effectuate Loans on its behalf. Notwithstanding anything to the contrary
contained in this Agreement or any of the other Loan Documents, the
Administrative Agent and the Lenders shall be entitled to rely upon any request,
notice or other communication received by them from the REIT on behalf of all
Borrowers, and shall be entitled to treat their giving of any notice hereunder
to the REIT in accordance with the provisions of this Agreement as notice to
each and all Borrowers.

Each Borrower agrees that the joint and several liability of the Borrowers
provided for in this Section 10.20 shall not be impaired or affected by any
modification, supplement, extension or amendment or any contract or agreement to
which the other Borrowers may hereafter agree (other than an agreement signed by
the Administrative Agent and the Lenders specifically releasing such liability),
nor by any delay, extension of time, renewal, compromise or other indulgence
granted by the Administrative Agent or any Lender with respect to any of the
Obligations, nor by any other agreements or arrangements whatsoever with the
other Borrowers or with any other person, each Borrower hereby waiving all
notice of such delay, extension, release, substitution, renewal, compromise or
other indulgence, and hereby consenting to be bound thereby as fully and
effectually as if it had expressly agreed thereto in advance. The liability of
each Borrower is direct and unconditional as to all of the Obligations, and may
be enforced without requiring the Administrative Agent or any Lender first to
resort to any other right, remedy or security. Except to the extent otherwise
provided herein, each Borrower hereby expressly waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the
Obligations, the Notes, this Agreement or any other Loan Document and any
requirement that the Administrative Agent or any Lender protect, secure, perfect
or insure any Lien or any property subject thereto or exhaust any right or take
any action against any Borrower or any other person or any collateral.

Each Borrower hereby irrevocably waives and releases each other Borrower from
all “claims” (as defined in Section 101(5) of the Bankruptcy Code) to which such
Borrower is or would be entitled by virtue of the provisions of the first
paragraph of this Section 10.20 or the performance of such Borrower’s
obligations thereunder including, without limitation, any right of subrogation
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise),
reimbursement, contribution, exoneration or similar right, or indemnity, or any
right of recourse to security for any of the Obligations.

10.21 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

BORROWERS: COLONY FINANCIAL, INC., a Maryland corporation By:   /s/ Darren J.
Tangen Name:   Darren J. Tangen Title:   CFO CFI MEZZ FUNDING, LLC, a Delaware
limited liability company By: Colony Financial, Inc., its managing member By:  
/s/ Darren J. Tangen Name:   Darren J. Tangen Title:   CFO CFI RE HOLDCO, LLC, a
Delaware limited liability company By: Colony Financial, Inc., its managing
member By:   /s/ Darren J. Tangen Name:   Darren J. Tangen Title:   CFO COLFIN
ESH FUNDING, LLC, a Delaware limited liability company By: Colony Financial,
Inc., its managing member By:   /s/ Darren J. Tangen Name:   Darren J. Tangen
Title:   CFO

[Signature Page to Credit Agreement]

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BANK OF AMERICA, N.A., as Administrative Agent By:   /s/ Kathleen M. Carry Name:
  Kathleen M. Carry Title:   Vice President

[Signature Page to Credit Agreement]

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BANK OF AMERICA, N.A., as a Lender By:   /s/ James P. Johnson Name:   James P.
Johnson Title:   Senior Vice President

[Signature Page to Credit Agreement]

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UBS LOAN FINANCE LLC, as a Lender By:   /s/ Mary E. Evans Name:   Mary E. Evans
Title:  

Associate Director

Banking Products

Services, US

By:   /s/ Irja R. Otsa Name:   Irja R. Otsa Title:  

Associate Director

Banking Products

Services, US

[Signature Page to Credit Agreement]

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GOLDMAN SACHS LENDING PARTNERS LLC, as a Lender By:   /s/ Mark Walton Name:  
Mark Walton Title:   Authorized Signatory

[Signature Page to Credit Agreement]

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MORGAN STANLEY SENIOR FUNDING, INC., as a Lender By:   /s/ Ryan Vetsch Name:  
Ryan Vetsch Title:   Vice President

[Signature Page to Credit Agreement]

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ROYAL BANK OF CANADA, as a Lender By:   /s/ PK Shields Name:   PK Shields Title:
  Authorized Signatory

[Signature Page to Credit Agreement]