Exhibit 10.59

 

CREDIT AGREEMENT

 

dated as of

 

August 20, 2013

 

by and among

 

NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P.,
as Borrower,

 

AMERICAN REALTY CAPITAL NEW YORK RECOVERY REIT, INC.,
as the REIT and a Guarantor

 

The LENDERS party hereto,
as Lenders,

 

The SWINGLINE LENDER party hereto,
as Swingline Lender,

 

CAPITAL ONE, NATIONAL ASSOCIATION,
as Sole Lead Arranger, Sole Bookrunner, Administrative Agent and L/C Issuer,

 

and

 

U.S. BANK NATIONAL ASSOCIATION, as Syndication Agent

 

 

 

 

 

TABLE OF CONTENTS

    Page       ARTICLE I DEFINITIONS 1 Section 1.01 Defined Terms 1 Section 1.02
Terms Generally 42 Section 1.03 Accounting Terms; GAAP 42 ARTICLE II THE CREDITS
43 Section 2.01 The Commitments 43 Section 2.02 Loans and Borrowings 44 Section
2.03 Requests for Borrowings 45 Section 2.04 Letter of Credit Borrowings 46
Section 2.05 Funding of Borrowings 56 Section 2.06 Interest Elections 56 Section
2.07 Termination and Conversion of the Commitments 57 Section 2.08 Repayment of
Loans; Evidence of Debt 58 Section 2.09 Prepayment of Loans 59 Section 2.10 Fees
61 Section 2.11 Interest 62 Section 2.12 Alternate Rate of Interest 63 Section
2.13 Increased Costs 64 Section 2.14 Break Funding Payments 65 Section 2.15
Taxes 66 Section 2.16 Payments Generally; Pro Rata Treatment; Sharing of Setoffs
70 Section 2.17 Mitigation Obligations; Replacement of Lenders 73 Section 2.18
Use of Proceeds 74 Section 2.19 Swingline Loans 74 Section 2.20 Extension of
Revolving Maturity Date 76 Section 2.21 Swap Agreements 78 ARTICLE III
REPRESENTATIONS AND WARRANTIES 79 Section 3.01 Organization; Powers 79 Section
3.02 Authorization; Enforceability 79 Section 3.03 Governmental Approvals; No
Conflicts 80

-i-

 

 

TABLE OF CONTENTS

(continued)

 

    Page       Section 3.04 Financial Condition; No Material Adverse Effect 80
Section 3.05 Properties 80 Section 3.06 Litigation, Environmental and Labor
Matters 81 Section 3.07 Compliance With Laws and Agreements 84 Section 3.08
[Reserved] 84 Section 3.09 Taxes 84 Section 3.10 ERISA 85 Section 3.11
Disclosure 85 Section 3.12 Use of Credit 85 Section 3.13 Solvency 86 Section
3.14 No Default 86 Section 3.15 Insurance 86 Section 3.16 Security Interests and
Liens 86 Section 3.17 Organizational Documents 87 Section 3.18 Principal
Offices; Place of Organization 87 Section 3.19 No Burdensome Restrictions 88
Section 3.20 Brokers’ Fees 88 Section 3.21 REIT and Tax Status 88 Section 3.22
Borrowing Base Properties 88 Section 3.23 Anti-Money Laundering/International
Trade Law Compliance 90 Section 3.24 Fiscal Year; Fiscal Quarters 91 ARTICLE IV
CONDITIONS 91 Section 4.01 Effective Date 91 Section 4.02 Credit Event 93
ARTICLE V AFFIRMATIVE COVENANTS 94 Section 5.01 Financial Statements and Other
Information 94 Section 5.02 Notices of Material Events 96 Section 5.03
Existence; Conduct of Business 96 Section 5.04 Payment of Obligations 97 Section
5.05 Insurance; Property Maintenance 97

-ii-

 

 

TABLE OF CONTENTS

(continued)

 

    Page       Section 5.06 Books and Records; Inspection 97 Section 5.07
Compliance with Laws 98 Section 5.08 Use of Proceeds 98 Section 5.09 Operating
Accounts 98 Section 5.10 Organizational Documents 98 Section 5.11 UCC Searches
99 Section 5.12 Environmental Laws 99 Section 5.13 Maintenance of REIT Status 99
Section 5.14 Communication with Accountants 99 Section 5.15 Patriot Act
Compliance 99 Section 5.16 Further Assurances 100 Section 5.17 Material
Contracts 100 Section 5.18 Collateral Matters; Liens and Security Interest 100
Section 5.19 Alterations 105 Section 5.20 Special Purpose Entity 106 Section
5.21 Ground Leases 106 ARTICLE VI NEGATIVE COVENANTS 107 Section 6.01 Financial
Covenants 107 Section 6.02 Liens 112 Section 6.03 Fundamental Changes 112
Section 6.04 Indebtedness 113 Section 6.05 Transactions with Affiliates; Joint
Ventures 113 Section 6.06 Restrictive Agreements 114 Section 6.07 Fiscal Year;
Fiscal Quarters 114 Section 6.08 Employees 114 Section 6.09 ERISA 114 Section
6.10 Asset Sales 114 Section 6.11 Prohibited Transfers; REIT Covenants 115
Section 6.12 Management Fees 115 Section 6.13 Subsidiaries 115

-iii-

 

 

TABLE OF CONTENTS

(continued)

 

    Page       Section 6.14 Taxation of Borrower 116 Section 6.15 Line of
Business; Investments 116 Section 6.16 Zoning 117 Section 6.17 No Joint
Assessment; Separate Lots 117 Section 6.18 Special Purpose Entity 118 Section
6.19 Borrowing Base Properties; Ground Leases 118 Section 6.20 Advisory
Agreement 118 ARTICLE VII EVENTS OF DEFAULT 119 Section 7.01 Events of Default
119 ARTICLE VIII THE ADMINISTRATIVE AGENT 123 Section 8.01 Appointment, Powers
and Immunities 123 Section 8.02 Reliance by Administrative Agent 124 Section
8.03 Defaults 124 Section 8.04 Intentionally Omitted 129 Section 8.05 Rights as
a Lender 129 Section 8.06 Standard of Care; Indemnification 130 Section 8.07
Non-Reliance on Administrative Agent and Other Lenders 131 Section 8.08 Failure
to Act 132 Section 8.09 Resignation of Administrative Agent 132 Section 8.10
Consents Under Loan Documents 133 Section 8.11 Authorization 136 Section 8.12
Administrative Fee 136 Section 8.13 Defaulting Lenders 136 Section 8.14
Liability of Administrative Agent 143 Section 8.15 Transfer of Agency Function
143 Section 8.16 Administrative Agent May File Proofs of Claim 143 Section 8.17
Several Obligations; No Liability, No Release 144 Section 8.18 No Reliance on
Administrative Agent’s Customer Identification Program 145 Section 8.19 Lenders
with Titles 145

-iv-

 

 

TABLE OF CONTENTS

(continued)

 

    Page       Section 8.20 Arranger; Bookrunner 145 ARTICLE IX BORROWING BASE
PROPERTIES 145 Section 9.01 Borrowing Base Properties 145 Section 9.02 Exclusion
Events 152 Section 9.03 Addition and Removal of Borrowing Base Properties 153
ARTICLE X MISCELLANEOUS 154 Section 10.01 Notices 154 Section 10.02 No Deemed
Waivers; Remedies Cumulative 158 Section 10.03 Expenses; Indemnity; Damage
Waiver 159 Section 10.04 Waiver of Consequential Damages, Etc 160 Section 10.05
Successors and Assigns 160 Section 10.06 Survival 166 Section 10.07
Counterparts; Integration; Effectiveness 166 Section 10.08 Severability 166
Section 10.09 Set-off 166 Section 10.10 Governing Law; Jurisdiction; Etc 167
Section 10.11 WAIVER OF JURY TRIAL 168 Section 10.12 Headings 168 Section 10.13
No Broker 168 Section 10.14 Obligations of the Credit Parties Independent; Joint
and Several 168 Section 10.15 Confidentiality 168 Section 10.16 No Advisory or
Fiduciary Responsibility 169 Section 10.17 Additional Commitments 170 Section
10.18 Amendments 173

-v-

 

SCHEDULE I - Commitments SCHEDULE II - Principal Offices; Places of Organization
SCHEDULE III - Initial Borrowing Base Properties and Subsidiary Guarantors
SCHEDULE IV - Disclosed Litigation SCHEDULE V - Applicable Margin and Adjusted
Applicable Margin SCHEDULE VI - Special Purpose Entity SCHEDULE VII - Insurance
Requirements for Borrowing Base Properties SCHEDULE VIII - Employer
Identification Numbers SCHEDULE IX - Organization Chart; Subsidiaries SCHEDULE X
- Environmental Matters SCHEDULE 3.16(c) - Equity Interests in Corporations or
Entities other than the Subsidiary Guarantors and the 163 Entities SCHEDULE 6.12
- Management Agreements       EXHIBIT A - Form of Revolving Note EXHIBIT B -
Form of Swingline Note EXHIBIT C - Form of Term Note EXHIBIT D - Form of
Assignment and Assumption EXHIBIT E - Form of Borrowing Base Certificate EXHIBIT
F - Form of Compliance Certificate EXHIBIT G - Form of Solvency Certificate

 

 

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT (this “Agreement”), dated as of August 20, 2013, is made
by and among NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership (“Borrower”), AMERICAN REALTY CAPITAL NEW YORK RECOVERY REIT, INC.,
a Maryland corporation and the sole general partner of Borrower (the “REIT”),
the LENDERS party hereto listed on the signature pages of this Agreement under
the heading “LENDERS” (each a “Lender” and, collectively, the “Lenders”), and
CAPITAL ONE, NATIONAL ASSOCIATION, as administrative agent for the Lenders
hereunder (in such capacity, the “Administrative Agent”) and as Sole Lead
Arranger and Bookrunner.

 

The Borrower has requested that the Lenders (i) make revolving loans to the
Borrower in an aggregate principal amount of up to $110,000,000.00, and (ii)
make term loans to the Borrower in an aggregate principal amount of up to
$110,000,000.00 (which amounts are collectively increasable up to
$325,000,000.00 in accordance with Section 10.17 of this Agreement). The Lenders
are severally willing to make such loans to the Borrower upon the terms and
subject to the conditions set forth in this Agreement.

 

Accordingly, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

 

“Accepting Lender” has the meaning assigned to such term in Section 10.17(b).

 

“Acquisition Cost” as to any Real Property shall mean the purchase price, prior
to any adjustment for closing costs, rents and other accounts receivable,
expenses including real estate taxes and other customary pro-rations, paid by
Borrower, the REIT or applicable Subsidiary thereof to acquire such Real
Property.

 

“Additional Commitment Amount” has the meaning assigned to such term in
Section 10.17.

 

“Additional Commitment Notice” has the meaning assigned to such term in
Section 10.17(b).

 

“Adjusted Applicable Margin” means the amount set forth opposite the indicated
Consolidated Leverage Ratio in the grid set forth on Schedule V.

 

“Adjusted Applicable Margin Conditions” means, collectively, that (i) the
Consolidated Net Worth of the REIT is greater than Two Hundred Fifty Million
Dollars ($250,000,000.00) and (ii) there are at least five (5) separate and
distinct Borrowing Base Properties, each in compliance with the terms of this
Agreement.

 

1

 

“Adjusted LIBOR Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum equal to (a) the LIBOR Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Adjusted Borrowing Base Net Operating Income” for any Borrowing Base Property
for the four (4) fiscal quarters most recently ended, means the Net Operating
Income of such Borrowing Base Property for such period (as adjusted pursuant to
the provisions of Section 9.01(d)) less Capital Reserves attributable to such
period.

 

“Adjusted Net Operating Income” for any Real Property the value of which is
included in the calculation of Total Asset Value for the four (4) fiscal
quarters most recently ended means the Net Operating Income of such Real
Property for such period less Capital Reserves attributable to such period.

 

“Administrative Agent” means Capital One, in its capacity as administrative
agent for the Lenders hereunder, or any successor Administrative Agent appointed
pursuant to Article VIII.

 

“Administrative Agent’s Account” means an account designated by Administrative
Agent in a notice to Borrower and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
to be supplied by Administrative Agent to Borrower.

 

“Advanced Amount” has the meaning set forth in Section 8.13(d).

 

“Advanced Date” has the meaning set forth in Section 2.16(d).

 

“Advisor” means New York Recovery Advisors, LLC.

 

“Advisory Agreement” means the Fifth Amended and Restated Advisory Agreement
dated as of June 17, 2013 by and among REIT, the Borrower and the Advisor.

 

“Affiliate” means, with respect to a specified 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.

 

“Agent Parties” has the meaning set forth in Section 10.01(f).

 

“Aggregate Commitments” means the combined Revolving Loan Commitments and Term
Loan Commitments of all of the Lenders, which as of the Effective Date, total
$220,000,000, as such Aggregate Commitments may be (a) reduced from time to time
pursuant to Section 2.07 or (b) increased from time to time up to $325,000,000
pursuant to Section 10.17.

 

“Anti-Terrorism Laws” has the meaning set forth in Section 3.23(f).

 

“Applicable Margin” means the amount set forth opposite the indicated
Consolidated Leverage Ratio in the grid set forth on Schedule V.

 

2

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments and Term Loans represented by such Lender’s Commitment and
Term Loans. If the Commitments have terminated or expired, the “Applicable
Percentage” of each Lender shall be the ratio, expressed as a percentage of (A)
the sum of the unpaid principal amount of all outstanding Revolving Loans,
Swingline Loans, L/C Obligations and Term Loans owing to such Lender as of such
date to (B) the sum of the aggregate unpaid principal amount of all outstanding
Revolving Loans, Swingline Loans, L/C Obligations and Term Loans owing to all
Lenders as of such date.

 

“Appraisal” means an appraisal of a Real Property commissioned and engaged by
Administrative Agent and paid for by Borrower or the REIT, prepared by an
independent third-party MAI licensed appraiser selected by Administrative Agent
and licensed in the State in which the Real Property is located, which appraisal
must comply in all respects with the standards for real estate appraisal
established pursuant to Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (“FIRREA”), and otherwise be in form and substance
reasonably satisfactory to Administrative Agent.

 

“Appraised Value” as to any Real Property shall mean, as of any date of
determination(i) in the case of any Borrowing Base Property, the “as-is”
appraised value of such Real Property reflected in the Appraisal thereof most
recently obtained by and approved by Administrative Agent pursuant to
Section 4.01(i), Section 9.01(b)(vii), Section 9.01(b)(viii) or Section 9.03(a)
and (ii) in the case of any other Real Property), the “as-is” appraised value of
such Real Property reflected in the Appraisal thereof most recently obtained by
and approved by Administrative Agent pursuant to Section 6.01(c) or Section
9.01(b), as applicable.

 

“Approved Fund” means any entity that is engaged in making, purchasing, holding
or investing in bank loans and similar extensions of credit in the ordinary
course of business and that is administered or managed by (a) a Lender, (b) an
Affiliate of Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Approved Ground Lease” means, at any time, any ground lease (whether related to
an interest in land alone or an interest in land and the improvements located
thereon) with respect to any Real Property which is on terms and conditions that
are reasonably acceptable to Administrative Agent, and: (a) under which a
Subsidiary Guarantor is the lessee or holds equivalent rights (including,
without limitation, as a sublessee), (b) that has a remaining term of not less
than forty (40) years (assuming the exercise of any extension options that are
exercisable at the Subsidiary Guarantor’s option) or be subject to a purchase
option in favor of the Subsidiary Guarantor that is exercisable in the sole
discretion of the Subsidiary Guarantor and is for a nominal purchase price,
(c) under which any required rental payment, principal or interest payment or
other payment due under such lease or sublease, as applicable, from the
Subsidiary Guarantor to the ground lessor is not more than thirty (30) days past
due, (d) where no party to such lease or sublease, as applicable, is the subject
of an Insolvency Proceeding, (e) where the Subsidiary Guarantor’s interest in
the Real Property or the lease or sublease, as applicable, is not subject to any
Lien (other than Permitted Exceptions), (f) contains provisions which create an
obligation of the lessor to give the holder of any (i) recorded or unrecorded
mortgage lien on such leased property or (ii) security interest in the Equity
Interests of the owner of such leased property (provided such lessor has
received written notice of either such lien or security interest) written notice
of any defaults on the part of the Subsidiary Guarantor and agreement of such
lessor that such lease will not be terminated until such holder has had a
reasonable opportunity to cure such defaults (after foreclosure, if necessary
for such cure), and fails to do so, (g) contains provisions which permit the use
of such Real Property for its then-current use, (h) contains provisions which
provide for such other rights customarily required by mortgagees making a loan
secured by the interest of the holder of the leasehold estate demised pursuant
to a ground lease or sublease, and (i) under which there exists no default or
event of default by a ground lessor, which default or event of default has
caused or otherwise resulted in or could reasonably be expected to cause or
otherwise result in any material interference with the Subsidiary Guarantor’s
occupancy or other rights under the applicable ground lease or sublease.

 

3

 

“Approved Uses” has the meaning set forth in Section 2.18.

 

“Asset” means, with respect to any Credit Party, any Real Property or other
investment assets owned directly or indirectly by such Credit Party or any of
its Subsidiaries from time to time.

 

“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 Section 10.05), and accepted by Administrative Agent, in the form of Exhibit
D or any other form approved by Administrative Agent.

 

“Assignment of Agreements” means, collectively, each Assignment of Agreements,
Licenses, Permits and Contracts from each Subsidiary Guarantor and the 163
Washington SPE to Administrative Agent for the benefit of the Lenders, in form
and substance reasonably acceptable to Administrative Agent and Administrative
Agent’s counsel.

 

“Auto-Extension Letter of Credit” has the meaning specified in
Section 2.04(b)(iii).

 

“Base Rate” means, for any day, a rate per annum equal to the highest of (a) the
Federal Funds Rate for such day plus 1/2 of 1%, (b) the Prime Rate for such day
and (c) the sum of (i) the LIBOR Rate (for a one month Interest Period) plus
(ii) 1%. Each change in any interest rate provided for herein based upon the
Base Rate resulting from a change in the Base Rate shall take effect at the time
of such change in the Base Rate. For purposes of this definition, LIBOR referred
to above shall be the rate for deposits in U.S. dollars for a one-month period
in the London interbank market, as determined by Administrative Agent based on
quotes or other information available to it, and shall not be required to be
determined strictly in accordance with the requirements of the definition of
“LIBOR” and the notice and other provisions applicable thereto as set forth
herein.

 

“Base Rate Borrowing” or “Base Rate Loan” refer to, when used in reference to
any Loan or Borrowing, whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the Base
Rate.

 

“Black Walnut Partner” means Black Walnut 163 Wash LLC.

 

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

 

4

 

“Borrower” has the meaning set forth in the introductory paragraph hereof.

 

“Borrowing” means Loans of the same Type made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect. For purposes hereof, the date of a Borrowing comprising one
or more Loans that have been converted or continued shall be the effective date
of the most recent conversion or continuation of such Loan or Loans.

 

“Borrowing Base” shall mean during any fiscal quarter or portion thereof, the
lesser of:

 

(a) the Aggregate Commitments and the aggregate principal amount of the Term
Loans;

 

(b) the Value-Based Borrowing Base Limit; and

 

(c) the DSCR-Based Borrowing Base Limit.

 

“Borrowing Base Addition” has the meaning set forth in Section 9.03.

 

“Borrowing Base Approval Lenders” means, at any time, non-Defaulting Lenders
having Revolving Credit Exposures, Term Credit Exposures and unused Commitments
representing more than 75% of the sum of the total Revolving Credit Exposures,
Term Credit Exposures and unused Commitments of non-Defaulting Lenders at such
time; provided that if there are only two (2) Lenders, “Borrowing Base Approval
Lenders” shall mean all Lenders that are non-Defaulting Lenders and if there are
only three (3) Lenders, “Borrowing Base Approval Lenders” shall mean at least
two (2) Lenders having at least 75% of the aggregate Revolving Credit Exposures,
Term Credit Exposures and unused Commitments of non-Defaulting Lenders at such
time (unless there is only one (1) Lender that is a non-Defaulting Lender, in
which case “Borrowing Base Approval Lenders” shall be that one (1) Lender).

 

“Borrowing Base Asset Value” shall mean with respect to any Borrowing Base
Property:

 

(a) until the date that is twenty-four (24) months from the Effective Date, the
lesser of (i) the Acquisition Cost for such Borrowing Base Property or (ii) the
Appraised Value of such Borrowing Base Property as determined prior to the
addition of such Borrowing Base Property to the Borrowing Base pursuant to
Section 9.01(b)(vii) or, if applicable, as subsequently determined pursuant to
Section 9.01(b)(ix); and

 

(b) from and after the date that is twenty four (24) months from the Effective
Date, at Borrower’s election, either the Estimated Value of such Borrowing Base
Property or the Appraised Value of such Borrowing Base Property; provided that
the Appraised Value of such Borrowing Base Property shall be utilized at
Borrower’s election in this clause (b) only if (A) no Default or Event of
Default exists, (B) an updated Appraisal shall have been obtained by
Administrative Agent pursuant to Section 9.01(b)(viii) or 9.01(b)(ix) during the
period of twenty-four (24) months from and after the date of value indicated in
the original Appraisal for such Borrowing Base Property, and (C) Borrower has
elected pursuant to Section 9.01(b)(xi) to calculate the Borrowing Base Asset
Values for all Borrowing Base Properties, subject to the exceptions described
therein, based on their Appraised Values.

 

5

 

“Borrowing Base Certificate” means a certificate of a Responsible Officer of
Borrower, substantially in the form of Exhibit E and appropriately completed.

 

“Borrowing Base Property” means, as of any date of determination, each Real
Property that is located in Bronx County, Kings County, New York County or
Queens County in the State of New York:

 

(a) that is set forth on Schedule III hereto (as such schedule may be updated
from time to time in accordance with Section 9.03 to the extent that such Real
Property has not otherwise been removed as a “Borrowing Base Property” pursuant
to the other criteria for qualification as set forth in this definition and the
other provisions of this Agreement);

 

(b) that is 100% owned in fee simple by, or 100% ground leased pursuant to an
Approved Ground Lease by, a Subsidiary 100% owned directly or indirectly by
Borrower (other than with respect to the Asset known as 163 Washington Street,
Brooklyn, New York, as to which the 163 Washington SPE shall be 100% owned
directly by the 163 Washington JV, the 163 Washington JV shall be 97.93% owned
by the 163 Washington Member, and the 163 Washington Member shall be 99.45%
owned by Borrower) and that is (i) controlled by Borrower, (ii) a Special
Purpose Entity or a 163 Entity, and (iii) upon the Effective Date, a Subsidiary
Guarantor; or that shall have become a Subsidiary Guarantor in accordance with
Section 9.03;

 

(c) with respect to which neither (i) such Real Property is subject to any Lien
or Negative Pledge (other than Permitted Exceptions) nor (ii) any Equity
Interest of any applicable Subsidiary Guarantor or the 163 Washington Member
therein (including the lease thereof or any indirect interest owned by
Borrower), is subject to any Lien or Negative Pledge (other than Permitted
Exceptions);

 

(d) with respect to which Borrower has certified to Administrative Agent that,
to Borrower’s actual knowledge, such Real Property is free from any material
structural (based on a third party property condition report) or environmental
(based on a third party Phase I environmental site assessment report) issues;
and

 

(e) that is in compliance with the provisions of Section 9.01(b) hereof and as
to which no Exclusion Event has occurred.

 

“Borrowing Base Removal” has the meaning set forth in Section 9.03.

 

“Borrowing Request” means a request by Borrower for a Borrowing in accordance
with Section 2.03.

 

“Business Day” means any day other than a Saturday, Sunday or any day on which
commercial banks in New York City are authorized or required to close by law or
executive order.

 

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP. For
purposes hereof, all ground leases shall be deemed to be “Capital Lease
Obligations.”

 

6

 

“Capital One” means Capital One, National Association.

 

“Capital Reserves” means, on the date of any determination, an amount equal to
the product of thirty cents ($0.30) and the total rentable square footage of the
applicable Property on an annual basis.

 

“Capitalization Rate” means (i) with respect to Borrowing Base Properties
located in New York County, New York State, six and three quarters percent
(6.75%) and (ii) with respect to Borrowing Base Properties located in any county
other than New York County, New York State, seven and one quarter percent
(7.25%).

 

“Cash Collateralize” means, to pledge and deposit with or deliver to
Administrative Agent, for the benefit of Issuing Bank or the Revolving Lenders,
as collateral for L/C Obligations or obligations of Revolving Lenders to fund
participations in respect of L/C Obligations, cash or deposit account balances
or, if Administrative Agent and L/C Issuer shall agree in their sole discretion,
other credit support, in each case pursuant to documentation in form and
substance reasonably satisfactory to Administrative Agent and L/C Issuer. “Cash
Collateral” shall have a meaning correlative to the foregoing and shall include
the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by the REIT or any of its Subsidiaries free and clear of all Liens
(other than Liens created under the Collateral Documents and other Liens
permitted hereunder):

 

(a) readily marketable obligations issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
having maturities of not more than one year from the date of acquisition
thereof; provided that the full faith and credit of the United States of America
is pledged in support thereof;

 

(b) time deposits with, or insured certificates of deposit or bankers’
acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized
under the laws of the United States of America, any state thereof or the
District of Columbia or is the principal banking subsidiary of a bank holding
company organized under the laws of the United States of America, any state
thereof or the District of Columbia, and is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper rated as
described in clause (c) of this definition and (iii) has combined capital and
surplus of at least $1,000,000,000, in each case with maturities of not more
than 90 days from the date of acquisition thereof;

 

(c) commercial paper in an aggregate amount of no more than $10,000,000 per
issuer outstanding at any time issued by any Person organized under the laws of
any state of the United States of America and rated at least “Prime-1” (or the
then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent
grade) by S&P, in each case with maturities of not more than 180 days from the
date of acquisition thereof;

 

7

 

(d) bonds or other obligations having a short-term unsecured debt rating of not
less than A+ by S&P and P+ by Moody’s and having a longer term debt rating of
not less than A by S&P and A1 by Moody’s issued by or by authority of any state
of the United States

 

(e) repurchase agreements having a term not greater than thirty (30) days and
fully secured by securities described in the foregoing clauses (a), (b), (c) or
(d) with banks described in the foregoing clause (b) or with financial
institutions or other corporations having total assets in excess of
$500,000,000; and

 

(f) shares of any money market mutual fund rated at least AAA or the equivalent
thereof by S&P or at least Aaa or the equivalent thereof by Moody’s, and the
portfolios of which are limited solely to Investments of the character, quality
and maturity described in clauses (a), (b), (c), (d) and (e) of this definition.

 

“CEA” shall mean the Commodity Exchange Act (7 U.S.C.§1 et seq.), as amended
from time to time, and any successor statute.

 

“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.

 

“CFTC” shall mean the Commodity Futures Trading Commission.

 

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

 

(a) Prior to the Internalization, the Advisor, or a replacement advisor
consented to in writing by the Required Lenders, shall fail to be the advisor of
the Borrower;

 

(b) Prior to the Internalization, the Advisor shall no longer be Controlled by
Nicholas S. Schorsch and William M. Kahane or other Persons consented to in
writing by the Required Lenders;

 

(c) After the Internalization, if (i) any of Nicholas S. Schorsch, William M.
Kahane, William G. Stanley, Scott J. Bowman, Robert H. Burns, Edward M. Weil,
Jr., Michael A. Happel, Peter M. Budko or Brian S. Block, shall die or become
disabled or otherwise cease to be active on a daily basis in the management of
the REIT or serve as board members of the REIT, and such event results in fewer
than four (4) of such individuals, being active on a daily basis in the
management of the REIT or serving as board members of the REIT; provided, that
it will constitute a “Change of Control” if either of Nicholas S. Schorsch or
William M. Kahane shall cease to be active on a daily basis in the management of
the REIT or serve as board members for any reason other than death or
disability; provided, further, that if fewer than four (4) of such individuals
shall continue to be active on a daily basis in the management of the REIT, it
shall not be a “Change of Control” (subject to the preceding proviso) if a
replacement executive of comparable experience and reasonably satisfactory to
the Agent shall have been retained within three (3) months of such event such
that there are not fewer than four (4) such individuals (including Nicholas S.
Schorsch and William M. Kahane unless subject to death or disability) active in
the daily management of REIT or serving as board members of the REIT; or

 

8

 

(d) Borrower ceases to have the sole responsibility for managing and
administering the day-to-day business and affairs of any Subsidiary Guarantor or
any 163 Entity; or otherwise ceases to own, directly or indirectly, (i) one
hundred percent (100%) of the Equity Interests of any Subsidiary Guarantor, or
(ii) with respect to the 163 Washington Member, ninety-nine point four five
percent (99.45%) of the Equity Interests in the 163 Washington Member, in each
case free and clear of any Liens (other than Liens in favor of Administrative
Agent) unless Borrower removes the Borrowing Base Property owned by such
Subsidiary Guarantor or the 163 Washington Member from the Borrowing Base Asset
Value in accordance with Article IX; or

 

(e) 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 Equity Interests 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 thirty-five percent (35%) or more of the Equity Interests 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 Equity Interests that such person or group has the right to acquire
pursuant to any option right); or

 

(f) during any period of twelve (12) consecutive months ending after the
Effective Date, individuals who at the beginning of any such twelve (12) month
period constituted the Board of Directors of the REIT (together with any new
directors whose election by such Board or whose nomination for election by the
shareholders of the REIT was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved but
excluding any director whose initial nomination for, or assumption of office as,
a director 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) cease for any reason to constitute a
majority of the Board of the REIT of Borrower then in office; or

 

9

 

(g) The REIT shall cease to (i) either be the sole general partner of, or wholly
own and control the general partner of, Borrower or (ii) own, directly or
indirectly, greater than fifty percent (50%) of the Equity Interests of
Borrower.

 

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

 

“CIP Regulations” has the meaning set forth in Section 8.18.

 

“Closing Date” has the meaning set forth in Section 4.01.

 

“Code” means the Internal Revenue Code of 1986, as amended and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

 

“Collateral” means, collectively, (i) the collateral covered by the definition
of “Collateral” as set forth in the Pledge and (ii) the collateral covered by
the definition of “Mortgaged Property” as set forth in the Mortgage.

 

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans and to acquire participations in Letters of Credit and Swingline
Loans hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender’s Credit Exposure hereunder, as such commitment may be
(a) reduced from time to time pursuant to Section 2.07, or (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.05 or (e) increased from time to time pursuant to
Section 10.17. As of the Effective Date, the initial amount of each Lender’s
Commitment is set forth on Schedule I, and to the extent hereinafter assigned
pursuant to Section 10.05 hereof, it will be set forth in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Commitment, as
applicable, a copy of which shall be delivered to Borrower.

 

“Communications” has the meaning set forth in Section 10.01(f).

 

“Competitor” means a Person other than a Lender, an Affiliate of a Lender, an
Approved Fund or an Eligible Institution that is or is an Affiliate of a real
estate investment trust (other than the REIT or any mortgage real estate
investment trust) which is primarily engaged in the business of acquiring assets
of a similar size, type and quality as the REIT in New York City.

 

10

 

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

 

“Consolidated Adjusted EBITDA” means, for the four (4) fiscal quarters most
recently ended, Consolidated EBITDA, less the Capital Reserve applicable to such
period.

 

“Consolidated EBITDA” means an amount, for the four (4) fiscal quarters most
recently ended, equal to the following amounts: (a) Consolidated Net Income for
such period, plus (b) the sum of the following (without duplication, except as
set forth below, and to the extent reflected as a charge in the statement of
such Consolidated Net Income for such period): (i) income tax expense, (ii)
interest expenses, amortization or write-off of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness, (iii) depreciation and amortization expenses, (iv) amortization of
intangibles (including goodwill) and organization costs, (v) any extraordinary,
unusual or non-recurring expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, losses on sales of assets outside of the ordinary course of
business and costs and expenses incurred during such fiscal quarter with respect
to acquisitions, whether or not consummated), (vi) any other non-cash charges,
and (vii) all fees and expenses incurred in connection with the negotiation and
execution of this Agreement and the other Loan Documents, minus (c) the sum of
the following (to the extent included in the statement of such Consolidated Net
Income for such fiscal quarter): (i) interest income (except to the extent
deducted in determining such Consolidated Net Income); (ii) any extraordinary,
unusual or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such fiscal quarter, gains on the sales of assets outside of the ordinary
course of business); (iii) any other non-cash income; and (iv) any cash payments
made during such fiscal quarter in respect of items described in clause (b)(v)
above subsequent to the fiscal quarter in which the relevant non-cash expenses
or losses were reflected as a charge in the statement of Consolidated Net
Income.

 

“Consolidated Entity” means the REIT, Borrower and any member of the
Consolidated Group.

 

“Consolidated Fixed Charges” means, on a consolidated basis, for the
Consolidated Group for the four (4) fiscal quarters most recently ended, the sum
(without duplication) of (a) Consolidated Interest Expense, (b) provision for
cash income taxes made on a consolidated basis in respect of such period, (c)
scheduled principal amortization payments due during such period on account of
Indebtedness (excluding balloon payments), and (d) Restricted Payments payable
in cash with respect to Disqualified Capital Stock and preferred Equity
Interests of such Person during such period.

 

“Consolidated Group” means the REIT and all Persons whose financial results are
consolidated with the REIT for financial reporting purposes under GAAP.

 

“Consolidated Interest Expense” means, for the four (4) fiscal quarters most
recently ended, without duplication, the amount of interest expense, determined
in accordance with GAAP, of the Consolidated Group for such fiscal quarter
attributable to Consolidated Total Debt during such period (excluding
amortization or write-off of debt issuance costs and commissions). Consolidated
Interest Expense shall exclude any interest expense in respect of any
convertible Indebtedness in excess of the cash coupon on such convertible
Indebtedness.

 

11

 

“Consolidated Leverage Ratio” means, as of the date of determination, the ratio,
expressed as a percentage, of (a) Consolidated Total Debt to (b) Total Asset
Value.

 

“Consolidated Net Income” means, for any Person for the four (4) fiscal quarters
most recently ended, the consolidated net income (or loss) of such Person for
such period, determined on a consolidated basis in accordance with GAAP;
provided that in calculating Consolidated Net Income of the REIT for period,
there shall be excluded (a) the income (or deficit) of any Person accrued prior
to the date it becomes a Subsidiary or is merged into or consolidated with the
REIT or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Consolidated Entity) in which any Consolidated Entity has an
ownership interest, except to the extent that any such income is actually
received by such Consolidated Entity in the form of dividends or similar
distributions, and (c) the undistributed earnings of any Subsidiary of any
Consolidated Entity to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary is not at the time permitted by the
terms of any Contractual Obligation (other than under any Loan Document) or
Legal Requirement applicable to such Subsidiary.

 

“Consolidated Net Worth” shall mean with respect to any Person, as of any date
of determination, such Person’s net worth, as determined in accordance with GAAP
(except that in determining such net worth, Indebtedness shall include such
Person’s pro rata share of the Indebtedness of any unconsolidated partnership,
joint venture or Affiliate in which such Person directly or indirectly holds any
interest plus any Recourse or contingent obligations, directly or indirectly, of
such Person with respect to any Indebtedness of such unconsolidated partnership,
joint venture or Affiliate in excess of its proportionate share), all determined
on a consolidated basis.

 

“Consolidated Total Debt” means the aggregate principal amount of all
Indebtedness of the REIT and its Subsidiaries determined on a consolidated basis
and shall include, as of any date of determination, without duplication, the sum
of (a) the Indebtedness of the Consolidated Group outstanding as of such date,
as determined in accordance with GAAP (but adjusted to eliminate increases or
decreases arising from ASC-805), and (b) the applicable pro rata share of any
member of the Consolidated Group of the outstanding Indebtedness as of such date
of any unconsolidated partnership, joint venture or Affiliate in which such
member owns a direct or indirect Equity Interest as would be shown on a
consolidated balance sheet of REIT and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, but in any event excluding (x) any
Indebtedness (including such Indebtedness of an Unconsolidated Affiliate) of the
type described in clauses (iii) and (v) of the definition thereof, (y) security
deposits, accounts payable, accrued liabilities and prepaid rents, any
intracompany debt, and to the extent not payable Indebtedness of the type
described in clauses (vii) and (viii) of the definition thereof and (z) and
Indebtedness of the type described in clause (ix) of the definition thereof
related to clauses (x) or (y) above.

 

“Contingent Non-Recourse Obligation” means, as to any Person, any Contingent
Obligation of that Person with respect to customary carve-outs for fraud,
misrepresentation, bankruptcy, misapplication or misappropriation of funds,
waste, environmental claims and liabilities and other circumstances customarily
excluded by institutional commercial real estate lenders from exculpation
provisions or included in separate indemnification agreements or guarantees in
connection with non-recourse Indebtedness created, incurred, suffered or assumed
in compliance with this Agreement, except if (a) the party entitled to enforce
such guaranty or indemnity has commenced or is continuing efforts to enforce
such guaranty or indemnity and either (i) has obtained an initial judgment or
order with respect to such enforcement action in such party’s favor
(notwithstanding any rights of appeal), or (ii) such Person is not actively
defending such enforcement action in good faith, (b) the guarantor’s obligations
with respect thereto have become liquidated or (c) with respect to any
Contingent Obligation pursuant to which the obligor is obligated to pay all or
any portion of the principal of the Indebtedness of another Person as a result
of the commencement or conduct of any voluntary or involuntary Insolvency
Proceeding with respect to that Person (or any actions of such Person, such
obligor or their affiliates in connection with the commencement or conduct of
any such voluntary or involuntary Insolvency Proceeding), such voluntary or
involuntary Insolvency Proceeding with respect to that Person shall have been
commenced.

 

12

 

“Contingent Obligation” 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), but only to the extent
of the value of the property encumbered by such Lien; provided that the term
Contingent Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Contingent
Obligation 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 Contingent Obligation 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.

 

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

 

13

 

“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.

 

“Controlled Group” means the REIT, Borrower and all Persons (whether or not
incorporated) under a “controlled group of corporations” (within the meaning of
Section 414 of the Code) with the REIT or Borrower which maintains, sponsors or
contributes to a “defined benefit plan” (within the meaning of Section 3(35) of
ERISA) or a “multiemployer pension plan” (within the meaning of Section 3(37)(A)
of ERISA).

 

“Covered Entity” has the meaning set forth in Section 3.23(f).

 

“Credit Exposure” means the combined Revolving Credit Exposure and Term Credit
Exposure. The Credit Exposure of any Lender at any time shall be the sum of its
Revolving Loan Applicable Percentage of the total Revolving Credit Exposure plus
its Term Loan Applicable Percentage of the total Term Credit Exposure at such
time.

 

“Credit Party” means each of Borrower and each Guarantor (including each
Subsidiary Guarantor and each 163 Entity).

 

“Debt Service” means, with respect to any particular period during the term of
this Agreement, scheduled payments of interest and principal due with respect to
an outstanding principal balance equal to the sum of the outstanding principal
balance of the Loans plus the L/C Obligations on the last day of such period
based on a 30-year mortgage-style amortization schedule and an assumed interest
rate equal to the greater of (a) the yield in effect as of the last day of such
period on U.S. Treasury obligations having a maturity corresponding to ten (10)
years from the date of determination (and, if no such maturity shall so exactly
correspond, yields for the two most closely corresponding published maturities
shall be calculated as of such determination date, and the yield for a maturity
corresponding to ten (10) years from the date of determination, interpolated or
extrapolated (as applicable) from such yields on a straight-line basis
(rounding, in the case of relevant periods, to the nearest month), shall be
utilized), plus two and three quarters percent (2.75%), and (b) six percent
(6.0%).

 

“Debt Service Coverage Ratio” means, as of any date, the ratio calculated and
submitted by Borrower, of (i) the Adjusted Borrowing Base Net Operating Income
for the four (4) fiscal quarters most recently ended, to (ii) the Debt Service
with respect to such period.

 

“Default” means any event or condition which constitutes an Event of Default or
a condition which, after any applicable notice from Administrative Agent to
Borrower or, following the expiration of any applicable cure period therefor,
would become an Event of Default.

 

“Default Rate” has the meaning set forth in Section 2.11(c).

 

“Defaulting Lender” has the meaning set forth in Section 8.13.

 

14

 

“Disqualified Capital Stock” shall mean with respect to any Person any Equity
Interest of such Person that by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or otherwise
(including upon the occurrence of any event), is required to be redeemed or is
redeemable for cash at the option of the holder thereof, in whole or in part
(including by operation of a sinking fund), or is exchangeable for Indebtedness
(other than at the option of such Person), in whole or in part, at any time.

 

“Dollars” or “$” refers to lawful money of the United States of America.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.

 

“DSCR-Based Borrowing Base Limit” shall mean as of any date the maximum
principal amount of Loans and L/C Liabilities that would be available to be
outstanding under this Agreement as would result in a Pro Forma Debt Service
Coverage Ratio for the four (4) fiscal quarters most recently ended equal to
1.40:1.00, where the Pro Forma Debt Service Coverage Ratio calculation is based
on the Adjusted Borrowing Base Net Operating Income for all Borrowing Base
Properties for such period, and the Pro Forma Debt Service for such period.

 

“Effective Date” means the date of this Agreement.

 

“Eligible Contract Participant” shall mean an “eligible contract participant” as
defined in the CEA and regulations thereunder.

 

“Eligibility Date” shall mean, with respect to Borrower or any Guarantor and
each Swap, the date on which this Agreement or any Loan Document becomes
effective with respect to such Swap Contract (for the avoidance of doubt, the
Eligibility Date shall be the Effective Date of such Swap Contract if this
Agreement or any Loan Document is then in effect with respect to Borrower or any
Guarantor, and otherwise it shall be the Effective Date of this Agreement and/or
such Loan Document(s) to which Borrower or any Guarantor is a party).

 

“Eligible Institution” means any of (i) a commercial bank organized under the
laws of the United States, or any State thereof, and having (x) total assets in
excess of $1,000,000,000 and (y) a combined capital and surplus of at least
$250,000,000; (ii) a commercial bank organized under the laws of any other
country which is a member of the Organization of Economic Cooperation and
Development (“OECD”), or a political subdivision of any such country, and having
(x) total assets in excess of $1,000,000,000 and (y) a combined capital and
surplus of at least $250,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of OECD; (iii) a life insurance company organized
under the laws of any State of the United States, or organized under the laws of
any country and licensed as a life insurer by any State within the United States
and having admitted assets of at least $1,000,000,000; (iv) a nationally
recognized investment banking company or other financial institution in the
business of making loans, or an Affiliate thereof (other than any Person which
is directly or indirectly a Borrower or Guarantor or directly or indirectly an
Affiliate of Borrower or Guarantor) organized under the laws of any State of the
United States, and licensed or qualified to conduct such business under the laws
of any such State and having (1) total assets of at least $1,000,000,000 and (2)
a net worth of at least $250,000,000; (v) an Approved Fund; or (vi) any
Affiliate of Capital One, any other Person into which, or with which, Capital
One is merged, consolidated or reorganized, or which is otherwise a successor to
Capital One by operation of law, or which acquires all or substantially all of
the assets of Capital One, any other Person which is a successor to the business
operations of Capital One and engages in substantially the same activities, or
any Affiliate of any of the foregoing.

 

15

 

“Environmental Indemnity Agreement” means, collectively, each Environmental
Indemnity Agreement made by each Subsidiary Guarantor (or, in the case of 163
Washington, made by the 163 Washington SPE) and the REIT in favor of
Administrative Agent for the benefit of the Lenders, in form and substance
reasonably acceptable to Administrative Agent and Administrative Agent’s
counsel.

 

“Environmental Laws” means, collectively, any Legal Requirement pertaining to or
imposing liability or standards of conduct concerning environmental regulation,
contamination or clean-up, including the Comprehensive Environmental Response,
Compensation and Liability Act, the Resource Conservation and Recovery Act, the
Emergency Planning and Community Right-to-Know Act of 1986, the Hazardous
Substances Transportation Act, the Solid Waste Disposal Act, the Clean Water
Act, the Clean Air Act, the Toxic Substance Control Act, the Safe Drinking Water
Act, the Occupational Safety and Health Act, any state super-lien and
environmental clean-up statutes (including with respect to Toxic Mold), and all
amendments to and regulations in respect of the foregoing laws.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Credit Party or their Affiliates 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 in violation of any Environmental Law, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment in violation of any Environmental Law or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.

 

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock, partnership interests, membership interests of (or other
ownership or profit interests in) such Person, all of the subscriptions,
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,
subscriptions, warrants, options, rights or other interests are outstanding on
any date of determination, and all related voting rights, rights to information
and other rights attributable to such shares, subscriptions, warrants, options,
rights or other interests.

 

16

 

“Equity Issuance” means the issuance or sale by any Person of any of its Equity
Interests or any capital contribution to such Person by the holders of its
Equity Interests.

 

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

 

“ERISA Affiliate” means all members of a Controlled Group and all trades and
business (whether or not incorporated) under common control and all other
entities which, together with Borrower, are treated as a single employer under
any or all of Section 414(b), (c), (m) or (o) of the Code.

 

“Estimated Value” means, for any Borrowing Base Property or Real Property, on
the date of any determination, (i) in the case of a Borrowing Base Property, the
Adjusted Borrowing Base Net Operating Income for such Borrowing Base Property,
divided by the applicable Capitalization Rate therefor and (ii) in the case of
Real Property that is not a Borrowing Base Property, the Adjusted Net Operating
Income for such Real Property, divided by the applicable Capitalization Rate
therefor.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loans, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate.

 

“Event of Default” has the meaning set forth in Article VII.

 

“Excluded Swap Obligation” means, with respect to any Credit Party, any Swap
Obligation if, and to the extent that, all or a portion of the Guaranty of such
Credit Party of, or the grant by such Credit Party of a security interest to
secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal
under the CEA or any rule, regulation or order of the CFTC (or the application
or official interpretation of any thereof) by virtue of such Credit Party’s
failure for any reason to constitute an “eligible contract participant” as
defined in the CEA and the regulations thereunder at the time the Guaranty of
such Credit Party or the grant of such security interest becomes effective with
respect to such Swap Obligation. Notwithstanding anything to the contrary
contained in the foregoing or in any other provision of this Agreement or any
Loan Document, the foregoing is subject to the following provisos: (a) If a Swap
Obligation arises under a master agreement governing more than one swap, such
exclusion shall apply only to the portion of such Swap Obligation that is
attributable to swaps for which such Guaranty or security interest is or becomes
illegal under the CEA, or any rule, regulations or order of the CFTC, solely as
a result of the failure by such Borrower or Guarantor for any reason to qualify
as an Eligible Contract Participant on the Eligibility Date for such Swap; (b)
if a guarantee of a Swap Obligation would cause such obligation to be an
Excluded Swap Obligation but the grant of a security interest would not cause
such obligation to be an Excluded Swap Obligation, such Swap Obligation shall
constitute an Excluded Swap Obligation for purposes of the guaranty but not for
purposes of the grant of the security interest; and (c) if there is more than
one Credit Party executing this Agreement or the Loan Documents and a Swap
Obligation would be an Excluded Swap Obligation with respect to one or more of
such Persons, but not all of them, this definition of Excluded Swap Obligation
with respect to each such Person shall only be deemed applicable to (i) the
particular Swap Obligations that constitute Excluded Swap Obligations with
respect to such Person, and (ii) the particular Person with respect to which
such Swap Obligations constitute Excluded Swap Obligations.

 

17

 

 

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
Administrative Agent or any Lender or required to be withheld or deducted from a
payment to Administrative Agent or any Lender, (a) Taxes imposed on or measured
by net income (however denominated), franchise Taxes, and branch profits Taxes,
in each case, (i) imposed as a result of Administrative Agent or such Lender
being organized under the laws of, or having its principal office or, in the
case of any Lender, its applicable lending office located in, the jurisdiction
imposing such Tax (or any political subdivision thereof) or (ii) that are Other
Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes
imposed on amounts payable to or for the account of such Lender with respect to
an applicable interest in a Loan or Commitment pursuant to a law in effect on
the date on which (i) such Lender acquires such interest in the Loan or
Commitment (other than pursuant to an assignment request by Borrower under
Section 2.17(b)) or (ii) such Lender changes its lending office, except in each
case to the extent that, pursuant to Section 2.15, amounts with respect to such
Taxes were payable either to such Lender’s assignor immediately before such
Lender became a party hereto or to such Lender immediately before it changed its
lending office, (c) Taxes attributable to Administrative Agent’s or such
Lender’s failure to comply with Section 2.15(f) and (d) any U.S. federal
withholding Taxes imposed under FATCA.

 

“Exclusion Event” has the meaning set forth in Section 9.02.

 

“Existing Facility” means that certain credit facility, in an aggregate
principal amount not exceeding $40,000,000 at any one time, made pursuant to
that certain Credit Agreement, dated as of March 30, 2012, among the Borrower,
Capital One National Association, as the administrative agent, and the lenders
thereto, as same may have been amended or modified from time to time.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version) and any current or future
regulations (whether final, temporary or proposed) or official interpretations
thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code
and any law implementing an intergovernmental agreement entered into in
connection with FATCA.

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) 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, provided that (a)
if such day is not a Business Day, the Federal Funds Rate for the immediately
preceding Business Day shall be applicable, as determined by Administrative
Agent, or such other commercial bank as selected by Administrative Agent.

 

“Fee Letter” means that certain fee letter agreement, dated as of the date
hereof, among Borrower, Administrative Agent, Sole Lead Arranger and Sole
Bookrunner with respect to certain fees payable by Borrower in connection with
the Loans, as the same may be modified or amended from time to time, the terms
of which shall expressly survive the Closing Date.

 

18

 

“FFO Distribution Allowance” means, for the REIT, with respect to (i) the period
consisting of the first, second and third fiscal quarters of the REIT following
the Closing Date, a cumulative amount equal to 95% of Modified Funds From
Operations for such period, and (ii) for each period of four (4) consecutive
fiscal quarters following the Closing Date, a cumulative amount equal to 95% of
Modified Funds From Operations for such quarters.

 

“First Extended Revolving Maturity Date” has the meaning set forth in Section
2.20(a).

 

“Fitch” means Fitch Ratings and any successor thereto.

 

“Fixed Charge Coverage Ratio” means, for the four (4) fiscal quarters most
recently ended, the ratio of (i) Consolidated Adjusted EBITDA for such period to
(ii) Consolidated Fixed Charges for such period.

 

“Foreign Lender” means (a) if Borrower is a U.S. Person, a Lender that is not a
U.S. Person, and (b) if Borrower is not a U.S. Person, a Lender that is resident
or organized under the laws of a jurisdiction other than that in which 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.

 

“Form W-8BEN” means Form W-8BEN of the Department of the Treasury of the United
States of America.

 

“Form W-8ECI” means Form W-8ECI of the Department of the Treasury of the United
States of America.

 

“Form W-8IMY” means Form W-8IMY of the Department of the Treasury of the United
States of America.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the L/C Issuer, such Defaulting Lender’s Revolving Loan Applicable
Percentage of the outstanding L/C Obligations other than L/C Obligations as to
which such Defaulting Lender’s participation obligation has been reallocated to
other Lenders or Cash Collateralized in accordance with the terms hereof, and
(b) with respect to the Swingline Lender, such Defaulting Lender’s Revolving
Loan Applicable Percentage of outstanding Swingline Loans other than Swingline
Loans as to which such Defaulting Lender’s participation obligation has been
reallocated to other Lenders.

 

“Fundamental Change” has the meaning set forth in Section 6.03(a).

 

“Funds From Operations” means, with respect to any fiscal quarter, the REIT’s
net income (or loss) computed in accordance with GAAP, excluding gains or losses
from sales of property and asset impairment write-downs, plus depreciation and
amortization, after adjustments for unconsolidated partnerships and joint
ventures determined in a manner consistent with the “white paper” issued in
April 2002 by the National Association of Real Estate Investment Trusts, and
after adjustments for costs and expenses incurred during such fiscal quarter
with respect to acquisitions, whether or not consummated.

 

19

 

“GAAP” means generally accepted accounting principles in the United States of
America as of the date of the applicable financial report.

 

“Governmental Lists” means (i) the Specially Designated Nationals and Blocked
Persons Lists maintained by Office of Foreign Assets Control (“OFAC”), (ii) any
other list of terrorists, terrorist organizations or narcotics traffickers
maintained pursuant to any of the Rules and Regulations of OFAC that
Administrative Agent notified Borrower in writing is now included in
“Governmental Lists”, or (iii) any similar lists maintained by the United States
Department of State, the United States Department of Commerce or any other
government authority or pursuant to any executive order of the President of the
United States of America that Administrative Agent notified Borrower in writing
is now included in “Governmental Lists”.

 

“Governmental Authority” means the government of the United States of America 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).

 

“Guaranteed Obligations” has the meaning set forth in each of the Guaranties.

 

“Guarantor” means, collectively and jointly and severally, the REIT, each
Subsidiary Guarantor (excluding, for the purposes of this definition, the 163
Washington Member).

 

“Guaranties” means, collectively, the Guaranty (REIT) and the Subsidiary
Guaranty, and “Guaranty” means any one of the Guaranties.

 

“Guaranty (REIT)” means that certain Guaranty (REIT), dated as of the Effective
Date, made by the REIT in favor of Administrative Agent, for the benefit of the
Lenders.

 

“Hazardous Materials” means any explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes, substances, materials or other
pollutants which are included under or regulated by Environmental Laws,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
hazardous, toxic and/or dangerous substances, and toxic mold or fungus of a type
that poses a risk to human health or the environment or would negatively impact
the value of any Real Property (“Toxic Mold”).

 

“Hedge Obligation” 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.

 

20

 

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

 

“Honor Date” has the meaning specified in Section 2.04(c)(i).

 

“Included Properties” shall mean each of the Assets consisting of improved Real
Property (other than a Borrowing Base Property) the value of which is included
in any calculation of Total Asset Value that is delivered to or made by
Administrative Agent under this Agreement.

 

“Included Property Asset Value” shall mean with respect to any Included
Property:

 

(a) until the date that is twenty-four (24) months from the Effective Date, the
lesser of (i) the Acquisition Cost for such Included Property or (ii) the
Appraised Value of such Included Property as determined pursuant to an Appraisal
obtained by Administrative Agent pursuant to Section 6.01(c)(ii) or, if
applicable, as subsequently determined pursuant to Section 6.01(c)(iv); and

 

(b) from and after the date that is twenty four (24) months from the Effective
Date, at Borrower’s election pursuant to Section 6.01(c)(v), either the
Estimated Value of such Included Property or the Appraised Value of such
Included Property; provided that the Appraised Value of such Included Property
shall be utilized at Borrower’s election only if (A) no Default or Event of
Default exists, (B) an updated Appraisal shall have been obtained by
Administrative Agent pursuant to Section 6.01(c)(iii) or 6.01(c)(iv) when
required during the period of twenty-four (24) months from and after the date of
value indicated in the original Appraisal for such Borrowing Base Property, and
(C) Borrower has elected pursuant to Section 6.01(c)(v) to calculate the
Included Property Asset Values for all Included Properties based on their
Appraised Values.

 

“Indebtedness” means, as to any Person, at a particular time, all items which
constitute, without duplication, (i) indebtedness for borrowed money or the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business and not past due for more than ninety
(90) days after the date on which such trade account was created), (ii)
indebtedness evidenced by notes, bonds, debentures or similar instruments, (iii)
obligations with respect to any conditional sale or title retention agreement,
(iv) the maximum amount of 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, (v) all
liabilities secured by any lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof
(other than carriers’, warehousemen’s, mechanics’, repairmen’s or other like
non-consensual statutory Liens arising in the ordinary course of business, and
only to the extent of the value of the property encumbered by such Lien), (vi)
Capital Lease Obligations, (vii) all obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any Equity
Interest in such Person at any time prior to the date that is twelve (12) months
after the Term Maturity Date (excluding any such obligation to the extent the
obligation can be satisfied solely by the issuance of Equity Interests), (viii)
indebtedness arising under any Hedge Obligation, and (ix) all Contingent
Obligations of such Person with respect to liabilities of the type referenced in
clauses (i) through (viii) above (other than Contingent Non-Recourse
Obligations). For all purposes hereof, the Indebtedness of any Person shall
include such Person’s pro rata share of the Indebtedness of any unconsolidated
partnership, joint venture or Affiliate in which such Person holds any direct or
indirect Equity Interests, plus any Recourse or contingent obligations, directly
or indirectly, of such Person with respect to any Indebtedness of such
unconsolidated partnership, joint venture or Affiliate in excess of its
proportionate share. For these purposes, the amount of any net obligation under
any Hedge Obligation on any date shall be deemed to be the applicable Hedge
Termination Value thereof as of such date. “Indebtedness” includes, without
limitation, L/C Obligations and Loans outstanding under this Agreement.

 

21

 

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

 

“Indemnitee” has the meaning set forth in Section 10.03(b).

 

“Information” has the meaning specified in Section 10.15.

 

“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case as undertaken under U.S. Federal, State or foreign law.

 

“Interest Election Request” means a request by Borrower to convert or continue a
Borrowing in accordance with Section 2.06.

 

“Interest Payment Date” means (i) with respect to any Loan that is a Base Rate
Loan (other than a Swingline Loan), on the last day of each Interest Period
thereof (or if such day is not a Business Day, on the Business Day immediately
succeeding such Interest Period), (ii) with respect to any Loan that is a
Eurodollar Loan, on the last day of each Interest Period thereof (or if such day
is not a Business Day, on the Business Day immediately succeeding such Interest
Period) provided that if the Interest Period selected is six (6) months, the
Interest Payment Date shall occur on the first (1st) day of every third (3rd)
calendar month (or if such day is not a Business Day, on the next Business Day)
and (iii) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.

 

22

 

“Interest Period” means, (A) with respect to any Loan that is a Base Rate Loan,
the period commencing on (and including) the date such Base Rate Loan is made
(or converted from a Eurodollar Loan) and ending on (but excluding) the first
(1st) day in the next calendar month and, thereafter, each period commencing on
(and including) the first (1st) day of each calendar month and ending on (but
excluding) the first (1st) day in the next calendar month, and (B) with respect
to any Loan that is a Eurodollar Loan, each period commencing on (and including)
the date such Eurodollar Loan is made or (in the event of a continuation) the
last day of the immediately preceding Interest Period for such Loan and ending
on (but excluding) the numerically corresponding day in the calendar month that
is one (1), two (2), three (3), or six (6) months thereafter, as Borrower may
elect; provided that (i) if any Interest Period is scheduled to end on a day
that is not a Business Day, then the Interest Period will end on (but exclude)
the next succeeding Business Day, unless the result of such extension would be
to carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day; (ii) any
Interest Period scheduled to end after the Maturity Date shall end on the
Maturity Date (and if the Maturity Date is a day that is not a Business Day,
then the final Interest Period will end on the next Business Day unless such
Business Day is the first day of the next calendar month in which case the
Interest Period shall end on the immediately preceding Business Day); and
(iii) 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.

 

“Internalization” means any transaction or series of related transactions
(including, without limitation, mergers, consolidations, stock or other
ownership interest purchases or modifications of agreements) whereby (1) the
Advisor ceases or reduces to provide the services contemplated under the
Advisory Agreement, and (2) REIT or any of its wholly owned Subsidiaries
subsequently is to perform all of the duties previously performed by the
Advisor.

 

“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 of another Person, (b) a loan, advance or
capital contribution to, incurrence of a Contingent Obligation in relation to 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, (c) the
purchase of assets of another Person that constitute a business unit, or (d) the
purchase or other acquisition (in one transaction or a series of transactions)
of interests in Real Property. 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 Grade Borrowing Base Property” means any Borrowing Base Property
that is a Single Tenant Asset, the lessee of which is (i) an Investment Grade
Tenant or (ii) a tenant whose obligations under its net lease for such Borrowing
Base Property are guaranteed by an Investment Grade Guarantor.

 

23

 

“Investment Grade Guarantor” means any guarantor of a net lease of a Borrowing
Base Property that has a rating of BBB- or better from S&P or Baa3 or better
from Moodys.

 

“Investment Grade Tenant” means any tenant under a net lease of a Borrowing Base
Property that has a rating of BBB- or better from S&P or Baa3 from Moodys.

 

“IRS” means the United States Internal Revenue Service.

 

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and Borrower (or any Subsidiary) or in favor of the L/C
Issuer and relating to such Letter of Credit.

 

“Joinder Agreement” means a Joinder Agreement substantially in the form attached
to the Subsidiary Guaranty.

 

“L/C Advance” means, with respect to each Revolving Lender, such Revolving
Lender’s funding of its participation in any L/C Borrowing in accordance with
its Revolving Loan Applicable Percentage.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

 

“L/C Issuer” means Capital One in its capacity as issuer of Letters of Credit
hereunder, or any successor issuer of Letters of Credit hereunder.

 

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For all purposes of
this Agreement, if on any date of determination a Letter of Credit has expired
by its terms but any amount may still be drawn thereunder by reason of the
operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to be drawn.

 

“Lease” means a lease, sublease, license, concession agreement or other
agreement or other agreement (not including any ground lease) providing for the
use or occupancy of any portion of any Real Property owned or leased by the
Borrower or any Subsidiary Guarantor or other Subsidiary, including all
amendments, supplements, restatements, assignments and other modifications
thereto.

 

“Lease-Back Master Lease” means a lease, sublease or other agreement with
respect to any Real Property entered into by a Subsidiary Guarantor or 163
Entity, as the lessor, and the Person that sold such Real Property to such
Subsidiary Guarantor or 163 Entity (or the principals or affiliates of such
Person) pursuant to which such Person has agreed to pay rent or other charges
with respect to all or a portion of such Real Property for the term of such
lease, sublease or other agreement.

 

24

 

“Legal Requirements” means all statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental Authorities
affecting any Credit Party, any Loan Document or all or part of any Borrowing
Base Property or the construction, ownership, use, alteration or operation
thereof, whether now or hereafter enacted and in force, and all permits,
licenses and authorizations and regulations relating thereto.

 

“Lenders” means the Persons listed on Schedule I and any other Person that shall
have become a party hereto pursuant to an Assignment and Assumption in
accordance with the terms hereof, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Assumption in accordance with the
terms hereof. Unless the context requires otherwise, the terms “Lender” and
“Lenders” include the Swingline Lender.

 

“Lender Funding Amount” means an advance of the Loans, an unreimbursed
Protective Advance, any Unreimbursed Amount, any participation funded by a
Lender in Letters of Credit or Swingline Loans, or any other amount that a
Lender is required to fund under this Agreement.

 

“Letter of Credit” means any letter of credit issued hereunder. For purposes of
clarification, a Letter of Credit may only be a standby letter of credit only.

 

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

 

“Letter of Credit Expiration Date” means a day not later than the earlier of (i)
twelve (12) months after its date of issuance and (ii) the fifth (5th) Business
Day prior to the Revolving Maturity Date (or, if such day is not a Business Day,
the next succeeding Business Day); provided, however, that any such Letter of
Credit may provide for renewal thereof for additional periods of up to twelve
(12) months on customary terms (which in no event shall extend beyond the date
referred to in clause (ii) of the foregoing).

 

“Letter of Credit Fee” has the meaning specified in Section 2.04(g).

 

“Letter of Credit Sublimit” means, as of any date of determination, an amount
equal to the lesser of (a) $20,000,000 and (b) the Revolving Loan Commitments
(minus the Revolving Credit Exposure) as of such date.

 

“LIBOR Rate” means, with respect to any Interest Period, the rate for deposits
in U.S. Dollars for a period of one (1), two (2), three (3) or six (6) months,
as may be elected by Borrower pursuant to Section 2.06, which appears on the
Reuters Screen LIBOR01 Page as of 11:00 a.m., London, England, time, on the
Business Day that is at least two (2) London Banking Days preceding the Reset
Date for such Interest Period. If such rate does not appear on the Reuters
Screen LIBOR01 Page, then LIBOR for that Interest Period will be determined as
if the parties had specified “USD-LIBOR-Reference Banks” as the applicable rate.

 

“Lien” means, with respect to any asset, any mortgage, deed of trust, lien
(statutory or otherwise), pledge, hypothecation, easement, preference, capital
lease, assignment, security interest or any other encumbrance, charge or
transfer of, or any agreement to enter into, grant or create any of the
foregoing which is automatic upon the occurrence of any other events, on or
affecting all or any part of such asset or any interest therein, or any direct
or indirect interest in Borrower, any Subsidiary Guarantor or any 163 Entity,
including any conditional sale or other title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing, and
mechanic’s, materialmen’s and other similar liens and encumbrances.

 

25

 

“Loan Documents” means each of this Agreement, the Notes, the Pledge, the
Mortgages, any other Security Documents, each Assignment of Agreements, each
Environmental Indemnity Agreement, the Guaranty, each Subordination of
Management Agreement, and the other instruments or agreements made or entered
into by any of the Credit Parties with or in favor of any or all of the Secured
Parties in connection with the Transactions, and any supplements or amendments
to or waivers of any of the foregoing executed and delivered from time to time.

 

“Loans” means the loans made by the Lenders to Borrower pursuant to this
Agreement.

 

“London Banking Day” means any day on which commercial banks are open for
general business (including dealings in foreign exchange and foreign currency
deposits) in London, England.

 

“Management Agreement” the management agreement for any Borrowing Base Property,
between a Subsidiary Guarantor, the 163 Washington SPE and a Manager, pursuant
to which such Manager is to manage a Borrowing Base Property, as same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with a Subordination of Management Agreement.

 

“Manager” means the Person acting as the manager of any Borrowing Base Property
pursuant to a Management Agreement, and any successor, assignee or replacement
manager appointed by Borrower with Administrative Agent’s consent.

 

“Margin Stock” means “margin stock” within the meaning of Regulation U of the
Board.

 

“Material Adverse Effect” means any event, matter, condition or circumstance
which (i) has or would reasonably be expected to have a material adverse effect
on the business, properties, results of operations or condition (financial or
otherwise) of any Credit Party and its Subsidiaries taken as a whole; (ii) would
materially impair the ability of any Credit Party or any other Person to perform
or observe its obligations under or in respect of the Loan Documents, or
(iii) affects the legality, validity, binding effect or enforceability of any of
the Loan Documents or the perfection or priority of any Lien granted to the
Lenders or the Administrative Agent for the benefit of the Lenders under any of
the Security Documents.

 

“Maturity Date” means, with respect to Revolving Loans, the Revolving Maturity
Date, and with respect to Term Loans, the Term Maturity Date, as applicable.

 

“Maximum Loan Amount” means, from time to time, the aggregate of all Commitments
(whether funded or unfunded), as such Commitments may be reduced at Borrower’s
option pursuant to Section 2.07 or increased pursuant to Section 10.17 hereof.

 

“Modified Funds From Operations” means, with respect to any fiscal quarter, the
REIT’s Funds From Operations for such quarter, adjusted for the following items,
as applicable, included in the determination of GAAP net income for such quarter
(without duplication of any adjustments included in Funds From Operations for
such quarter): acquisition fees and expenses; amounts relating to amortization
of above and below market leases and liabilities (which are adjusted in order to
reflect such payments from a GAAP accrual basis to a cash basis of disclosing
the rent and lease payments); accretion of discounts and amortization of
premiums on debt investments; mark-to-market adjustments included in net income;
gains or losses included in net income from the extinguishment or sale of debt,
hedges, foreign exchange, derivatives or securities holdings where trading of
such holdings is not a fundamental attribute of the business plan, unrealized
gains or losses resulting from consolidation from, or deconsolidation to, equity
accounting, and after adjustments for consolidated and unconsolidated
partnerships and joint ventures, determined in a manner consistent with the
Investment Program Association’s Guideline 2010-01 (it being understood that
Modified Funds From Operations shall not include an adjustment for amounts
relating to deferred rent receivables), Supplemental Performance Measure for
Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the
Practice Guideline, issued in November 2010.

 

26

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage” means, collectively, each deed of trust, mortgage or similar real
property security instrument encumbering a Borrowing Base Property in favor of
the Administrative Agent, in form and substance reasonably acceptable to
Administrative Agent and Administrative Agent’s counsel.

 

“Mortgaged Borrowing Base Property” means, collectively, the first seven (7)
Real Properties which became Borrowing Base Properties pursuant hereto, together
with any substitution for any of such Borrowing Base Properties in accordance
with the terms of Section 9.03(b).

 

“Multiemployer Plan” means a “multiemployer plan” within the meaning of Section
3(37)(A) of ERISA and to which any member of the Controlled Group makes, is
making, or is obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.

 

“Negative Pledge” means any covenant, agreement or arrangement in favor of the
creditor of any Person whereby that Person has agreed with respect to itself or
any of its subsidiaries or affiliates, (i) not to sell, dispose of or create any
Lien upon any of the assets of such Person or its subsidiaries or affiliates or
(ii) not to incur or grant in favor of any Person other than such creditor any
covenant not to sell or dispose of, or create any Lien upon, the assets of such
Person or its subsidiaries or affiliates.

 

“Net Equity Proceeds” means, with respect to the sale or issuance of any Equity
Interest by the REIT, the excess of (i) the sum of the cash and Cash Equivalents
received in connection with such transaction over (ii) the underwriting
discounts and commissions, and other reasonable and customary out-of-pocket
expenses, incurred by the REIT, in connection therewith.

 

“Net Operating Income” means, with respect to any Real Property for any period,
property rental and other income (as determined in accordance with GAAP)
attributable to such property accruing for such period (adjusted to eliminate
the straight lining of rents) minus (b) the amount of all expenses (as
determined in accordance with GAAP) incurred in connection with and directly
attributable to the ownership and operation of such property for such period,
including without limitation, management fees (which shall be assumed to be the
higher of (i) the actual management fees payable or (ii) three percent (3%) of
gross revenues from the property) and amounts accrued for the payment of real
estate taxes and insurance premiums, but excluding any general and
administrative expenses related to the operation of the REIT, Borrower, any
Subsidiary Guarantor or any 163 Entity, any interest expense or other debt
service charges and any non-cash charges such as depreciation or amortization of
financing costs. Net Operating Income shall be adjusted to remove any impact
from straight line rent leveling adjustments as required under GAAP and
amortization of deferred market rent into income pursuant to Statement of
Financial Accounting Standards number 141.

 

27

 

“Non-Extension Notice Date” has the meaning specified in Section 2.04(b)(iii).

 

“Non-Pro Rata Advance” means a Protective Advance or a disbursement under the
Loans with respect to which fewer than all Lenders have funded their respective
Applicable Percentage in breach of their obligations under this Agreement.

 

“Non-Qualifying Party” shall mean Borrower or any Guarantor that on the
applicable Eligibility Date fails for any reason to qualify as an Eligible
Contract Participant.

 

“Non-Recourse” means, with reference to any obligation or liability, any
obligations or liability for which a Person, as obligor thereunder, is not
liable or obligated other than as to such Person’s interest in a specifically
identified asset only, subject to such limited exceptions to the non-recourse
nature of such obligation or liability for customary carve-outs for fraud,
misrepresentation, bankruptcy, misapplication or misappropriation of funds,
waste, environmental claims and liabilities, the non-payment of taxes and
assessments, insolvency proceedings and other circumstances customarily excluded
by institutional commercial real estate lenders from exculpation provisions or
included in separate indemnification agreements or guarantees.

 

“Notes” means the Revolving Notes, the Term Notes, and the Swingline Note.

 

“Notices” has the meaning set forth in Section 10.01(a).

 

“NPL” means the National Priorities List under CERCLA.

 

“Obligations” means all obligations, liabilities and indebtedness of every
nature of any Credit Party, including (i) under a Swap Contract and (ii) the
Guaranteed Obligations, from time to time owing to any Lender under or in
connection with this Agreement or any other Loan Document to which such Credit
Party is a party, including principal, interest, fees (including fees of
external counsel), and expenses whether now or hereafter existing under the Loan
Documents. Notwithstanding the foregoing, the Obligations of a Credit Party
shall not include any Excluded Swap Obligations with respect to such Credit
Party.

 

“Occupancy Rate” has the meaning set forth in Section 9.01(b)(iv).

 

28

 

“163 Entity” or “163 Entities” means, singularly or collectively as the context
may require, the 163 Washington Member, the 163 Washington JV and the 163
Washington SPE.

 

“163 Washington” has the meaning set forth in Section 5.18(iii).

 

“163 Washington Consent” has the meaning set forth in Section 5.18(a)(ix).

 

“163 Washington JV Agreement” means that certain Limited Liability Company
Agreement, dated as of September 7, 2012, by and between Borrower and the Black
Walnut Partner.

 

“163 Washington JV” means 163 Washington Avenue NYRR JV, LLC, a Delaware limited
liability company.

 

“163 Washington Member” means 163 Washington Avenue NYRR JV Member, LLC, a
Delaware limited liability company.

 

“163 Washington SPE” means ARC NYWSHAV001, LLC, a Delaware limited liability
company.

 

“Option Rights” has the meaning set forth in Section 3.16(f).

 

“Organizational Documents” shall mean (a) for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, any subscription agreements for such
corporation, and any amendments thereto, (b) for any limited liability company,
the articles of organization or certificates of formation and any certificate
relating thereto and the limited liability company (or operating) agreement of
such limited liability company, any subscription agreements for such limited
liability company, and any amendments thereto, and (c) for any partnership
(general or limited), the certificate of limited partnership or other
certificate pertaining to such partnership and the partnership agreement of such
partnership (which must be a written agreement), any subscription agreements for
such partnership, and any amendments thereto.

 

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

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.17).

 

29

 

“Participant” has the meaning set forth in Section 10.05(e).

 

“Participant Register” has the meaning specified in Section 10.05(e)(iii).

 

“Patriot Act” has the meaning set forth in Section 5.15.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

 

“Permitted Exceptions” means (i) Liens to secure taxes, assessments and other
governmental charges (excluding any Lien imposed pursuant to any of the
provisions of ERISA or pursuant to any Environmental Laws) or claims for labor,
material or supplies incurred in the ordinary course of business in respect of
obligations not then delinquent or which are being contested as permitted under
this Agreement, (ii) deposits or pledges made in connection with, or to secure
payment of, workers’ compensation, unemployment insurance, old age pensions or
other social security obligations, (iii) with respect to each Borrowing Base
Property, encumbrances consisting of easements, right of way, zoning
restrictions, restrictions on the use of real property affecting a Borrowing
Base Property, and other minor non-monetary liens or encumbrances none of which
interferes materially with the use thereof in the ordinary conduct of the
business of the applicable Subsidiary Guarantor (or, in the case of 163
Washington, the business of the 163 Washington SPE) or, (iv) with respect to
each Approved Ground Lease, encumbrances on the underlying fee estate and Liens
thereon, provided that the holder of such Liens shall be a party to an
instrument which shall provide customary non-disturbance protections reasonably
satisfactory to Administrative Agent, (v) Liens in respect of judgments not
constituting an Event of Default, (vi) Liens securing assessments or charges
payable to a property owner association or similar entity, which assessments are
not yet due and payable or that are being contested in good faith by appropriate
proceedings diligently conducted, and for which adequate reserves with respect
thereto, to the extent required by GAAP, are maintained on the books of the
applicable Person, (vii) assignments to a reserve Section 1031 exchange trust,
(viii) Liens on assets of the Borrower or any of its Subsidiaries securing
obligations under Swap Contracts, and (ix) other covenants, conditions,
restrictions, easements and other exceptions to title affecting a Borrowing Base
Property as reasonably approved by Administrative Agent.

 

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

 

“Plan” means (i) an employee benefit (as defined in Section 3(3) of ERISA) or
other plan established or maintained by Borrower or any ERISA Affiliate for or
on behalf of their employees or to which Borrower or any ERISA Affiliate makes
or is obligated to make contributions for or on behalf of their employees and
(ii) which is subject to Title IV of ERISA or Section 302 of ERISA or
Section 412 of the Code.

 

“Plan Asset Regulation” means Department of Labor Regulation Section 2510.3-101,
29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA.

 

“Platform” has the meaning set forth in Section 10.01(d).

 

30

 

“Pledge” means, collectively, the Pledge and Security Agreement, dated as of the
Effective Date, made by Borrower in favor of Administrative Agent and, each
additional Pledge and Security Agreement delivered by Borrower pursuant to
Article IX hereof.

 

“Post-Foreclosure Plan” has the meaning set forth in Section 8.03(f).

 

“Prepayment Trigger Date” has the meaning set forth in Section 2.09(b)(i).

 

“Prime Rate” means the rate of interest from time to time announced by Capital
One at its principal office as its prime commercial lending rate, it being
understood that such prime commercial rate is a reference rate and does not
necessarily represent the lowest or best rate being charged by Capital One to
any customer and such rate is set by Capital One based upon various factors
including Capital One’s costs and desired return, general economic conditions
and other factors. Any change in such prime rate announced by Capital One shall
take effect at the opening of business on the day specified in the announcement
of such change.

 

“Pro Forma Debt Service” means, with respect to any particular period during the
Loan term, the pro forma payments of interest and principal that would be due
with respect to a loan in an amount that is being measured pursuant to the
definition of “DSCR-Based Borrowing Base Limit” in this Agreement, based on a
30-year mortgage-style amortization schedule and an assumed interest rate equal
to the greater of (a) the yield in effect as of the last day of such period on
U.S. Treasury obligations having a maturity corresponding to ten (10) years from
the date of determination (and, if no such maturity shall so exactly correspond,
yields for the two most closely corresponding published maturities shall be
calculated as of such determination date, and the yield for a maturity
corresponding to ten (10) years from the date of determination, interpolated or
extrapolated (as applicable) from such yields on a straight-line basis
(rounding, in the case of relevant periods, to the nearest month), shall be
utilized), plus two and three quarters percent (2.75%), and (b) six percent
(6.0%).

 

“Pro Forma Debt Service Coverage Ratio” means, as of any date, the ratio
calculated and submitted by Borrower of (i) the Adjusted Borrowing Base Net
Operating Income to (ii) the Pro Forma Debt Service with respect to such period;
provided, however, if Administrative Agent determines the Debt Service Coverage
Ratio at any time other than upon the delivery by Borrower of a Borrowing Base
Certificate as and when required hereunder, then Administrative Agent shall
calculate the Debt Service Coverage Ratio based upon the information provided by
Borrower pursuant to Section 5.01 hereof.

 

“Prohibited Person” means any Person:

 

(i) listed in the Annex to, or otherwise subject to the provisions of, the
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001,
and relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”);

 

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

 

31

 

(iii) with whom any Lender is prohibited from dealing or otherwise engaging in
any transaction by any terrorism or money laundering law, including the
Executive Order;

 

(iv) who is known to Borrower to commit, threaten or conspire to commit or
support “terrorism”, as defined in the Executive Order;

 

(v) that is named as a “specially designated national and blocked person” on the
most current list published by the U.S. Treasury Department Office of Foreign
Assets Control at its official website, http://www.treas.gov.ofac/t11sdn.pdf or
at any replacement website or other replacement official publication of such
list;

 

(vi) that is named on the consolidated list of asset freeze targets by the
United Nations, the European Union and the United Kingdom (maintained by the
Asset Freezing Unit of the United Kingdom Treasury:
http://www.hm-treasury.gov.uklfinancialsanctions);

 

(vii) that is named on the most current lists pertaining to EU-Regulations Nos.
2580/2001 and/or 881/2002;

 

(viii) that violates any of the criminal laws of the United States of America or
of any of the several states, or commits any act that would be a criminal
violation if committed within the jurisdiction of the United States of America
or any of the several states, relating to terrorism or the laundering of
monetary instruments, including any offense under (a) the criminal laws against
terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy
Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or
the (e) Patriot Act; or

 

(ix) who is known to Borrower to be an Affiliate of or affiliated with a Person
listed above.

 

“Property” means, collectively and severally, any and all Real Property and all
personal property owned or occupied by the subject Person. “Property” shall
include all Equity Interests owned by the subject Person in a Subsidiary.

 

“Proposed Modification” has the meaning set forth in Section 6.03(b).

 

“Proposed Modification Notice” has the meaning set forth in Section 6.03(b).

 

“Protective Advance” means, collectively, (i) any out-of-pocket expenses
incurred by Administrative Agent in connection with any Default to the extent
any such expenses have not been paid by Borrower or Guarantor (including,
without limitation, any recording charges or mortgage recording taxes that are
payable in connection with the recordation of any Mortgage following any Default
or Event of Default in accordance herewith, and any charges incurred for title
insurance policies insuring the Lien of any Mortgage that is recorded following
any Default or Event of Default in accordance herewith) and (ii) any advances or
disbursements made in respect of real estate taxes and assessments (including
special assessments or payments in lieu of real estate taxes), maintenance
costs, ground rent, insurance premiums or other items (including capital items)
which Administrative Agent or Required Lenders determine are necessary to
preserve the Lien (or priority of the Lien) of any Collateral from any
intervening lien or forfeiture, or to protect any Collateral or Borrowing Base
Property from any loss, or casualty, waste or other impairment, diminution or
reduction in value (including, without limitation, advances or disbursements for
the completion of any applicable alterations or improvements which have
theretofore been commenced or are deemed necessary for the leasing, marketing or
maintenance of the subject Borrowing Base Property for its permitted use or to
preserve, protect, sell, operate, manage, lease, improve, maintain, repair,
defend or dispose of any Collateral or Borrowing Base Property or any portion
thereof), whether or not the amount necessary to be advanced for such purposes
exceeds the amount of the applicable Mortgage, if any.

 

32

 

“Public Lender” has the meaning set forth in Section 10.01(e).

 

“Qualified ECP Loan Guarantor” shall mean Borrower or each Guarantor that on the
Eligibility Date is (a) a corporation, partnership, proprietorship,
organization, trust, or other entity other than a “commodity pool” as defined in
Section 1a(10) of the CEA and CFTC regulations thereunder that has total assets
exceeding $10,000,000 or (b) an Eligible Contract Participant that can cause
another person to qualify as an Eligible Contract Participant on the Eligibility
Date under Section 1a(18)(A)(v)(II) of the CEA by entering into or otherwise
providing a “letter of credit or keepwell, support, or other agreement” for
purposes of Section 1a(18)(A)(v)(II) of the CEA.

 

“Qualified Plan” means a pension plan (as defined in Section 3(2) of ERISA)
intended to be tax-qualified under Section 401(a) of the Code and which any
member of the Controlled Group sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five (5)
plan years, but excluding any Multiemployer Plan.

 

“Quarterly Dates” means the last Business Day of March, June, September and
December in each year, the first of which shall be the first such day after the
Effective Date.

 

“Rate Contracts” means interest rate and currency swap agreements, cap, floor
and collar agreements, interest rate insurance, currency spot and forward
contracts and other agreements or arrangements designed to provide protection
against fluctuations in interest or currency exchange rates.

 

“Real Property” means any Asset consisting of real property.

 

“Real Property Indebtedness” means any Indebtedness secured by a Lien on any
Real Property.

 

“Recourse” means, with reference to any obligation or liability, any direct or
indirect liability or obligation that is not Non-Recourse to the obligor
thereunder.

 

“Recycled Mortgages” means the initial Mortgages encumbering the Borrowing Base
Properties listed on Schedule III and known as 163 Washington Street, Brooklyn,
New York and 216 West 18th Street, New York, New York, that secure only the Term
Loans, as more fully described in Section 5.18(a)(iii).

 

33

 

“Reference Banks” means major banks in the London interbank market selected by
Administrative Agent.

 

“Register” has the meaning set forth in Section 10.05(c).

 

“REIT” means American Realty Capital New York Recovery REIT, Inc., a Maryland
corporation, which is the general partner of Borrower.

 

“REIT Status” means, with respect to any Person, (a) the qualification and
taxation of such Person as a real estate investment trust under Sections 856
through 860 of the Code, and (b) the qualification and taxation of such Person
as a real estate investment trust under analogous provisions of state and local
law in each state and jurisdiction in which such Person owns property, operates
or conducts business.

 

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

 

“Remediation Threshold” means, with respect to each individual Borrowing Base
Property, any amount in excess of the lesser of (i) 5% of the Borrowing Base
Asset Value of such Borrowing Base Property and (ii) $5,000,000 which is
required to be expended in connection with any individual remediation activity
or the resolution of any liability set forth in Section 3.06(b)(iii) through
(vii).

 

“REOC” means a “Real Estate Operating Company” within the meaning of Regulation
Section 2510.3101(e) of the Plan Asset Regulation.

 

“Reportable Compliance Event” has the meaning set forth in Section 3.23(f).

 

“Required Lenders” means, at any time, non-Defaulting Lenders having Revolving
Credit Exposures, Term Credit Exposures and unused Commitments representing more
than 66⅔% of the sum of the total Revolving Credit Exposures, Term Credit
Exposures and unused Commitments of non-Defaulting Lenders at such time;
provided that if there are only two (2) Lenders, “Required Lenders” shall mean
all Lenders that are non-Defaulting Lenders and if there are only three (3)
Lenders, “Required Lenders” shall mean at least two (2) Lenders having Revolving
Credit Exposures, Term Credit Exposures and unused Commitments representing more
than 66⅔% of the sum of the total Revolving Credit Exposures, Term Credit
Exposures and unused Commitments of non-Defaulting Lenders at such time (unless
there is only one (1) Lender that is a non-Defaulting Lender, in which case
“Required Lenders” shall be that one (1) Lender).

 

“Required Payment” has the meaning set forth in Section 2.16(d).

 

“Required Revolving Lenders” means, at any time, Revolving Lenders that are
non-Defaulting Lenders having Revolving Credit Exposures and unused Revolving
Loan Commitments representing more than 66⅔% of the sum of the total Revolving
Credit Exposures and unused Revolving Loan Commitments of non-Defaulting Lenders
that are Revolving Lenders at such time; provided that if there are only two (2)
Revolving Lenders, “Required Revolving Lenders” shall mean all Revolving Lenders
that are non-Defaulting Lenders and if there are only three (3) Revolving
Lenders, “Required Revolving Lenders” shall mean at least two (2) Revolving
Lenders having Revolving Credit Exposures and unused Revolving Loan Commitments
representing more than 66⅔% of the sum of the total Revolving Credit Exposures
and unused Revolving Loan Commitments of non-Defaulting Lenders that are
Revolving Lenders at such time (unless there is only one (1) Revolving Lender
that is a non-Defaulting Lender, in which case “Required Revolving Lenders”
shall be that one (1) Revolving Lender).

 

34

 

“Required Term Lenders” means, at any time, Term Lenders that are non-Defaulting
Lenders having Term Credit Exposures and unused Term Loan Commitments
representing more than 66⅔% of the sum of the total Term Credit Exposures and
unused Term Loan Commitments of non-Defaulting Lenders that are Term Lenders at
such time; provided that if there are only two (2) Term Lenders, “Required Term
Lenders” shall mean all Term Lenders that are non-Defaulting Lenders and if
there are only three (3) Term Lenders, “Required Term Lenders” shall mean at
least two (2) Term Lenders having Term Credit Exposures and unused Term Loan
Commitments representing more than 66⅔% of the sum of the total Term Credit
Exposures and unused Term Loan Commitments of non-Defaulting Lenders that are
Term Lenders at such time (unless there is only one (1) Term Lender that is a
non-Defaulting Lender, in which case “Required Term Lenders” shall be that one
(1) Term Lender)..

 

“Reset Date” means the first day of each Interest Period.

 

“Resigning Lender” has the meaning set forth in Section 8.09.

 

“Responsible Officer” means, with respect to any Person, the president, chief
financial officer, the senior vice president or treasurer of such Person.

 

“Restricted Payment” means, with respect to any Person, any dividend or other
distribution (whether in cash, Equity Interests or other property) with respect
to any capital stock or other Equity Interest of such Person, or any payment
(whether in cash, Equity Interests 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 such Person’s
stockholders, partners or members (or the equivalent holder thereof).

 

“Revolving Borrowing” means Revolving Loans of the same Type made, converted or
continued on the same date and, in the case of Revolving Loans which are
Eurodollar Loans, as to which a single Interest Period is in effect. For
purposes hereof, the date of a Revolving Borrowing comprising one or more
Revolving Loans that have been converted or continued shall be the effective
date of the most recent conversion or continuation of such Revolving Loan or
Revolving Loans.

 

“Revolving Borrowing Request” means a request by Borrower for a Revolving
Borrowing in accordance with Section 2.03.

 

“Revolving Credit Exposure” means, with respect to any Revolving Lender at any
time, the sum of the outstanding principal amount of such Revolving Lender’s
Revolving Loans, L/C Obligations (after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements by Borrower of Unreimbursed Amounts) and Swingline Exposure at
such time.

 

35

 

“Revolving Lender” means a Lender having a Revolving Loan Commitment, or if the
Revolving Loan Commitments have terminated, holding any Revolving Loans or
participations in any Letter of Credit or Swingline Loan.

 

“Revolving Loan” means a Loan made pursuant to Section 2.01.

 

“Revolving Loan Applicable Percentage” means, with respect to any Revolving
Lender, the percentage of the total Revolving Loan Commitments represented by
such Revolving Lender’s Revolving Loan Commitment; provided, however, that if at
the time of determination the Revolving Loan Commitments have terminated or been
reduced to zero, the “Revolving Loan Applicable Percentage” of each Lender shall
be the ratio, expressed as a percentage of (A) the sum of the unpaid principal
amount of all outstanding Revolving Loans, Swingline Loans and L/C Obligations
owing to such Revolving Lender as of such date to (B) the sum of the aggregate
unpaid principal amount of all outstanding Revolving Loans, Swingline Loans and
L/C Obligations of all Revolving Lenders as of such date.

 

“Revolving Loan Borrowing Base Availability” at any time shall mean the amount
by which (i) the Borrowing Base exceeds (ii) the Term Credit Exposure at such
time.

 

“Revolving Loan Commitment” means, with respect to each Revolving Lender, the
commitment of such Revolving Lender to make Revolving Loans, to acquire
participations in Letters of Credit hereunder, and to make or participate in
Swingline Loans, expressed as an amount representing the maximum aggregate
amount of such Revolving Lender’s Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.09 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Revolving Lender pursuant to Section 10.05. The initial amount of each Revolving
Lender’s Revolving Loan Commitment is set forth on Schedule I, or in the
Assignment and Assumption pursuant to which such Revolving Lender shall have
assumed its Commitment, as applicable. The initial aggregate amount of the
Lenders’ Revolving Loan Commitments is $110,000,000.00. The Revolving Loan
Commitments may be increased pursuant to Section 10.17 hereof.

 

“Revolving Maturity Date” means, with respect to the Revolving Loans, August 20,
2016, as the same may be extended pursuant to Section 2.20 (or such earlier date
as the Revolving Loan Commitments shall have been terminated in accordance with
the terms hereof).

 

“Revolving Notes” means the promissory notes provided for in Section 2.08(f) in
the form set forth in Exhibit A and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.

 

“Sanctioned Country” has the meaning set forth in Section 3.23(f).

 

36

 

“Sanctioned Person” has the meaning set forth in Section 3.23(f).

 

“Second Extended Revolving Maturity Date” has the meaning set forth in Section
2.20(b).

 

“Secured Indebtedness” means any Indebtedness for borrowed money of a Person
that is secured by a Lien on any Real Estate or on any Equity Interests in any
other Person owning Real Estate, provided that if such Indebtedness is
Non-Recourse the portion of such Indebtedness included in Secured Indebtedness
shall not exceed the sum of the aggregate value of the assets securing such
Indebtedness, plus the aggregate value of any improvements to such assets.

 

“Secured Party” or “Secured Parties” means each of the Lenders and
Administrative Agent.

 

“Security Documents” means, collectively, the Pledge, the Mortgage and all UCC
financing statements required by this Agreement, the Pledge and/or the Mortgage
to be filed with respect to the security interests in accounts and other
property created pursuant to this Agreement, the Pledge and/or the Mortgage.

 

“Single Tenant Asset” means either (i) improved Real Property the entirety of
which has been leased to a single tenant (or group of affiliated tenants); (ii)
improved Real Property consisting of a distribution facility; or (iii) improved
Real Property consisting of a parking facility.

 

“Senior Loans” has the meaning set forth in Section 8.13(h).

 

“Solvency” or “Solvent” as to any Person means that such Person (a) is not
“insolvent” within the meaning of Section 101(32) of the Bankruptcy Code or
Section 271 of the Debtor and Creditor Law of the State of New York and (b) is
in compliance with the representations and warranties that are set forth in
Section 3.13 hereof determined as if such Person were a “Credit Party”
referenced therein.

 

“Solvency Certificate” means a certificate in the form attached hereto as
Exhibit G.

 

“Special Advance Lender” has the meaning set forth in Section 8.13(c).

 

“Special Purpose Entity” shall have the meaning set forth on Schedule VI hereto

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which Administrative Agent is subject with respect
to the Adjusted LIBOR Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

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“Subordination of Management Agreement” means, collectively, each Subordination
of Management Agreement delivered by each Manager to Administrative Agent for
the benefit of the Lenders, in form and substance reasonably acceptable to
Administrative Agent and Administrative Agent’s counsel.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the Equity Interests are, as of such date,
directly or indirectly owned, controlled or held, or (b) that is, as of such
date, otherwise Controlled, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent. Unless
otherwise specified, “Subsidiary” means a Subsidiary of Borrower.

 

“Subsidiary Guarantor” means each wholly owned Subsidiary of the Borrower that
is either the sole fee owner or the ground or master lessee of a Borrowing Base
Property from time to time. The Subsidiary Guarantors described on Schedule III
hereto on the Effective Date are the Subsidiary Guarantors as of the Effective
Date. Subsidiary Guarantors may be released and Subsidiaries may be added as
Subsidiary Guarantors pursuant to Section 9.03.

 

“Subsidiary Guaranty” means the Subsidiary Guaranty executed by each Subsidiary
Guarantor (or as to which a Subsidiary Guarantor has executed a Joinder
Agreement) in favor of Administrative Agent, for the benefit of the Lenders, in
form and substance acceptable to Administrative Agent.

 

“Swap Contract” means any “swap” (as defined in Section 1a(47) of the CEA and
regulations thereunder) entered into by Borrower with any person who is, or was
on the Effective Date, Administrative Agent, any Lender or Affiliate of any
Lender and which is secured by the Collateral, other than (a) a swap entered
into, or subject to the rules of, a board of trade designated as a contract
market under Section 5 of the CEA, or (b) a commodity option entered into
pursuant to CFTC Regulation 32.3(a).

 

“Swap Obligation” means any obligation to pay or perform under any Swap Contract
or transaction thereunder.

 

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any
Revolving Lender at any time shall be its Revolving Loan Applicable Percentage
of the total Swingline Exposure at such time.

 

“Swingline Lender” means Capital One, in its capacity as lender of Swingline
Loans hereunder.

 

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“Swingline Loan” means a loan made by Swingline Lender pursuant to Section 2.19.

 

“Swingline Note” means the promissory note evidencing the Swingline Loan in the
form set forth in Exhibit B and all promissory notes delivered in substitution
or exchange therefor, in each case as the same shall be modified and
supplemented and in effect from time to time.

 

“Tangible Net Worth” shall mean with respect to any Person, as of any date of
determination, such Person’s net worth, as determined in accordance with GAAP
plus accumulated depreciation and amortization (except that in determining such
net worth, Indebtedness shall include, without duplication, such Person’s pro
rata share of the Indebtedness of any unconsolidated partnership, joint venture
or Affiliate in which such Person directly or indirectly holds any interest),
minus (to the extent included when determining such Person’s net worth in
accordance with GAAP): (a) the amount of any write-up in the book value of any
assets reflected in any balance sheet resulting from revaluation thereof or any
write up in excess of the cost of such assets acquired and (b) the aggregate of
all amounts appearing on the assets side of any such balance sheet for
franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, service marks, trade names, goodwill, treasury stock, experimental
or organizational expenses and other like assets which would be classified as
intangible assets under GAAP (excluding acquired intangible lease assets and
amortization in respect thereof), all determined on a consolidated basis.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including back-up withholding), assessments, fees, or
other charges imposed by any Governmental Authority.

 

“Term Borrowing” means Term Loans of the same Type made, converted or continued
on the same date and, in the case of Term Loans which are Eurodollar Loans, as
to which a single Interest Period is in effect. For purposes hereof, the date of
a Term Borrowing comprising one or more Term Loans that have been converted or
continued shall be the effective date of the most recent conversion or
continuation of such Term Loan or Term Loans.

 

“Term Borrowing Request” means a request by Borrower for a Term Borrowing in
accordance with Section 2.03.

 

“Term Credit Exposure” means, at any time, the aggregate principal amount of all
Term Loans outstanding at such time. The Term Credit Exposure of any Term Lender
at any time shall be its Term Loan Applicable Percentage of the total Term
Credit Exposure at such time.

 

“Term Lender” means a Lender having a Term Loan Commitment, or if the Term Loan
Commitments have terminated, holding any Term Loans.

 

“Term Loan” means a Loan made pursuant to Section 2.02 and any other term loans
incurred pursuant to Section 10.17.

 

“Term Loan Applicable Percentage” means, with respect to any Term Lender, the
ratio, expressed as a percentage of (a) during any period during which Borrower
may make Term Borrowings pursuant to Section 2.03(b) or Section 10.17(c), (i)
(x) the amount of such Term Lender’s Term Loan Commitment plus (y) the amount of
such Term Lender’s outstanding Term Loans to (ii) (x) the aggregate amount of
the Term Loan Commitments of all Term Lenders plus (y) aggregate amount of all
outstanding Term Loans and (b) during any period following the termination of
Borrower’s right to may make Term Borrowings pursuant to Section 2.03(b) or
Section 10.17(c), or if the Term Loan Commitments have terminated or expired,
(i) the amount of such Term Lender’s outstanding Term Loans to (ii) the
aggregate amount of all outstanding Term Loans.

 

39

 

“Term Loan Borrowing Base Availability” at any time shall mean the amount by
which (i) the Borrowing Base exceeds (ii) the Revolving Credit Exposure at such
time.

 

“Term Loan Commitment” means, with respect to each Term Lender, the commitment
of such Term Lender to make Term Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Term Lender’s Term Loan
Exposure hereunder, as such commitment may be reduced or increased from time to
time pursuant to assignments by or to such Term Lender pursuant to Section
10.05. The initial amount of each Term Lender’s Term Loan Commitment is set
forth on Schedule I, or in the Assignment and Assumption pursuant to which such
Term Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders’ Term Loan Commitments is $110,000,000.00. The
Term Loan Commitments may be increased pursuant to Section 10.17 hereof.

 

“Term Loan Exposure” means, with respect to any Term Lender at any time, the sum
of the outstanding principal amount of such Term Lender’s Term Loans at such
time.

 

“Term Maturity Date” means, with respect to the Term Loans, August 20, 2018 (or
such earlier date as the Term Loan Commitments shall have been terminated in
accordance with the terms hereof).

 

“Term Notes” means the promissory notes provided for in Section 2.08(f) in the
form set forth in Exhibit C and all promissory notes delivered in substitution
or exchange therefor, in each case as the same shall be modified and
supplemented and in effect from time to time.

 

“Threshold Amount” shall mean (a) Twenty-Five Million Dollars ($25,000,000) with
respect to any Indebtedness or obligations in respect of Hedge Termination Value
that are Non-Recourse, and (b) Fifteen Million Dollars ($15,000,000) with
respect to any Indebtedness or obligations in respect of Hedge Termination Value
that are Recourse.

 

“Total Asset Value” means, for any Person, as of the date of determination, the
sum of (a) for any Asset of that Person that is improved Real Property, the
lower of the (i) Acquisition Cost for such Real Property and (ii) the Appraised
Value of such Real Property (provided that the Appraised Value of such Real
Property may only be used in the calculation of Total Asset Value if the date of
value indicated in the applicable Appraisal is not more than twenty-four (24)
months prior to the date on which the Total Asset Value is being determined, and
only if a new Appraisal is not then required of the applicable Real Property
pursuant to Section 6.01(c)), (b) the cash and Cash Equivalents of that Person,
(c) actual cost (purchase price) for each parcel of vacant, unimproved Real
Property owned by that Person, (d) any mortgage notes receivable by such Person
as determined in accordance with GAAP, (e) the actual cost of construction in
process and (f) with respect to the Assets of such Person of the type described
in Section 6.15(b), (d), (e), (f), (g), (h) and (i), either the value thereof as
determined in accordance with GAAP or, if applicable, the value based on one of
the valuation methodologies set forth in clauses (a)-(e) above to the extent
same are applicable to the Assets of such Person of the type described in
Section 6.15(b), (d), (e), (f), (g), (h) and (i).

 

40

 

“Toxic Mold” has the meaning set forth in the definition of Hazardous Materials.

 

“Trade Payables” means unsecured trade payables incurred in the ordinary course
of business that (A) are not evidenced by a note, (B) do not exceed, at any
time, a maximum aggregate amount of 3% of the Maximum Loan Amount and (C) are
paid within sixty (60) days of the date an invoice therefor is delivered to the
REIT, Borrower or the applicable Subsidiary Guarantor or the 163 Washington SPE,
as the case may be.

 

“Transactions” means the execution, delivery and performance by the Credit
Parties of the Loan Documents to which they are parties, the establishment of
the credit facilities hereunder, the borrowing of Loans, the use of the proceeds
thereof or the granting of Liens on the Collateral under the Loan Documents.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBOR Rate or the Base Rate.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

 

“UCC Searches” has the meaning set forth in Section 4.01(h).

 

“Unpaid Amount” has the meaning set forth in Section 8.13(d).

 

“Unreimbursed Amount” has the meaning specified in Section 2.04(c)(i).

 

“USD-LIBOR-Reference Banks” means, with respect to any Interest Period, the
rates at which deposits in U.S. Dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on the day that is two (2) London Banking
Days preceding the Reset Date for such Interest Period to prime banks in the
London interbank market for a period of one month, two months, three months or
six months, as elected by Borrower pursuant to Section 2.06, commencing on that
Reset Date and in an amount equal to the portion of the principal amount
outstanding under the Notes as to which Borrower has made such election pursuant
to Section 2.06. Administrative Agent will request the principal London office
of each of the Reference Banks to provide a quotation of its rate. If at least
two (2) such quotations are provided, the rate for that Reset Date will be the
arithmetic mean of the quotations. Notwithstanding the foregoing, if fewer than
two (2) quotations are provided as requested, the rate for that Reset Date will
be the arithmetic mean of the rates quoted by major banks in New York City,
selected by Administrative Agent, at approximately 11:00 a.m., New York City
time, on that Reset Date for loans in U.S. Dollars to leading European banks for
a period of one month, two months or three months, as elected by Borrower
pursuant to Section 2.06, commencing on that Reset Date, and in an amount equal
to the portion of the principal amount outstanding under the Notes as to which
Borrower has made such election pursuant to Section 2.06.

 

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

 

“U.S. Tax Compliance Certificate” has the meaning set forth in
Section 2.15(f)(ii)(B)(III).

 

“Value-Based Borrowing Base Limit” shall mean the sum of sixty percent (60%) of
the Borrowing Base Asset Value of all Borrowing Base Properties located in New
York County, New York State and fifty-five percent (55%) of the Borrowing Base
Asset Value of all Borrowing Base Properties that are not located in New York
County, New York State.

 

“Variable Rate Indebtedness” means any Indebtedness for borrowed money that
bears interest at a variable rate without benefit of a Rate Contract.

 

“VCOC” means a “venture capital operating company” within the meaning of Section
2510.3-101(d) of the Plan Asset Regulation.

 

“Withholding Agent” means any Credit Party or Administrative Agent.

 

Section 1.02 Terms Generally. 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 (a) any definition of or reference to any
agreement, instrument or other document herein 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), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) unless otherwise noted herein, all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) 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.

 

Section 1.03 Accounting Terms; GAAP.

 

(a) GAAP. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time.

 

(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 REIT, Borrower or Required Lenders shall so request,
Administrative Agent, the Lenders, the REIT and Borrower 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 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
REIT and Borrower shall provide to 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.

 

42

 

(c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of the REIT or Borrower or to the
determination of any amount for the REIT or Borrower on a consolidated basis or
any similar reference shall, in each case, be deemed to include each variable
interest entity that the REIT or Borrower is required to consolidated pursuant
to FASB ASC 810 as if such variable interest entity were a Subsidiary as defined
herein, provided further that for all purposes in calculating consolidated
covenants hereunder the REIT shall be deemed to own one hundred percent (100%)
of the Equity Interests in Borrower.

 

(d) Financial Standards. All financial computations required of a Person under
this Agreement shall be calculated without giving effect to any election under
Accounting Standards Codification 825-10-25 (or any other Accounting Standards
Codification or Financial Accounting Standard having a similar result or effect)
to value any Indebtedness or other liabilities of the REIT, Borrower or any
Subsidiary at “fair value”, as defined therein.

 

(e) Rounding. Any financial ratios required to be maintained by Borrower
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).

 

ARTICLE II

THE CREDITS

 

Section 2.01 The Commitments.

 

(a) Revolving Loan Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans to Borrower from time to time
in U.S. dollars in an aggregate principal amount that will not result in
(i) such Lender’s Revolving Credit Exposure exceeding the lesser of such
Lender’s Revolving Loan Commitment and such Lender’s Revolving Loan Applicable
Percentage of the aggregate Revolving Loan Borrowing Base Availability or
(ii) the total Revolving Credit Exposures exceeding the lesser of the total
Revolving Loan Commitments and the aggregate Revolving Loan Borrowing Base
Availability then in effect. Within the foregoing limits and subject to the
terms and conditions set forth herein, Borrower may borrow, prepay and reborrow
the Revolving Loans.

 

(b) Term Loan Commitments.

 

(i) Subject to the terms and conditions set forth herein, each Lender agrees to
make Term Loans to Borrower from time to time in U.S. Dollars in an aggregate
principal amount that will not result in (A) such Lender’s Term Credit Exposure
exceeding the lesser of such Lender’s Term Loan Commitment and such Lender’s
Term Loan Applicable Percentage of the aggregate Term Loan Borrowing Base
Availability or (B) the total Term Credit Exposures exceeding the lesser of the
total Term Loan Commitments and the aggregate Term Loan Borrowing Base
Availability then in effect. Borrower may not reborrow the Term Loans and no
amount prepaid or repaid in respect of the Term Loans may be reborrowed.

 

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(ii) The first Term Borrowing shall be made on the Effective Date in an amount
equal to $80,000,000 pursuant to the terms of this Agreement.

 

(iii) The full amount of the Term Loan must be borrowed by Borrower in
accordance with the terms of this Agreement no later than (A) six (6) months
from the Effective Date and (B) if increased pursuant to Section 10.17, six (6)
months from the date of any Additional Commitment Notice.

 

(iv) Subject to Section 10.17, the Borrower shall not be permitted to make more
than three (3) Term Borrowings.

 

Section 2.02 Loans and Borrowings.

 

(a) Obligations of Lenders. Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Commitments. The failure of any Lender to make any Loan required to
be made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.

 

(b) Type of Loans. Subject to Section 2.12, each Borrowing shall be, at
Borrower’s election, comprised entirely of Eurodollar Loans or Base Rate Loans
as Borrower may request in accordance herewith. Each Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of Borrower to repay such Loan in accordance
with the terms of this Agreement. Each Swingline Loan shall be a Base Rate Loan.

 

(c) Minimum Amounts; Limitation on Number of Borrowings. At the commencement of
each Interest Period for any Borrowing, such Borrowing shall be not less than
$1,000,000.00; provided that a Borrowing may be in an aggregate amount that is
required to finance the repayment of any Swingline Loan. Each Swingline Loan
shall be in an amount that is not less than $500,000.00. Borrowings of more than
one Type may be outstanding at the same time; provided that there shall not at
any time be more than a total of five (5) Eurodollar Borrowings outstanding.

 

(d) Limitations on Lengths of Interest Periods. Notwithstanding any other
provision of this Agreement, Borrower shall not be entitled to request, or to
elect to convert to or continue as a Eurodollar Borrowing, any Borrowing if the
Interest Period requested therefor would end after the Maturity Date.

 

44

 

Section 2.03 Requests for Borrowings.

 

(a) Requests for Revolving Borrowings. To request a Revolving Borrowing (other
than a Swingline Borrowing, which shall be governed by the terms of
Section 2.19), Borrower shall notify Administrative Agent of such request in a
written notice signed by Borrower (which signed written notice may be delivered
to Administrative Agent by [(i) email to patricia.visone@capitalone.com and
agency@capitalone.com or (ii) by facsimile transmission to 888-246-3710], or to
any such other email addresses or facsimile numbers as Administrative Agent may
designate in a written notice to Borrower pursuant to Section 10.01 hereof) not
later than 11:00 a.m., New York City time, with respect to Eurodollar Loans,
three (3) Business Days before the date of the proposed Revolving Borrowing;
with respect to Base Rate Loans, one (1) Business Day before the date of the
proposed Revolver Borrowing. Each written Revolving Borrowing Request shall
specify the following information in compliance with Section 2.02(c):

 

(i) that the requested Borrowing shall be a Revolving Borrowing;

 

(ii) the aggregate amount of the requested Revolving Borrowing;

 

(iii) the date of such Revolving Borrowing, which shall be a Business Day;

 

(iv) whether the requested Borrowing shall be a Eurodollar Loan or a Base Rate
Loan; and

 

(v) the location and number of Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.

 

(b) Requests for Term Borrowings. To request a Term Borrowing, Borrower shall
notify Administrative Agent of such request in a written notice signed by
Borrower (which signed written notice may be delivered to Administrative Agent
by [(i) email to patricia.visone@capitalone.com and agency@capitalone.com or
(ii) by facsimile transmission to 888-246-3710], or to any such other email
addresses or facsimile numbers as Administrative Agent may designate in a
written notice to Borrower pursuant to Section 10.01 hereof) not later than
11:00 a.m., New York City time, with respect to Eurodollar Loans, three (3)
Business Days before the date of the proposed Revolving Borrowing; with respect
to Base Rate Loans, one (1) Business Day before the date of the proposed
Revolver Borrowing. Each written Term Borrowing Request shall be irrevocable and
shall specify the following information in compliance with Section 2.02(c):

 

(i) that the requested Borrowing shall be a Term Borrowing;

 

(ii) the aggregate amount of the requested Term Borrowing;

 

(iii) the date of such Term Borrowing, which shall be a Business Day;

 

45

 

(iv) whether the requested Borrowing shall be a Eurodollar Loan or a Base Rate
Loan; and

 

(v) the location and number of Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.

 

Notwithstanding anything herein to the contrary, (A) Borrower shall not be
required to provide a Term Borrowing Request for the first Term Borrowing, which
the Borrower, Agent, and the Lenders agree shall be made on the Effective Date
in an amount equal to $80,000,000 pursuant to the terms of this Agreement, (B)
Borrower’s rights to make Term Borrowing shall expire six (6) months from the
Effective Date (except for rights to make Term Borrowings with respect to any
Additional Commitment Amount pursuant to Section 10.17(c), which rights shall
expire six (6) months after the delivery of the applicable Additional Commitment
Notice therefor), and (C) Borrower shall not be permitted to make more than
three (3) Term Borrowings (exclusive of Term Borrowings with respect to any
Additional Commitment Amount pursuant to Section 10.17(c), and as to which
Additional Commitment Amount Borrower shall be permitted to make one single Term
Borrowing in connection with each Additional Commitment Amount that Borrower
elects to be provided in the form of additional Term Loan Commitments).

 

(c) General Borrowing Requirements.

 

(i) Together with each Borrowing Request, a Responsible Officer of Borrower
shall deliver to Administrative Agent a duly executed Borrowing Base Certificate
as of such date.

 

(ii) Each Eurodollar Borrowing shall be based upon an Adjusted LIBOR Rate
determined as of two (2) Business Days prior to commencement of such Interest
Period. Notwithstanding anything herein to the contrary, Borrower shall not be
required to provide a Term Borrowing Request for the first Term Borrowing, as
contemplated by Section 2.01(b). Promptly following receipt of a Borrowing
Request in accordance with this Section, Administrative Agent shall advise each
Lender of the details thereof and of the amount of such Lender’s Loan to be made
as part of the requested Borrowing.

 

Section 2.04 Letter of Credit Borrowings.

 

(a) The Letter of Credit Commitment.

 

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Revolving Lenders set forth in
this Section 2.04, (1) from time to time on any Business Day during the period
from the Effective Date until the fifth (5th) Business Day prior to the
Revolving Maturity Date (or, if such day is not a Business Day, the next
succeeding Business Day), to issue Letters of Credit for the account of
Borrower, and to amend or extend Letters of Credit previously issued by it, in
accordance with subsection (b) below, and (2) to honor drawings under the
Letters of Credit; and (B) except as otherwise provided in Section 8.13(k), the
Revolving Lenders severally agree to participate in Letters of Credit issued for
the account of Borrower and any drawings thereunder; provided that after giving
effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the
total Revolving Credit Exposure shall not exceed the lesser of the total
Revolving Loan Commitments and the aggregate Revolving Loan Borrowing Base
Availability then in effect, (y) the Revolving Credit Exposure of any Revolving
Lender shall not exceed the lesser of such Revolving Lender’s Revolving Loan
Commitment and such Revolving Lender’s Applicable Percentage of the aggregate
Revolving Loan Borrowing Base Availability, and (z) the L/C Obligations shall
not exceed the Letter of Credit Sublimit. Each request by Borrower for the
issuance or amendment of a Letter of Credit shall be deemed to be a
representation by Borrower that the L/C Credit Extension so requested complies
with the conditions set forth in the proviso to the preceding sentence. Within
the foregoing limits, and subject to the terms and conditions hereof, Borrower’s
ability to obtain Letters of Credit shall be fully revolving, and accordingly
Borrower may, during the foregoing period, obtain Letters of Credit to replace
Letters of Credit that have expired or that have been drawn upon and reimbursed
by Borrower and terminated.

 

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(ii) The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:

 

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the
Letter of Credit, or any Legal Requirements or any request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer
refrain from, the issuance of letters of credit generally or the Letter of
Credit in particular or shall impose upon the L/C Issuer with respect to the
Letter of Credit any restriction, reserve or capital requirement (for which the
L/C Issuer is not otherwise compensated hereunder) not in effect on the
Effective Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost
or expense which was not applicable on the Effective Date and which the L/C
Issuer in good faith deems material to it;

 

(B) the issuance of the Letter of Credit would violate one or more policies of
the L/C Issuer applicable to letters of credit generally;

 

(C) except as otherwise agreed by Administrative Agent and the L/C Issuer, the
Letter of Credit is in an initial stated amount less than $100,000;

 

(D) such Letter of Credit is to be denominated in a currency other than Dollars;
or

 

(E) such Letter of Credit would have an expiry date beyond the Letter of Credit
Expiration Date; and the L/C Issuer shall not issue a Letter of Credit that
would have an expiry date beyond the Letter of Credit Expiration Date without
the written approval of each of the Revolving Lenders.

 

47

 

(iii) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer
would not be permitted at such time to issue the Letter of Credit in its amended
form (or as so extended) under the terms hereof.

 

(iv) The L/C Issuer shall be under no obligation to amend any Letter of Credit
if (A) the L/C Issuer would have no obligation at such time to issue the Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
the Letter of Credit does not accept the proposed amendment to the Letter of
Credit.

 

(v) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (A) provided to
Administrative Agent in Article VIII with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article VIII
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.

 

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit.

 

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of Borrower delivered to the L/C Issuer (with a copy to
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of Borrower. Such
Letter of Credit Application must be received by the L/C Issuer and
Administrative Agent not later than 11:00 a.m. at least three (3) Business Days
(or such later date and time as Administrative Agent and the L/C Issuer may
agree in a particular instance in their sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail reasonably satisfactory to the L/C Issuer:
(A) the proposed issuance date of the requested Letter of Credit (which shall be
a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the
name and address of the beneficiary thereof; (E) the documents to be presented
by such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; (G) the purpose and nature of the requested Letter of Credit; and
(H) such other matters as the L/C Issuer may reasonably require. In the case of
a request for an amendment of any outstanding Letter of Credit, such Letter of
Credit Application shall specify in form and detail reasonably satisfactory to
the L/C Issuer (W) the Letter of Credit to be amended; (X) the proposed date of
amendment thereof (which shall be a Business Day); (Y) the nature of the
proposed amendment; and (Z) such other matters as the L/C Issuer may reasonably
require. Additionally, Borrower shall furnish to the L/C Issuer and
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or Administrative Agent may reasonably require,
which shall include all applicable documentation as would be required to be
delivered in connection with a Borrowing of a Revolving Loan in the same amount
as the requested Letter of Credit.

 

48

 

(ii) Within three (3) Business Days following receipt of any Letter of Credit
Application, the L/C Issuer shall confirm with Administrative Agent (by
telephone or in writing) that Administrative Agent has received a copy of such
Letter of Credit Application from Borrower and, if not, the L/C Issuer shall
provide Administrative Agent with a copy thereof. Unless the L/C Issuer has
received written notice from any Revolving Lender or Administrative Agent, at
least one Business Day prior to the requested date of issuance or amendment of
the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the terms
and conditions hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer’s
usual and customary business practices; provided that L/C Issuer shall not be
required to issue a Letter of Credit, if immediately after the issuance of such
Letter of Credit, the aggregate principal amount of all outstanding Revolving
Loans and Swingline Loans, together with the aggregate amount of all L/C
Obligations, would exceed the aggregate amount of the Revolving Loan Commitments
at such time or the Revolving Loan Borrowing Base Availability. Immediately upon
the issuance of each Letter of Credit, each Revolving Lender shall be deemed to,
and hereby irrevocably and unconditionally agrees to, purchase from the L/C
Issuer a risk participation in such Letter of Credit in an amount equal to the
product of such Revolving Lender’s Revolving Loan Applicable Percentage times
the amount of such Letter of Credit.

 

(iii) If Borrower so requests in any applicable Letter of Credit Application,
the L/C Issuer may, in its sole discretion, agree to issue a Letter of Credit
that has automatic extension provisions (each, an “Auto-Extension Letter of
Credit”); provided that any such Auto-Extension Letter of Credit must permit the
L/C Issuer to prevent any such extension at least once in each twelve-month
period (commencing with the date of issuance of such Letter of Credit) by giving
prior notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer,
Borrower shall not be required to make a specific request to the L/C Issuer for
any such extension. Once an Auto-Extension Letter of Credit has been issued, the
Revolving Lenders shall be deemed to have authorized (but may not require) the
L/C Issuer to permit the extension of such Letter of Credit at any time to an
expiry date not later than the Letter of Credit Expiration Date; provided,
however, that the L/C Issuer shall not permit any such extension if (A) the L/C
Issuer has determined that it would not be permitted, or would have no
obligation, at such time to issue such Letter of Credit in its revised form (as
extended) under the terms hereof (by reason of the provisions of clause (ii) or
(iii) of Section 2.04(a) or otherwise), or (B) it has received notice (which may
be by telephone or in writing) on or before the day that is seven Business Days
before the Non-Extension Notice Date (1) from Administrative Agent that the
Required Lenders have elected not to permit such extension or (2) from
Administrative Agent, any Lender or Borrower that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied, and in each such
case directing the L/C Issuer not to permit such extension.

 

49

 

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer shall also deliver to Borrower and Administrative Agent
a true and complete copy of such Letter of Credit or amendment.

 

(c) Drawings and Reimbursements; Funding of Participations.

 

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify Borrower and
Administrative Agent thereof. Not later than 11:00 a.m. on the first Business
Day following the date of any payment by the L/C Issuer under a Letter of Credit
(each such date, an “Honor Date”), Borrower shall reimburse the L/C Issuer
through Administrative Agent in an amount equal to the amount of such drawing.
If Borrower fails to so reimburse the L/C Issuer by such time, Administrative
Agent shall promptly notify each Revolving Lender of the Honor Date, the amount
of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Revolving Lender’s Revolving Loan Applicable Percentage thereof. In such event,
Borrower shall be deemed to have requested a Revolving Loan to be disbursed on
the Honor Date in an amount equal to the Unreimbursed Amount, without regard to
the minimum and multiples specified in Section 2.03 for the principal amount of
Revolving Loans, but subject to the amount of the unutilized portion of the
Aggregate Commitments. Any notice given by the L/C Issuer or Administrative
Agent pursuant to this Section 2.04(c)(i) may be given by telephone if
immediately confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.

 

(ii) Each Revolving Lender shall upon any notice pursuant to Section 2.04(c)(i)
make funds available (and Administrative Agent may apply cash collateral
provided for this purpose) for the account of the L/C Issuer at Administrative
Agent’s Office in an amount equal to its Revolving Loan Applicable Percentage of
the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified
in such notice by Administrative Agent, whereupon, subject to the provisions of
Section 2.04(c)(iii), each Revolving Lender that so makes funds available shall
be deemed to have made a Revolving Loan to Borrower in such amount.
Administrative Agent shall remit the funds so received to the L/C Issuer.

 

50

 

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Loan for any reason, Borrower shall be deemed to have incurred from the L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the Default Rate. In such event, each
Revolving Lender’s payment to Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.04(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Revolving Lender in satisfaction of its participation obligation under this
Section 2.04.

 

(iv) Until each Revolving Lender funds its Loan or L/C Advance pursuant to this
Section 2.04(c) to reimburse the L/C Issuer for any amount drawn under any
Letter of Credit, interest in respect of such Revolving Lender’s Revolving Loan
Applicable Percentage of such amount shall be solely for the account of the L/C
Issuer.

 

(v) Each Revolving Lender’s obligation to make Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.04(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, Borrower or any other Person for any reason whatsoever;
(B) the occurrence or continuance of a Default, (C) the failure of any other
Revolving Lender to make Loans or L/C Advances to reimburse the L/C Issuer,
(D) the financial condition of Borrower or any other Credit Party, (E) the
termination of the Revolving Loan Commitments, or (F) any other occurrence,
event or condition, whether or not similar to any of the foregoing. No such
making of an L/C Advance shall relieve or otherwise impair the obligation of
Borrower to reimburse the L/C Issuer for the amount of any payment made by the
L/C Issuer under any Letter of Credit, together with interest as provided
herein.

 

(vi) If any Revolving Lender fails to make available to Administrative Agent for
the account of the L/C Issuer any amount required to be paid by such Revolving
Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(ii), then, without limiting the other provisions of
this Agreement, the L/C Issuer shall be entitled to recover from such Revolving
Lender (acting through Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer at a rate
per annum equal to the greater of the Federal Funds Rate and a rate determined
by the L/C Issuer in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily
charged by the L/C Issuer in connection with the foregoing. If such Revolving
Lender pays such amount (with interest and fees as aforesaid), the amount so
paid shall constitute such Revolving Lender’s Revolving Loan included in the
relevant borrowing or L/C Advance in respect of the relevant L/C Borrowing, as
the case may be. A certificate of the L/C Issuer submitted to any Revolving
Lender (through Administrative Agent) with respect to any amounts owing under
this clause (vi) shall be conclusive absent manifest error. Nothing contained in
this Section 2.04(c)(vi) shall be deemed or otherwise construed to impose any
additional liability upon Borrower for any default by any Revolving Lender in
the performance of its obligations under this Section 2.04(c).

 

51

 

(d) Repayment of Participations.

 

(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Revolving Lender such Revolving Lender’s L/C
Advance in respect of such payment in accordance with Section 2.04(c), if
Administrative Agent receives for the account of the L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from Borrower or otherwise), Administrative Agent shall distribute to such
Revolving Lender its Applicable Percentage thereof in the same funds as those
received by Administrative Agent.

 

(ii) If any payment received by Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.04(c)(i) is required to be returned under any of
the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Revolving
Lender shall pay to Administrative Agent for the account of the L/C Issuer its
Revolving Loan Applicable Percentage thereof on demand of Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is
returned by such Revolving Lender, at a rate per annum equal to the Federal
Funds Rate from time to time in effect. The obligations of the Revolving Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(e) Obligations Absolute. The obligation of Borrower to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing
shall be absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including
the following:

 

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

 

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that the REIT, Borrower or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the L/C Issuer or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;

 

52

 

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged or fraudulent, or proving to be invalid or
insufficient in any material respect, or any statement therein being untrue or
inaccurate in any material respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such Letter
of Credit;

 

(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; provided that the payment by the L/C Issuer does
not constitute gross negligence or willful misconduct of the L/C Issuer or its
agents or employees; or any payment made by the L/C Issuer under such Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any applicable Insolvency Proceedings; or

 

(v) any consequences arising from causes beyond the control of the L/C Issuer,
the Administrative Agent or any Lender.

 

Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with Borrower’s instructions or other irregularity, Borrower shall
immediately notify the L/C Issuer. Borrower shall be conclusively deemed to have
waived any such claim against the L/C Issuer and its correspondents unless such
notice is given as aforesaid.

 

(f) Role of L/C Issuer. Each Lender and Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
Administrative Agent, any of their respective Affiliates nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Lender for
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Lenders; (ii) any action taken or omitted in the absence of
gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer Document. Borrower hereby assumes all risks of
the acts or omissions of any beneficiary or transferee with respect to its use
of any Letter of Credit; provided, however, that this assumption is not intended
to, and shall not, preclude Borrower’s pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. None of the L/C Issuer, Administrative Agent, any of their respective
Affiliates nor any correspondent, participant or assignee of the L/C Issuer
shall be liable or responsible for any of the matters described in clauses (i)
through (v) of Section 2.04(e); provided, however, that anything in such clauses
to the contrary notwithstanding, Borrower may have a claim against the L/C
Issuer, and the L/C Issuer may be liable to Borrower, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by Borrower which Borrower proves were caused by the L/C Issuer’s
willful misconduct or gross negligence or the L/C Issuer’s willful failure to
pay under any Letter of Credit after the presentation to it by the beneficiary
of a sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

 

53

 

(g) Letter of Credit Fees. Borrower shall pay to Administrative Agent for the
account of each Revolving Lender in accordance with its Revolving Loan
Applicable Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for
each Letter of Credit equal to (i) (A) the Applicable Margin or (B) if the
Adjusted Applicable Margin Conditions are satisfied (determined based on the
most recent Borrowing Base Certificate delivered under this Agreement), the
Adjusted Applicable Margin, in either case dependent upon, and as determined by,
the REIT’s Consolidated Leverage Ratio at the time of determination and in the
amount set forth opposite the indicated Consolidated Leverage Ratio in the grid
set forth on Schedule V, times (ii) the daily amount available to be drawn under
such Letter of Credit. For purposes of computing the daily amount available to
be drawn under any Letter of Credit, the amount of such Letter of Credit shall
be determined in accordance with Section 2.04(j). Letter of Credit Fees shall be
due and payable quarterly in arrears commencing on the first Quarterly Date to
occur after the Effective Date; provided that all such fees shall be payable on
the date on which the Commitments terminate and any such fees accruing after the
date on which the Commitments terminate shall be payable on demand.
Notwithstanding anything to the contrary contained herein, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

 

(h) Documentary and Processing Charges Payable to L/C Issuer. Borrower shall pay
directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to Letters of Credit as from time to time in
effect. Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.

 

(i) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control subject to the terms of the International Standby Practices 1998, and
any subsequent official revision thereof or the Uniform Customs and Practice for
Documentary Credits (2007 Revision), International Chamber of Commerce
Publication No. 600, and any subsequent official revision.

 

(j) Computation of Daily Amount. Unless otherwise specified herein, the amount
of a Letter of Credit at any time shall be deemed to be the stated amount of
such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Document related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.

 

54

 

(k) Replacement of the L/C Issuer. The L/C Issuer may be replaced at any time by
written agreement among Borrower, Administrative Agent, the replaced L/C Issuer
and the successor L/C Issuer or in accordance with Section 8.08. Administrative
Agent shall notify the Lenders of any such replacement of the L/C Issuer. At the
time any such replacement shall become effective, Borrower shall pay all unpaid
fees accrued for account of the replaced L/C Issuer pursuant to Section 2.04(g).
From and after the effective date of any such replacement, (i) the successor L/C
Issuer shall have all the rights and obligations of the L/C Issuer under this
Agreement with respect to Letters of Credit to be issued thereafter and
(ii) references herein to the term “L/C Issuer” shall be deemed to refer to such
successor or to any previous L/C Issuer, or to such successor and all previous
L/C Issuers, as the context shall require. After the replacement of an L/C
Issuer hereunder, the replaced L/C Issuer shall remain a party hereto and shall
continue to have all the rights and obligations of an L/C Issuer under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.

 

(l) Cash Collateral for Letters of Credit.

 

(i) Certain Credit Support Events. If as of the expiration or termination of the
Revolving Loan Commitment, any L/C Obligations for any reason remain
outstanding, or if the Borrower shall be required to provide Cash Collateral
pursuant to Section 7.01, Borrower shall immediately Cash Collateralize all L/C
Obligations in an amount equal to 105% thereof. Borrower shall also Cash
Collateralize the L/C Obligations to the extent required pursuant to
Section 2.09(d) and Section 8.13.

 

(ii) Grant of Security Interest. Borrower hereby grants to (and subjects to the
control of) Administrative Agent, for the benefit of Administrative Agent, the
L/C Issuer and the Lenders, and agrees to maintain, a first priority security
interest in all Cash Collateral provided pursuant to Section 2.04(l)(i), deposit
accounts and all balances therein, and all other property so provided as
collateral pursuant hereto, and in all proceeds of the foregoing, all as
security for the obligations to which such Cash Collateral may be applied
pursuant to clause (c) below. If at any time Administrative Agent determines
that Cash Collateral is subject to any right or claim of any Person other than
Administrative Agent as herein provided, or that the total amount of such Cash
Collateral is less than the amount required, Borrower will, promptly upon demand
by Administrative Agent, pay or provide to Administrative Agent additional Cash
Collateral in an amount sufficient to eliminate such deficiency. All Cash
Collateral (other than credit support not constituting funds subject to deposit)
shall be maintained in blocked, non-interest bearing deposit accounts at
Administrative Agent. Borrower shall pay on demand therefor from time to time
all customary account opening, activity and other administrative fees and
charges in connection with the maintenance and disbursement of Cash Collateral.

 

55

 

(iii) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided by Borrower hereunder in respect of Letters
of Credit or other L/C Obligations shall be held and applied to the satisfaction
of the specific L/C Obligations and other obligations for which the Cash
Collateral was so provided, prior to any other application of such property as
may be provided for herein, except as provided in Section 2.09(d). If any amount
remains on deposit as Cash Collateral after all Letters of Credit have either
been fully drawn or expired, when the Unreimbursed Amount and all L/C
Obligations equal zero, the remaining amount of the Cash Collateral shall be
applied to the other Obligations, in the order for payments or recoveries upon
the Loans, as provided in this Agreement, or if no Obligations (other than
contingent indemnification obligations) are outstanding, to the Borrower.

 

Section 2.05 Funding of Borrowings. Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, New York City time, to the account of
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. Provided that the conditions to the advance of the applicable
Borrowing set forth herein are satisfied, Administrative Agent will make such
Loans available to Borrower by either promptly crediting the amounts so
received, in like funds, to an account of Borrower maintained with
Administrative Agent and designated by Borrower in the applicable Borrowing
Request or, upon the request by Borrower in the applicable Borrowing Request,
disbursing such amounts as designated by Borrower in the applicable Borrowing
Request.

 

Section 2.06 Interest Elections.

 

(a) Elections by Borrower for Borrowings. Each Borrowing initially shall be of
the Interest Period specified in the applicable Borrowing Request. Thereafter,
Borrower may elect to convert such Borrowing to a Borrowing of a different
Interest Period or to continue such Borrowing as a Borrowing of the same
Interest Period, as provided in this Section. Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.

 

(b) Notice of Elections. To make an election pursuant to this Section, Borrower
shall notify Administrative Agent of such election in a written notice signed by
Borrower (which signed written notice may be delivered via facsimile or email
transmission to the numbers and/or email addresses set forth in Section 2.03) by
the time that a Borrowing Request would be required under Section 2.03 if
Borrower were requesting a Borrowing to be made on the effective date of such
election.

 

(c) Information in Interest Election Requests. Each telephonic and written
Interest Election Request shall specify the following information in compliance
with Section 2.02:

 

56

 

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clause (iii) of this paragraph shall
be specified for each resulting Borrowing);

 

(ii) the Interest Period therefore after giving effect to such election; and

 

(iii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day.

 

(d) Notice by Administrative Agent to Lenders. Promptly following receipt of an
Interest Election Request, Administrative Agent shall advise each Lender of the
details thereof and of such Lender’s portion of each resulting Borrowing.

 

(e) Failure to Elect; Events of Default. If Borrower fails to deliver a timely
Interest Election Request with respect to a Eurodollar Borrowing prior to the
end of the Interest Period applicable thereto, then, unless Borrower has advised
Administrative Agent at least three (3) Business Days prior to the end of the
applicable Interest Period that such Borrowing will be repaid as provided
herein, at the end of such Interest Period such Borrowing shall be continued as
a one (1) month Eurodollar Borrowing based upon an Adjusted LIBOR Rate
determined as of two (2) Business Days prior to the commencement of such new
Interest Period. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and Administrative Agent, at the request
of the Required Lenders, so notifies Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing by Borrower may be continued
as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing
shall be converted to a Base Rate Borrowing at the end of the Interest Period
applicable thereto.

 

Section 2.07 Termination and Conversion of the Commitments.

 

(a) Voluntary Termination or Conversion. Borrower may, at any time terminate all
or any portion of the Commitments. Any such termination and/or conversion shall
be irrevocable and permanent. Notwithstanding the foregoing, Borrower may not
reduce the aggregate amount of the Revolving Commitments below $50,000,000
unless Borrower is terminating the Revolving Commitments in full.

 

(b) Notice of Voluntary Termination or Conversion. Borrower shall notify
Administrative Agent of any election to terminate or convert the Commitments or
Loans under paragraph (a) of this Section at least three (3) Business Days prior
to the effective date of such termination or reduction, specifying such election
and whether it pertains to a Revolving Loan Commitments, Term Loan Commitments,
or both, and the effective date thereof. Promptly following receipt of any
notice, Administrative Agent shall advise the Lenders of the contents thereof.
Each notice delivered by Borrower pursuant to this Section shall be irrevocable
provided that a notice of termination of the Commitments delivered by Borrower
may state that such notice is conditioned upon the effectiveness of other credit
facilities or the receipt of proceeds from a sale of a Real Property, in which
case such notice may be revoked by Borrower within ninety (90) days of the
delivery of such notice (by notice from Borrower to Administrative Agent on or
prior to the specified effective date) if such condition is not satisfied.

 

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(c) Effect of Termination or Conversion.

 

(i) Each reduction of the Revolving Loan Commitments or conversion of the
Revolving Loans shall be made ratably among the Revolving Lenders in accordance
with their respective Revolving Loan Commitments.

 

(ii) Each reduction of the Term Loan Commitments or conversion of the Term Loans
shall be made ratably among the Term Lenders in accordance with their respective
Term Loan Commitments.

 

Section 2.08 Repayment of Loans; Evidence of Debt.

 

(a) Repayment. Borrower hereby unconditionally promises to pay to (i) the
Administrative Agent for the account of the Lenders the outstanding principal
amount of the Loans on the Maturity Date and (ii) to the Swingline Lender the
then unpaid principal amount of each Swingline Advance in accordance with the
time periods set forth in Section 2.19(a); provided that on each date that any
Borrowing is made, the Borrower shall repay all Swingline Loans then
outstanding.

 

(b) Manner of Payment. Prior to any repayment of any Borrowings hereunder,
Borrower shall select the Borrowing or Borrowings to be paid and shall notify
Administrative Agent of such selection in writing signed by Borrower (which
signed written notice may be delivered via facsimile or email transmission to
the numbers and/or email addresses set forth in Section 2.03) not later than
11:00 a.m., New York City time, three (3) Business Days before the scheduled
date of such repayment in the case of a Eurodollar Borrowing and one (1)
Business Day before the scheduled date of such repayment in the case of a Base
Rate Borrowing; provided that, subject to the provisions of Article VIII, each
repayment of Borrowings shall be applied to repay any outstanding Base Rate
Borrowings of Borrower before any other Borrowings of Borrower. If Borrower
fails to make a timely selection of the Borrowing or Borrowings to be repaid or
prepaid, such payment shall be applied, first, to pay any outstanding Base Rate
Borrowings of Borrower and, second, to other Borrowings of Borrower in the order
of the remaining duration of their respective Interest Periods (the Borrowing
with the shortest remaining Interest Period to be repaid first). Each payment of
a Borrowing shall be applied first to repay any Swingline Loan, as applicable,
second, to repay any outstanding Revolving Loans (other than any Swingline Loan)
without reduction of Revolving Loan Commitments, and third, to repay the Term
Loan. Whenever any payment due hereunder shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the first Business Day
thereafter. All such payments shall be made irrespective of, and without any
deduction, set-off or counterclaim whatsoever and are payable without relief
from valuation and appraisement laws and with all costs and charges incurred in
the collection or enforcement thereof, including attorneys’ fees and court
costs. All payments (other than the initial funding of the Loan) by any Lender
shall be made to Administrative Agent not later than 11:00 a.m. New York City
time on the day such payment is due, to Administrative Agent for the account of
the Lenders by deposit to such account as Administrative Agent may designate by
written notice to Borrower.

 

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(c) Maintenance of Loan Accounts by Lenders. Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder.

 

(d) Maintenance of Loan Accounts by Administrative Agent. Administrative Agent
shall maintain accounts in which it shall record (i) the amount and Type of each
Revolving Loan and Term Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from Borrower to each
Revolving Lender and Term Lender hereunder and (iii) the amount of any sum
received by Administrative Agent hereunder for the account of the Revolving
Lenders and the Term Lenders and each Revolving Lender’s and Term Lender’s,
respectively, share thereof.

 

(e) Effect of Entries. The failure to make entries for the accounts maintained
pursuant to paragraph (c) or (d) of this Section or the failure of any Lender or
Administrative Agent to maintain such accounts shall not in any manner affect
the obligations of any Credit Party to repay the Loans in accordance with the
terms of this Agreement.

 

(f) Promissory Notes. Borrower shall prepare, execute and deliver to each Lender
(i) a promissory note payable to the order of such Lender (or, if requested by
such Lender, to such Lender and its registered assigns) in the amount of such
Lender’s Revolving Loan Commitment and in the form set forth in Exhibit A, (ii)
a promissory note payable to the order of such Lender, if such Lender is a
Swingline Lender (or, if requested by such Swingline Lender, to such Swingline
Lender and its registered assigns) in the amount of such Swingline Lender’s
Swingline Loan and in the form set forth in Exhibit B, and (iii) a promissory
note payable to the order of such Lender (or, if requested by such Lender, to
such Lender and its registered assigns) in the amount of such Lender’s Term Loan
Commitment and in the form set forth in Exhibit C. In the event of any
assignment pursuant to Section 10.05 hereof, Borrower agrees to promptly execute
and deliver replacement promissory notes in the forms of Exhibit A, Exhibit B,
and Exhibit C, as applicable, to the assignee and, if the assignor is retaining
any portion of the Loans, to the assignor, in order to evidence the amount of
the Revolving Loan Commitment, Swingline Loan Commitment, and Term Loan
Commitment, respectively, of each such applicable Lender following the
assignment. In connection with and as a condition precedent to the execution and
delivery of such replacement promissory notes by Borrower, the assignor shall be
obligated to return the existing promissory note(s) to Borrower. Upon payment of
the principal of and interest on the Loans and all Unreimbursed Amounts and
fees, the expiration of the Commitments and the reduction of all L/C Obligations
to zero, each Lender either shall return to Borrower each of the original
promissory notes delivered to it marked “PAID IN FULL”.

 

Section 2.09 Prepayment of Loans.

 

(a) Optional Prepayments. Subject to the payment of any amounts required by
Section 2.14 hereof, Borrower shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part without fees or penalty,
subject to the requirements of this Section; provided that Borrower shall notify
Administrative Agent (and, in the case of a prepayment of a Swingline Loan, the
Swingline Lender) in writing signed by Borrower of any optional prepayment
hereunder (which signed written notice may be delivered via facsimile or email
transmission to the numbers and/or email addresses set forth in Section 2.03)
(i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00
a.m., New York City time, three (3) Business Days before the date of prepayment
or (ii) in the case of prepayment of a Base Rate Borrowing, not later than 11:00
a.m., New York City time, one (1) Business Day before the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date and
the principal amount of each Borrowing or portion thereof to be prepaid and
whether the prepayment is to be applied to prepay outstanding Revolving Loans,
Term Loans, or an outstanding Swingline Loan; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.07 or is otherwise conditioned upon
the effectiveness of other credit facilities or the receipt of proceeds from a
sale of a Real Property, then such notice of prepayment may be revoked if such
notice of termination is revoked (in the case of a notice of termination of
Commitments, in accordance with Section 2.07). Promptly following receipt of any
such notice relating to a Borrowing, Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall
be in an amount that would be permitted in the case of a Borrowing of the same
Type as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied to repay (i) all outstanding Revolving Loans (other than Swingline
Loans) ratably, (ii) all outstanding Term Loans ratably or (iii) any Swingline
Loans, as applicable. Prepayments shall be accompanied by (A) accrued interest
to the extent required by Section 2.11 and (B) any payments due pursuant to
Section 2.14, and shall be made in the manner specified in Section 2.08(b). Each
prepayment of the Revolving Loans shall be made ratably among the Revolving
Lenders in accordance with their respective Revolving Loan Commitments. Each
prepayment of the Term Loans shall be made ratably among the Term Lenders in
accordance with their respective Term Loan Exposures.

 

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(b) Mandatory Prepayments.

 

(i) If, on any day (a “Prepayment Trigger Date”), the total Credit Exposures
exceed the Borrowing Base (including as a consequence of an Exclusion Event or a
reduction in the total Commitments), then Borrower shall prepay Loans or, if
required below, Cash Collateralize Letters of Credit in the amount of such
excess. Amounts to be applied pursuant to this paragraph to the partial
prepayment of Loans or to Cash Collateralize Letters of Credit shall be applied,
first, to repay any Swingline Loan, second, to reduce outstanding Revolving
Loans (other than any Swingline Loan) (with no reduction of Revolving Loan
Commitments), third, to repay the Term Loan, and fourth, to Cash Collateralize
Letters of Credit, as applicable.

 

(ii) Borrower shall pay all Loans and Cash Collateralize all Letters of Credit
immediately upon the occurrence of any of the following events:

 

(A) the Maturity Date; or

 

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(B) the acceleration of the Loans upon an Event of Default as provided in
Article VII.

 

Each such mandatory prepayment pursuant to clause (b)(ii) shall be applied,
first, to repay any Swingline Loan, second, to reduce outstanding Revolving
Loans (other than any Swingline Loan) without reducing Revolving Loan
Commitments, third, to repay the Term Loan, and fourth, to Cash Collateralize
Letters of Credit.

 

Prepayments pursuant to this Section 2.09(b) shall be accompanied by (i) accrued
interest to the extent required by this Section 2.09 or Section 2.11 and
(ii) any payments due pursuant to Section 2.14, and shall be made in the manner
specified in Section 2.08(b).

 

(c) [Intentionally Omitted].

 

(d) Application of Cash Collateral. Administrative Agent shall have the right,
but not the obligation, at any time after the acceleration of the Loans upon an
Event of Default as provided in Article VII, with the consent of the L/C Issuer,
to apply all sums used to Cash Collateralize Letters of Credit pursuant to this
Agreement towards the repayment of the Loans, in such order and in such manner
as Administrative Agent shall elect in its sole and absolute discretion, so long
as such repayment is applied, first, to repay any Swingline Loans, second, to
repay any outstanding Revolving Loans (other than any Swingline Loan), and
third, to repay the Term Loans.

 

Section 2.10 Fees.

 

(a) Unused Commitment Fee. On each Quarterly Date from and after September 30,
2013 and on the Revolving Maturity Date, Borrower agrees to pay to
Administrative Agent for the account of each Revolving Lender (other than the
Swingline Lender in its capacity as such) and Term Lender, respectively, in
arrears, an unused commitment fee, which shall be equal to the following:

 

(i) For Revolving Lenders, the product of:

 

(A) the daily unused amount of the Revolving Loan Commitment of such Revolving
Lender (excluding amounts drawn for these purposes and any amounts drawn as
Swingline Loans) for each day during the calendar quarter in which such
Quarterly Date or Revolving Maturity Date falls and

 

(B) a rate per annum, for each such day, of (i) 0.20% if the daily unused
amounts of the Revolving Loan Commitments of all Revolving Lenders on such day
represents a total Revolving Credit Exposure of all Revolving Lenders equal to
or in excess of fifty percent (50%) of the total Revolving Loan Commitments or
(ii) 0.25% if the daily unused amounts of the Revolving Loan Commitments of all
Revolving Lenders on such day represents a total Revolving Credit Exposure of
all Revolving Lenders that is less than fifty percent (50%) of the total
Revolving Loan Commitments, and

 

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(ii) for Term Lenders, the product of

 

(A) the daily unused amount of the Term Loan Commitment of such Lender for each
day during the calendar quarter (or partial calendar quarter) in which such
Quarterly Date falls during the six (6) month period following the Effective
Date, and

 

(B) a rate per annum, for each such day, of (i) 0.20% if the daily unused
amounts of the Term Loan Commitments of all Term Lenders during such period
represent a total Term Credit Exposure of all Term Lenders equal to or in excess
of fifty percent (50%) of the total Term Loan Commitments and (ii) 0.25% if the
daily unused amounts of the Term Loan Commitments of all Term Lenders on such
day represent a total Term Credit Exposure of all Term Lenders that is less than
fifty percent (50%) of the total Term Loan Commitments.

 

All unused commitment fees shall begin to accrue on the Effective Date and shall
be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). For purposes of computing unused commitment fees, the Revolving Loan
Commitment or Term Loan Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Revolving Loans (and Letters of Credit) or Term Loans
of such Lender, respectively.

 

(b) Payment of Fees. All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to Administrative Agent for distribution, in the
case of facility fees and participation fees, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances.

 

Section 2.11 Interest.

 

(a) Base Rate Loans. The Loans comprising each Base Rate Borrowing shall bear
interest at the Base Rate plus (i) the Applicable Margin or (ii) if Adjusted
Applicable Margin Conditions are satisfied (determined based on the most recent
Borrowing Base Certificate delivered under this Agreement), the Adjusted
Applicable Margin, in either case dependent upon, and as determined by,
Borrower’s Consolidated Leverage Ratio at the time of determination and in the
amount set forth opposite the indicated Consolidated Leverage Ratio in the grid
set forth on Schedule V.

 

(b) Eurodollar Loans. The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBOR Rate for the Interest Period in effect for such
Borrowing plus (i) the Applicable Margin or (ii) if Adjusted Applicable Margin
Conditions are satisfied (determined based on the most recent Borrowing Base
Certificate delivered under this Agreement), the Adjusted Applicable Margin, in
either case dependent upon, and as determined by, Borrower’s Consolidated
Leverage Ratio at the time of determination and in the amount set forth opposite
the indicated Consolidated Leverage Ratio in the grid set forth on Schedule V.

 

(c) Default Interest. Notwithstanding the foregoing, at any time during the
continuance of an Event of Default, all amounts payable hereunder and under the
Loan Documents shall bear interest, after as well as before judgment, (i) in
respect to overdue Obligations other than Letter of Credit fees at a rate per
annum equal to the interest rate applicable to each such amount pursuant to this
Agreement plus two percent (2.0%) per annum, (ii) in respect of overdue Letter
of Credit Fees, the rate otherwise applicable thereto plus two percent (2.0%)
per annum (each such sum being the applicable “Default Rate”), or (iii) the
maximum interest rate permissible by applicable Legal Requirements if the
applicable Default Rate is greater than such interest rate.

 

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(d) Payment of Interest. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and upon termination of the
applicable Revolving Loan Commitments or Term Loan Commitments; provided that
(i) interest accrued pursuant to paragraph (c) of this Section shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Borrowing prior to the end of the current Interest Period therefor,
accrued interest on such Borrowing shall be payable on the effective date of
such conversion.

 

(e) Computation. All interest hereunder shall be computed on the basis of a year
of 360 days, and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Base Rate, LIBOR Rate or Adjusted LIBOR Rate shall be determined by
Administrative Agent, and such determination shall be conclusive absent manifest
error.

 

(f) Restatement of Consolidated Net Worth. If, as a result of any restatement of
or other adjustment to the financial statements of the REIT or for any other
reason, the REIT, Borrower, Administrative Agent or the Lenders determine that
(i) the Consolidated Net Worth as reported as of the most recent calendar
quarter for which reporting has been provided by the REIT or Borrower pursuant
to Section 5.01 hereof was inaccurate at any time in respects that would have
required a higher Applicable Margin or Adjusted Applicable Margin to be paid,
then Borrower shall be obligated to pay to Administrative Agent for the account
of the applicable Lenders or L/C Issuer, as the case may be, within three (3)
Business Days after demand by Administrative Agent (or, after the commencement
of an Insolvency Proceeding with respect to any Credit Party, automatically and
without further action by Administrative Agent, any Lender or the L/C Issuer),
an amount equal to the excess of the amount of interest and fees that should
have been paid for such period over the amount of interest and fees actually
paid for such period. This paragraph shall not limit the rights of
Administrative Agent, any Lender or the L/C Issuer, as the case may be, under
this Agreement. Borrower’s obligations under this paragraph shall survive the
termination of the Commitments and the repayment of all Obligations hereunder.

 

Section 2.12 Alternate Rate of Interest.

 

If prior to the commencement of the Interest Period for a Eurodollar Borrowing:

 

(a) Administrative Agent reasonably determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBOR Rate or the LIBOR Rate, as applicable,
for such Interest Period;

 

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(b) Administrative Agent is advised by the Required Lenders that the Adjusted
LIBOR Rate or the LIBOR Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their Loans included in such Borrowing for such Interest Period; or

 

(c) Administrative Agent is advised by a Lender that it has become unlawful for
such Lender to honor its obligation to make or maintain Eurodollar Loans
hereunder;

 

then Administrative Agent shall give notice thereof to Borrower and the Lenders
as promptly as practicable thereafter and, until Administrative Agent notifies
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, (i) any Interest Election Request that requests the conversion of
any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing
shall be ineffective (in the case of clause (c) above, only as to the affected
Lender), (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as a Base Rate Borrowing (in the case of clause (c)
above, only as to the affected Lender); provided that if the circumstances
giving rise to such notice do not affect all the Lenders, then requests by
Borrower for Eurodollar Borrowings may be made to Lenders that are not affected
thereby and (iii) if in accordance with clause (c) above any Lender determines
that it is no longer lawful for such Lender or its applicable lending office
(subject to Section 2.17(a)) to maintain any existing Eurodollar Loans, or to
continue to charge interest rates based upon the LIBOR Rate, then, on notice
thereof by such Lender to Borrower through Administrative Agent, any obligation
of such Lender to continue Eurodollar Loans shall be suspended until such Lender
notifies Administrative Agent and Borrower that the circumstances giving rise to
such determination no longer exist and, in such event, all Eurodollar Loans of
such Lender shall be converted to Base Rate Loans, either on the last day of the
Interest Period thereof, if such Lender may lawfully continue to maintain such
Eurodollar Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such Eurodollar Loans.

 

Section 2.13 Increased Costs.

 

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

 

(A) 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;

 

(B) subject any Lender to any Taxes (other than (I) Indemnified Taxes, (II)
Taxes described in clauses (b) through (d) of the definition of Excluded Taxes
and (III) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

 

64

 

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

 

and the result of any of the foregoing shall be to increase the cost to
Administrative Agent or such Lender of making, converting to, continuing or
maintaining 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 (whether
of principal, interest or any other amount) then, upon request of such Lender,
Borrower will pay to such Lender, such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.

 

(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 or liquidity 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 Borrower 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 paragraph (a) or (b) of this Section shall be
delivered to Borrower and shall be conclusive absent manifest error. Borrower
shall pay such Lender the amount shown as due on any such certificate within ten
(10) days after receipt thereof.

 

(d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s right to demand such compensation; provided that Borrower shall not be
required to compensate a Lender pursuant to this Section for any increased costs
incurred or reductions suffered more than 270 days prior to the date that such
Lender notifies Borrower 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 270-day period referred to above shall be
extended to include the period of retroactive effect thereof).

 

Section 2.14 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto, (c) the failure to borrow, convert or prepay
any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.09(a) or is
revoked in accordance herewith), or (d) the assignment of any Eurodollar Loan
other than on the last day of an Interest Period applicable thereto as a result
of a request by Borrower pursuant to Section 2.17, then, in any such event,
Borrower shall compensate each Lender for the actual, out-of-pocket loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the LIBOR Rate that would have been applicable to such
Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the Eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to Borrower
and shall be conclusive absent manifest error. Borrower shall pay such Lender
the amount shown as due on any such certificate within thirty (30) days after
receipt thereof.

 

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Section 2.15 Taxes.

 

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Credit Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable Legal
Requirements. If any applicable Legal Requirements (as determined in the good
faith discretion of an applicable Withholding Agent) require the deduction or
withholding of any Tax from any such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable Legal Requirements
and, if such Tax is an Indemnified Tax, then the sum payable by the Credit Party
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section) Administrative Agent or the applicable Lender
receives an amount equal to the sum it would have received had no such deduction
or withholding been made.

 

(b) Payment of Other Taxes by Borrower. Borrower shall timely pay to the
relevant Governmental Authority in accordance with applicable Legal
Requirements, or at the option of Administrative Agent timely reimburse it for
the payment of, any Other Taxes.

 

(c) Indemnification by Borrower. Borrower shall indemnify Administrative Agent
and each Lender, within ten (10) days after written demand therefor, for the
full amount of any Indemnified Taxes (including Indemnified Taxes imposed or
asserted on or attributable to amounts payable under this Section) payable or
paid by Administrative Agent or such Lender or required to be withheld or
deducted from a payment to Administrative Agent or such Lender and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to Borrower by a Lender (with a
copy to Administrative Agent), or by Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.

 

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

 

(e) Evidence of Payments. As soon as practicable after any payment of Taxes by
any Credit Party to a Governmental Authority pursuant to this Section 2.15, such
Credit Party shall deliver to Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Administrative Agent.

 

(f) Status of Lenders.

 

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

 

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

 

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

 

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

 

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

 

(II) executed originals of Form W-8ECI;

 

(III) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code, a “10 percent shareholder” of Borrower within the
meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed originals of Form W-8BEN; or

 

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

 

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

 

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

 

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

 

(g) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.15 (including by
the payment of additional amounts pursuant to this Section 2.15), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (g) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

 

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(h) Survival. Each party’s obligations under this Section 2.15 shall survive the
resignation or replacement of Administrative Agent or any assignment of rights
by, or the replacement of, a Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all obligations under any Loan Document.

 

Section 2.16 Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

 

(a) Payments by Borrower. Each Credit Party shall make each payment required to
be made by it hereunder (whether of principal, interest or fees or under
Section 2.13, Section 2.14 or Section 2.15, or otherwise) or under any other
Loan Document (except to the extent otherwise provided therein) prior to 11:00
a.m., New York City time, on the date when due, in immediately available funds,
without set-off or counterclaim; provided that if a new Loan is to be made by
any Lender on a date Borrower is to repay any principal of an outstanding Loan
of such Lender, such Lender shall apply the proceeds of such new Loan to the
payment of the principal to be repaid and only an amount equal to the difference
between the principal to be borrowed and the principal to be repaid shall be
made available by such Lender to Administrative Agent as provided in
Section 2.05 or paid by Borrower to Administrative Agent pursuant to this
paragraph, as the case may be. Any amounts received after such time on any date
may, in the discretion of Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to Administrative Agent at
Administrative Agent’s Account, except as otherwise expressly provided in the
relevant Loan Document, and except that payments pursuant to Section 2.13,
Section 2.14, Section 2.15 and Section 10.03 shall be made directly to the
Persons entitled thereto. Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder or under any other Loan Document (except to the extent
otherwise provided therein) shall be made in dollars.

 

(b) Application of Insufficient Payments. If at any time insufficient funds are
received by and available to Administrative Agent to pay fully all amounts of
principal, interest and fees then due hereunder, such funds shall be applied
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties.

 

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(c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i) each
Revolving Borrowing shall be made from the Revolving Lenders, each Term
Borrowing shall be made from the Term Lenders, each payment of commitment fee
under Section 2.10 shall be made for the account of the Revolving Lenders and
the Term Lenders, as applicable, and each termination or reduction of the amount
of the Revolving Loan Commitments and Term Loan Commitments under Section 2.07
shall be applied to the respective Revolving Loan Commitments and Term Loan
Commitments of the Revolving Lenders and Term Lenders, respectively, pro rata
according to the amounts of their respective Revolving Loan Commitments and Term
Loan Commitments; (ii) each Revolving Borrowing shall be allocated pro rata
among the Revolving Lenders according to the amounts of their respective
Revolving Loan Commitments (in the case of the making of Revolving Loans) or
their respective Revolving Loans (in the case of conversions and continuations
of Revolving Loans); (iii) each Term Borrowing shall be allocated pro rata among
the Term Lenders according to the amounts of their respective Term Loan
Commitments (in the case of the making of Term Loans) or their respective Term
Loans (in the case of conversions and continuations of Term Loans); (iv) each
payment or prepayment of principal of Revolving Loans by Borrower shall be made
for the account of the Revolving Lenders pro rata in accordance with the
respective unpaid principal amounts of the Revolving Loans held by them;
(v) each payment or prepayment of principal of Term Loans by Borrower shall be
made for the account of the Term Lenders pro rata in accordance with the
respective unpaid principal amounts of the Term Loans held by them; (vi) each
payment of interest on Revolving Loans by Borrower shall be made for the account
of the Revolving Lenders pro rata in accordance with the amounts of interest on
such Revolving Loans then due and payable to the respective Revolving Lenders;
and (vii) each payment of interest on Term Loans by Borrower shall be made for
the account of the Term Lenders pro rata in accordance with the amounts of
interest on such Term Loans then due and payable to the respective Term Lenders.
If at any time while an Event of Default exists, any Revolving Lender or Term
Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its
Revolving Loans or Term Loans, respectively, resulting in such Revolving Lender
or Term Lender, as applicable, receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans or Term Loans, as applicable, and
accrued interest thereon then due than the proportion received by any other
Revolving Lender or Term Lender, as applicable, then the Revolving Lender or
Term Lender, as applicable, receiving such greater proportion shall purchase
(for cash at face value) participations in the Revolving Loans or Term Loans, as
applicable, of other Revolving Lenders or Term Lenders, as applicable, to the
extent necessary so that the benefit of all such payments shall be shared by the
Revolving Lenders or Term Lenders, as applicable, ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Loans or Term Loans; 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 paragraph shall not be construed to apply to any payment made
by a Credit Party pursuant to and in accordance with the express terms of this
Agreement or 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 to a Credit Party or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Further, if any
proceeds from the realization upon any of the Recycled Mortgages are recovered
prior to the recordation of the Second Amended and Restated Mortgages referenced
in Section 5.18(a)(iii) (or, if the Second Amended and Restated Mortgages
referenced in Section 5.18(a)(iii) have been recorded, but the grant or
recordation thereof is subsequently avoided as a result of any Insolvency
Proceeding, at any time), and, as a result of the realization of such proceeds,
the Term Lenders shall have received payment of a pro rata portion of the Term
Loans or accrued interest thereon that is greater than the pro rata portion of
the Revolving Loans or accrued interest thereon that is recovered by the
Revolving Lenders, then the Term Lenders, as applicable, receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans of the Revolving Lenders, to the extent necessary so that the
benefit of all such proceeds shall be shared by the Revolving Lenders or Term
Lenders, as applicable, ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Revolving Loans or Term
Loans; 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, (ii) the provisions of this sentence shall not be
construed to apply to any payment made by a Credit Party pursuant to and in
accordance with the express terms of this Agreement, and (iii) upon the
repayment or prepayment of the Revolving Loans so acquired by the Term Lenders
and interest thereon, their participation in such Revolving Loans shall cease
(it being understood that the Term Lenders shall not, as a result of such
participation, acquire or assume any obligations on account of the Revolving
Loan Commitments of the Revolving Lenders). Each of Borrower and Guarantor
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable Legal Requirements, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against Borrower or
Guarantor rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of Borrower or Guarantor in
the amount of such participation.

 

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(d) Non-Receipt of Funds by Administrative Agent. Unless Administrative Agent
shall have been notified by a Lender or Borrower (in either case, the “Payor”)
prior to the date on which the Payor is to make payment to Administrative Agent
of (in the case of a Lender) the proceeds of a Loan to be made by such Lender
hereunder or (in the case of Borrower) a payment to Administrative Agent for
account of any Lender hereunder (in either case, such payment being herein
called the “Required Payment”), which notice shall be effective upon receipt,
that the Payor does not intend to make the Required Payment to Administrative
Agent, Administrative Agent may assume that the Required Payment has been made
and may, in reliance upon such assumption (but shall not be required to), make
the amount thereof available to the intended recipient(s) on such date; and, if
the Payor has not in fact made the Required Payment to Administrative Agent, the
recipient(s) of such payment shall, on demand, repay to Administrative Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date (the “Advance Date”) such amount was so
made available by Administrative Agent until the date Administrative Agent
recovers such amount at a rate per annum equal to (a) the Federal Funds Rate for
such day in the case of payments returned to Administrative Agent by any of the
Lenders or (b) the applicable interest rate due hereunder with respect to
payments returned by Borrower to Administrative Agent and, if such recipient(s)
shall fail promptly to make such payment, Administrative Agent shall be entitled
to recover such amount, on demand, from the Payor, together with interest as
aforesaid; provided that if neither the recipient(s) nor the Payor shall return
the Required Payment to Administrative Agent within three (3) Business Days of
the Advance Date, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment as
follows:

 

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(i) if the Required Payment shall represent a payment to be made by Borrower to
the Lenders, Borrower and the recipient(s) shall each be obligated retroactively
to the Advance Date to pay interest in respect of the Required Payment at the
Default Rate (without duplication of the obligation of Borrower under Section
2.11 to pay interest on the Required Payment at the Default Rate), it being
understood that the return by the recipient(s) of the Required Payment to
Administrative Agent shall not limit such obligation of Borrower under
Section 2.11 to pay interest at the Default Rate in respect of the Required
Payment; and

 

(ii) if the Required Payment shall represent proceeds of a Loan to be made by
the Lenders to Borrower, the Payor and Borrower shall each be obligated
retroactively to the Advance Date to pay interest in respect of the Required
Payment at the applicable interest rate due hereunder with respect to such Loan,
it being understood that the return by Borrower of the Required Payment to
Administrative Agent shall not limit any claim Borrower may have against the
Payor in respect of such Required Payment and shall not relieve such Payor of
any obligation it may have hereunder or under any other Loan Documents to
Borrower and no advance by Administrative Agent to Borrower under this Section
2.16 shall release any Lender of its obligation to fund such Loan except as set
forth in the following sentence. If any such Lender shall thereafter advance any
such Required Payment to Administrative Agent, such Required Payment shall be
deemed such Lender’s applicable Loan to Borrower.

 

(e) Certain Deductions by Administrative Agent. If any Lender shall fail to make
any payment required to be made by it pursuant to Section 2.05 or Section 2.16,
then Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by Administrative Agent
for the account of such Lender to satisfy such Lender’s obligations under such
Sections until all such unsatisfied obligations are fully paid.

 

Section 2.17 Mitigation Obligations; Replacement of Lenders.

 

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.13, or if Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.15, or if LIBOR becomes unavailable under
Section 2.12(c), then such Lender shall 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 reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.12(c), Section 2.13 or Section 2.15, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

 

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(b) Replacement of Lenders. If (i) any Lender is unable to make or maintain
Eurodollar Loans pursuant to Section 2.12(c), (ii) any Lender requests
compensation under Section 2.13, (iii) Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.15, or (iv) any Lender defaults in its
obligation to fund Loans hereunder, then Borrower may, at its sole expense and
effort, upon notice to such Lender and Administrative Agent, require such Lender
to assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 10.05), including, without limitation, the
obligation to obtain the approval of Administrative Agent, the L/C Issuer and
the Swingline Lender where applicable), all its interests, rights and
obligations under this Agreement to an Eligible Institution that shall assume
all of such obligations (which assignee, subject to in Section 10.05, may be
another Lender, if a Lender accepts such assignment); provided that (A) Borrower
shall have received the prior written consent of Administrative Agent, which
consent shall not be required if the assignee is Administrative Agent, (B) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or Borrower (in the case of
all other amounts) and (C) in the case of any such assignment resulting from a
claim for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling Borrower to require such
assignment and delegation cease to apply.

 

Section 2.18 Use of Proceeds. Borrower shall use the proceeds of the Loans
solely for (a) repayment of the Existing Facility on the Effective Date, (b) to
fund property-level working capital expenditures, (c) to fund future
acquisitions of Real Property and related assets (to the extent permitted
hereunder) (collectively, “Approved Uses”), (d) for other legal purposes in
furtherance of the foregoing and (e) for general corporate purposes, all in
accordance with, and subject to the limitations and restrictions contained in,
Borrower’s Organizational Documents.

 

Section 2.19 Swingline Loans.

 

(a) Agreement to Make Swingline Loans. Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to Borrower
from time to time, in an aggregate principal amount at any time outstanding that
will not result in (i) the aggregate principal amount of outstanding Swingline
Loans exceeding $25,000,000 or (ii) the sum of the total Revolving Credit
Exposures exceeding the total Revolving Loan Commitments; provided that the
Swingline Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Swingline Loans shall not be outstanding for more
than ten (10) days during any calendar month. Within the foregoing limits and
subject to the terms and conditions set forth herein, Borrower may borrow,
prepay and reborrow Swingline Loans. Each Swingline Loan shall be a Base Rate
Loan.

 

(b) Notice of Swingline Loans by Borrower. To request a Swingline Loan, Borrower
shall notify Administrative Agent of such request in writing, not later than
12:00 noon, New York City time, on the day of a proposed Swingline Loan. Each
such notice shall be irrevocable and shall specify the requested date (which
shall be a Business Day) and amount of the requested Swingline Loan.
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from Borrower. Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make each Swingline Loan available to
Borrower either by means of a credit to the general deposit account of Borrower
with the Swingline Lender or, at the request of Borrower, by disbursing the
proceeds of the Swingline Loan to the Borrower, (or, in the case of a Swingline
Loan made to finance the reimbursement of an L/C Borrowing as provided in
Section 2.04(c), by remittance to the L/C Issuer) in either case on the
requested date of such Swingline Loan by 3:00 p.m. New York City time.

 

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(c) Repayment of Swingline Loans; Participations by Lenders in Swingline Loans.
Borrower agrees to repay each Swingline Loan within 5 Business Days after the
date such Swingline Loan was made; provided, that the proceeds of a Swingline
Loan may not be used to pay a Swingline Loan. Notwithstanding the foregoing,
Borrower shall repay the entire outstanding principal amount of, and all accrued
but unpaid interest on, the Swingline Loans on the Revolving Maturity Date (or
such earlier date as Swingline Lender and Borrower may agree in writing). In
lieu of demanding repayment of any outstanding Swingline Loan from Borrower,
Swingline Lender may, on behalf of Borrower (which hereby irrevocably directs
Swingline Lender to act on its behalf), request a Borrowing of Revolving Loans
that are Base Rate Loans from the Revolving Lenders in an amount equal to the
principal balance of such Swingline Loan. Swingline Lender shall give notice to
Administrative Agent of any such borrowing of Revolving Loans not later than
11:00 a.m., New York time, at least one Business Day prior to the proposed date
of such Borrowing. Promptly after receipt of such notice of borrowing of
Revolving Loans from Swingline Lender under the immediately preceding sentence,
Administrative Agent shall notify each Revolving Lender of the proposed
Borrowing. Not later than 12:00 noon, New York time, on the proposed date of
such Borrowing, each Revolving Lender will make available to Administrative
Agent for the account of Swingline Lender, in immediately available funds, the
proceeds of the Revolving Loan to be made by such Revolving Lender.
Administrative Agent shall pay the proceeds of such Revolving Loans to Swingline
Lender, which shall apply such proceeds to repay such Swingline Loan. If the
Revolving Lenders are prohibited from making Revolving Loans required to be made
under this subsection for any reason whatsoever, including without limitation,
the existence of any of the Defaults or Events of Default described in
Section 7.01(f) or (g), the Swingline Lender may by one (1) Business Day’s prior
written notice given to Administrative Agent require the Revolving Lenders to
acquire participations in all or a portion of the Swingline Loans outstanding.
Such notice shall specify the aggregate amount of Swingline Loans in which
Revolving Lenders will participate. Promptly upon receipt of such notice,
Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Revolving Lender’s Revolving Loan Applicable
Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above
in this paragraph, to pay to Administrative Agent, for the account of the
Swingline Lender, such Revolving Lender’s Revolving Loan Applicable Percentage
of such Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including (A) the occurrence and continuance of a
Default, (B) reduction or termination of the Revolving Loan Commitments, (C) the
failure of any other Revolving Lender to make Loans or acquire participations in
Swingline Loans, or (D) the financial condition of Borrower or any other Credit
Party, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Revolving Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available funds,
in the same manner as provided in Section 2.05 with respect to Revolving Loans
made by such Revolving Lender (and Section 2.05 shall apply, mutatis mutandis,
to the payment obligations of the Revolving Lenders), and Administrative Agent
shall promptly pay to the Swingline Lender the amounts so received by it from
the Revolving Lenders. If such amount is not in fact made available to Swingline
Lender by any Revolving Lender, Swingline Lender shall be entitled to recover
such amount on demand from such Lender, together with accrued interest thereon
for each day from the date of demand thereof, at the Federal Funds Rate. If such
Lender does not pay such amount forthwith upon Swingline Lender’s demand
therefor, and until such time as such Lender makes the required payment,
Swingline Lender shall be deemed to continue to have outstanding Swingline Loans
in the amount of such unpaid participation obligation for all purposes of the
Loan Documents (other than those provisions requiring the other Revolving
Lenders to purchase a participation therein). Further, such Lender shall be
deemed to have assigned any and all payments made of principal and interest on
its Revolving Loans, and any other amounts due it hereunder, to Swingline Lender
to fund Swingline Loans in the amount of the participation in Swingline Loans
that such Lender failed to purchase pursuant to this Section until such amount
has been purchased (as a result of such assignment or otherwise). Administrative
Agent shall notify Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to Administrative Agent and not to the Swingline Lender. Any
amounts received by the Swingline Lender from Borrower (or other party on behalf
of Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to Administrative Agent; any such amounts received by Administrative
Agent shall be promptly remitted by Administrative Agent to the Revolving
Lenders that shall have made their payments pursuant to this paragraph and to
the Swingline Lender, as their interests may appear; provided that any such
payment so remitted shall be repaid to the Swingline Lender or to Administrative
Agent, as applicable, if and to the extent such payment is required to be
refunded to Borrower for any reason. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve Borrower of any
default in the payment thereof.

 

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Section 2.20 Extension of Revolving Maturity Date.

 

(a) Not less than sixty (60) days and no earlier than one hundred eighty (180)
days prior to the original Revolving Maturity Date, Borrower may request in
writing that Administrative Agent extend the Revolving Maturity Date (if not
previously terminated) to August 20, 2017 (the end of such period and such date
being the “First Extended Revolving Maturity Date”).

 

(b) If the Revolving Maturity Date has been extended to the First Extended
Revolving Maturity Date, not less than sixty (60) days and no earlier than one
hundred eighty (180) days prior to the First Extended Revolving Maturity Date,
Borrower may request in writing that Administrative Agent extend the Revolving
Maturity Date (if not previously terminated) to August 20, 2018 (the end of such
period and such date being the “Second Extended Revolving Maturity Date”).

 

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(c) Each Revolving Lender agrees that the Revolving Maturity Date of the Loans
shall be extended following a request from Borrower pursuant to clause (a) or
(b) above subject to satisfaction of the following terms and conditions:

 

(i) no Default or Event of Default shall have occurred and be continuing on the
date of such extension and after giving effect thereto;

 

(ii) the Credit Exposure shall not exceed the Borrowing Base, and the Revolving
Credit Exposure shall not exceed the Revolving Loan Borrowing Base Availability;

 

(iii) in connection with each extension of the original Revolving Maturity Date
pursuant to clause (a) or (b) above, Borrower shall, on the original Revolving
Maturity Date (in connection with extension of the original Revolving Maturity
Date pursuant to clause (a) above), and on the First Extended Revolving Maturity
Date (in connection with extension of the Revolving Maturity Date pursuant to
clause (b) above), pay to Administrative Agent (for the pro rata benefit of the
Revolving Lenders based on their respective Applicable Percentage as of such
date) an extension fee equal to 0.20% of the Revolving Loan Commitments;

 

(iv) REIT, Borrower, the Subsidiary Guarantors and each 163 Entity shall deliver
to Administrative Agent a Solvency Certificate executed on behalf of REIT,
Borrower, each of the Subsidiary Guarantors and each 163 Entity (with respect to
the Solvency of REIT, Borrower, each Subsidiary Guarantor and each 163 Entity
both before and after giving effect to such extension) and a certificate of
REIT, Borrower, each Subsidiary Guarantor and each 163 Entity dated as of the
original Revolving Maturity Date (in connection with extension of the original
Revolving Maturity Date pursuant to clause (a) above), and on the First Extended
Revolving Maturity Date (in connection with extension of the Revolving Maturity
Date pursuant to clause (b) above), signed by a Responsible Officer
(i) certifying and attaching the resolutions adopted by such Person approving or
consenting to such extension and updated financial projections for Borrower and
the REIT through the First Extended Revolving Maturity Date or Second Extended
Revolving Maturity Date, as applicable, and (ii) certifying that, before and
after giving effect to such extension, (A) the representations and warranties
contained in this Agreement and the other Loan Documents are true and correct in
all material respects on and as of such date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of the date of such extension, provided, that
any representation or warranty which is qualified by materiality or “material
adverse effect” or similar language shall be true and correct in all respects,
and (B) no Default or Event of Default exists; and all of the certifications
contained in each of the foregoing certificates shall be true and correct;

 

(v) Borrower, REIT, each of the Subsidiary Guarantors shall deliver to
Administrative Agent such reaffirmations of their respective obligations under
the Loan Documents (after giving effect to the extension), including, without
limitation, (A) reaffirmations of each Pledge after giving effect to such
extension, and (B) reaffirmations of each of the Subsidiary Guaranties, all of
which shall be in form and substance reasonably satisfactory to Administrative
Agent; and

 

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(vi) Borrower shall have paid any costs or expenses incurred by Administrative
Agent with respect to such extension and the documents to be delivered in
connection therewith.

 

Section 2.21 Swap Agreements.

 

(a) Borrower shall hedge the floating interest expense of the outstanding
balance of the Term Loans through the Term Maturity Date by purchasing and
maintaining one or more Swap Contracts, on or before the earlier to occur of (i)
the date of the full Borrowing under the Term Loans and (ii) the expiration of
the period within which Borrower may obtain Term Loan Borrowings pursuant to the
Term Lenders’ initial Term Loan Commitments; provided, however, that if there
shall be more than one Term Borrowing, the requirement to enter into one or more
Swap Contracts hereunder shall arise upon the final Term Borrowing (or, if
earlier, upon the expiration of the initial Term Loan Commitment), in an
aggregate notional amount equal to the outstanding principal balance of the Term
Loan when the Swap Contract is executed, all upon terms and subject to such
conditions as shall be reasonably acceptable to Administrative Agent. In the
event that any portion of an Additional Commitment Amount is structured as an
increase in the Term Loan Commitment pursuant to Section 10.17, Borrower shall
hedge the floating interest expense of the outstanding balance of such portion
of the Additional Commitment Amount through the Term Maturity Date by purchasing
and maintaining one or more Swap Contracts on or before the date of the
Borrowing under such portion of the Additional Commitment Amount, in an
aggregate notional amount equal to such portion of the Additional Commitment
Amount, all upon terms and subject to such conditions as shall be reasonably
acceptable to Administrative Agent.

 

(b) All of Borrower’s obligations under any Swap Contract required to be
maintained under this Section 2.21 shall be secured by the lien of the Security
Documents on a pari passu basis with the Revolving Loans, Term Loans and other
sums evidenced or secured by the Loan Documents. Borrower’s interest in any Swap
Contract shall be assigned to Administrative Agent for the benefit of the
Lenders pursuant to documentation satisfactory to Administrative Agent in form
and substance; provided, however, that so long as no Event of Default exists,
Borrower shall retain the right to receive payments, provide direction to the
counterparty under such Swap Contract and to make decisions with respect to any
such Swap Contract which is so assigned to the Administrative Agent. Borrower
shall use commercially reasonable efforts to procure that such acknowledgment
includes such counterparty’s agreement to (i) pay directly into the operating
account referenced in Section 5.09 all sums payable by such counterparty
pursuant to the Swap Contract and (ii) provide Administrative Agent with the
ability to cure any Borrower defaults under such Swap Contract and to maintain
such Swap Contract in full force and effect after the occurrence of any Borrower
default or other termination event thereunder caused by Borrower, and shall
otherwise be satisfactory to Administrative Agent in form and substance.

 

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(c) Borrower shall promptly execute and deliver to Administrative Agent such
confirmations and similar documents as may be reasonably requested by
Administrative Agent in connection with any Swap Contract.

 

(d) Any Swap Contracts are independent agreements governed by the written
provisions thereof, which shall remain in full force and effect unaffected by
any repayment, prepayment, acceleration, reduction, increase or change in the
terms of the Loan, except as otherwise expressly provided in such Swap Contract,
and any payoff statement from Administrative Agent relating to the Loan shall
not apply to such Swap Contract except as otherwise expressly provided in such
payoff statement.

 

(e) Notwithstanding anything to the contrary contained herein, (i) no Swap
Obligations of any Non-Qualifying Party (including, without limitation, through
the exercise of rights of setoff or the realization upon any collateral pledged
to the Administrative Agent in favor of the L/C Issuer and the Lenders by such
Credit Party) shall be paid with amounts received from such Non-Qualifying Party
under its Guaranty (including sums received as a result of the exercise of
remedies with respect to such Guaranty) or from the proceeds of such
Non-Qualifying Party’s Collateral if such Swap Obligations would constitute
Excluded Swap Obligations, provided, however, that to the extent possible and
not inconsistent with applicable law appropriate adjustments shall be made with
respect to payments and/or the proceeds of Collateral from Borrower and/or
Guarantors that are Eligible Contract Participants with respect to such Swap
Obligations to preserve the allocation to Obligations otherwise set forth
herein, and (ii) none of the Collateral pledged by any Credit Party shall secure
any Excluded Swap Obligations with respect to such Credit Party.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Each of the REIT and Borrower represents and warrants to (and, where applicable,
agrees with) each of the Secured Parties that:

 

Section 3.01 Organization; Powers. Each Credit Party is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite corporate, partnership or limited liability
company, as the case may be, power and authority to own its property and assets
and to carry on its business as now conducted and, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required.

 

Section 3.02 Authorization; Enforceability. The Transactions are within the
respective organizational powers of each Credit Party and have been duly
authorized by all necessary organizational action. Each Credit Party has duly
executed and delivered each Loan Document to which it is a party or any Loan
Document that it is executing in a representative capacity on behalf of another
party, in each case with full power and authority, and each such Loan Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except as such enforceability may be
limited by (a) an applicable Insolvency Proceeding, (b) bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors’ rights and (c) the application of general principles
of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.

 

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Section 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require any material consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except for (i) such as have been
obtained or made and are in full force and effect and (ii) filings and
recordings in respect of the Liens created pursuant to the Security Documents,
(b) will not violate in any material way any applicable Legal Requirements or
regulation or the Organizational Documents of any Credit Party or any order of
any Governmental Authority, (c) will not violate or result in a material default
under any Organizational Document, material indenture, agreement or other
instrument binding upon any Credit Party or any of their Assets, or give rise to
a right thereunder to require any payment to be made by any such Person, and
(d) except for the Liens created pursuant to the Security Documents, will not
result in the creation or imposition of any Lien (other than, in connection with
Liens on Real Property, any Permitted Exceptions) on any asset of any Credit
Party.

 

Section 3.04 Financial Condition; No Material Adverse Effect.

 

(a) Financial Condition. REIT has furnished to Administrative Agent the REIT’s
audited consolidated balance sheet and statements of income, shareholder’s
equity and cash flows, which includes consolidating supplemental financial
statements that show REIT’s financial position separate from all other
properties owned by Guarantor, as of December 31, 2012 and a copy of the
unaudited consolidated balance sheet of the REIT as of March 31, 2013. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of Borrower and Guarantor, as
of such date and for such period in accordance with GAAP, except as otherwise
expressly noted therein.

 

(b) No Material Adverse Effect. Since (i) in the case of any representations
given by Borrower prior to any delivery of financial statements pursuant to
Section 5.01, the date of the financial statements referred to in
Section 3.04(a) or (ii) in the case of any representations given by Borrower
after the delivery of financial statements pursuant to Section 5.01, the date of
delivery of the most recent financial statements delivered pursuant thereto,
there has been no event, act or condition that has caused a Material Adverse
Effect.

 

Section 3.05 Properties.

 

(a) Subsidiary Guarantor Property Generally. Each applicable Subsidiary
Guarantor has good record and marketable title in fee simple to, or valid
leasehold interests pursuant to an Approved Ground Lease in, all of the
Borrowing Base Properties owned by it and all other real property necessary in
the ordinary conduct of its business, and the 163 Washington SPE has good record
and marketable title in fee simple to the Asset known as 163 Washington Street,
Brooklyn, New York, in each case free and clear of all Liens whatsoever, in each
case except for Permitted Exceptions and such other Liens as are permitted
pursuant to the Loan Documents. None of the Permitted Exceptions, individually
or in the aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage or any Borrowing Base Property,
materially and adversely affect the value of such Borrowing Base Property,
impair the use or operations of such Borrowing Base Property or otherwise would
reasonably be expected to have a Material Adverse Effect. The Borrower holds an
indirect 97.39% Equity Interest in the 163 Washington SPE free and clear of all
Liens whatsoever. To the extent a Borrowing Base Property is leased by a
Subsidiary Guarantor pursuant to an Approved Ground Lease, (i) such lease is in
full force and effect and remains unmodified except as disclosed to the
Administrative Agent and as is permitted under this Agreement; (ii) no rights in
favor of the applicable Subsidiary Guarantor lessee have been waived, canceled
or surrendered; (iii) all rental and other charges due and payable thereunder
have been paid in full (except to the extent such payment is not yet overdue or
are subject to dispute in good faith); (iv) no Subsidiary Guarantor or other
Consolidated Entity is in default under or has received any notice of default
with respect to such Approved Ground Lease; (v) no lessor under such a ground
lease is in material default thereunder; (vi) a true and correct copy of such
ground lease (together with any amendments, modifications, restatements or
supplements thereof), and of the current address for the lessor to which all
notices and payments under such lease are to be addressed, has been delivered to
the Administrative Agent; (vii) no material rights in favor of the applicable
Subsidiary Guarantor lessee have been waived, canceled or surrendered (other
than as the Administrative Agent has been notified); (viii) no Subsidiary
Guarantor or other Consolidated Entity is in default under or has received any
notice of default with respect to such Approved Ground Lease; (ix) to such
Subsidiary Guarantor’s knowledge, there exists no adverse claims as to such
Subsidiary Guarantor’s title or right to possession of the leasehold premises
referenced therein; (x) such Subsidiary Guarantor lessee has delivered to the
lessor thereunder notice of the encumbrance of its interest in favor of
Administrative Agent pursuant to the applicable Mortgage; and (xi) if such
Approved Ground Lease is a sub-lease, each of the representations and warranties
contained in clauses (i) through (x) above are true and correct both as to such
Approved Ground Lease and as to each superior lease to such sublease (as if each
reference therein to “such lease” or “ground lease” were to mean and refer to
such superior lease, and as if each reference therein to the lessee (or
Subsidiary Guarantor as lessee) or lessor were to mean and refer to the lessee
and lessor, respectively, under each such superior lease).

 

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(b) Credit Party Property Generally. Each Credit Party has good title to all its
real and personal property material to its business, except for any defects
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

 

(c) Intellectual Property. Each Credit Party owns, or is licensed to use, all
trademarks, trade names, copyrights, patents and other intellectual property
material to its business, and the use thereof by such Credit Party does not
infringe upon the rights of any other Person, except for any defects of title or
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

Section 3.06 Litigation, Environmental and Labor Matters.

 

(a) Actions, Suits and Proceedings. Except as disclosed in Schedule IV, there
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Borrower, threatened in
writing against or affecting any Consolidated Entity (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect or (ii) that involve this Agreement, any
other Loan Document, any Organizational Document of any Credit Party or the
Transactions.

 

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(b) Environmental Matters.

 

(i) The Consolidated Entities 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
the REIT and 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 or to have a (a) material adverse effect with
respect to the financial condition or the operations of any Borrowing Base
Property, (b) material adverse effect on the Borrowing Base Asset Value of any
Borrowing Base Property, or (c) material adverse effect on the ownership of any
Borrowing Base Property.

 

(ii) (A) None of the properties currently or to the knowledge of the Borrower,
formerly owned or operated by the REIT, the Borrower or any Subsidiary thereof
is listed or, to the knowledge of the Borrower, proposed for listing on the NPL
or on the CERCLIS or any analogous state or local list, (B) there are no and, to
the knowledge of the Borrower, 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 transported, treated, stored
or disposed of by the REIT, the Borrower or any Subsidiary thereof on any
property currently owned or operated by the REIT, the Borrower or any Subsidiary
thereof or, to the best of the knowledge of the Borrower, on any property
formerly owned or operated by the REIT, the Borrower or any Subsidiary thereof;
(C) to the knowledge of the Borrower, there is no friable asbestos or
asbestos-containing material on any property currently owned or operated by the
REIT, the Borrower or any Subsidiary thereof; and (D) Hazardous Materials have
not been transported, released, discharged or disposed of by the REIT, the
Borrower or any Subsidiary thereof on any property currently or formerly owned
or operated by the REIT, the Borrower or any Subsidiary thereof in violation of
applicable Environmental Laws except in each case under this Section
3.06(b)(ii)(A) through (D) above as would otherwise not reasonably be expected
to have a Material Adverse Effect or to have a (a) material adverse effect with
respect to the financial condition or the operations of any Borrowing Base
Property, (b) material adverse effect on the Borrowing Base Asset Value of any
Borrowing Base Property, or (c) material adverse effect on the ownership of any
Borrowing Base Property.

 

(iii) None of the REIT, the Borrower or any Subsidiary thereof is undertaking,
or has completed within the last three (3) years (except to the extent set forth
on Schedule X hereto), 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, discharge or disposal of
Hazardous Materials at any site, location or operation which investigation,
assessment, remedial or response action has exceeded or would exceed the
Remediation Threshold to complete, either voluntarily or pursuant to the order
of any Governmental Authority or the requirements of any Environmental Law; and
all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or, to the knowledge of Borrower,
formerly owned or operated by the REIT, the Borrower or any Subsidiary thereof
have been disposed of in a manner not reasonably expected to result in material
liability in excess of the Remediation Threshold to the REIT, the Borrower or
any Subsidiary.

 

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(iv) Each of the Borrowing Base Properties and all operations of Borrower and
the applicable Subsidiary at such Borrowing Base Properties are in material
compliance with all applicable Environmental Laws, there is no material
violation of any Environmental Law with respect to such Borrowing Base
Properties or the businesses located thereon, and there are no conditions
relating to such Borrowing Base Properties or the businesses that could
reasonably be expected to give rise to material liability to the REIT, Borrower
or any Subsidiary under any applicable Environmental Law which, in each case,
would require amounts in excess of the Remediation Threshold to remedy.

 

(v) None of the Borrowing Base Properties contains, or, to the knowledge of
Borrower, has previously contained, any Hazardous Materials at, on or under such
Borrowing Base Properties in amounts or concentrations that constitute a
material violation of, or could reasonably be expected to give rise to material
liability to the REIT, Borrower or any Subsidiary under applicable Environmental
Laws which would require amounts in excess of the Remediation Threshold to
remediate.

 

(vi) Neither the REIT, nor the Borrower nor any Subsidiary thereof has received
any written notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with applicable Environmental Laws
(in each case to the extent that the remedy for such violation, alleged
violation, non-compliance, liability, or potential liability would reasonably be
expected to exceed the Remediation Threshold) with regard to any of its
Borrowing Base Properties or the businesses located thereon that remains
outstanding or unresolved, nor does any Responsible Officer of the REIT have
knowledge or reason to believe that any such notice shall be received or is
being threatened.

 

(vii) No judicial proceeding or governmental or administrative action is pending
or, to the best knowledge of the Responsible Officers of the REIT, threatened,
under any applicable Environmental Law that is reasonably expected to give rise
to a material liability in excess of the Remediation Threshold under
Environmental Laws to which the REIT, the Borrower or any Subsidiary thereof is
or will be named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the REIT, the Borrower or any Subsidiary thereof, the Borrowing Base Properties
or, to the knowledge of the Borrower, the businesses located thereon that would
reasonably be expected to give rise to a material liability to the REIT, the
Borrower or any Subsidiary under applicable Environmental Laws in excess of the
Remediation Threshold.

 

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(c) Labor Matters. There is (a) no significant unfair labor practice complaint
pending against the REIT or Borrower or, to Borrower’s knowledge, threatened in
writing against the REIT or Borrower, before the National Labor Relations Board,
and no significant grievance or significant arbitration proceeding arising out
of or under any collective bargaining agreement is pending on the Effective Date
against the REIT or Borrower or, to Borrower’s knowledge, threatened in writing
against the REIT or Borrower which, in either case, would result in a Material
Adverse Effect, and (b) no significant strike, labor dispute, slowdown or
stoppage is pending against the REIT or Borrower or, to Borrower’s knowledge,
threatened in writing against the REIT or Borrower which would result in a
Material Adverse Effect.

 

Section 3.07 Compliance With Laws and Agreements.

 

Each Credit Party is in compliance in all material respects with all laws,
rules, regulations, orders, judgments, writs and decrees of any Governmental
Authority applicable to it or its property and all indentures, agreements and
other instruments binding upon it or its property, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

 

Section 3.08 [Reserved]

 

Section 3.09 Taxes. Borrower, the REIT and the Subsidiaries thereof have filed
all Federal and other material tax returns and reports required to be filed. All
tax returns filed by Borrower, the REIT and their Subsidiaries are complete and
correct in all material respects. Borrower, the REIT and their Subsidiaries have
paid all Federal and other material Taxes, assessments, fees and other
governmental charges for which they are liable (whether or not reflected on any
tax returns) and have fully satisfied any Taxes, assessments, fees, and other
governmental charges levied or imposed upon them or their income or assets or
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded. There is
no proposed Tax assessment against Borrower, the REIT or any Subsidiary thereof
which would, if the assessment were made, have a Material Adverse Effect or (a)
material adverse effect with respect to the financial condition or the
operations of any Borrowing Base Property, (b) material adverse effect on the
Borrowing Base Asset Value of any Borrowing Base Property, or (c) material
adverse effect on the ownership of any Borrowing Base Property. In addition,
Borrower, the REIT and the Subsidiaries thereof have no primary, secondary or
other liability for Taxes of any kind arising with respect to any individual,
trust, corporation, partnership or other entity (other than Borrower, the REIT,
and the Subsidiaries) as to which Borrower, the REIT or any Subsidiary thereof
is directly or indirectly liable for Taxes of any kind incurred by such
individual or entity either as a transferee, or pursuant to Code section
1.1502-6, or pursuant to any other Legal Requirement. Neither the REIT, nor
Borrower nor any Subsidiary thereof is (nor has it ever been) a party to any tax
sharing agreement. As of the Effective Date, each Credit Party’s true and
correct U.S. taxpayer identification number is set forth on Schedule VIII.

 

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Section 3.10 ERISA.

 

(a) No Consolidated Entity has any employees as of the Effective Date.

 

(b) No Consolidated Entity is or will be an “employee benefit plan,” as defined
in Section 3(3) of ERISA, (ii) none of the assets of any Credit Party
constitutes or will constitute “plan assets” of one or more such plans within
the meaning of the Plan Asset Regulation, (iii) no Consolidated Entity is or
will be a “governmental plan” within the meaning of Section 3(32) of ERISA, and
(iv) transactions by or with any Consolidated Entity are not and will not be
subject to state statutes regulating investment of, and fiduciary obligations
with respect to, governmental plans. As of the Effective Date, neither Borrower,
nor any member of the Controlled Group maintains, sponsors or contributes to a
“defined benefit plan” (within the meaning of Section 3(35) of ERISA) or a
“multiemployer pension plan” (within the meaning of Section 3(37)(A) of ERISA).

 

(c) Neither the Transactions nor the use of the Facility will constitute a
nonexempt prohibited transaction (as such term is defined in Section 4975 of the
Code or Section 406 of ERISA) that could subject any Secured Party to any Tax or
penalty on prohibited transactions imposed under Section 4975 of the Code or
Section 502(i) of ERISA or any similar state law.

 

Section 3.11 Disclosure. To Borrower’s knowledge, all information heretofore
(or, if any financial statements have been delivered pursuant to Section
5.01(a), since the most recent such delivery), furnished by any Credit Party to
any Secured Party for purposes of or in connection with this Agreement, any
other Loan Document or any Transaction contemplated hereby is true and accurate
in all material respects on the date as of which such information is stated or
deemed stated. The Credit Parties have disclosed to the Lenders in writing any
and all facts of which they have actual knowledge which materially and adversely
affect or in the future could reasonably be expected to materially and adversely
affect, the business, operations or financial condition of Borrower, taken as a
whole, or Guarantor, taken as a whole, or the ability of any Credit Party to
perform its obligations under this Agreement or the other Loan Documents in any
material respect.

 

Section 3.12 Use of Credit.

 

(a) Borrower is not engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying Margin Stock, and no part of the
proceeds of any extension of credit hereunder will be used to buy or carry any
Margin Stock.

 

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

 

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Section 3.13 Solvency. On the Effective Date and the date of each Borrowing,
after giving effect to the Transactions contemplated by the Loan Documents
occurring on such date, each of the Credit Parties are and will at all times be
Solvent. No Credit Party has entered in to the Transactions or executed this
Agreement or any other Loan Document with the actual intent to hinder, delay or
defraud any creditor. Each Credit Party has received reasonably equivalent value
in exchange for its obligations under the Loan Documents. After giving effect to
any Borrowing or the issuance of any Letter of Credit, the fair saleable value
of the Credit Parties’ assets exceeds and will, immediately following the making
of any such Borrowing or the issuance of any Letter of Credit, exceed the Credit
Parties’ total liabilities, including subordinated, unliquidated, disputed and
contingent liabilities. The Credit Parties’ assets do not constitute
unreasonably small capital to carry out their business as conducted or as
proposed to be conducted, nor will their assets constitute unreasonably small
capital immediately following the making of any Borrowing or the issuance of any
Letter of Credit. The Credit Parties do not intend to incur debt and liabilities
(including contingent liabilities and other commitments) beyond their ability to
pay such debt and liabilities as they mature (taking into account the timing and
amounts of cash to be received by the Credit Parties and the amounts to be
payable on or in respect of obligations of Credit Parties). No petition under
the Bankruptcy Code or any state insolvency laws has been filed against any
Credit Party in the last seven (7) years, and neither the REIT, nor Borrower nor
any other Credit Party in the last seven (7) years has ever made an assignment
for the benefit of creditors or taken advantage of any insolvency act for the
benefit of debtors. No Credit Party is contemplating either the filing of a
petition by it under the Bankruptcy Code or any state insolvency laws or the
liquidation of all or a major portion of its assets or property, and no Credit
Party has actual knowledge of any Person contemplating the filing of any such
petition against it or any other Credit Party.

 

Section 3.14 No Default. No Credit Party is in default under any of the terms or
provisions of any Organizational Document. No Credit Party is in default in any
material respect beyond any applicable grace period under or with respect to any
other material agreement, instrument or undertaking to which it is a party or by
which it or any of its property is bound in any respect, the existence of which
default is likely to result in a Material Adverse Effect.

 

Section 3.15 Insurance. Each Credit Party currently maintains all insurance that
is required to be maintained by Section 5.05.

 

Section 3.16 Security Interests and Liens.

 

(a) The Security Documents create, as security for the Obligations, valid and
enforceable, first priority security interests in and to all of the respective
Collateral, perfected in accordance with the terms of the Pledge, as to the
Pledge, and perfected as of recording, to the extent permitted in accordance
with the terms hereof, as to the Mortgages, in favor of Administrative Agent as
agent for the benefit of the Secured Parties, except as enforceability may be
limited by applicable Insolvency Proceeding, or general principles of equity,
whether such enforceability is considered in a proceeding in equity or at law.
Other than in connection with (i) any future change in such a Credit Party’s
name or the location in which Borrower is organized or registered or (ii) with
respect to the Liens of the Mortgages, recording of the Mortgages in accordance
with the terms hereof, no further recordings or filings are or will be required
in connection with the creation, perfection or enforcement of such security
interests and Liens, other than the filing of continuation statements in
accordance with applicable Legal Requirements.

 

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(b) The Borrower has no Subsidiaries other than those disclosed on Schedule IX,
and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by Borrower free
and clear of all Liens other than the Liens arising under the Pledge Agreement.

 

(c) The Borrower has no equity investments in any other corporation or entity
other than the Subsidiary Guarantors and the 163 Entities except as (i) set
forth on Schedule 3.16(c), or (ii) as may hereafter be disclosed to the
Administrative Agent on a schedule attached to a Borrowing Request, Borrowing
Base Certificate or Compliance Certificate submitted to the Administrative
Agent.

 

(d) All of the outstanding Equity Interests in the Subsidiary Guarantors have
been validly issued, and are fully paid and nonassessable and are owned by
Borrower free and clear of all Liens other than the Liens arising under the
Pledge Agreement, subject to the indirect ownership of less than five percent
(5%) of the 163 Washington Member by third parties. Borrower’s direct
ninety-nine point four five percent (99.45%) Equity Interest in the 163
Washington Member, its indirect ninety-seven point three nine percent (97.39%)
Equity Interest in the 163 Washington JV and Borrower’s indirect ninety-seven
point three nine percent (97.39%) Equity Interest in the 163 Washington SPE are
fully paid and nonassessable and are owned by Borrower free and clear of all
Liens.

 

(e) The corporate capital and ownership structure of the REIT, the Borrower and
their respective Subsidiaries (as of the most recent update of such schedule in
accordance with Section 6.03 hereof) is as described in Schedule IX. The REIT
and Borrower have no Subsidiaries except as disclosed in Schedule IX.

 

(f) No Subsidiary Guarantor or 163 Entity has outstanding any securities
convertible into or exchangeable for its Equity Interests nor does any such
Subsidiary Guarantor or 163 Entity have outstanding any rights to subscribe for
or to purchase or any options for the purchase of, or any agreements providing
for the issuance (contingent or otherwise) of, or any calls, commitments or
claims of any character relating to its Equity Interests, except as set forth in
the 163 Washington JV Agreement or in the operating agreement of 163 Washington
Avenue NYRR JV, LLC (collectively, the “Option Rights”).

 

Section 3.17 Organizational Documents. The organizational documents delivered
pursuant to Section 4.01(d) constitute, as of the Effective Date, true, correct,
and complete copies of all of the Organizational Documents (together with all
amendments and modifications thereof) of each Credit Party.

 

Section 3.18 Principal Offices; Place of Organization. The principal office,
chief executive office and principal place of business of each Credit Party as
of the Effective Date is located at the address specified in Schedule II. The
jurisdiction of organization of each Credit Party is the jurisdiction specified
in Schedule II.

 

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Section 3.19 No Burdensome Restrictions. No Credit Party is a party to any
agreement or instrument or subject to any other obligation or restriction under
any Organizational Document, as the case may be, which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.

 

Section 3.20 Brokers’ Fees. Borrower hereby represents that no Credit Party has
dealt with any financial advisors, brokers, underwriters, placement agents,
agents or finders in connection with the Loan.

 

Section 3.21 REIT and Tax Status. The REIT currently has REIT Status and has
maintained REIT Status on a continuous basis since its initial election to be
taxed as a real estate investment trust for U.S. federal income tax purposes.
Borrower is not an association taxable as a corporation under the Code.

 

Section 3.22 Borrowing Base Properties. Each Real Property listed on Schedule
III fully qualifies as a Borrowing Base Property. With respect to each Borrowing
Base Property (including each Real Property which shall be added as a Borrowing
Base Property in accordance with the terms hereof, whether upon the Effective
Date or pursuant to Section 9.03(a)):

 

(a) Other than Permitted Exceptions, there are no claims for payment for work,
labor or materials affecting any Borrowing Base Property which are or may become
a Lien prior to, or of equal priority with, the Liens created by the Loan
Documents.

 

(b) Each Borrowing Base Property is being, and will continue to be, used
exclusively for one or more of the uses permitted pursuant to Section
9.01(b)(iii) and in accordance with such Section 9.01(b)(iii), and other
appurtenant and related uses;

 

(c) All material certifications, permits, licenses and approvals, including
without limitation, certificates of completion and occupancy permits, required
for the legal use, occupancy and operation of each Borrowing Base Property as an
office building (with ground floor retail uses) have been obtained and are in
full force and effect. The Borrower shall (or cause the applicable Subsidiary
to) keep and maintain all material certifications, permits, licenses and
approvals, in full force and effect. The use being made of each Borrowing Base
Property is in material conformity with any applicable certificate of occupancy
issued for such Borrowing Base Property.

 

(d) The operation of each Borrowing Base Property by the Borrower or applicable
Subsidiary does not involve a violation of (a) any Legal Requirement or (b) any
building permits, restrictions of record, any agreement affecting any such
property or part thereof, and any judgment, decree or order applicable to such
property, except any violations that would not reasonably be expected to
materially interfere with the current use and value of such Borrowing Base
Property or to cause such property to no longer qualify as a Borrowing Base
Property.

 

(e) (i) As of the Closing Date, and except as disclosed in any estoppel
certificate delivered to the Administrative Agent, the rent rolls delivered
pursuant to Section 5.01(d) are true, correct and complete in all material
respects and the Leases referred to thereon are all valid and in full force and
effect; (ii) the Leases and any Lease Back Master Leases (including
modifications thereto) are in writing, and there are no oral agreements with
respect thereto; (iii) the copies of each of the Leases and any Lease Back
Master Leases (if any) delivered to the Administrative Agent are true, correct
and complete in all material respects and have not been modified (or further
modified); (iv) to the knowledge of any Credit Party, no defaults exist under
any of the Leases or any Lease Back Master Leases by any party (including any
guarantor) thereto that, individually or in the aggregate with respect to all
such defaults that could reasonably be expected to have a (a) material adverse
effect with respect to the financial condition or the operations of such
Borrowing Base Property, (b) material adverse effect on the Borrowing Base Asset
Value of such Borrowing Base Property, (c) material adverse effect on the
ownership of such Borrowing Base Property, or that would involve more than
$1,000,000 or take longer than three (3) months to repair or remediate, and, as
of the Effective Date, to the knowledge of any Credit Party, no material default
exists under any of the Leases; (v) no Credit Party has any knowledge of any
presently effective notice of termination or notice of default given by any
tenant in writing under any other Leases or any Lease Back Master Leases that
individually or in the aggregate could reasonably be expected to have a (a)
material adverse effect with respect to the financial condition or the
operations of such Borrowing Base Property, (b) material adverse effect on the
Borrowing Base Asset Value of such Borrowing Base Property, (c) material adverse
effect on the ownership of such Borrowing Base Property, or that would involve
more than $1,000,000 or take longer than three (3) months to repair or
remediate; (vi) no Credit Party has made any presently effective assignment or
pledge of any of the Leases, the rents or any interests therein except to the
Administrative Agent; (vii) no tenant or other party has an option or right of
first refusal to purchase all or any portion of any Borrowing Base Property,
except for the rights in favor of a Subsidiary Guarantor under an Approved
Ground Lease; (viii) no tenant has the right to terminate any Lease or any Lease
Back Master Leases prior to expiration of the stated term of such Lease or any
Lease Back Master Leases (except as a result of counterparty breach, casualty,
condemnation or other customary basis of a right to terminate); and (ix) no
tenant has prepaid more than one month’s rent in advance (except for bona fide
security deposits and estimated payments of operating expenses, Taxes and other
pass-throughs paid by tenants pursuant to their Leases or any Lease Back Master
Leases not prepaid more than one month prior to the date such estimated payments
are due or prepayments of rent made in the ordinary course of business).

 

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(f) No portion of any Borrowing Base Property is located in a flood hazard area
as designated by the Federal Emergency Management Agency or, if in a flood zone,
flood insurance is maintained therefor in full compliance with the provisions of
the applicable Mortgage.

 

(g) None of the Borrowing Base Properties have been 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 has not previously been repaired or
that, either individually or in the aggregate, could reasonably be expected to
have a (a) material adverse effect with respect to the financial condition or
the operations of such Borrowing Base Property, (b) material adverse effect on
the Borrowing Base Asset Value of such Borrowing Base Property, or (c) material
adverse effect on the ownership of such Borrowing Base Property, or that would
involve more than $1,000,000 or take longer than three (3) months to repair or
remediate.

 

89

 

In the event that any of the representations or warranties set forth in this
Section 3.22 are inaccurate with respect to any Borrowing Base Property, it
shall constitute a Default only in the event that Borrower, if required by the
Required Lenders, has not removed such Borrowing Base Property in accordance
with Section 9.03(b) within thirty (30) days following delivery to the Borrower
of written notice of such breach.

 

Section 3.23 Anti-Money Laundering/International Trade Law Compliance.

 

(a) No Covered Entity (i) is a Sanctioned Person; (ii) has any of its assets in
a Sanctioned Country or in the possession, custody or control of a Sanctioned
Person; or (iii) does business in or with, or derives any of its operating
income from investments in or transactions with, any Sanctioned Country or
Sanctioned Person in violation of any law, regulation, order or directive
enforced by any Compliance Authority;

 

(b) None of the proceeds of any Borrowing will be used to fund any operations
in, finance any investments or activities in, or, make any payments to, a
Sanctioned Country or Sanctioned Person in violation of any law, regulation,
order or directive enforced by any Compliance Authority;

 

(c) The funds used to repay the Loans or the Existing Financing are not derived
from any unlawful activity; and

 

(d) Each Covered Entity is in compliance with, and no Covered Entity engages in
any dealings or transactions prohibited by, any Legal Requirements, including
but not limited to any Anti-Terrorism Laws.

 

(e) The REIT and Borrower covenant and agree that Borrower shall immediately
notify Administrative Agent in writing upon the occurrence of a Reportable
Compliance Event.

 

(f) As used herein: “Anti-Terrorism Laws” means any Legal Requirements relating
to terrorism, trade sanctions programs and embargoes, import/export licensing,
money laundering, or bribery, all as amended, supplemented or replaced from time
to time; “Compliance Authority” means each and all of the (a) U.S. Treasury
Department/Office of Foreign Assets Control, (b) U.S. Treasury
Department/Financial Crimes Enforcement Network, (c) U.S. State
Department/Directorate of Defense Trade Controls, (d) U.S. Commerce
Department/Bureau of Industry and Security, (e) U.S. Internal Revenue Service,
(f) U.S. Justice Department, and (g) U.S. Securities and Exchange Commission;
“Covered Entity” means each Credit Party, its affiliates and subsidiaries, all
owners of the foregoing, and all brokers or other agents of any Credit Party
acting in any capacity in connection with the Transactions; “Reportable
Compliance Event” means that any Covered Entity becomes a Sanctioned Person, or
is indicted, arraigned, investigated or custodially detained, or receives an
inquiry from any Governmental Authority, in connection with any Anti-Terrorism
Law or any predicate crime to any Anti-Terrorism Law, or self-discovers facts or
circumstances implicating any aspect of its operations with the actual or
possible violation of any Anti-Terrorism Law; “Sanctioned Country” means a
country subject to a sanctions program maintained by any Compliance Authority;
and “Sanctioned Person” means any individual person, group, regime, entity or
thing listed or otherwise recognized as a specially designated, prohibited,
sanctioned or debarred person or entity, or subject to any limitations or
prohibitions (including but not limited to the blocking of property or rejection
of transactions), under any order or directive of any Compliance Authority or
otherwise subject to, or specially designated under, any sanctions program
maintained by any Compliance Authority.

 

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Section 3.24 Fiscal Year; Fiscal Quarters. Each Credit Party’s fiscal year ends
on December 31st and each Credit Party’s fiscal quarters end on the respective
last day of each calendar quarter of each year.

 

All of the representations and warranties in this Article III and elsewhere in
the Loan Documents shall be deemed to have been relied upon by Administrative
Agent, the L/C Issuer and the Lenders notwithstanding any investigation
heretofore or hereafter made by Administrative Agent, the L/C Issuer or any
Lender or on their respective behalves.

 

ARTICLE IV

CONDITIONS

 

Section 4.01 Effective Date. The obligations of the Lenders to make the initial
advance of any Revolving Loan or Term Loan hereunder shall not become effective
until the date (the “Closing Date”) on which (i) Administrative Agent shall have
received each of the following documents and (ii) each of the other conditions
listed below is satisfied, the satisfaction of such conditions to be
satisfactory to Administrative Agent (and to the extent specified below, to each
Lender) in form and substance (or such condition shall have been waived in
accordance with Section 10.02):

 

(a) Agreement. From each party hereto either (i) a counterpart of this Agreement
signed on behalf of such party or (ii) written evidence satisfactory to
Administrative Agent (which may include either an electronic transmission of a
.pdf of a signed signature page to this Agreement or a telecopy transmission of
a signed signature page to this Agreement) that such party has signed a
counterpart of this Agreement.

 

(b) Notes. The Notes duly completed and executed by Borrower for each applicable
Lender.

 

(c) Opinion of Counsel to Borrower. A favorable written opinion (addressed to
Administrative Agent, L/C Issuer, the Swingline Lender, and the Lenders and
dated the Effective Date) of counsel for the Credit Parties, covering such
matters relating to the Credit Parties, this Agreement or the Transactions as
Administrative Agent and/or the Required Lenders shall reasonably request (and
each of the Credit Parties hereby instructs such counsel to deliver such opinion
to the Lenders and Administrative Agent).

 

(d) Organizational Documents. Such documents and certificates as Administrative
Agent or its counsel may reasonably request relating to the organization,
existence and good standing of the Credit Parties, the authorization of the
Transactions, and any other matters relevant hereto, all in form and substance
reasonably satisfactory to Administrative Agent, including the Organizational
Documents of such Persons, as amended, modified or supplemented through the
Effective Date, certified to be true, correct and complete by a Responsible
Officer of Borrower and Guarantor, respectively, as of the Effective Date.

 

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(e) Security Documents. Each of the Security Documents, duly executed and
delivered by each Credit Party that is a party thereto. In addition, Borrower
shall have taken such other action (including delivering to Administrative
Agent, for filing, appropriately completed and duly executed copies of Uniform
Commercial Code financing statements) as Administrative Agent shall have
reasonably requested in order to perfect the security interests created pursuant
to the Security Documents other than the Mortgage.

 

(f) Financial Information. Administrative Agent shall have received all
available financial information with respect to the Credit Parties reasonably
requested by it.

 

(g) Consents. Copies of all consents, licenses and approvals, if any, required
in connection with the execution, delivery and performance by the Credit
Parties, and the validity and enforceability, of the Loan Documents, or in
connection with any of the Transactions contemplated thereby, and such consents,
licenses and approvals shall be in full force and effect in all material
respects.

 

(h) UCC Searches. Satisfactory reports of UCC (collectively, the “UCC
Searches”), tax lien, judgment and litigation searches conducted by a search
firm reasonably acceptable to Administrative Agent with respect to the
Collateral and the Credit Parties, in each of the locations reasonably requested
by Administrative Agent.

 

(i) Borrowing Base Properties. Such materials and information with respect to
the initial Borrowing Base Properties as Administrative Agent (on its own behalf
or on behalf of any Lender) shall reasonably require, including title updates
and copies of Borrower’s existing environmental reports, engineering reports in
Borrower’s possession, custody or reasonable control, and Appraisals, and such
other materials and information as would be required in connection with the
addition of a property to the Borrowing Base pursuant to Section 9.03(a).

 

(j) Existing Facility. Payment in full of all amounts due under the Existing
Facility.

 

(k) Other Documents. Such other documents as Administrative Agent or any Lender
may reasonably request.

 

The obligation of any Lender to make its initial extension of credit hereunder
is also subject to (i) the payment by the Credit Parties of such fees, expenses
and other consideration as the Credit Parties shall have agreed to pay to any
Lender or Administrative Agent in connection herewith, including all fees
required pursuant to the Fee Letter and the reasonable and documented fees and
expenses of Morrison & Foerster LLP, counsel to Administrative Agent, in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Loan Documents and the extensions of credit hereunder
(to the extent that statements for such fees and expenses have been delivered to
the Credit Parties); and (ii) the Borrowing by Borrower of Term Loans in
connection with such initial extension of credit, in compliance with the
conditions to advances contained herein, in the minimum principal amount of not
less than $75,000,000.

 

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Administrative Agent shall notify the Credit Parties and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.

 

Section 4.02 Credit Event. The obligation of each Lender to make a Loan or of
the L/C Issuer to issue or extend any Letter of Credit on the occasion of any
Borrowing (including, without limitation, any Borrowing that occurs upon the
Effective Date) is subject to the satisfaction of the following conditions:

 

(a) receipt by Administrative Agent of a Borrowing Request and Borrowing Base
Certificate pursuant to Section 2.03;

 

(b) immediately after such Borrowing or issuance (i) the Credit Exposure will
not exceed the Borrowing Base; (ii) the Term Loan Credit Exposure will not
exceed the Term Loan Borrowing Base Availability; (iii) the Revolving Loan
Credit Exposure will not exceed the Revolving Loan Borrowing Base Availability;
(iv) with respect to each Term Lender, such Term Lender’s Term Loan Applicable
Percentage of the Term Loan Credit Exposure will not exceed such Term Lender’s
Term Loan Commitment; and (v) with respect to each Revolving Lender, such
Revolving Lender’s Revolving Loan Applicable Percentage of the Revolving Loan
Credit Exposure will not exceed such Revolving Lender’s Revolving Loan
Commitment;

 

(c) the representations and warranties of Borrower contained in this Agreement
and the representations and warranties of Borrower and Guarantor in the other
Loan Documents shall be true and correct in all material respects on and as of
the date of such Borrowing or issuance both before and after giving effect to
the making of such Loans, except to the extent that any representation or
warranty relates to an earlier date, in which case such representation or
warranty shall be true and correct in all material respects as of such earlier
date and except with respect to any representations or warranties contained in
Section 3.22 hereof which are inaccurate but for which the thirty (30) day
period provided thereunder for Borrower to remove the applicable Borrowing Base
Property has not yet expired;

 

(d) at the time of and immediately after giving effect to such Borrowing or
issuance, no Default shall have occurred and be continuing;

 

(e) Intentionally Omitted;

 

(f) Intentionally Omitted;

 

(g) receipt by Administrative Agent of a completed Borrowing Base Certificate
dated the date that the applicable request for Borrowing or issuance of a Letter
of Credit is given pursuant to Section 2.03 which shall be true and correct as
of the date of such applicable Borrowing or issuance;

 

(h) Intentionally Omitted; and

 

(i) the Solvency of each Credit Party both before and after giving effect to the
making of the Loan and issuance or extension of any Letter of Credit, and the
delivery by Borrower, the REIT and, if reasonably requested by the
Administrative Agent, each Subsidiary Guarantor or 163 Entity, of a Solvency
Certificate.

 

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Each Borrowing shall be deemed to constitute a representation and warranty by
each Credit Party on the date thereof as to the matters specified in the
preceding sentence.

 

ARTICLE V

AFFIRMATIVE COVENANTS

 

Until the Commitments have expired or been terminated, the principal of and
interest on each Loan and all Unreimbursed Amounts and fees payable hereunder
shall have been paid in full, and all L/C Obligations shall equal zero, each of
the REIT and Borrower covenants and agrees with the Secured Parties that:

 

Section 5.01 Financial Statements and Other Information. Each of the REIT and
Borrower shall furnish to Administrative Agent and each Lender:

 

(a) as soon as available, but in any event within ninety (90) days after the end
of each fiscal year of the REIT (or, if earlier, within fifteen (15) days after
the filing of the same with the Securities and Exchange Commission), a copy of
the audited consolidated balance sheet of the REIT and its Subsidiaries as of
the end of such year and the related consolidated statements of operations,
stockholders’ equity (where applicable) and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
year, and accompanied by the opinion of a nationally-recognized independent
public accounting firm stating that such consolidated financial statements
present fairly the financial position for the periods indicated, in conformity
with GAAP applied on a basis consistent with prior years which 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; provided, however,
that the obligations to deliver the financial statements described in this
Section 5.01(a) may be satisfied by furnishing to the Agent a copy of its annual
report on Form 10-K in respect of such fiscal year together with the financial
statements required to be attached thereto, provided REIT is required to file
such annual report on Form 10-K with the Securities and Exchange Commission and
such filing is actually made;

 

(b) as soon as available, but not later than forty five (45) days after the end
of each of the first three (3) fiscal quarters of each fiscal year (or, if
earlier, within fifteen (15) days after the date required to be filed with the
SEC), a copy of the unaudited consolidated balance sheet of each of the REIT and
its Subsidiaries as of the end of such quarter and the related consolidated
statements of operations, stockholders’ equity (where applicable) and cash flows
for the period commencing on the first day and ending on the last day of such
quarter, and accompanied by a certificate signed by a Responsible Officer
stating that such financial statements are complete and correct and present
fairly the financial position for the periods indicated, in conformity with GAAP
for interim financial statements applied on a basis consistent with prior
quarters; provided, however, that the obligations to deliver the financial
statements described in this Section 5.01(b) may be satisfied by furnishing to
the Agent a copy of its annual report on Form 10-Q in respect of such fiscal
year together with the financial statements required to be attached thereto,
provided REIT is required to file such annual report on Form 10-Q with the
Securities and Exchange Commission and such filing is actually made;

 

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(c) (i) within sixty (60) days after the end of each fiscal quarter and (ii)
upon any Borrowing Base Addition or Borrowing Base Removal in accordance with
Article IX, a Borrowing Base Certificate reflecting the results from the
operations during such fiscal quarter or after giving effect to such Borrowing
Base Addition or Borrowing Base Removal, respectively;

 

(d) concurrently with the delivery of the financial statements referred to in
Sections 5.01(a) and 5.01(b) above, a rent roll with respect to the Borrowing
Base Properties and operating statements for the trailing four (4) quarters for
the Borrowing Base Properties accompanied by a certificate signed by a
Responsible Officer certifying that the information contained therein is
complete and correct to the knowledge of Borrower;

 

(e) concurrently with the delivery of the financial statements referred to in
Sections 5.01(a) and 5.01(b) above, a compliance certificate, substantially in
the form of Exhibit F, signed by a Responsible Officer of Borrower and of REIT
(i) stating that, to the best of such officers’ knowledge, each of the Credit
Parties, during such period, has observed or performed in all material respects
all of its covenants and other agreements, and satisfied in all material
respects every condition contained in this Agreement and the other Loan
Documents to be observed, performed or satisfied by it, and that such officers
have no knowledge of any Default or Event of Default except as specified in such
certificate; (ii) showing in detail the calculations supporting such statement
for such period in respect of the covenants in Section 6.01; and (iii) showing
in detail the calculation of the Borrowing Base for such period on an
asset-by-asset basis. Notwithstanding anything to the contrary contained herein
and without limiting the Lenders’ other rights and remedies, if such certificate
is not provided on the due date therefor, Borrower shall be prohibited from any
further Borrowings and from requesting the issuance of any further Letters of
Credit under this Agreement until such certificate is provided;

 

(f) promptly and in any event within five (5) Business Days after the same are
available, copies of any report, proxy statement, financial statement,
periodical or special report which the REIT files with the Securities and
Exchange Commission or any successor or similar Governmental Authority;

 

(g) promptly after the same are received, copies of all reports which the
independent certified public accountants of Borrower or the REIT deliver to
Borrower or the REIT; and

 

(h) such additional financial and other information as Administrative Agent
(acting on its own behalf or on behalf of any Lender) may from time to time
reasonably request.

 

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 REIT or Borrower 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.

 

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Section 5.02 Notices of Material Events. Each of REIT and Borrower shall
promptly (and in no event later than ten (10) days after REIT or Borrower has
knowledge of the same) notify Administrative Agent and each Lender of:

 

(a) Default; Event of Default. The occurrence of any Default or Event of
Default;

 

(b) Litigation. The commencement of, or any material development in, any
litigation, arbitration or proceeding affecting Borrower, the REIT, or any
Subsidiary (including any Subsidiary Guarantor or any 163 Entity) (i) in which
the amount of damages claimed is $1,000,000 or more, (ii) which, if adversely
determined, would reasonably be expected to have a Material Adverse Effect or to
have a (a) material adverse effect with respect to the financial condition or
the operations of any Borrowing Base Property, (b) material adverse effect on
the Borrowing Base Asset Value of any Borrowing Base Property, (c) material
adverse effect on the ownership of any Borrowing Base Property, (iii) in which
the relief sought is an injunction or other stay of the performance of any Loan
Document or (iv) required to be reported to the Securities and Exchange
Commission pursuant to the Exchange Act;

 

(c) Environmental Matters. (i) Any enforcement, cleanup, removal or other
governmental or regulatory actions instituted or threatened in writing against
Borrower, the REIT, or any Subsidiary (including any Subsidiary Guarantor or 163
Entity) or any of their Properties pursuant to any applicable Environmental Laws
that would be expected to result in a liability to any of them in excess of the
Remediation Threshold, and (ii) any environmental condition of the Properties of
Borrower, the REIT, or any Subsidiary that could reasonably be anticipated to
cause such Properties (or any portion thereof) to be subject to any material
restrictions on ownership, occupancy, transferability or use under any
applicable Environmental Laws;

 

(d) Legal Compliance. Any material written notice received from any Governmental
Authority asserting that any Borrowing Base Property is not in compliance with
any Requirements of Law; and

 

(e) Exclusion Events. Promptly and in any event within five (5) Business Days
after Borrower or Guarantor obtains actual knowledge of the occurrence of an
Exclusion Event, a notice setting forth the Exclusion Event.

 

Each notice pursuant to this section shall be accompanied by a written
statement, signed by a Responsible Officer, setting forth details of the
occurrence referred to therein and the provisions of this Agreement affected,
and stating what action Borrower or the REIT proposes to take with respect
thereto. Each notice under Section 5.02(a) shall describe with particularity the
clause or provision of this Agreement or other Loan Document that has been
breached or violated.

 

Section 5.03 Existence; Conduct of Business. Each of the REIT and Borrower shall
do or cause to be done and cause each Credit Party to do or cause to be done,
all things necessary to preserve, renew and keep in full force and effect its
legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03. Each of Borrower and Guarantor shall continue to engage only in
business of the same general type as conducted by Borrower or Guarantor, as
applicable, as of such date that such Credit Party becomes a party hereto or as
may be contemplated in their respective Organizational Documents.

 

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Section 5.04 Payment of Obligations. Each of the REIT and Borrower shall, and
shall cause each Subsidiary (including any Subsidiary Guarantor or 163 Entity)
to, pay and discharge as the same shall become due and payable and otherwise
comply with, all their respective obligations and liabilities, including (a) all
Tax liabilities, assessments and governmental charges or levies upon it or its
Properties, unless the same are being contested in good faith by appropriate
proceedings and adequate reserves in accordance with GAAP are being maintained
by the REIT, Borrower or such Person, (b) all lawful claims which, if unpaid,
would by law become a Lien upon its Properties (other than, in connection with
any Real Property, Permitted Exceptions), including Properties constituting
Collateral, (c) all Indebtedness, as and when due and payable, but subject to
any subordination provisions contained in any instrument or agreement evidencing
such Indebtedness, and (d) all Contractual Obligations, provided that no such
payment need be made nor obligation observed if the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

Section 5.05 Insurance; Property Maintenance.

 

(a) Insurance. Each of the REIT and Borrower shall, and shall cause each
Subsidiary (including any Subsidiary Guarantor or 163 Entity) to, maintain
insurance with respect to their activities and properties with financially sound
and reputable insurance companies not Affiliates of the Borrower, 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 and Borrower operate. All insurance related to the
Borrowing Base Properties shall at all times comply with the requirements
attached hereto as Schedule VII.

 

(b) Property Maintenance. Each of the REIT and Borrower shall maintain, and
shall cause each Subsidiary (including any Subsidiary Guarantor or 163 Entity)
to maintain, and preserve all of their Properties, including Properties
constituting Collateral and Borrowing Base Properties, in good working order and
condition, ordinary wear and tear excepted, and make all necessary repairs
thereto and renewals and replacements thereof, except, in each case, where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect or to have a (a) material adverse effect with respect to the financial
condition or the operations of any Borrowing Base Property, (b) material adverse
effect on the Borrowing Base Asset Value of any Borrowing Base Property, (c)
material adverse effect on the ownership of any Borrowing Base Property.

 

(c) Each of the REIT and Borrower shall use, and shall cause each Subsidiary to
use, the standard of care typical in the industry in the operation and
maintenance of its Real Properties and other property.

 

Section 5.06 Books and Records; Inspection. Each of the REIT and Borrower shall
maintain, and shall cause each Subsidiary (including any Subsidiary Guarantor or
163 Entity) to maintain, proper books of record and account, in which materially
full, true and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the Properties
and business of Borrower, the REIT and each Subsidiary (including any Subsidiary
Guarantor or 163 Entity). Each of the REIT and Borrower shall permit, and shall
cause each Subsidiary (including any Subsidiary Guarantor or 163 Entity) to
permit, representatives and independent contractors of Administrative Agent
(which may be accompanied by representatives and independent contractors of one
or more Lenders) and, if an Event of Default has occurred and is continuing,
representatives and independent contractors of Administrative Agent or any
Lender to visit and inspect any of their respective Real Properties, to conduct
audits of the Collateral, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense of
Borrower and at any time during normal business hours and as often as may be
reasonably desired, upon no less than forty-eight (48) hours advance notice to
Borrower and no more often than once in any period of twelve (12) consecutive
months unless an Event of Default has occurred and is continuing; provided,
however, when an Event of Default exists, Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may visit
and inspect at the expense of Borrower such Properties at any time during
business hours and without advance notice. Administrative Agent and each Lender
shall use its reasonable efforts to minimize interference or disturbance to the
possession, occupancy and operations of any lessee or other occupant of any
Property when exercising its rights under this Section 5.06.

 

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Section 5.07 Compliance with Laws. Each of the REIT and Borrower shall comply,
and shall cause each Subsidiary (including any Subsidiary Guarantor or 163
Entity) to comply, with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business, including, without limitation, all
securities laws and regulations, except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.

 

Section 5.08 Use of Proceeds. The proceeds of the Loans will be used only for
Approved Uses. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X.

 

Section 5.09 Operating Accounts. Borrower hereby agrees that it shall at all
times maintain its operating account at Capital One in an account selected by
Borrower. Borrower hereby authorizes Administrative Agent to automatically debit
Borrower’s designated account maintained by Borrower for the payment of any
amounts due hereunder, or under any Mortgage, or under the Loan Documents, or
under any Swap Contract; provided that if sufficient funds are not available in
such account for any such payment, it shall not constitute an Event of Default
unless Borrower has failed to pay the full amount of such payment when due
(subject to any applicable cure or grace period in Section 7.01). Debits for
monthly interest payments shall be made on each Interest Payment Date as
aforesaid unless other arrangements are agreed to in writing.

 

Section 5.10 Organizational Documents. The Credit Parties will be managed and
operated materially in accordance with their respective Organizational
Documents.

 

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Section 5.11 UCC Searches. At any time that an Event of Default has occurred and
is continuing, Borrower shall pay for UCC Searches ordered by Administrative
Agent with respect to the Collateral or the Credit Parties.

 

Section 5.12 Environmental Laws. Each of the REIT and Borrower shall, and shall
cause each Subsidiary (including any Subsidiary Guarantor or 163 Entity) to,
conduct its operations and keep and maintain its Properties in material
compliance with all applicable Environmental Laws. Upon the written request of
Administrative Agent (on its own behalf or on behalf of any Lender), the REIT
and Borrower shall submit, and cause any Subsidiary to submit, to Administrative
Agent, at Borrower’s sole cost and expense (except as set forth below), at
reasonable intervals, but no more frequently than once every twelve (12) months
unless an Event of Default has occurred and is continuing, a report providing an
update of the status of any environmental, health or safety compliance, hazard
or liability issue identified in any notice or report required pursuant to
Section 5.02(c); provided, however, unless either (a) an Event of Default has
occurred, or (b) Administrative Agent has a reasonable basis to require such
updated report, then Administrative Agent and the Lenders shall be responsible
for the cost of such report.

 

Section 5.13 Maintenance of REIT Status. The REIT shall maintain REIT Status.

 

Section 5.14 Communication with Accountants. Each of the REIT and Borrower
authorizes Administrative Agent to communicate directly with Borrower’s
independent accountants and authorizes such accountants to disclose to
Administrative Agent any and all financial statements and other information of
any kind with respect to the business, financial condition and other affairs of
the REIT or Borrower, as long as, if no Event of Default exists, Administrative
Agent promptly notifies the REIT or Borrower of such discussions and provided
that if no Event of Default exists, Administrative Agent shall only engage in
such communications once per calendar year (but shall not be so limited from and
after the occurrence of an Event of Default).

 

Section 5.15 Patriot Act Compliance.

 

(a) Each of the REIT and Borrower shall comply and cause each Subsidiary to
comply with the Patriot Act (as defined below) and all applicable requirements
of governmental authorities having jurisdiction over the REIT, Borrower or any
such Subsidiary or any of their Property relating to money laundering and
terrorism. In the event that the REIT, Borrower or any Subsidiary fails to
comply with the Patriot Act or any such requirements of governmental
authorities, then Administrative Agent may, at its option, cause such Credit
Party to comply therewith and any and all reasonable costs and expenses incurred
by Administrative Agent in connection therewith shall be secured by the Security
Documents and shall be immediately due and payable. For purposes hereof, the
term “Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT)
Act of 2001 (Public Law 107-56), as the same may be amended from time to time,
and corresponding provisions of future laws.

 

(b) The Patriot Act and federal regulations issued with respect thereto require
all financial institutions to obtain, verify and record certain information that
identifies individuals or business entities which open an “account” with such
financial institution. Consequently, each Lender (for itself and/or as
Administrative Agent for all Lenders hereunder) may from time-to-time request,
and each of the REIT and Borrower shall provide to such Lender or Administrative
Agent, the REIT’s and Borrower’s name, address, tax identification number and/or
such other identification information as shall be necessary for Lender to comply
with federal law. An “account” for this purpose may include, without limitation,
a deposit account, cash management service, a transaction or asset account, a
credit account, a loan or other extension of credit, and/or other financial
services product.

 

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(c) Neither the REIT, nor Borrower, nor any Subsidiary, nor any partner in
Borrower or any Subsidiary or member of such partner nor any owner holding more
than five percent (5%) of a direct or indirect interest in the REIT, Borrower or
any Subsidiary (a) is listed on any Government Lists, (b) is a Prohibited
Person, (c) has been previously indicted for or convicted of any felony
involving a crime or crimes of moral turpitude, or (d) is currently under
investigation by any governmental authority for alleged criminal activity.

 

Section 5.16 Further Assurances. Promptly upon reasonable request by the
Administrative Agent, or any Lender through the Administrative Agent, each of
the REIT and Borrower shall (and shall cause each Credit Party to): (a) correct
any material defect or error that may be discovered in any Loan Document or in
the execution, acknowledgment, filing or recordation thereof, and (b) 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
fullest extent permitted by applicable law, subject the properties, assets,
rights or interests of any Credit Party to the Liens now or hereafter intended
to be covered by any of the Security Documents, (iii) perfect and maintain the
validity, effectiveness and priority of any of the Security 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 Credit Party is or is
to be a party, and cause each of its Subsidiaries to do so.

 

Section 5.17 Material Contracts. Each of the REIT and Borrower shall (a) perform
and observe and cause each Subsidiary (including each Subsidiary Guarantor and
163 Entity) to perform and observe, all the material terms and provisions of
each material contract to be performed or observed by it, except to the extent
the failure to so perform or observe would not have a Material Adverse Effect
and would not have a (i) material adverse effect with respect to the financial
condition or the operations of any Borrowing Base Property, (ii) material
adverse effect on the Borrowing Base Asset Value of any Borrowing Base Property,
and (iii) material adverse effect on the ownership of any Borrowing Base
Property, and (b) obtain the prior written approval of Administrative Agent
prior to entering into, or causing any Subsidiary Guarantor (or the 163
Washington SPE) to enter into, any reciprocal easement or similar agreement,
ground lease or any other material agreement affecting any Borrowing Base
Property.

 

 

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Section 5.18 Collateral Matters; Liens and Security Interest.

 

(a) To secure performance by Borrower of its Obligations:

 

(i) Borrower has granted to Administrative Agent, for the benefit of each of the
Lenders, an exclusive, perfected first priority security interest and Lien in
and to all of the outstanding Equity Interests now or hereafter held by Borrower
in each Subsidiary Guarantor pursuant to the Pledge (for the avoidance of doubt,
and subject to clause (ix) below, with respect to the 163 Washington Member such
security interest shall include only Borrower’s 99.45% Equity Interest in 163
Washington JV to the extent the 163 Washington Consent is obtained);

 

(ii) In connection with the replacement of any of the Borrowing Base Properties
or Borrowing Base Addition pursuant to Article IX hereof, Borrower shall be
required to deliver an additional Pledge and the other Loan Documents as
required by the terms of such Article IX.

 

(iii) Borrower has caused each Subsidiary Guarantor and the 163 Washington SPE,
and shall cause each Subsidiary Guarantor which hereafter owns any of the
Mortgaged Borrowing Base Properties (including the Borrowing Base Properties as
of the Effective Date), to grant to Administrative Agent, for the benefit of
each of the Lenders, an exclusive, separate mortgage lien on each of the
Mortgaged Borrowing Base Properties pursuant to the applicable Mortgages, which
upon recordation thereof shall be first priority, perfected mortgage Liens and
which Mortgages shall be, upon the execution and delivery thereof to
Administrative Agent, effective and legally binding but such Mortgages shall not
be recorded until after a Default or Event of Default occurs, at which time
Administrative Agent is hereby irrevocably and unconditionally authorized
(subject as between Administrative Agent and the Lenders, to Section 8.03) to
(i) cause each such Mortgage to be recorded in the appropriate records, together
with any UCC Financing Statements required to be filed in connection therewith,
and to take any other steps it deems necessary or appropriate in order to
perfect Administrative Agent's first priority mortgage lien in and to the
Borrowing Base Properties and (ii) take such steps as Administrative Agent may
require to perfect collateral assignments of all personalty, all in accordance
with the terms thereof, in each case subject only to any applicable Permitted
Exceptions. All mortgage, recording, stamp, intangible or other similar Taxes
required to be paid by Borrower, Subsidiary Guarantor, the 163 Washington SPE,
or any other Person under applicable Legal Requirements in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any Mortgage (all of which are Indemnified Taxes hereunder) shall
be paid by Borrower, Subsidiary Guarantor or the 163 Washington SPE, as
applicable, immediately when due. Notwithstanding the foregoing, the Credit
Parties acknowledge that with respect to the Borrowing Base Properties listed on
Schedule III and known at 163 Washington Street, Brooklyn, New York “163
Washington”) and 216 West 18th Street, New York, New York, the Mortgages on
those properties will be delivered and recorded upon the Effective Date and will
initially secure only the Term Loans and interest and fees thereon. Such
Mortgages are sometimes referred to herein as the “Recycled Mortgages.” Upon the
Effective Date, the applicable Subsidiary Guarantor and the 163 Washington SPE
owning such Mortgaged Borrowing Base Properties shall also execute and deliver
Second Amended and Restated Mortgages in respect of such Mortgaged Borrowing
Base Properties, and such Second Amended and Restated Mortgages will secure both
the Term Loans and Revolving Loans and interest and fees thereon and all other
Obligations and may, in accordance with Section 8.03, be recorded after a
Default or an Event of Default occurs, and upon such recording will replace the
Recycled Mortgages.

 

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(iv) In connection with the addition of any property to the Borrowing Base
pursuant to Section 9.03 hereof (including the initial Borrowing Base Properties
as of the Effective Date), Borrower shall be required to deliver to
Administrative Agent a Mortgage as required by the terms of such Article IX, to
be held by Administrative Agent on the same terms as required by Section
5.18(a)(iii) hereof.

 

(v) From time to time upon the reasonable request of Administrative Agent,
Borrower shall promptly cause the Subsidiary Guarantors and the 163 Washington
SPE to deliver the Mortgages, dated a then-current date, to Administrative
Agent, each re-executed by the respective Subsidiary Guarantor and the 163
Washington SPE and newly acknowledged, it being expressly understood that,
notwithstanding any requirement by a Governmental Authority or pursuant to any
Legal Requirement that a mortgage must be recently acknowledged to be recorded,
the Mortgages originally delivered to Administrative Agent shall continue to
grant to Administrative Agent a first priority mortgage lien in and to the
Borrowing Base Properties.

 

(vi) Upon recordation of any Mortgage in accordance with the terms hereof,
including the Recycled Mortgages which will be recorded upon the Effective Date,
Borrower shall deliver to Administrative Agent, for the benefit of the Lenders,
a title insurance policy insuring such Mortgage, and such co-insurance and/or
re-insurance as Administrative Agent may reasonably require. The title insurance
policy insuring each Mortgage shall be in form and substance reasonably
satisfactory to Administrative Agent. Borrower shall pay for reasonable and
documented fees and expenses for Administrative Agent's title insurance policy,
title and lien searches, intangibles taxes, personal property taxes, recording
fees and due diligence expenses.

 

(vii) For the avoidance of doubt, except for the Recycled Mortgages which will
be recorded upon the Effective Date, the Mortgages shall not be recorded if no
Default or Event of Default has occurred and is then continuing but each
Mortgage shall, as of the date of each such Mortgage and at all times while it
is held by Administrative Agent pursuant hereto, (i) nonetheless be effective
and (ii) upon recordation thereof in accordance with the terms hereof grant to
Administrative Agent a first priority mortgage lien in and to the Borrowing Base
Property described therein, which shall be subject to no exceptions other than
Permitted Exceptions.

 

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(viii) Borrower shall deliver such security agreements, financing statements,
assignments and other Security Documents (all of which shall be deemed part of
the Security Documents), in form and substance reasonably satisfactory to
Administrative Agent, as Administrative Agent acting on behalf of the Lenders
may reasonably request from time to time for the purpose of granting to, or
maintaining or perfecting in favor of, the Lenders, first and exclusive security
interests in the Equity Interests of the Subsidiary Guarantors (and, upon
obtaining the 163 Washington Consent, the 163 Washington Member) and when
required hereunder, the Mortgages, together with other reasonable assurances as
to the enforceability and priority of the Lenders' Liens and assurances of due
recording and documentation of copies of the Security Documents, as
Administrative Agent may reasonably require to avoid material impairment of the
Liens and security interests granted or purported to be granted pursuant to this
Section 5.18, provided that such documents do not increase Borrower's
obligations or liabilities under the Loan Documents or decrease Borrower's
rights or remedies under the Loan Documents.

 

(ix) Notwithstanding anything to the contrary set forth in this Section 5.18(a),
solely with respect to 163 Washington, Borrower covenants and agrees as follows:

 

(A) On or prior to the Effective Date Borrower shall request in writing the
consent of the Black Walnut Partner pursuant to the 163 Washington JV Agreement
to the pledge by Borrower of its Equity Interest in the 163 Washington Member,
such consent to include an acknowledgment that upon any foreclosure on such
Equity Interest pursuant to a Pledge Agreement to be entered into following the
delivery of such consent, Administrative Agent, on behalf of the Lenders, shall
be entitled to be admitted to the 163 Washington Member as a substitute member
and to assume all of the rights, powers and obligations of a “Member” and as
“Manager” thereunder (notwithstanding any requirements for admission as a Member
and Manager thereunder) and which consent shall be otherwise in form and
substance acceptable to Administrative Agent (the “163 Washington Consent”);

 

(B) In the event that the Black Walnut Partner shall consent in writing to
Borrower’s pledge of its Equity Interest in the 163 Washington Member as set
forth above, within five (5) days following Borrower’s receipt of such consent
Borrower shall (i) deliver an additional Pledge and the other Loan Documents as
required by the terms of Article IX (provided that the Pledge Agreement
delivered in connection with such Pledge shall be subject to the operating
agreement of the 163 Washington Member as supplemented by the 163 Washington
Consent), and (ii) deliver such security agreements, financing statements,
assignments and other Security Documents as are required pursuant to Section
5.18(a)(viii) above with respect to such Pledge;

 

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(C) In the event that the Black Walnut Partner shall decline to consent to
Borrower’s pledge of its Equity Interest in the 163 Washington Member as set
forth above or shall fail to reply to such request for consent, in either case
within thirty (30) days after the Effective Date, Administrative Agent may
thereafter require that Borrower remove 163 Washington from the Borrowing Base
pursuant to the terms of Section 9.03(b) hereof; and

 

(D) In the event that Borrower delivers the Pledge as contemplated in Section
5.18(a)(ix)(B) above and thereafter shall acquire the Black Walnut Partner’s
Equity Interest in the 163 Washington Member (whether pursuant to the terms of
the 163 Washington JV Agreement or otherwise), Borrower shall (ii) deliver an
additional Pledge and the other Loan Documents as required by the terms of
Article IX with respect to the remaining Equity Interest so acquired in 163
Washington Member, and (ii) deliver such security agreements, financing
statements, assignments and other Security Documents (including any opinions of
counsel reasonably requested by Administrative Agent) as are required pursuant
to Section 5.18(a)(viii) above with respect to such Pledge. In the event that
Borrower shall so acquire the Black Walnut Partner’s Equity Interest in the 163
Washington JV, any reference in any representation, covenant or agreement
contained herein or exception thereto which relates to the Equity Interests held
by the Black Walnut Partner as of the Effective Date shall be of no further
force and effect.

 

(b) Each of the REIT and Borrower shall cause (i) all Real Property interests
related to the Borrowing Base Properties, (ii) all personal property (including,
without limitation, any and all construction drawings, construction plans and
architectural renderings relating thereto) owned by the Borrower, any Subsidiary
Guarantor or any of the 163 Entities to the extent applicable and relating to
any Borrowing Base Properties (other than vehicles subject to certificates of
title) and (iii) all of the Pledged Interests to, in each case, be subject at
all times to first priority, perfected, as to the Pledge, and perfected and
title insured as of recording in accordance with the terms hereof, as to the
Mortgages and, in the case of the Real Property interest in each Borrowing Base
Property (whether leased or owned), Liens in favor of the Administrative Agent
at all times as required pursuant to this Agreement and the Loan Documents, to
secure the Obligations pursuant to the terms and conditions of the Security
Documents or, with respect to any such property acquired subsequent to the
Effective Date, such other additional security documents as the Administrative
Agent shall request and as it shall then be entitled to obtain hereunder and
under the Loan Documents, subject in any case only to Permitted Exceptions;

 

(c) With respect to any Collateral described in the foregoing clause (b),
Borrower shall deliver, shall cause each Subsidiary Guarantor or 163 Entity to
deliver or shall use commercially reasonable efforts to cause any other Person
to deliver, such other documentation as the Administrative Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, real estate title insurance policies,
surveys, environmental reports in Borrower’s, the REIT’s or each Subsidiary
Guarantor’s or 163 Entity’s possession, custody or control, landlord’s waivers,
certified resolutions and other organizational and authorizing documents of such
Person, favorable opinions of counsel to such Person (which shall cover, among
other things, the legality, validity, binding effect and enforceability of the
documentation referred to above and, at all times as required pursuant to this
Agreement and the Loan Documents, the perfection of the Administrative Agent’s
Liens thereunder) and other items of the types required to be delivered pursuant
to Section 4.01(a), all in form, content and scope satisfactory to the
Administrative Agent;

 

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(d) Each of the REIT and Borrower shall indemnify and/or reimburse (as
applicable) the Administrative Agent for any and all reasonable and
out-of-pocket costs, expenses, losses, claims, fees or other amounts paid or
incurred by the Administrative Agent to the extent paid or incurred in
connection with the filing or recording of any documents, agreement or
instruments related to the Collateral, the protection of any of the Collateral,
its rights and interests therein or the Borrower’s or any Subsidiary Guarantor’s
or any of the 163 Entities’ underlying rights and interests therein or the
enforcement of any of its other rights with respect to the Collateral; provided,
that the reimbursement and indemnity obligations set forth in this clause (c)
shall be in addition to and in furtherance of all other reimbursement or
indemnity obligations of the REIT, the Borrower or any of their respective
Subsidiaries referenced herein or in any other Loan Document.

 

(e) Each of the REIT and Borrower shall pay all Taxes, charges, filing,
registration and recording fees, excises and levies payable with respect to the
Notes or the Liens created or secured by the Loan Documents, other than Excluded
Taxes. If there shall be enacted any Law (i) affecting any Lien on any Borrowing
Base Property, or (ii) changing existing Laws of taxation of mortgages, deeds of
trust, security deeds, or debts secured by real property, or changing the manner
of collecting any such Taxes, the REIT and Borrower shall promptly pay to the
Administrative Agent, on demand, all Taxes, costs and charges for which the
Administrative Agent or any Lender is or may be liable as a result thereof
(other than Excluded Taxes); however, if such payment would be prohibited by Law
or would render the Loans usurious, then instead of collecting such payment, the
Administrative Agent may (and on the request of the Required Lenders shall)
declare all amounts owing under the Loan Documents to be immediately due and
payable.

 

Section 5.19 Alterations. Borrower shall obtain the Administrative Agent’s prior
written consent, which consent shall not be unreasonably withheld or delayed, to
any alterations to any improvements upon any Borrowing Base Property that could
reasonably be expected to have a Material Adverse Effect or to have a (a)
material adverse effect with respect to the financial condition or the
operations of such Borrowing Base Property, (b) material adverse effect on the
Borrowing Base Asset Value of such Borrowing Base Property, (c) material adverse
effect on the ownership of such Borrowing Base Property, or that would involve
more than $10,000,000 to complete, other than (i) tenant improvement work
performed pursuant to the terms of any Lease executed on or before the Effective
Date, and (ii) tenant improvement work performed pursuant to the terms and
provisions of a lease and not adversely affecting any structural component of
any improvements, any utility or HVAC system contained in any improvements or
the exterior of any building constituting a part of any improvements at any
Borrowing Base Property, and in the case of any such alterations, shall
discharge all mechanic’s liens resulting from such alterations within thirty
(30) days of becoming aware of same.

 

105

 

Section 5.20 Special Purpose Entity. Each Subsidiary Guarantor and the 163
Washington SPE shall at all times be, and the REIT and Borrower shall cause each
Subsidiary Guarantor and the 163 Washington SPE to at all times be, a Special
Purpose Entity.

 

Section 5.21 Ground Leases. With respect to any Borrowing Base Property that is
subject to an Approved Ground Lease, each of the REIT and Borrower shall, and
shall cause each Subsidiary Guarantor to:

 

(a) Diligently perform and observe in all material respects all of the terms,
covenants, and conditions of such Approved Ground Lease as tenant under such
Approved Ground Lease within any time periods required therein for such
performance;

 

(b) Promptly notify Administrative Agent of (i) the giving to the applicable
Subsidiary Guarantor of any notice of any default by such Subsidiary Guarantor
under such Approved Ground Lease and deliver to Administrative Agent a true copy
of each such notice within five (5) Business Days of such Subsidiary Guarantor’s
receipt thereof, (ii) the obtaining of any knowledge of any bankruptcy,
reorganization, or insolvency of the landlord under such Approved Ground Lease
or of the receipt of any notice thereof, and deliver to Administrative Agent a
true copy of such notice within five (5) Business Days of the applicable
Subsidiary Guarantor’s receipt and (iii) the commencement of any judicial or
arbitration proceeding relating to such Approved Ground Lease. If the trustee in
bankruptcy of the lessor under the Approved Ground Lease or the lessor as
debtor-in-possession rejects any Approved Ground Lease, such Subsidiary
Guarantor shall obtain the prior written consent of the Administrative Agent
before it exercises its right to elect to treat the Approved Ground Lease as
terminated or to remain in possession for the balance of the terms of the Ground
Lease pursuant to Section 365(f) of the Bankruptcy Code; and

 

(c) Exercise any individual option to extend or renew the term of an Approved
Ground Lease within the window provided in such Approved Ground Lease for the
exercise thereof upon demand by Administrative Agent made at any time but not
less than thirty (30) days prior to the last day upon which any such option may
be exercised.

 

If the applicable Subsidiary Guarantor shall default in the performance or
observance of any term, covenant, or condition of any Approved Ground Lease on
the part of such Subsidiary Guarantor and shall fail to cure the same prior to
the expiration of any applicable cure period provided thereunder, then
Administrative Agent, subject to the terms thereof, shall have the right, but
shall be under no obligation, to pay any sums and to perform any act or take any
action as may be appropriate to cure the same, to the end that the rights of
such Subsidiary Guarantor in, to, and under such Approved Ground Lease shall be
kept unimpaired and free from default. If the landlord under any Approved Ground
Lease shall deliver to Administrative Agent a copy of any notice of default
under such Acceptable Ground Lease, then such notice shall constitute full
protection to Administrative Agent for any action taken or omitted to be taken
by Administrative Agent, in good faith, in reliance thereon.

 

106

 

ARTICLE VI

NEGATIVE COVENANTS

 

Until the Commitments have expired or terminated, the principal of and interest
on each Loan and all Unreimbursed Amounts and fees payable hereunder have been
paid in full, and all L/C Obligations shall equal zero, each of the REIT and
Borrower covenants and agrees with the Secured Parties that:

 

Section 6.01 Financial Covenants.

 

(a) Borrower. The REIT and Borrower shall not permit:

 

(i) The Credit Exposure at any time to exceed sixty percent (60%) of the
Borrowing Base Asset Values of all Borrowing Base Properties; or

 

(ii) The Debt Service Coverage Ratio for any fiscal quarter to be less than
1.40:1.00.

 

provided, however, that upon a violation of this Section 6.01(a) by the
Borrower, no Default shall exist hereunder unless the Borrower has failed to
cure such Default within five (5) days of receiving notice of such Default.

 

(b) REIT. The REIT agrees as follows:

 

(i) Consolidated Leverage Ratio. The Consolidated Leverage Ratio of the REIT and
its consolidated Subsidiaries shall not exceed sixty percent (60%) at any time;
provided, however, that if, on any date, the Consolidated Leverage Ratio exceeds
sixty percent (60%), there shall be a sixty (60) day grace period to cure such
breach provided that (i) the REIT delivers written notice of the failure to
comply with such ratio within three (3) Business Days after a Responsible
Officer of the REIT obtains knowledge of such failure; (ii) at all times during
such grace period, such ratio does not exceed sixty-five percent (65%); (iii) on
the tenth (10th) Business Day following the commencement of such grace period,
and on each tenth (10th) Business Day thereafter through the end of such grace
period, the REIT shall deliver to the Administrative Agent an officer’s
certificate of a Responsible Officer that certifies as to the amount of the
Consolidated Leverage Ratio as of such date, which certificate shall be
accompanied by calculations in respect thereof in such detail as may be
satisfactory to the Administrative Agent and shall be in form and substance
satisfactory to the Administrative Agent, and (iv) such grace period shall only
be available a maximum of five (5) times throughout the term of the Loans, and
no more than two (2) times in any four (4) consecutive calendar quarters. The
foregoing grace period shall immediately terminate in the event that any of the
conditions in clause (i), (ii), (iii) or (iv) is not satisfied, time being of
the essence.

 

(ii) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio for the most
recent fiscal quarter shall not be less than 1.50:1.00.

 

107

 

(iii) Tangible Net Worth. The Tangible Net Worth of the REIT and its
consolidated Subsidiaries shall not be less than the sum of (i)  $200,000,000
plus (ii) an amount equal to eighty-five percent (85%) of Net Equity Proceeds by
reason of the issuance and sale, from and after the Effective Date, of Equity
Interests of the REIT, the Borrower and their respective Subsidiaries (other
than issuances to the Borrower or a wholly-owned Subsidiary of the Borrower),
including upon any conversion of debt securities of the REIT, the Borrower and
their respective Subsidiaries into such Equity Interests.

 

(iv) Recourse Indebtedness Ratio. The ratio, expressed as a percentage, of
(i) Indebtedness of the Consolidated Group that is Recourse (excluding the
Indebtedness under this Agreement and the Loan Documents) to (ii) Total Asset
Value shall not exceed ten percent (10%) as of the end of the most recently
ended fiscal quarter.

 

(v) Secured Leverage Ratio. The ratio, expressed as a percentage, of (i) the
Secured Indebtedness of the REIT and its consolidated Subsidiaries to (ii) Total
Asset Value shall not exceed sixty percent (60%) as of the end of the most
recently ended fiscal quarter.

 

(vi) Unhedged Variable Rate Indebtedness. The ratio, expressed as a percentage,
of (i) the Indebtedness of the REIT and its consolidated Subsidiaries that is
Variable Rate Indebtedness (exclusive of the Indebtedness under this Agreement
and the Loan Documents) to (ii) Total Asset Value shall not exceed twenty-five
percent (25%) as of the end of the most recently ended fiscal quarter.

 

(vii) Restricted Payments. The REIT shall not, directly or indirectly, and shall
not permit any member of the Consolidated Group, directly or indirectly, to pay
any Restricted Payment, except (a) the REIT may make the Restricted Payments in
respect of its Equity Interests to the extent not prohibited below in this
Section, (b) the Borrower and each direct Subsidiary of the REIT may make
Restricted Payments to the REIT in order for the REIT to make payments that are
not prohibited below in this Section, (c) each Subsidiary Guarantor or 163
Entity may make Restricted Payments (directly or indirectly) to the Borrower,
(d) the REIT may declare and make dividend payments or other Restricted Payments
payable solely in the capital stock of the REIT so long as no Change of Control
shall result therefrom, (e) REIT, Borrower and each Subsidiary may make cash
payments in lieu of the issuance of fractional shares in connection with the
exercise of warrants, options or other securities convertible into or
exchangeable for Equity Interests of REIT, Borrower or any Subsidiary, (f) REIT,
Borrower and each Subsidiary may make Restricted Payments in connection with the
implementation of or pursuant to any retirement, health, stock option and other
benefit plans, bonus plans, performance-based incentive plans, and other similar
forms of compensation for the benefit of the directors, officers and employees
of REIT, Borrower and the Subsidiaries, provided that in no event shall such
Restricted Payments made in connection with any of the foregoing exceed
$5,000,000 in the aggregate for any given fiscal year for any period that there
are less than five (5) Borrowing Base Properties, (g) REIT may, and Borrower may
make dividends or distributions to REIT to allow REIT to, make payments in
connection with dividend reinvestment programs and share repurchase programs,
provided that in no event shall such Restricted Payments made in connection with
any of this clause (g) exceed $65,000,000 in the aggregate for any fiscal year
and provided that no such dividends or distributions will be permitted following
the occurrence and during the continuance of any Default or Event of Default
hereunder, (h) REIT, Borrower or any Credit Party may declare and make any
Restricted Payment of assets other than Borrowing Base Properties (or the Equity
Interest of any Subsidiary which is not a 163 Entity and the sole assets of
which are not Borrowing Base Properties) provided that (i) such assets are
acquired in connection with a Fundamental Change, (ii) such Restricted Payment
shall be made within one year of such Fundamental Change, (iii) immediately
prior thereto, and immediately thereafter and after giving effect thereto, no
Default or Event of Default has occurred or would result therefrom and (iv)
Borrower and REIT will remain in pro forma compliance with the covenants set
forth in this Section 6.01 after giving effect to such Restricted Payment, (i)
Borrower and REIT may purchase, redeem or otherwise acquire Equity Interests
issued by it solely with the proceeds received from the substantially concurrent
issue of new shares of its common Equity Interests or other Equity Interests
provided that such purchase, redemption or acquisition is limited to the amount
of such proceeds so received and (j) REIT or Borrower may, and Borrower may make
dividends or distributions to REIT, to allow REIT do make, any (i) cash
settlement payments and (ii) any cash interest payments, in each case in
accordance with the terms of any series of convertible Indebtedness of REIT or
the Borrower and issued by REIT or Borrower and otherwise permitted hereunder.
Notwithstanding the foregoing, the REIT may, for any given fiscal quarter or
consecutive fiscal quarters, make Restricted Payments in cash to the holders of
its Equity Interests during such fiscal quarter or quarters in an amount that
would not exceed the greater of (1) so long as no Default or Event of Default
exists or would result therefrom, the FFO Distribution Allowance for such
quarter or quarters or (2) so long as no Default or Event of Default as
described in Section 7.01(a), 7.01(f), and 7.01(g) shall exist or would result
therefrom and neither the Revolving Loans nor the Term Loans shall have become
due and payable (whether upon stated maturity or acceleration or otherwise), the
amount necessary for the REIT to maintain REIT Status.

 

108

 

 

(c) Provisions relative to the Calculation of Total Asset Value. For purposes of
the calculation of Total Asset Value under this Agreement:

 

(i) The Appraised Value of any Borrowing Base Property the value of which is
included in the calculation of Total Asset Value shall be determined in
accordance with the other applicable provisions of this Agreement, including,
without limitation, Section 9.01(b).

 

(ii) An Appraisal shall be required for each Included Property that is not a
Borrowing Base Property unless the Borrower elects that the Total Asset Value
shall be calculated based on the Estimated Value of such Property pursuant to
the terms hereof, provided that any Appraisal obtained within six (6) months
prior to the Effective Date (with respect to any Included Property the value of
which is included in the Total Asset Value as of the Effective Date) or within
six (6) months prior to the date that the value of such Included Property is
first included in the Total Asset Value (with respect to any Included Property
the value of which is first included in the Total Asset Value subsequent to the
Effective Date) and that is reasonably acceptable to Administrative Agent in its
reasonable discretion shall satisfy the requirements of this clause (ii),
subject to the provisions of Sections 6.01(c)(iii) and (iv).

 

109

 

(iii) Notwithstanding anything to the contrary in clause (ii) above, in
Administrative Agent’s reasonable discretion, a new Appraisal may be required,
at Borrower’s expense, for each Included Property commencing (i) twenty four
(24) months from the Effective Date (with respect to any Included Property the
value of which was included in the Total Asset Value as of the Effective Date),
(ii) twenty four (24) months from the date that the value of any improved Real
Property is thereafter included in the Total Asset Value (with respect to any
such subsequently-added Included Property), and (iii) twenty four (24) months
from the date of any Appraisal of such Included Property obtained pursuant to
this Section 6.01(c)(iii). Borrower may, at its election and expense, also
request that Administrative Agent obtain a new Appraisal of any improved Real
Property at any time. For purposes of this Section 6.01(c)(iii), an Appraisal
that has a date of value that is no earlier than six (6) months prior to the end
of any applicable 24-month period described in this Section 6.01(c)(v) shall, if
it is approved by Administrative Agent and complies with the requirements of
this Agreement, be deemed to satisfy the requirements herein for a new Appraisal
to be obtained commencing on each such 24-month period.

 

(iv) If the Net Operating Income for any Included Property shall decrease (A) by
more than five percent (5%) from one fiscal quarter to the next and the Net
Operating Income of such Included Property for the next succeeding fiscal
quarter does not make up for such decline in Net Operating Income or (B) ten
percent (10%) or more from the Net Operating Income of such Included Property
for the previous calendar year, then a new Appraisal for such Included Property
shall be required to be obtained at Borrower’s cost.

 

(v) For purposes of determining the Appraised Value of any Included Property
hereunder, the most recent Appraisal thereof obtained by and accepted by
Administrative Agent in compliance herewith shall govern the determination of
the Appraised Value thereof, so long as such Appraisal remains current and a new
Appraisal is not required to be obtained for such Included Property pursuant to
Section 6.01(c)(iii) or (iv). If at any time, a new Appraisal of any Included
Property is required, but such new Appraisal has not timely been obtained by
Administrative Agent, then the Included Property Asset Value of such Included
Property shall equal the lesser of the Acquisition Cost of such Included
Property or the Estimated Value thereof. In addition, unless Borrower elects to
calculate the Included Property Asset Values for all Included Properties based
on their Appraised Values, the Included Property Asset Value of each such
Included Property for which an appraisal has not been obtained as required
hereby shall equal the lesser of the Acquisition Cost of such Included Property
or the Estimated Value thereof.

 

110

 

(vi) Borrower may elect, pursuant to the definition of “Included Property Asset
Value,” to require the determination of the component of the definition of
Included Property Asset Value referenced in clause (b) of the definition thereof
to be based upon the Estimated Values of the Included Property or the Appraised
Value of each Included Property only once per fiscal quarter, in connection with
the delivery by Borrower to Administrative Agent of the Compliance Certificate
that is due to be delivered during such fiscal quarter, and such election shall
be made on an “all or none” basis such that, if Borrower elects to require such
determination to be based on Appraised Values, such election must be made as to
all Included Properties, and if Borrower elects to require such determination to
be based on Estimated Values, such election must be made as to all Included
Properties (provided, however, that in the event that Borrower obtains an
updated Appraisal pursuant to Section 9.01(b)(viii) Borrower shall be permitted
to require that such determination be made on the basis of such updated
Appraised Value); and provided, further, that if the Appraised Value of one or
more Included Properties cannot be calculated solely because Appraisals have
been ordered but have not yet been delivered for such Included Properties as
required hereby, the Included Property Asset Value may nonetheless be determined
according to the Estimated Value of each such affected Included Property and the
Appraised Value of all other Included Properties until such time as an Appraisal
for such affected Included Property has been obtained as provided herein.

 

(vii) With respect to the calculation of Total Asset Value, if the REIT,
Borrower or any of their Subsidiaries have made Investments in Assets of the
types referred to in Section 6.15(b) through (g) that have values that exceed
the portion of the Total Asset Value that Investments in Assets of those types
are permitted to have pursuant to Section 6.15(b) through (g), then the Total
Asset Value shall be calculated without regard to the portion of the values of
those Investments that exceed the portion of the Total Asset Value that
Investments in Assets of those types are permitted to have pursuant to Section
6.15(a) through (g).

 

(d) Provision Relative to Calculation of certain Financial Covenants. For the
purpose of calculating the Estimated Values and covenants set forth in this
Section 6.01 that contain calculations dependent upon the Adjusted Borrowing
Base Net Operating Income or Adjusted Net Operating Income of any Asset, and in
connection with any related definitions set forth in Section 1.01 that are used
in such calculations, to the extent any such covenant (or definition) references
a trailing four (4) fiscal quarters calculation methodology, but a particular
Asset that is included as part of the calculation has not been owned by the
applicable Person for such four (4) fiscal quarters, the Adjusted Borrowing Base
Net Operating Income or Adjusted Net Operating Income of the Applicable Asset
shall be annualized, based on the Adjusted Borrowing Base Net Operating Income
or Adjusted Net Operating Income, respectively, of such Asset for the applicable
quarters during its period of ownership.

 

111

 

Section 6.02 Liens. Each Credit Party shall not create, incur, assume or permit
to exist any Lien or Negative Pledge (other than (i) the Lien of the Security
Documents and (ii) in connection with any Borrowing Base Property, any Permitted
Exceptions) on (a) the Assets constituting the Borrowing Base Properties,
(b) the legal or beneficial interest in any Subsidiary Guarantor, any of the 163
Entities or in Borrower or (c) the other Collateral for the Loans and
Obligations.

 

Section 6.03 Fundamental Changes.

 

(a) Mergers, Consolidations, Disposal of Assets, Etc. No Credit Party shall
merge or consolidate, or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), terminate, discontinue its business or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of its business or property, whether now
or hereafter acquired, except that, so long as no Event of Default has occurred
and is continuing or would result therefrom: (i) any Credit Party may dispose of
a Property owned by such Credit Party in the ordinary course of business and for
fair value; provided that if such Property is a Borrowing Base Property, then
Borrower shall have complied with Section 9.03(b); and (ii) REIT or Borrower
may, directly or indirectly, merge or consolidate with any other Person so long
as (A) REIT or Borrower shall be the survivor thereof; (B) Borrower shall have
given the Administrative Agent and the Lenders at least 30 days’ prior written
notice of such consolidation or merger; (C) REIT and Borrower shall have
provided to the Administrative Agent and the Lenders all documentation and other
information that the Administrative Agent (on its own behalf or on behalf of any
Lender) requests in order to comply with its ongoing obligations under
applicable “know your customer” and anti-money laundering rules and regulations,
including the Patriot Act; (D) the Administrative Agent has not advised Borrower
that such merger or consolidation would result in a violation of any
concentration or lending limits applicable by law or regulation applicable to
the Administrative Agent or any such Lender; (E) immediately prior thereto, and
immediately thereafter and after giving effect thereto, no Default or Event of
Default has occurred or would result therefrom; and (F) at the time of
consummation of the merger, Borrower shall have delivered to the Administrative
Agent for distribution to each of the Lenders a Compliance Certificate,
calculated on a pro forma basis based on information then available to the
Borrower, evidencing the continued compliance by the Credit Parties with the
terms and conditions of this Agreement and the other Loan Documents, including
without limitation, the financial covenants contained in Section 6.01, after
giving effect to such consolidation or merger (each of clause (i) - (ii), a
“Fundamental Change”). Nothing in this Section shall be deemed to prohibit
(i) subject to Section 9.01(c), the leasing of all or portions of Assets in the
ordinary course of business for occupancy by the tenants thereunder, or
(ii) subject to compliance with the provisions of Article IX hereof, the sale of
Assets in the ordinary course of Borrower’s business.

 

(b) Restriction on Amendments. At least twenty (20) days prior to amending (or
causing or permitting to be amended), modifying or waiving any of the provisions
of any of the Organizational Documents of any Credit Party in any material
respect, the REIT and Borrower shall deliver a written notice (the “Proposed
Modification Notice”) to Administrative Agent setting forth the specific details
of the proposed amendment, modification and/or waiver (each, a “Proposed
Modification”). Any Proposed Modification which will materially and adversely
affect the Administrative Agent will require the prior written consent of
Administrative Agent, which consent shall not be unreasonably withheld,
conditioned, or delayed; provided, however, that the Required Lenders’ consent
in their sole and absolute discretion shall be required for any Proposed
Modification which would materially and adversely affect the Lenders or
Administrative Agent, including a modification that would adversely affect the
Collateral for the Loans or repayment of any of the Obligations. Neither
Borrower nor Guarantor will change its chief executive office or place of
organization unless the applicable party shall have provided Administrative
Agent with thirty (30) days’ prior written notice of such change (but in any
event, within the period required pursuant to the UCC) and there shall have been
taken such action, reasonably satisfactory to Administrative Agent, as may be
necessary to maintain the security interest in, and the Liens upon, the
Collateral granted under the Security Documents at all times fully perfected, as
to the Pledge, and perfected as of recording in accordance with the terms
hereof, as to the Mortgages, and in full force and effect.

 

112

 

Section 6.04 Indebtedness. Borrower, each Subsidiary of Borrower that holds any
interest in any Subsidiary Guarantor, each of the 163 Entities and each
Subsidiary Guarantor shall not create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness except (a) Indebtedness incurred pursuant to this Agreement and
(b) Trade Payables. The foregoing covenant does not limit the ability of
Subsidiaries that are not Subsidiary Guarantors and that do not hold any
interest in any Subsidiary Guarantor (other than the 163 Entities) from
creating, incurring, assuming, suffering to exist or otherwise becoming or
remaining directly or indirectly liable with respect any Indebtedness so long as
neither Borrower, nor any Subsidiary Guarantor, nor any Subsidiary that is not a
Subsidiary Guarantor (other than the 163 Entities) and that holds any interest
in any Subsidiary Guarantor nor any 163 Entity has any obligations with respect
thereto.

 

Section 6.05 Transactions with Affiliates; Joint Ventures.

 

(a) Transactions with Affiliates. No Credit Party shall enter into any
transaction with any Affiliate of Borrower or of any such Person, except (a) as
expressly permitted by this Agreement, or (b) in the ordinary course of business
and pursuant to the reasonable requirements of the business of Borrower or such
Person, (c) reasonable and customary fees paid to, and indemnification
arrangements with, members of the board of directors (or similar governing body)
of any of the Credit Parties or the issuance of directors’ or nominees’
qualifying shares, (d) compensation and indemnification arrangements for
directors (or equivalent), officers and employees of REIT, Borrower and the
Subsidiaries, including retirement, health, option and other benefit plans,
bonuses, performance-based incentive plans, and other similar forms of
compensation, the granting of Equity Interests to directors (or equivalent),
officers and employees of REIT, Borrower and the Subsidiaries in connection with
the implementation of any such arrangement, and the funding of any such
arrangement, (e) Restricted Payments permitted under Section 6.01(b)(vii), (f)
Investments permitted under Section 6.15 and (g) transactions between or among
Borrower and the Subsidiaries permitted under Section 6.03 not involving any
other Affiliate; in each case, upon fair and reasonable terms no less favorable
to such Person than would obtain in a comparable arm’s-length transaction with a
Person not such an Affiliate.

 

113

 

(b) Joint Ventures. No Subsidiary Guarantor or 163 Entity shall enter into any
joint venture or other co-ownership relationship for any Asset with any Person
(other than with respect to the Asset known as 163 Washington Street, Brooklyn,
New York, in which third parties own less than a 5% indirect interest).

 

Section 6.06 Restrictive Agreements. No Credit Party shall directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon the ability
of such Credit Party to create, incur or permit to exist any Lien or Negative
Pledge (other than, in connection with any Real Property, any Permitted
Exceptions or, with respect to 163 Washington, restrictions pursuant to the
organizational documents of any of the 163 Entities as in effect on the
Effective Date) upon any of the Collateral.

 

Section 6.07 Fiscal Year; Fiscal Quarters. No Credit Party shall change its
fiscal year or any of its fiscal quarters, without Administrative Agent’s prior
written consent, which consent shall not be unreasonably withheld, conditioned,
or delayed.

 

Section 6.08 Employees. No Credit Party shall employ or engage any employees at
any time unless such employees are engaged by a Credit Party in connection with
such Credit Party’s normal business operations or in the ordinary course of
owning and operating any Property and with the prior written consent of the
Administrative Agent (which consent shall not be unreasonably withheld or
delayed).

 

Section 6.09 ERISA. (a) No Credit Party shall take any action, or omit to take
any action, which would (i) cause any of such Credit Party’s Assets to be
subject to Title I of ERISA and/or Section 4975 of the Code or (ii) cause the
transactions contemplated by the Loan Documents to be a nonexempt prohibited
transaction (as such term is defined in Section 4975 of the Code or Section 406
of ERISA) that could subject Administrative Agent and/or the Lenders, on account
of any Loan or execution of the Loan Documents hereunder, to any tax or penalty
on prohibited transactions imposed under Section 4975 of the Code or Section
502(i) of ERISA.

 

(b) During the term of the Loans, no Credit Party shall maintain, sponsor or
become obligated to contribute to a “defined benefit plan” (within the meaning
of Section 3(35) of ERISA) or a Multiemployer Plan.

 

Section 6.10 Asset Sales. No Credit Party shall transfer, voluntarily, by
operation of law or otherwise, any Borrowing Base Property other than in
compliance with the requirements for Borrowing Base Removal set forth in Section
9.03(b). No Credit Party shall transfer, voluntarily, by operation of law or
otherwise, any Asset other than a Borrowing Base Property during the occurrence
of any Event of Default or at any other time if such transfer would cause any
Credit Party to be in violation of any of the covenants set forth in
Section 6.01; provided, however, that the following transfers or other
dispositions shall not be prohibited: (i) transfers or dispositions with respect
to Assets other than Borrowing Base Properties during the continuance of an
Event of Default in the event that a purchase and sale agreement has been
entered into for any such Asset with a Person that is not an Affiliate of
Borrower and upon arms’-length terms and all of the sales proceeds therefrom are
immediately after such sale delivered to Administrative Agent to be applied
toward repayment of the Loans and other Obligations then due and owing, with any
remaining amount to be returned to Borrower; (ii) transfers or dispositions of
obsolete or worn out property, whether now owned or hereafter acquired, in the
ordinary course of business; (iii) transfers or dispositions of inventory in the
ordinary course of business; (iv) any transfer of real property due to
condemnation and (v) transfers or dispositions permitted by Section 6.03.

 

114

 

Section 6.11 Prohibited Transfers; REIT Covenants.

 

(a) Transfers of Guarantor Equity Interest. The REIT shall not (i) transfer,
voluntarily, involuntarily, by operation of law or otherwise, all or any part of
its Equity Interest in Borrower in any respect that would result in a Change of
Control without the prior written consent of Administrative Agent and the
Required Lenders, in their sole and absolute discretion; (ii) cause, permit or
suffer to exist any Lien, whether directly or indirectly, upon all or any
portion of its interest in Borrower or any rights to distributions therefrom, or
grant any Negative Pledge with respect thereto; or (iii) fail for any reason
whatsoever, whether voluntarily or involuntarily, to be the sole general partner
of Borrower.

 

(b) Transfers of Borrower Equity Interests. Except in connection with a
Borrowing Base Removal in accordance with Article IX, Borrower shall not
transfer, voluntarily, involuntarily, by operation of law or otherwise, all or
any part of its Equity Interest in any Subsidiary Guarantor or 163 Entity
without the prior written consent of Administrative Agent and the Required
Lenders, in their sole and absolute discretion.

 

(c) Principal Subsidiary. The REIT shall not undertake any act, acquire any
Investment, enter into any transaction, dispose of any asset or otherwise cause
or permit any transaction to occur whereby Borrower ceases to be the principal
Subsidiary of the REIT through which the REIT directly or indirectly holds all
or substantially all of its Assets.

 

Section 6.12 Management Fees. No Credit Party shall pay property management or
similar fees in connection with the Transactions, provided that the foregoing
shall not prohibit Subsidiary Guarantors or the 163 Entities from paying
management, investment advisory fees or similar fees in connection with the
management of the Borrowing Base Properties and, provided further, that nothing
herein shall prohibit any payments pursuant to the agreements set forth on
Schedule 6.12 hereto.

 

Section 6.13 Subsidiaries. The REIT and Borrower shall not fail to cause each of
the Subsidiary Guarantors and each of the 163 Entities at all times to be a
Special Purpose Entity and a wholly-owned (except with respect to the 163
Entities as to which third parties hold less than 5% of the Equity Interests)
Domestic Subsidiary (whether direct or indirect) of the Borrower. The REIT and
the Borrower shall not fail to cause (a) Borrower to own a direct 99.45% Equity
Interest in the 163 Washington Member , (b) Borrower to own an indirect 97.39%
Equity Interest in the 163 Washington JV, or (c) Borrower to own an indirect
97.39% Equity Interest in the 163 Washington SPE.

 

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Section 6.14 Taxation of Borrower. Borrower shall at all times be taxed as a
partnership under the Code and not as an association taxable as a corporation.
Each Subsidiary Guarantor and 163 Entity shall be treated as an entity
disregarded from Borrower for U.S. federal income tax purposes.

 

Section 6.15 Line of Business; Investments. Neither the REIT nor Borrower shall,
nor shall the REIT or Borrower permit any of their respective Subsidiaries to,
enter into or acquire any Investment other than, or engage in any material line
of business substantially different from, Investments in Real Properties (to the
extent permitted hereunder and in accordance with this Agreement) which are used
as offices, retail space, and multifamily housing, parking or distribution
facilities or any combination thereof, and any business activities substantially
related or incidental thereto. Neither the REIT nor the Borrower shall, nor
permit any of their respective Subsidiaries to, make any Investments, or engage
in any business, other than:

 

(a) Investments by the REIT or Borrower in Real Properties (to the extent
permitted hereunder and in accordance with this Agreement) which are used as
offices, retail space, multifamily housing, parking facilities (so long as they
are operated by a third-party operator) or distribution facilities which meet
the conditions set forth in Section 9.01(b)(v) hereof, or any combination
thereof, and any business activities substantially related or incidental
thereto;

 

(b) Investments by the REIT or Borrower in non-wholly owned subsidiaries and
unconsolidated Affiliates; provided that such Investments in the aggregate for
the REIT, Borrower, Subsidiary Guarantors and the 163 Entities shall not
collectively exceed fifteen percent (15%) of Total Asset Value;

 

(c) Investments by the REIT or Borrower in undeveloped or unimproved Real
Property; provided that such Investments in the aggregate for the REIT,
Borrower, Subsidiary Guarantors and the 163 Entities shall not collectively
exceed five percent (5%) of Total Asset Value; and

 

(d) Investments by the REIT or Borrower in underdeveloped, partially
constructed, or partially improved Real Property; provided that such Investments
in the aggregate for the REIT, Borrower, Subsidiary Guarantors and the 163
Entities shall not collectively exceed ten percent (10%) of Borrower’s Total
Asset Value;

 

(e) Investments by the REIT or Borrower in loans secured, in whole or in part,
by a first-lien mortgage or deed of trust upon Real Property, provided that such
investments in the aggregate for the REIT and Borrower shall not collectively
exceed ten percent (10%) of Total Asset Value;

 

(f) Investments in the form of cash or Cash Equivalents or other short term
liquid Investments approved by the Administrative Agent;

 

(g) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, provided that such Investments in the aggregate for
the REIT, Borrower and Subsidiaries shall not collectively exceed five percent
(5%) of Total Asset Value;

 

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(h) Investments by the REIT or Borrower permitted under applicable law in the
publicly traded Equity Interests of real estate investment trust or other real
estate companies conducting business, services or activities substantially
similar or related to those engaged in by the REIT and its Subsidiaries on the
Effective Date not to at any time exceed five percent (5%) of Total Asset Value;
and

 

(i) Investments by the REIT or Borrower (i) in the ordinary course of business
constituting 100% of the Equity Interests in any Person the assets of which
(other than immaterial assets) constitute real property assets and which
Investments do not constitute or include the assumption of Indebtedness of such
Person or a Guarantee or Indebtedness of such Person (in each case other than
Non-Recourse Indebtedness) or (ii) constituting all of the Equity Interests in
any other Person so long as (A) unless the assets of such Person (other than
immaterial assets) constitute real property assets which are otherwise permitted
to be acquired by the REIT or Borrower un this Section 6.16, Borrower shall have
given the Administrative Agent and the Lenders at least thirty (30) days’ prior
written notice of such Investment, (B) immediately prior thereto, and
immediately thereafter and after giving effect thereto, no Default or Event of
Default has occurred or would resulted therefrom, and (C) prior to consummating
such Investment, Borrower shall have delivered to the Administrative Agent for
distribution to each of the Lenders a Compliance Certificate, calculated on a
pro forma basis based on information then available to Borrower, evidencing the
continued compliance by the Loan Parties with the financial covenants contained
in Section 9, after giving effect to such Investment.

 

Notwithstanding anything to the contrary herein, the aggregate amount of the
Investments described in clauses (b) through (e) above shall not exceed in the
aggregate for the REIT, Borrower, Subsidiary Guarantors and the 163 Entities
twenty percent (20%) of Total Asset Value.

 

Section 6.16 Zoning. Each of the REIT and Borrower shall not, and shall not
permit any Subsidiary Guarantor or any 163 Entity to, without the Administrative
Agent’s prior written consent, seek, make, suffer, consent to or acquiesce in
any material change or variance in any zoning or land use laws or other
conditions of any Borrowing Base Property or any portion thereof. The Borrower
shall not use or permit the use of any portion of any Borrowing Base Property in
any manner that could result in such use becoming a non-conforming use under any
zoning or land use law or any other Laws, or amend or modify any agreements
relating to zoning or land use matters or permit the joinder or merger of lots
for zoning, land use or other purposes, without the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld, delayed
or conditioned provided that such change could not reasonably be expected to
adversely affect the value of such Borrowing Base Property. Further, without the
Administrative Agent’s prior written consent, the Borrower shall not, and shall
not permit any Subsidiary Guarantor or any 163 Entity to, file or subject any
part of any Borrowing Base Property to any declaration of condominium or
co-operative or convert any part of any Borrowing Base Property to a
condominium, co-operative or other direct or indirect form of multiple ownership
and governance.

 

Section 6.17 No Joint Assessment; Separate Lots. The REIT and Borrower shall
not, and shall not permit any Subsidiary Guarantor or any 163 Entity to, suffer,
permit or initiate the joint assessment of any Borrowing Base Property with any
other real property constituting a separate tax lot in any respect which could
reasonably be expected to have a material adverse effect on such Borrowing Base
Property.

 

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Section 6.18 Special Purpose Entity. No Subsidiary Guarantor or 163 Entity
shall, and the REIT and Borrower shall not permit any Subsidiary Guarantor or
163 Entity to, directly or indirectly make any change, amendment or modification
to its organizational documents, or otherwise take any action which could result
in any Subsidiary Guarantor or 163 Entity not being a Special Purpose Entity.

 

Section 6.19 Borrowing Base Properties; Ground Leases. Each of the REIT and
Borrower shall not, nor shall it permit any other Credit Party to, directly or
indirectly:

 

(a) use or occupy or conduct any activity on, or knowingly permit the use or
occupancy of or the conduct of any activity on any Borrowing Base Properties by
any tenant, in any manner which violates any Legal Requirement or which could
reasonably be expected to have a (a) material adverse effect with respect to the
financial condition or the operations of such Borrowing Base Property, (b)
material adverse effect on the Borrowing Base Asset Value of such Borrowing Base
Property, (c) material adverse effect on the ownership of such Borrowing Base
Property, or which makes void, voidable, or cancelable any insurance then in
force with respect thereto or makes the maintenance of insurance in accordance
with Section 5.05 commercially unreasonable (including by way of increased
premium);

 

(b) Without the prior written consent of Administrative Agent (which consent
shall not be unreasonably withheld or delayed), (i) impose any material
easement, restrictive covenant, or encumbrance upon any Borrowing Base Property,
(ii) execute or file any subdivision plat or condominium declaration affecting
any Borrowing Base Property;

 

(c) Without the prior written consent of the Required Lenders (which consent
shall not be unreasonably withheld or delayed), permit any drilling or
exploration for or extraction, removal or production of any mineral,
hydrocarbon, gas, natural element, compound or substance (including sand and
gravel) from the surface or subsurface of any Borrowing Base Property regardless
of the depth thereof or the method of mining or extraction thereof;

 

(d) Without the prior consent of the Required Lenders, surrender the leasehold
estate created by any Approved Ground Lease or terminate or cancel any Approved
Ground Lease or materially modify, change, supplement, alter, or amend any
Approved Ground Lease, either orally or in writing; or

 

(e) Enter into any Contractual Obligations related to any Borrowing Base
Property providing for the payment of a management fee (or any other similar
fee) to anyone other than a Credit Party if, with respect thereto,
Administrative Agent has reasonably required that such fee be subordinated to
the Obligations in a manner reasonably satisfactory to Administrative Agent, and
a reasonably acceptable subordination agreement has not yet been obtained.

 

Section 6.20 Advisory Agreement. Prior to the Internalization, amend or modify
the Advisory Agreement in a manner that either (i) increases the monetary
obligations of the Borrower thereunder other than to a de minimus extent or (ii)
materially reduces the Borrower’s rights thereunder, in either case without the
prior written consent of the Agent and the Required Lenders, which consent shall
not be unreasonably withheld, conditioned or delayed.

 

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ARTICLE VII

EVENTS OF DEFAULT

 

Section 7.01 Events of Default. If any of the following events (each an “Event
of Default”) shall occur:

 

(a) Borrower shall fail to (i) pay as and when due and payable any principal on
any of the Loans or Obligations (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), or (ii) pay when due any
interest on any of the Loans or Obligations or (iii) pay when due any fees or
any other amount payable hereunder or under any other Loan Document, and such
failure to pay interest, fees or such other amounts described in clause (ii) or
(iii) shall continue for five (5) days after written notice thereof has been
given to Borrower by Administrative Agent;

 

(b) any representation or warranty made or deemed made by or on behalf of any
Credit Party in or in connection with this Agreement or any other Loan Document
or any amendment or modification hereof or thereof, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any other Loan Document or any amendment or
modification hereof or thereof, shall prove to have been incorrect in any
material respect when made or deemed made;

 

(c) (i) any Credit Party shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.01 (provided that in the case of a
failure to comply with Sections 5.01(a), (b), (c), (d), (f), (g) or (j)
Administrative Agent shall have given the applicable Borrower five (5) days’
prior written notice of such failure), Section 5.02, Section 5.08, Section 5.09,
Section 5.18, Section 5.21, Section 6.03(a) or in Article VI, (ii) Borrower
shall fail to observe or perform any covenant, condition or agreement contained
in Section 7(c)(iv), 7(c)(v) or 7(c)(vi) of the Pledge or (iii) any Guarantor
shall fail to pay when due any monetary obligations due to the Administrative
Agent, the L/C Issuer or the Lenders under any Guaranty to which such Guarantor
is party;

 

(d) any Credit Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in the other
subsections of this Section 7.01) or any other Loan Document (except to the
extent a shorter time period is provided for in the applicable Loan Document)
and such failure shall continue unremedied for a period of thirty (30) or more
days after notice thereof from Administrative Agent to such Credit Party;
provided that in the case of any such default which is susceptible to cure but
cannot be cured within thirty (30) days through the exercise of reasonable
diligence, if such Credit Party commences such cure within the initial thirty
(30) day period and diligently prosecutes same to completion, such period of
thirty (30) days shall be extended for such additional period of time as may be
reasonably necessary to cure same, provided such additional period shall in no
event exceed one hundred twenty (120) days;

 

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(e) a payment default by a Credit Party under any Swap Contract or the failure
to pay any obligations arising as a result of a “Termination Event” under any
Swap Contract as to which a Credit Party is the “Affected Party” in each case
beyond applicable notice or cure periods set forth in any such Swap Contract;

 

(f) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Credit Party or its debts, or of a substantial part of its
assets, under any Insolvency Proceeding or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any Credit
Party or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for a period of sixty (60) or
more days or an order or decree approving or ordering any of the foregoing shall
be entered;

 

(g) any Credit Party shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any
Insolvency Proceeding, (ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or petition described in
Section 7.01(g), (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for such
Credit Party or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;

 

(h) either REIT or the Borrower shall admit in writing its inability to pay its
debts as they become due;

 

(i) one or more judgments for the payment of money in an aggregate amount in
excess of $15,000,000 shall be rendered against any Consolidated Entity alone or
any combination thereof, and the same shall remain undischarged for a period of
forty-five (45) consecutive days during which either (i) execution shall not be
effectively stayed or bonded or (ii) a reputable insurance company has not
accepted liability therefor (other than requiring payment of the applicable
deductible);

 

(j) any Consolidated Entity (A) fails to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise),
after the expiration of any applicable grace periods, in respect of any
Indebtedness or Contingent Obligation (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(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 such Indebtedness or
Contingent Obligation 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 permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Contingent Obligation (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
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; provided that this clause (j) shall not apply to any redemption,
conversion or settlement of any convertible Indebtedness of REIT or the Borrower
(and cash in lieu of fractional shares or units) pursuant to its terms unless
such redemption, conversion or settlement results from a default thereunder or
an event of a type that otherwise constitutes an Event of Default or the
required amount payable in respect of such redemption, conversion or settlement
is not timely paid;

 

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(k) the written assertion by any Governmental Authority against any Consolidated
Entity of (or there shall have been asserted against any Consolidated Entity)
any claims or liabilities, whether accrued, absolute or contingent, based on or
arising from the generation, storage, transport, handling or disposal of
Hazardous Materials by such Consolidated Entity or any of its Subsidiaries or
predecessors that, in the reasonable judgment of Administrative Agent, are
reasonably likely to be determined adversely to such Consolidated Entity, and
the amount thereof (either individually or in the aggregate) will have a
Material Adverse Effect (insofar as such amount is payable by such Consolidated
Entity but after deducting any portion thereof that is reasonably expected to be
paid by other creditworthy Persons jointly and severally liable therefor);

 

(l) subject to the provisions of Article IX, the Liens created by the Security
Documents shall at any time not constitute a valid and perfected Lien, as to the
Pledge, or a valid and perfected Lien as of the time of recording to the extent
permitted herein, on the collateral intended to be covered thereby (to the
extent perfection by filing, registration, recordation or possession is required
herein or therein) in favor of Administrative Agent, free and clear of all other
Liens (other than Liens under the respective Security Documents and Permitted
Exceptions), or, except for expiration, any of the Security Documents shall for
whatever reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by any Credit Party;

 

(m) any Guaranty shall for any reason be revoked or invalidated, or otherwise
cease to be in full force and effect, or any Guarantor shall contest in any
manner the validity or enforceability thereof or deny that it has any further
liability or obligation thereunder;

 

(n) any Credit Party with ERISA investors who have made a capital contribution
shall fail or cease to qualify as a REOC or a VCOC or otherwise meet an
exception under the Plan Assets Regulations which would prevent the assets of
such Credit Party from being subject to Title I of ERISA and/or Section 4975 of
the Code;

 

(o) any event shall occur which gives rise to a nonexempt prohibited transaction
(as such term is defined in Section 4975 of the Code or Section 406 of ERISA)
involving any plan (as such term is defined in the Plan Asset Regulation) that
is a Consolidated Entity that could subject Administrative Agent and/or the
Lenders, on account of any Loan or any other transaction contemplated by the
Loan Documents, to any Tax or penalty on prohibited transactions imposed under
Section 4975 of the Code or Section 502(i) of ERISA;

 

(p) any writ or warrant of attachment or execution or similar process is issued
or levied against all or any material part of the Collateral or any Borrowing
Base Property or any of the other material assets of the REIT or the Borrower,
and is not released, vacated or fully bonded within thirty (30) days after its
issue or levy;

 

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(q) a Change in Control shall occur;

 

(r) the Borrower fails for any reason or cause whatsoever to procure a Swap
Contract as and when required to do so under Section 2.21 hereof; or

 

(s) any Default with respect to Borrower’s obligations under Section 5.18(a)(ix)
which is not remedied within five (5) days,

 

then, and in every such event (other than an event with respect to a Credit
Party described in Section 7.01(f) or Section 7.01(g)), and at any time
thereafter during the continuance of such event, Administrative Agent may, and
at the request of the Required Lenders shall, by notice to the Credit Parties,
take any or all of the following actions, at the same or different times:
(i) terminate the Commitments (other than the respective obligations of the
Revolving Lenders to participate in outstanding L/C Obligations) and any
obligations of the Issuing Bank to issue, amend or renew Letters of Credit, to
be terminated, whereupon the same shall terminate immediately, (ii) declare the
Loans and Obligations then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans and Obligations so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Credit
Parties accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties, (iii) record the Mortgages, (iv) require
that Borrower Cash Collateralize all outstanding Letters of Credit (in an amount
equal to 105% of the stated amount thereof), (iv) with respect to a default
under Section 7.01(r) hereof, exercise all rights and remedies available to it
under this Agreement and the other Loan Documents or otherwise, including the
right (but not the obligation) of Administrative Agent to procure or otherwise
enter into one or more Swap Contracts with a counterparty for and on behalf of
Borrower without such action constituting a cure of such Event of Default and
without waiving Administrative Agent's or Lenders' rights arising out of or in
connection with such Event of Default, provided that if Administrative Agent
shall enter into a Swap Contract in accordance with its right to do so pursuant
to this Section 7.01, then (A) the terms and provisions of any such Swap
Contract, including the term thereof, shall be determined by Administrative
Agent in its sole and absolute discretion and (B) Borrower shall pay all of
Administrative Agent's costs and expenses in connection therewith, and (v)
exercise all of the rights and remedies of the Administrative Agent and the
Lenders, whether provided at law or in equity, including its rights and remedies
under this Agreement (including, without limitation, pursuant to Section 5.18)
and/or the Security Documents; and in case of any event with respect to the REIT
or the Borrower described in Section 7.01(f) or Section 7.01(g), (A) the
Commitments (other than the respective obligations of the Revolving Lenders to
participate in outstanding L/C Obligations) and any obligations of the Issuing
Bank to issue, amend or renew Letters of Credit shall automatically terminate;
(B) the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Credit Parties accrued
hereunder, shall automatically become due and payable (such automatic events
being deemed an acceleration hereunder), without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Credit Parties,
(iii) Administrative Agent thereupon may, and at the request of the Required
Lenders shall, record the Mortgages; (iv) Borrower shall automatically be
required to Cash Collateralize all outstanding Letters of Credit (in an amount
equal to 105% of the stated amount thereof), and (iv) all of the rights and
remedies of the Administrative Agent and the Lenders, whether provided at law or
in equity, including their rights and remedies under this Agreement (including,
without limitation, pursuant to Section 5.18) and/or the Security Documents,
shall thereupon immediately be exercisable. The Loans are fully recourse to the
Borrower and the Guarantors, and Administrative Agent and the Lenders are
expressly permitted to enforce the liability and obligation of the Credit
Parties to perform and observe the obligations contained in the Loan Documents
by any action or proceeding wherein, without limitation, a money judgment or
specific performance shall be sought against any Credit Party, or any other
appropriate action or proceeding to enable the Agent and the Lenders to enforce
and realize upon its interest and rights under the Loan Documents or any other
collateral that may be given to Lenders pursuant to the Loan Documents.

 

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ARTICLE VIII

THE ADMINISTRATIVE AGENT

 

Section 8.01 Appointment, Powers and Immunities. Each Lender hereby appoints and
authorizes Administrative Agent to act as its administrative agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
Administrative Agent by the terms of this Agreement and of the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Administrative Agent (which term as used in this sentence and in Section 8.05
and the first sentence of Section 8.06 shall include reference to its Affiliates
and its own and its Affiliates’ officers, directors, employees and agents):

 

(a) shall have no duties or responsibilities except those expressly set forth in
this Agreement and in the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Lender except to the
extent that Administrative Agent acts as an agent with respect to the receipt or
payment of funds, nor shall Administrative Agent have any fiduciary duty to any
Credit Party nor shall any Lender have any fiduciary duty to any Credit Party or
any other Lender;

 

(b) shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement or any other Loan Document,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of the Loan Documents or any other document referred to or provided
for therein or for any failure by any Credit Party or any other Person to
perform any of its obligations thereunder;

 

(c) shall not be responsible for any action taken or omitted to be taken by it
under any Loan Document or under any other document or instrument referred to or
provided for therein or in connection therewith, except to the extent any such
action taken or omitted violates Administrative Agent’s standard of care set
forth in the first sentence of Section 8.06;

 

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(d) shall not, except to the extent expressly instructed by the Required Lenders
with respect to collateral security under the Loan Documents, be required to
initiate or conduct any litigation or collection proceedings hereunder or under
any other Loan Document; and

 

(e) shall not be required to take any action which is contrary to the Loan
Documents or applicable Legal Requirements.

 

The relationship between Administrative Agent and each Lender is a contractual
relationship only, and nothing herein shall be deemed to impose on
Administrative Agent any obligations other than those for which express
provision is made herein or in the other Loan Documents. Administrative Agent
may employ agents and attorneys, and may delegate all or any part of its
obligations hereunder, to third parties and shall not be responsible for the
negligence or misconduct of any such agents, attorneys in fact or third parties
selected by it in good faith. Administrative Agent may deem and treat the payee
of a Note as the holder thereof for all purposes hereof unless and until a
notice of the assignment or transfer thereof shall have been filed with
Administrative Agent, any such assignment or transfer to be subject to the
provisions of Section 10.05. Except as provided in Section 8.08 and 8.09, the
provisions of this Article VIII are solely for the benefit of Administrative
Agent, the Lenders, and the L/C Issuer and no Credit Party shall have any rights
as a third-party beneficiary of any of the provisions of this Article VIII and
Administrative Agent and the Lenders may modify, amend or waive such provisions
of this Article VIII in their sole and absolute discretion.

 

Section 8.02 Reliance by Administrative Agent. Administrative Agent shall be
entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telegram or
cable) reasonably believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by Administrative Agent. As to any matters not expressly provided for
by this Agreement or any other Loan Document, Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder or
thereunder in accordance with instructions given by the Required Lenders, and
such instructions of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and the L/C Issuer.

 

 

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Section 8.03 Defaults.

 

(a) Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or an Event of Default unless Administrative Agent has
received notice from a Lender, the L/C Issuer or any Credit Party specifying
such Default or Event of Default and stating that such notice is a “Notice of
Default.” In the event that Administrative Agent receives such a notice of the
occurrence of a Default or Event of Default, Administrative Agent shall give
prompt notice thereof to the Lenders and the L/C Issuer. Within ten (10) days of
delivery of such notice of Default or Event of Default from Administrative Agent
to the Lenders and the L/C Issuer (or such shorter period of time as
Administrative Agent determines is necessary), Administrative Agent, the Lenders
and the L/C Issuer shall consult with each other to determine a proposed course
of action. Administrative Agent shall (subject to Section 8.07) take such action
with respect to such Default or Event of Default as shall be directed by the
Required Lenders, including recording of the Mortgages as permitted hereunder,
provided that, (A) unless and until Administrative Agent shall have received
such directions, Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, including decisions (1) to make
Protective Advances that Administrative Agent determines are necessary to
protect or maintain any Collateral, (2) to record the Mortgages as permitted
hereunder, and (3) to foreclose on any Collateral or exercise any other remedy,
with respect to such Default or Event of Default as it shall deem advisable in
the interest of the Lenders and the L/C Issuer except to the extent that this
Agreement expressly requires that such action be taken, or not be taken, only
with the consent or upon the authorization of all of the Lenders; provided,
however, that no actions approved by the Required Lenders shall violate the Loan
Documents or applicable Legal Requirements; and, provided, further, that if, as
a result of a Revolving Maturity Date that is not a Term Maturity Date, an Event
of Default shall have occurred as a result of Borrower’s failure to pay the
Revolving Loans on the Revolving Maturity Date, Administrative Agent shall, at
the direction of either the Required Lenders or the Required Revolving Lenders,
promptly accelerate all Obligations under this Agreement that have not
theretofore become due and payable and demand Borrower to Cash Collateralize the
Letters of Credit. Each of the Lenders and the L/C Issuer acknowledges and
agrees that neither any individual Lender nor the L/C Issuer may separately
enforce or exercise any of the provisions of any of the Loan Documents
(including the Notes) other than through Administrative Agent. Administrative
Agent shall advise the Lenders and the L/C Issuer of all material actions which
Administrative Agent takes in accordance with the provisions of this
Section 8.03(a) and shall continue to consult with the Lenders and the L/C
Issuer with respect to all of such actions. Notwithstanding the foregoing, if
the Required Lenders shall at any time direct that a different or additional
remedial action be taken from that already undertaken by Administrative Agent,
including the commencement of foreclosure proceedings, such different or
additional remedial action shall be taken in lieu of or in addition to, the
prosecution of such action taken by Administrative Agent; provided that all
actions already taken by Administrative Agent pursuant to this Section 8.03(a)
shall be valid and binding on each Lender and the L/C Issuer; and, provided
further that no such direction shall involve any countermand of any direction
given by the Required Revolving Lenders to accelerate all obligations under this
Agreement All cash proceeds (other than cash proceeds subject to the provisions
of Section 8.03(j) received from any enforcement actions, including, without
limitation, the cash proceeds of a foreclosure sale of any Collateral and the
proceeds of any recoveries under any of the Notes or Guaranties, shall be
applied, first, to the payment or reimbursement of Administrative Agent for
expenses incurred in accordance with the provisions of Sections 8.03(b),
8.03(c), and 8.03(d) and 8.05 and to the payment of the Administrative Fee (as
such term is defined in the Fee Letter) and other servicing fees to the extent
not paid by Borrower pursuant to Section 8.11, second, to the payment or
reimbursement of the Lenders for expenses incurred in accordance with the
provisions of Sections 8.03(b), 8.03(c), and 8.03(d) and 8.05; third, to the
payment or reimbursement of the Lenders for any advances made pursuant to
Section 8.03(b) or 8.03(g); fourth, pari passu to the Lenders in accordance with
their respective Applicable Percentage, unless an Unpaid Amount is owed pursuant
to Section 8.12, in which event such Unpaid Amount shall be deducted from the
portion of such proceeds of the Defaulting Lender and be applied to payment of
such Unpaid Amount to the Special Advance Lender, to pay any Indebtedness of
Borrower under any Swap Contract provided by Administrative Agent or any
Affiliate and to Cash Collateralize all L/C Obligations.

 

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(b) All losses incurred in connection with the Loans (including with respect to
interest (including interest at the Default Rate) and other sums payable
pursuant to the Notes), the enforcement thereof or the realization of the
security therefor, shall be borne by the Lenders in accordance with their
respective Applicable Percentages. The Lenders shall promptly, upon request by
Administrative Agent, remit to Administrative Agent their respective Applicable
Percentages of (i) Protective Advances, (ii) any other expenses incurred in
connection with the enforcement of the Security Documents or other Loan
Documents, and (iii) any expenses incurred in connection with the consummation
of the Loans not paid or provided for by Borrower. Protective Advances as
described in clause (ii) of the definition of the term “Protective Advances”
shall not exceed $2,500,000 annually unless approved by the Required Lenders in
advance. Each Lender’s Applicable Percentage of any Protective Advance shall
constitute obligatory advances of that Lender under this Agreement, shall be
payable by each Lender on demand by Administrative Agent and secured by the
Collateral, and if unpaid by any Lender as set forth below and not reimbursed by
Borrower, its Applicable Percentage thereof shall bear interest at the rate
applicable to such amount under the Loans or, if no longer applicable, at the
Base Rate. Administrative Agent shall notify each Lender in writing of its
Applicable Percentage of each Protective Advance.  Upon receipt of notice from
Administrative Agent of its making of a Protective Advance, each Lender shall
make the amount of such Lender’s Applicable Percentage of the Protective Advance
available to Administrative Agent, in same day funds, to such account of
Administrative Agent as Administrative Agent may designate, (i) on or before
3:00 p.m. New York time on the day Administrative Agent provides Lenders with
notice of the making of such Protective Advance if Administrative Agent provides
such notice on or before 12:00 p.m. (Administrative Agent’s Time), or (ii) on or
before 12:00 p.m. on the Business Day immediately following the day
Administrative Agent provides Lenders with notice of the making of such advance
if Administrative Agent provides notice after 12:00 p.m. New York time.

 

(c) If, at the direction of the Required Lenders or otherwise as provided in
Section 8.03(a), any action(s) is brought to collect on the Notes or enforce any
Security Document or any other Loan Document, such action shall (to the extent
permitted under applicable Legal Requirements and the decisions of the court in
which such action is brought) be an action brought by Administrative Agent for
the benefit of the Lenders and the L/C Issuer, collectively, to collect on all
or a portion of the Notes or enforce any Security Document or any other Loan
Document and counsel selected by Administrative Agent shall prosecute any such
action on behalf of Administrative Agent, the Lenders and the L/C Issuer, and
Administrative Agent, the Lenders and the L/C Issuer shall consult and cooperate
with each other in the prosecution thereof. If requested by Administrative
Agent, each Lender and the L/C Issuer shall join as a party in any such lawsuit
or proceeding. The out-of-pocket costs and expenses of any such action shall be
borne by the Lenders in accordance with each of their respective Applicable
Percentage, without limiting the REIT’s and Borrower’s Obligations on account
thereof.

 

(d) If, at the direction of the Required Lenders or otherwise as provided in
Section 8.03(a), any action(s) is brought to foreclose any Collateral, such
action shall (to the extent permitted under applicable Legal Requirements and
the decisions of the court in which such action is brought) be an action brought
by Administrative Agent on behalf and for the benefit of the Lenders and the L/C
Issuer, collectively, to foreclose all or a portion of the Collateral and
collect on the Notes. Counsel selected by Administrative Agent shall prosecute
any such foreclosure on behalf of Administrative Agent, the Lenders and the L/C
Issuer, and Administrative Agent, the Lenders and the L/C Issuer shall consult
and cooperate with each other in the prosecution thereof and Administrative
Agent shall provide periodic updates to the Lenders regarding material
developments in the prosecution thereof. All decisions concerning the
appointment of a receiver, the conduct of such receivership, the conduct of such
foreclosure action, the acceptance of a deed in lieu of foreclosure, the bid on
behalf of Administrative Agent, the Lenders and the L/C Issuer at the
foreclosure sale of any Collateral, the manner of taking and holding title to
any Collateral (other than as set forth in Section 8.03(e) below), the sale of
any Collateral after foreclosure pursuant to Section 8.03(f), and the
commencement and conduct of any deficiency judgment proceeding shall be made by
Administrative Agent subject to this Article VIII. The out-of-pocket costs and
expenses of foreclosure to the extent not paid by Borrower or Guarantor will be
borne by the Lenders in accordance with their respective Applicable Percentage.
If requested by Administrative Agent, each Lender and the L/C Issuer shall join
as a party in any such lawsuit or proceeding brought to foreclose the Mortgage
and collect on the Notes.

 

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(e) If (i) any Borrowing Base Property (or any part thereof) is acquired by
Administrative Agent or its nominee as a result of a foreclosure or the
acceptance of a deed or assignment in lieu of foreclosure or (ii) the Pledged
Interests (as such term is defined in the Pledge) of any Subsidiary Guarantor
(or the 163 Washington Member) is acquired by Administrative Agent or its
nominee as a result of a foreclosure or the acceptance of a conveyance in lieu
of foreclosure, or any such Borrowing Base Property or Pledged Interest is
retained in satisfaction of all or any part of the Obligations, the title to
such Borrowing Base Property or Pledged Interests shall be held as directed by
the Required Lenders and acceptable to Administrative Agent provided title is
held in an entity or structure which limits the liability of the Lenders and the
L/C Issuer to third parties and is a “pass-through” entity or structure for U.S.
federal income tax purposes (including, without limitation, a limited liability
company of which Administrative Agent (or a nominee or subsidiary of
Administrative Agent, as administrative agent, for the ratable benefit of the
Lenders and the L/C Issuer) is the manager and the Lenders and the L/C Issuer
(or their permitted assignees) are the members in proportion to their Applicable
Percentage, which shall be formed pursuant to a form of limited liability
company agreement approved by Administrative Agent and the Required Lenders
prior to the completion of such foreclosure, which agreement shall include
provisions in all material respects similar to this Section 8.03 and Article
VIII in relation to the duties, rights and immunities of Administrative Agent
(or a nominee or subsidiary of Administrative Agent, in its capacity as the
manager thereunder) and rights and obligations of the Lenders and the L/C
Issuer), or, in the absence of such direction of the Required Lenders, at the
sole option of Administrative Agent, be held in the name of Administrative
Agent, or a nominee or subsidiary of Administrative Agent, as administrative
agent, for the ratable benefit of the Lenders and the L/C Issuer. In the event
any Lender fails to execute and deliver such agreement in accordance with and
after written request therefor from Administrative Agent, each such Lender
hereby grants to Administrative Agent a power of attorney to execute and deliver
such agreement on its behalf and to take on its behalf any other actions as may
reasonably be required to form and qualify such company, which power of attorney
is coupled with an interest and irrevocable.

 

 

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(f) During the continuance of an Event of Default, and after any Borrowing Base
Property (or any part thereof) is acquired by Administrative Agent or its
nominee as a resultof a foreclosure or the acceptance of a deed or assignment in
lieu of foreclosure, Administrative Agent shall prepare for the approval of the
Required Lenders a recommended course of action for any Borrowing Base Property
or Pledged Interests (a “Post-Foreclosure Plan”). Subject to its standard of
care contained herein, Administrative Agent (or a nominee or subsidiary of
Administrative Agent, as administrative agent, for the account of, and ratable
benefit of, the Lenders and the L/C Issuer) shall manage, operate, repair,
administer, complete, construct, restore or otherwise deal with each Borrowing
Base Property acquired or controlled as a result of foreclosure upon a Mortgage
or an acquisition of Pledged Interests, and shall administer all transactions
relating thereto, substantially in accordance with the Post-Foreclosure Plan,
including, without limitation, employing a management agent, leasing agent and
other agents, contractors and employees, including agents for the sale of any
Borrowing Base Property, and the collecting of rents and other sums from any
Borrowing Base Property and paying the expenses of any Borrowing Base Property.
Once approved by Administrative Agent and the Required Lenders, Administrative
Agent shall use commercially reasonable efforts, consistent with its standard of
care contained in this Article VIII, to operate and maintain, or cause to be
operated and maintained, the Borrowing Base Property in accordance with the
Post-Foreclosure Plan in all material respects (subject to the effect of force
majeure events, fire, earthquake, floods, explosion, actions of the elements,
other accidents or casualty, declared or undeclared war, riots, mob violence,
acts of terrorism, inability to procure or a general shortage of labor,
equipment, facilities, energy, materials or supplies in the open market, the
effect of orders of Governmental Authorities, laws, rules, regulations or other
cause beyond the reasonable control of Administrative Agent) and shall be
authorized to make expenditures and pay expenses in accordance with the
Post-Foreclosure Plan. It is understood and agreed that Administrative Agent is
not warranting that the results contemplated by the Post-Foreclosure Plan shall
be realized. If the Required Lenders shall fail to approve of the proposed
Post-Foreclosure Plan, however, the following shall apply: (i) if the proposed
Post-Foreclosure Plan is the initial Post-Foreclosure Plan, then Administrative
Agent, on behalf of the Lenders and the L/C Issuer, may approve an interim plan
to govern the operations of the Borrowing Base Property until the Required
Lenders approve the first plan; and, (ii) if the proposed Post-Foreclosure Plan
is other than the plan referred to in the preceding clause (i), then the
Borrowing Base Property shall be operated under the most recent Post-Foreclosure
Plan until a new Post-Foreclosure Plan shall be approved by the Required
Lenders, subject to adjustments as Administrative Agent shall deem appropriate
to take into account emergency or serious maintenance situations at any
Borrowing Base Property, any tenant improvement costs and leasing commissions
for leases executed after approval of the most recently approved budget and any
expenditures for any Borrowing Base Property required by applicable Legal
Requirements, which, if not made, may result in the imposition of a fine or
penalty or other sanction against the Lenders, Administrative Agent or entity
that holds title to any Borrowing Base Property for the benefit of the Lenders
and the L/C Issuer. Administrative Agent shall not make any material changes to
the approved Post-Foreclosure Plan without the consent of the Required Lenders.

 

(g) Upon demand therefor from time to time, each Lender shall contribute its
Applicable Percentage of all out-of-pocket costs and expenses incurred by
Administrative Agent pursuant to the approved Post-Foreclosure Plan in
connection with the construction, operation, management, maintenance, leasing
and sale of the Collateral. In addition, Administrative Agent shall render or
cause to be rendered to each Lender, on a periodic basis (but in any event once
per calendar quarter), an income and expense statement for the Collateral, and
each Lender shall promptly contribute its Applicable Percentage of any operating
loss for the Collateral, and such other expenses and operating reserves as
Administrative Agent shall deem reasonably necessary pursuant to and in
accordance with the approved Post-Foreclosure Plan.

 

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(h) To the extent there is net operating income from the Collateral,
Administrative Agent shall, in accordance with the approved Post-Foreclosure
Plan, determine the amount and timing of distributions in accordance with
Section 8.03(j).

 

(i) The Lenders and the L/C Issuer acknowledge and agree that if title to the
Collateral is obtained by Administrative Agent or its nominee or limited
liability company as provided above, the Collateral will not be held as a
permanent investment but will be liquidated and the proceeds of such liquidation
will be distributed in accordance with the Post-Foreclosure Plan as soon as
practicable. Administrative Agent shall undertake to sell the Collateral, at
such price and upon such terms and conditions as the Required Lenders reasonably
shall determine to be most advantageous to the Lenders and the L/C Issuer. Any
purchase money mortgage or deed of trust taken in connection with the
disposition of the Collateral in accordance with the immediately preceding
sentence shall name Administrative Agent, as Agent for the Lenders and the L/C
Issuer, as the beneficiary or mortgagee; provided, however, that purchase money
financing shall not be provided in connection with the disposition of the
Collateral without the prior consent of each Lender. If purchase money financing
is so provided, then, Administrative Agent and the Lenders shall enter into an
agreement with respect to such purchase money mortgage or deed of trust defining
the rights and obligations of Administration Agent and the rights and
obligations of the Lenders in the same Applicable Percentage as provided
hereunder, which agreement shall be in all material respects similar to this
Article insofar as the same is appropriate or applicable and shall contain such
other terms and conditions as may be satisfactory to each of the Lenders.

 

(j) All cash proceeds received with respect to the Collateral after so acquiring
title to or taking possession of the Collateral or the Pledged Interests,
including cash proceeds from the rental, operation and management of the
Collateral and the proceeds of a sale of the Collateral or the Pledged
Interests, shall be applied, first, to the payment of the Agency Fee to the
extent not paid by Borrower pursuant to Section 8.12 and any unpaid Servicing
Fees and to the payment or reimbursement of Administrative Agent for expenses
incurred in accordance with the provisions of this Article VIII or for any other
sums then due to Administrative Agent hereunder; second, to the payment of
operating expenses with respect to the Collateral; third, to the establishment
of reasonable reserves for the operation of the Collateral, including, without
limitation, to fund any capital improvement, leasing and other reserves; fourth,
to the payment or reimbursement of the Lenders for any advances made pursuant to
Section 8.03(b) or (g); fifth, in accordance with clauses first through fourth
of Section 8.03(a); and sixth, pari passu to the Lenders in accordance with
their respective Applicable Percentages.

 

Section 8.04 Intentionally Omitted.

 

Section 8.05 Rights as a Lender. With respect to its Commitment and the Loans
made by it, Capital One (and any successor acting as Administrative Agent) in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as Administrative Agent, and the term “Lender” or “Lenders” shall, unless
the context otherwise indicates, include Administrative Agent in its individual
capacity. Capital One (and any successor acting as Administrative Agent) and its
Affiliates may (without having to account therefor to any Lender) lend money to,
enter into any Swap Contract or other “swap agreement” as defined in 11 U.S.C.
101 with, make investments in and generally engage in any kind of lending, trust
or other business with any Credit Party (and any of their Affiliates) as if it
were not acting as Administrative Agent, and without providing to the Lenders
any opportunity to review or approve of any decisions to be made by it with
respect thereto and Capital One and its Affiliates may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
Further, Administrative Agent and any affiliate may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the other
Lenders. The Lenders acknowledge that, pursuant to such activities, Capital One
or its affiliates may receive information regarding the Credit Parties, other
loan parties, other subsidiaries and other Affiliates (including information
that may be subject to confidentiality obligations in favor of such Person) and
acknowledge that Administrative Agent shall be under no obligation to provide
such information to them.

 

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Section 8.06 Standard of Care; Indemnification. Notwithstanding anything to the
contrary contained in the Loan Documents or this Article VIII, in performing its
duties under the Loan Documents, Administrative Agent will exercise the same
degree of care as it normally exercises in connection with real estate loans
that it syndicates and administers, but Administrative Agent shall have no
further responsibility to any Lender or the L/C Issuer except for its own gross
negligence or willful misconduct which results in actual loss to such Lender or
the L/C Issuer, and, except to such extent, Administrative Agent shall have no
responsibility to any Lender or the L/C Issuer. The Lenders agree to indemnify
Administrative Agent (to the extent not reimbursed under Section 10.03, but
without limiting the obligations of Borrower under Section 10.03 ratably, in
accordance with their respective Applicable Percentages, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against Administrative Agent (including any
of the foregoing that arise from any claims or assertions of any Lender) arising
out of or by reason of any investigation in or in any way relating to or arising
out of this Agreement or any other Loan Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses that Borrower is obligated to pay under Section 10.03, but excluding,
unless an Event of Default has occurred and is continuing, normal administrative
costs and expenses incident to the performance of its agency duties hereunder)
or the enforcement of any of the terms hereof or thereof or of any such other
documents or any action taken or omitted by Administrative Agent under the Loan
Documents, provided that no Lender shall be liable for any of the foregoing to
the extent they arise from Administrative Agent’s gross negligence or willful
misconduct as determined by a court of competent jurisdiction in a final,
non-appealable judgment provided, however, that no action taken in accordance
with the directions of the Required Lenders (or, where applicable, Required
Revolving Lenders or Required Term Lenders) shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 8.06. Without
limiting the generality of the foregoing, each Lender agrees to reimburse
Administrative Agent (to the extent not reimbursed by Borrower and without
limiting the obligation of Borrower to do so) promptly upon demand for its
ratable share of any out-of-pocket expenses (including the reasonable fees and
expenses of the counsel to Administrative Agent) incurred by Administrative
Agent in connection with the preparation, negotiation, execution,
administration, or enforcement (whether through negotiations, legal proceedings,
or otherwise) of, or legal advice with respect to the rights or responsibilities
of the parties under, the Loan Documents, any suit or action brought by
Administrative Agent to enforce the terms of the Loan Documents and/or collect
any obligation of Borrower hereunder, any “lender liability” suit or claim
brought against Administrative Agent and/or the Lenders and/or the L/C Issuer,
and any claim or suit brought against Administrative Agent and/or the Lenders
and/or the L/C Issuer arising under any Environmental Laws as a result of this
Agreement or any other Loan Documents. Such out-of-pocket expenses (including
counsel fees) shall be advanced by the Lenders on the request of Administrative
Agent, notwithstanding any claim or assertion that Administrative Agent is not
entitled to indemnification hereunder, upon receipt of an undertaking by
Administrative Agent that Administrative Agent will reimburse the Lenders if it
is actually and finally determined by a court of competent jurisdiction that
Administrative Agent is not so entitled to indemnification. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder or under the other Loan Documents and the termination of this
Agreement. If Borrower shall reimburse Administrative Agent for any of the
foregoing amounts following payment by any Lender to Administrative Agent in
respect of such amount pursuant to this Section 8.06, then Administrative Agent
shall share such reimbursement on a ratable basis with each Lender making any
such payment in accordance with each such Lender’s respective Applicable
Percentage.

 

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Section 8.07 Non-Reliance on Administrative Agent and Other Lenders. Each of the
Lenders and the L/C Issuer expressly acknowledges and agrees that neither
Administrative Agent nor any of its officers, directors, employees, agents,
counsel, attorneys-in-fact or other affiliates has made any representations or
warranties to such Lender or L/C Issuer and that no act by Administrative Agent
hereafter taken, including any review of the affairs of any Credit Party or any
of their Affiliates, shall be deemed to constitute any such representation or
warranty by Administrative Agent to any Lender or L/C Issuer. Each Lender and
the L/C Issuer, for itself, agrees that it has, independently and without
reliance on Administrative Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of the Credit Parties and their Affiliates and decision to enter into
this Agreement and that it will, independently and without reliance upon
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
under any other Loan Document. Subject to the provisions of the first sentence
of Section 8.06, Administrative Agent shall not be required to keep itself
informed as to the performance or observance by any Credit Party of this
Agreement or any of the other Loan Documents or any other document referred to
or provided for herein or therein or to inspect the Borrowing Base Property or
the books of the Credit Parties or any of their Affiliates. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders or the L/C Issuer by Administrative Agent hereunder or as
otherwise agreed by Administrative Agent and the Lenders or the L/C Issuer,
Administrative Agent shall not have any duty or responsibility to provide any
Lender or the L/C Issuer with any credit or other information concerning the
affairs, financial condition or business of the Credit Parties or any of their
Affiliates that may come into the possession of Administrative Agent or any of
its Affiliates. Without limiting the foregoing, Administrative Agent 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 the Credit Parties or any of their Affiliates that is
communicated to or obtained by the Person serving as Administrative Agent or any
of its Affiliates in any capacity. Administrative Agent shall, except as
expressly set forth herein and in the other Loan Documents, have no obligation
whatsoever to the Lenders or the L/C Issuer or to any other Person to assure
that any Borrowing Base Property or Collateral exists or is owned by Borrower or
a Subsidiary Guarantor or the 163 Washington SPE or is cared for, protected or
insured or that the Liens granted to Administrative Agent herein or pursuant
hereto have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
or to continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to Administrative Agent in this Article VIII or in any of the Loan
Documents, it being understood and agreed that in respect of any Borrowing Base
Property or Collateral, or any act, omission or event related thereto,
Administrative Agent shall have no duty or liability whatsoever to the Lenders
or the L/C Issuer, except for actual loss to the extent resulting from its gross
negligence or willful misconduct that results in actual loss to a Lender.

 

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Section 8.08 Failure to Act. Except for action expressly required of
Administrative Agent hereunder, and under the other Loan Documents,
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 8.06 against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.

 

Section 8.09 Resignation of Administrative Agent. Administrative Agent may
resign at any time by giving notice thereof to the Lenders and Borrower and such
resignation shall be effective as of the date indicated in such notice. The
Required Lenders may remove Administrative Agent at any time for gross
negligence or willful misconduct by giving at least thirty (30) Business Days’
prior written notice and cure period to Administrative Agent, Borrower and all
other Lenders if such gross negligence or willful misconduct is not cured by
Administrative Agent within such cure period. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent that shall be a Person that (a) meets the qualifications of
an Eligible Institution, (b) unless an Event of Default as described in Section
7.01(a), 7.01(f) or 7.01(g) exists, is not a Competitor, and (c) so long as no
Event of Default exists, is otherwise reasonably acceptable to Borrower, it
being understood that any Lender who has executed this Agreement on the
Effective Date shall be deemed an acceptable successor Administrative Agent that
satisfies (a), (b) and (c) above. If no successor Administrative Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent’s
giving of notice of resignation or its receipt of notice of removal, then the
retiring or removed Administrative Agent may, on behalf of the Lenders, appoint
a successor Administrative Agent; provided that if Administrative Agent shall
notify Borrower and the Lenders that no Person has accepted such appointment
within such thirty (30) day period, then Administrative Agent’s resignation or
removal shall nonetheless become effective and (1) the retiring or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that, in the case of any
Collateral held by Administrative Agent on behalf of the Lenders under any of
the Loan Documents, the retiring or removed Administrative Agent shall continue
to hold such Collateral (and be entitled, with respect thereto, to all of the
rights of Administrative Agent hereunder) until such time as a successor
Administrative Agent is appointed and has accepted such Collateral); (2) all
payments and communications provided to be made to or through Administrative
Agent shall instead be made to each Lender directly in accordance with its
Applicable Percentage; and (3) all determinations, approvals and communications
provided to be made by Administrative Agent shall instead be made by the
Required Lenders (except for such determinations, approvals and communications
as are required pursuant to the provisions of Section 8.10 to be made by each of
the Lenders or by each affected Lender in which case such determinations,
approvals and communications shall be made by each Lender or each affected
Lender, as applicable, directly), until such time as the

 

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Required Lenders appoint a successor Administrative Agent and such successor
accepts such appointment as provided for above in this Section. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring (or retired) or removed Administrative Agent, and the retiring
(or retired) or removed Administrative Agent shall be discharged from its duties
and obligations hereunder (if not already discharged therefrom as provided above
in this Section 8.09). The fees payable by Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between Borrower and such successor. During the period
from the delivery by Administrative Agent of its notice of resignation until the
effectiveness of its discharge from its duties and obligations hereunder, and at
all times thereafter, the provisions of this Article VIII and Section 10.03
shall continue in effect for the benefit of such retiring Administrative Agent,
its subagents and their respective Affiliates in respect of any actions taken or
omitted to be taken by any of them while it was acting as Administrative Agent
and during any period following its resignation as Administrative Agent pending
the acceptance by a successor Administrative Agent of its appointment as
Administrative Agent hereunder. Any resignation by an Administrative Agent shall
also constitute the resignation as the L/C Issuer and as Swingline Lender by the
Lender then acting as Administrative Agent (“Resigning Lender”). Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder (i)
Resigning Lender shall be discharged from all duties and obligations of the L/C
Issuer and Swingline Lender hereunder and under the other Loan Documents, (ii)
the Lender designated as replacement Administrative Agent shall become the
successor L/C Issuer and as the successor L/C Issuer, it shall issue or cause to
be issued Letters of Credit backstopping or in substitution for all Letters of
Credit issued by Resigning Lender as the L/C Issuer outstanding at the time of
such succession (which letters of credit issued in substitution shall be deemed
to be Letters of Credit issued hereunder) or make other arrangements
satisfactory to the Resigning Lender to effectively assume the obligations of
the Resigning Lender with respect to such Letters of Credit and (ii) the Lender
designated as replacement Administrative Agent shall purchase from the Resigning
Lender any Swingline Loans that are outstanding immediately prior to such
acceptance.

 

Section 8.10 Consents Under Loan Documents. Except as expressly provided in this
Agreement, any amendment, waiver or consent, to be effective, shall require the
consent or agreement in writing of the Required Lenders and Administrative
Agent, on the one hand, and the Borrower or applicable Credit Party, on the
other hand, and any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. Notwithstanding
the foregoing, neither Administrative Agent nor the Required Lenders shall agree
to the following (provided that no Lender’s consent shall be required for any of
the following which are otherwise required or contemplated under the Loan
Documents):

 

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(a) increase the Commitment of any Lender (provided that no such increase shall
be deemed to result from the operation of the provisions of this Agreement which
contain indemnification obligations of such Lender or obligations of such Lender
with respect to the funding of Protective Advances or other sums as more fully
provided in Sections 8.03, 8.05 and 8.12 hereof) without the consent of each
Lender affected thereby;

 

(b) reduce the principal amount of the Loans or reduce the interest rate thereon
(exclusive of interest at the Default Rate to the extent it is in excess of
interest at the non-Default Rate) or reduce any extension fee payable pursuant
to Section 2.20(c)(iii) or the Unused Fee without the consent of each Lender
affected thereby;

 

(c) extend any stated payment date for principal of or interest on the Loans
payable to any Lender or waive any material condition to the extension of the
Maturity Date provided for in Section 2.20 without the consent of each Lender
affected thereby;

 

(d) release any Credit Party or any other party from liability under the Loan
Documents (except for any assigning Lender pursuant to Section 10.05(b) and any
resigning Administrative Agent pursuant to Section 8.08 and provided that any
decision to waive or modify any affirmative, negative or financial covenant
shall not be deemed a “release” for these purposes and may be granted by the
Required Lenders) without the consent of each Lender (except that no such
consent shall be required, and Administrative Agent is hereby authorized, to
release each Credit Party (A) as expressly provided in the Loan Documents and
(B) upon payment of the Loans and termination of the Commitments in full in
accordance with the terms of the Loan Documents);

 

(e) release or subordinate in whole or in part any portion of the Collateral
given as security for the Loans without the consent of each Lender (except that
no such consent shall be required, and Administrative Agent is hereby
authorized, to release any Lien covering the Collateral under the Pledge or the
Mortgage or other Loan Documents (A) as expressly provided in the Loan Documents
and (B) upon payment of the Loans and all Unreimbursed Amounts and fees,
termination of the Commitments in full and reduction of all L/C Obligations to
zero, in accordance with the terms of the Loan Documents); or

 

(f) modify any of the provisions of this Section 8.10, the definition of
“Required Lenders” or any other provision in the Loan Documents specifying the
number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder without the
consent of each Lender.

 

 

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Provided, however, that: (A) any modification or supplement of Article VIII, or
of any of the rights or duties of Administrative Agent hereunder, and the waiver
of the performance or observance by Borrower or any other Credit Party or any
Subsidiary of any such terms (either generally or in a particular instance and
either retroactively or prospectively) shall require the consent of
Administrative Agent, (B) any modification or supplement of any term of this
Agreement or of any other Loan Document relating to any rights or obligations of
the Lender then providing any Swap Contract hereunder and the waiver of the
performance or observance by Borrower or any other Credit Party or any
Subsidiary of any such terms (either generally or in a particular instance and
either retroactively or prospectively) shall require the consent of
Administrative Agent and the Lender then providing any Swap Contract hereunder;
(C) any modification or supplement of any term of this Agreement or of any other
Loan Document relating to any rights or obligations in respect of Sole Lead
Arranger or Sole Bookrunner and any waiver of the performance or observance by
Borrower or any other Credit Party or any Subsidiary of any such terms (either
generally or in a particular instance and either retroactively or prospectively)
shall require the consent of Sole Lead Arranger or Sole Bookrunner,
respectively; (D) any modification or supplement of any term of this Agreement
or of any other Loan Document relating to the rights or obligations of the
Revolving Lenders, and not any other Lenders, and any waiver of the performance
or observance by Borrower or any other Credit Party or any Subsidiary of any
such terms (either generally or in a particular instance and either
retroactively or prospectively) shall require, and may be granted with, and only
with, the written consent of the Required Revolving Lenders); (E) any
modification or supplement of any term of this Agreement or of any other Loan
Document relating to the rights or obligations of the Term Lenders, and not any
other Lenders, and any waiver of the performance or observance by Borrower or
any other Credit Party or any Subsidiary of any such terms (either generally or
in a particular instance and either retroactively or prospectively) shall
require, and may be granted with, and only with, the written consent of the
Required Term Lenders; (F) 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; (G) Administrative Agent is hereby authorized to enter into
modifications or amendments to the Loan Documents which are ministerial in
nature, including the preparation and execution of Uniform Commercial Code
forms, Assignments and Assumptions and, if applicable, subordination and
non-disturbance agreements with tenants at the Borrowing Base Property; (H) any
modification or supplement of any term of this Agreement or of any other Loan
Document relating to the Letters of Credit, the L/C Obligations or any of the
rights or duties of the L/C Issuer hereunder and any waiver of the performance
or observance by Borrower or any other Credit Party or any Subsidiary of any
such terms (either generally or in a particular instance and either
retroactively or prospectively) shall require the consent of the L/C Issuer; and
(I) any modification or supplement of any term of this Agreement or of any other
Loan Document relating to the Swingline Loans or any of the rights or duties of
Swingline Lender hereunder and any waiver of the performance or observance by
Borrower or any other Credit Party or any Subsidiary of any such terms (either
generally or in a particular instance and either retroactively or prospectively)
shall require the consent of Swingline Lender. If Administrative Agent solicits
any consents or approvals from the Lenders under any of the Loan Documents, each
Lender shall within ten (10) Business Days of receiving such request, give
Administrative Agent written notice of its consent or approval or denial
thereof; provided that, if any Lender does not respond within such ten (10)
Business Days, such Lender shall be deemed to have authorized Administrative
Agent to vote such Lender’s interest with respect to the matter which was the
subject of Administrative Agent’s solicitation as Administrative Agent elects.
Any such solicitation by Administrative Agent for a consent or approval shall be
in writing and shall include a description of the matter or thing as to which
such consent or approval is requested and shall include Administrative Agent’s
recommended course of action or determination in respect thereof.

 

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Section 8.11 Authorization. Administrative Agent is hereby authorized by the
Lenders to execute, deliver and perform in accordance with the terms of each of
the Loan Documents to which Administrative Agent is or is intended to be a party
and each Lender agrees to be bound by all of the agreements of Administrative
Agent contained in such Loan Documents. Borrower shall be entitled to rely on
all written agreements, approvals and consents received from Administrative
Agent as being that also of the Lenders, without obtaining separate
acknowledgment or proof of authorization of same. The Lenders, L/C Issuer and
Swingline Lender further authorize Administrative Agent, at its option and in
its discretion,

 

(a) to transfer or release any Lien on any Collateral (i) upon termination of
the Commitments and payment and satisfaction in full of all Obligations (other
than contingent indemnification obligations) and the expiration or termination
of all Letters of Credit (other than Letters of Credit as to which other
arrangements reasonably satisfactory to Administrative Agent and the L/C Issuer
shall have been made), (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,
(iii) subject to Section 8.10, if approved, authorized or ratified in writing by
Required Lenders, (iv) in accordance with the provisions of Section 9.03(b), or
(v) after foreclosure or other acquisition of title if approved by Required
Lenders; and

 

(b) to release any Subsidiary Guarantor from its obligations under any
Subsidiary Guaranty if such Person ceases to own a Borrowing Base Property.

 

In its capacity, Administrative Agent is a “representative” of the Lenders,
Swingline Lender and L/C Issuer within the meaning of the term “secured party”
as defined in the New York Uniform Commercial Code. Each Lender, Swingline
Lender and L/C Issuer authorizes Administrative Agent to enter into each of the
Security Documents to which it is a party.

 

Upon request by Administrative Agent at any time, Required Lenders will confirm
in writing Administrative Agent’s authority to release or subordinate its
interest in particular types or items of property, or to release any Guarantor
from its obligations under the Guaranty pursuant to this Section 8.11.

 

Section 8.12 Administrative Fee. So long as the Commitments are in effect and
until payment in full of all obligations under this Agreement, the Notes and the
other Loan Documents, Borrower shall pay to Administrative Agent, for its sole
account, the Administrative Fee in accordance with the Fee Letter.

  

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Section 8.13 Defaulting Lenders.

 

(a) A Lender shall be a “Defaulting Lender” hereunder if it (a) shall for any
reason fail to (i) make any respective Loan required pursuant to the terms of
this Agreement unless such Lender notifies Administrative Agent and the Borrower
in writing within two (2) Business Days of the day on which such Loan was
required to be funded that such failure is the result of such Lender’s good
faith determination that one or more material conditions precedent to funding
(each of which conditions precedent, together with the applicable Default, shall
be specifically identified in such writing) has not been satisfied, after giving
effect to any valid waivers of such conditions precedent granted hereunder),
(ii) pay to Administrative Agent, the L/C Issuer, the Swingline Lender or any
other Lender any other amount required to be paid by it hereunder (including in
respect of its participation in Letters of Credit or Swingline Loans), or (iii)
pay its Applicable Percentage of any advance pursuant to Sections 8.03, 8.06 or
8.09, or any Protective Advance, or otherwise made or requested by
Administrative Agent to be made in connection with the exercise by
Administrative Agent of any of its remedies hereunder, or of any indemnification
payment required pursuant to Section 8.06, and such failure shall continue for a
period of two (2) Business Days following the delivery of written notice thereof
by Administrative Agent to such Lender; (b) shall assign or transfer its
interest hereunder or in or to its Loan or Commitment in violation of Section
10.05; (c) shall exercise any rights of set-off in violation of Section 10.09;
(d) has notified Borrower or Administrative Agent, the L/C Issuer or the
Swingline Lender, as applicable, in writing that it does not intend to comply
with its funding obligations hereunder, or has made a public statement to that
effect (unless such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on
such Lender’s determination that a condition precedent to funding (which
condition precedent, together with any applicable default, shall be specifically
identified in such writing or public statement) cannot be satisfied); (e) has
failed, within three (3) Business Days after written request by Administrative
Agent or Borrower, to confirm in writing to Administrative Agent and Borrower
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(e) upon receipt of such written confirmation by Administrative Agent and
Borrower); or (f) has, or has a direct or indirect parent company that has, (i)
become the subject of a proceeding under any debtor relief law, or (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by Administrative Agent that a Lender is a Defaulting
Lender under one or more of clauses (a) through (f) above shall be conclusive
and binding absent manifest error, and such Lender shall be deemed to be a
Defaulting Lender upon delivery of written notice of such determination to
Borrowers and each Lender and the L/C Issuer. If for any reason a Lender fails
to make timely payment to Administrative Agent of any amount required to be paid
to Administrative Agent hereunder (without giving effect to any notice or cure
periods), in addition to other rights and remedies which Administrative Agent or
Borrower may have under the immediately preceding provisions or otherwise,
Administrative Agent shall be entitled (i) to collect interest from such
Defaulting Lender on such delinquent payment for the period from the date on
which the payment was due until the date on which the payment is made at the
Federal Funds Rate, (ii) to withhold or setoff and to apply in satisfaction of
the defaulted payment and any related interest, any amounts otherwise payable to
such Defaulting Lender under this Agreement or any other Loan Document and (iii)
to bring an action or suit against such Defaulting Lender in a court of
competent jurisdiction to recover the defaulted amount and any related interest.
Any amounts received by Administrative Agent in respect of a Defaulting Lender’s
Loans shall not be paid to such Defaulting Lender and shall be held uninvested
by Administrative Agent and either applied against the purchase price of such
Loan under the following Section 8.13(b) or paid to such Defaulting Lender upon
the Defaulting Lender’s curing of its default.

 

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(b) Any Lender who is not a Defaulting Lender shall have the right, but not the
obligation, in its sole discretion, to acquire by assignment all of a Defaulting
Lender’s Commitments. Any Lender desiring to exercise such right shall give
written notice thereof to Administrative Agent and Borrower no sooner than two
(2) Business Days and not later than five (5) Business Days after such
Defaulting Lender became a Defaulting Lender. If more than one Lender exercises
such right, each such Lender shall have the right to acquire an amount of such
Defaulting Lender’s Commitments in proportion to the respective Commitments of
the Lenders exercising such right. If after such fifth (5th) Business Day, the
Lenders have not elected to acquire all of the Commitments of such Defaulting
Lender, then Borrower may (but shall not be obligated to), by giving written
notice thereof to Administrative Agent, such Defaulting Lender and the other
Lenders, demand that such Defaulting Lender assign its Commitments to an
Eligible Institution subject to and in accordance with the provisions of Section
10.05 (including, without limitation, obtaining all approvals that are required
to be obtained thereunder from Administrative Agent, the L/C Issuer and the
Swingline Lender for such assignment) for the purchase price provided for below.
Upon any such assignment, the Defaulting Lender’s interest in the Loan and its
rights hereunder (but not its liability in respect thereof or under the Loan
Documents to the extent the same relate to the period prior to the effective
date of the purchase) shall terminate on the date of purchase, and the
Defaulting Lender shall promptly execute all documents reasonably requested to
surrender and transfer such interest to the purchaser or assignee thereof,
including an appropriate Assignment and Acceptance Agreement and,
notwithstanding Section 10.05, shall pay to Administrative Agent an assignment
fee in the amount of $10,000. The purchase price for the Commitments of a
Defaulting Lender shall be equal to the amount of the principal balance of the
Loan outstanding and owed by Borrower to the Defaulting Lender plus interest
thereon, accrued fees and all other amounts payable to such Defaulting Lender
hereunder and under the other Loan Documents. Prior to payment of such purchase
price to a Defaulting Lender, Administrative Agent shall apply against such
purchase price any amounts retained by Administrative Agent pursuant to the last
sentence of the immediately preceding Section 8.13(a). So long as any Lender is
a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any
Swingline Loans unless it is satisfied that it will have no Fronting Exposure
after giving effect to such Swingline Loan and (ii) the L/C Issuer shall be
required to issue, extend, renew or increase any Letter of Credit unless it is
satisfied that it will have no Fronting Exposure after giving effect thereto.

 

(c) If a Defaulting Lender shall for any reason fail to (i) make any respective
Loan required pursuant to the terms of this Agreement or to pay to
Administrative Agent, the L/C Issuer, the Swingline Lender or any other Lender
any other amount required to be paid by it hereunder (including in respect of
its participation in Letters of Credit or Swingline Loans) or (ii) pay its
Applicable Percentage of a Protective Advance, any of the other Lenders may, but
shall not be obligated to, make all or a portion of the Defaulting Lender’s Loan
or amount or Applicable Percentage of such advance, provided that such Lender
gives the Defaulting Lender and Administrative Agent prior notice of its
intention to do so. The right to make such advances in respect of the Defaulting
Lender shall be exercisable first by the Lender holding the greatest Applicable
Percentage and thereafter to each of the Lenders in descending order of their
respective Applicable Percentage of the Loans or in such other manner as the
Required Lenders (excluding the Defaulting Lender) may agree on. Any Lender
making all or any portion of the Defaulting Lender’s Applicable Percentage of
the applicable Loan or advance in accordance with the foregoing terms and
conditions shall be referred to as a “Special Advance Lender”.

 

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(d) In any case where a Lender becomes a Special Advance Lender, the Special
Advance Lender shall be deemed to have purchased, and the Defaulting Lender
shall be deemed to have sold, a senior participation in the Defaulting Lender’s
respective Loans to the extent of the amount so advanced or disbursed (the
“Advanced Amount”) bearing interest (including interest at the Default Rate, if
applicable). It is expressly understood and agreed that each of the respective
obligations under this Agreement and the other Loan Documents, including
advancing Loans, losses incurred in connection with the Loan, costs and expenses
of enforcement, advancing to preserve the Collateral or to preserve and protect
the Borrowing Base Property, shall be without regard to any adjustment in the
Applicable Percentage occasioned by the acts of a Defaulting Lender. The Special
Advance Lender shall be entitled to an amount (the “Unpaid Amount”) equal to the
applicable Advanced Amount, plus any unpaid interest due and owing with respect
thereto, less any repayments thereof made by the Defaulting Lender immediately
upon demand. The Defaulting Lender shall have the right to repurchase the senior
participation in its Loan from the Special Advance Lender, pro rata if there is
more than one Special Advance Lender, at any time by the payment of the Unpaid
Amount.

 

(e) A Special Advance Lender shall (i) give notice to the Defaulting Lender,
Administrative Agent and each of the other Lenders (provided that failure to
deliver said notice to any party other than the Defaulting Lender shall not
constitute a default under this Agreement) of the Advance Amount and the
percentage of the Special Advance Lender’s senior participation in the
Defaulting Lender’s Loan and (ii) in the event of the repayment of any of the
Unpaid Amount by the Defaulting Lender, give notice to the Defaulting Lender and
Administrative Agent of the fact that the Unpaid Amount has been repaid (in
whole or in part), the amount of such repayment and, if applicable, the revised
percentage of the Special Advance Lender’s senior participation. Provided that
Administrative Agent has received notice of such participation, Administrative
Agent shall have the same obligations to distribute interest, principal and
other sums received by Administrative Agent with respect to a Special Advance
Lender’s senior participation as Administrative Agent has with respect to the
distribution of interest, principal and other sums under this Agreement; and at
the time of making any distributions to the Lenders, shall make payments to the
Special Advance Lender with respect to a Special Advance Lender’s senior
participation in the Defaulting Lender’s Loan out of the Defaulting Lender’s
share of any such distributions.

 

(f) A Defaulting Lender shall immediately pay to a Special Advance Lender all
sums of any kind paid to or received by the Defaulting Lender from Borrower,
whether pursuant to the terms of this Agreement or the other Loan Documents or
in connection with the realization of the security therefor until the Unpaid
Amount is fully repaid. Notwithstanding the fact that the Defaulting Lender may
temporarily hold such sums, the Defaulting Lender shall be deemed to hold same
as a trustee for the benefit of the Special Advance Lender, it being the express
intention of the Lenders that the Special Advance Lender shall have an ownership
interest in such sums to the extent of the Unpaid Amount.

 

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(g) Each Defaulting Lender shall indemnify, defend and hold Administrative Agent
and each of the other Lenders harmless from and against any and all losses,
damages, liabilities or expenses (including reasonable attorneys’ fees and
expenses and interest at the Default Rate) which they may sustain or incur by
reason of the Defaulting Lender’s failure or refusal to abide by its obligations
under this Agreement or the other Loan Documents. Administrative Agent shall,
after payment of any amounts due to any Special Advance Lender pursuant to the
terms of Section 8.13(c) above, set-off against any payments due to such
Defaulting Lender for the claims of Administrative Agent and the other Lenders
pursuant to this indemnity.

 

(h) Notwithstanding any provision hereof to the contrary, until such time as a
Defaulting Lender has funded its Applicable Percentage of any advance described
in Sections 8.03, 8.06, 8.09, or prior Loan disbursement which was previously a
Non-Pro Rata Advance (including through the funding thereof on its behalf by a
Special Advance Lender), or all other Lenders have received payment in full
(whether by repayment or prepayment) of the amounts due in respect of such
Non-Pro Rata Advance, all of the indebtedness and obligations owing to such
Defaulting Lender hereunder shall be subordinated in right of payment, as
provided in the following sentence, to the prior payment in full of all
principal, interest and fees in respect of all Non-Pro Rata Advances in which
the Defaulting Lender has not funded its Applicable Percentage (including
through the funding thereof on its behalf by a Special Advance Lender) (such
principal, interest and fees being referred to as “Senior Loans”). All amounts
paid by Borrower and otherwise due to be applied to the indebtedness and
obligations owing to the Defaulting Lender pursuant to the terms hereof shall be
distributed by Administrative Agent to the other Lenders in accordance with
their respective Applicable Percentage of the Loan (recalculated for purposes
hereof to exclude the Defaulting Lender’s Applicable Percentage of the Loan),
until all Senior Loans have been paid in full. This provision governs only the
relationship among Administrative Agent, each Defaulting Lender, and the other
Lenders; nothing hereunder shall limit the obligations of Borrower under this
Agreement. The provisions of this paragraph shall apply and be effective
regardless of whether a Default occurs and is then continuing, and
notwithstanding (i) any other provision of this Agreement to the contrary, (ii)
any instruction of Borrower as to its desired application of payments or (iii)
the suspension of such Defaulting Lender’s right to vote on matters which are
subject to the consent or approval of Required Lenders or all Lenders. The
failure of any Defaulting Lender to timely receive any amounts otherwise payable
to such Defaulting Lender under this Agreement or the other Loan Documents on
account of the provisions of this paragraph shall not constitute a Default or
Event of Default.

 

(i) Except as provided in Section 8.10(F), a Defaulting Lender shall have no
voting rights or rights to grant any consent or approval whatsoever under this
Agreement or any other Loan Documents (including, without limitation, under
Section 8.10 of this Agreement) and shall not be considered in the calculation
of “Required Lenders” so long as it is a Defaulting Lender. This Section shall
remain effective with respect to a Defaulting Lender until such time as the
Defaulting Lender shall no longer be in default of any of its obligations under
this Agreement by curing such default with the consent of the non-Defaulting
Lenders.  Such Defaulting Lender nonetheless shall be bound by any amendment to
or waiver of any provision of, or any consent, approval or other action granted,
taken or omitted to be taken by Administrative Agent and/or the non-Defaulting
Lenders under any Loan Document which is made subsequent to that Lender’s
becoming a Defaulting Lender and prior to such cure or waiver.

 

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(j) Certain Fees.

 

(i) No Revolving Lender that is a Defaulting Lender shall be entitled to receive
any fee payable under Sections 2.04(g) or 2.10 for any period during which that
Revolving Lender is a Defaulting Lender (and Borrower shall not be required to
pay any such fee that otherwise would have been required to have been paid to
that Defaulting Lender).

 

(ii) Each Revolving Lender that is a Defaulting Lender shall be entitled to
receive the fee payable under Section 2.04(g) for any period during which that
Revolving Lender is a Defaulting Lender only to the extent allocable to its
Revolving Loan Applicable Percentage of the stated amount of Letters of Credit
for which it has provided Cash Collateral pursuant Section 8.13(l).

 

(iii) With respect to any fee not required to be paid to any Revolving Lender
that is a Defaulting Lender pursuant to the immediately preceding clauses (i) or
(ii), Borrower shall (x) pay to each Revolving Lender that is Non-Defaulting
Lender that portion of any such fee otherwise payable to such Defaulting Lender
with respect to such Defaulting Lender’s participation in L/C Obligations or
Swingline Loans that has been reallocated to such Revolving Lender that is
Non-Defaulting Lender pursuant to Section 8.13(k), (y) pay to the L/C Issuer and
Swingline Lender, as applicable, the amount of any such fee otherwise payable to
such Defaulting Lender to the extent allocable to the L/C Issuer’s or Swingline
Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to
pay the remaining amount of any such fee.

 

(k) Reallocation of Participations to Reduce Fronting Exposure. All or any part
of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans
shall be reallocated among the Revolving Lenders that are Non-Defaulting Lenders
in accordance with their respective Revolving Loan Applicable Percentages
(determined without regard to such Defaulting Lender’s Revolving Loan
Commitment) but only to the extent that (x) no Default shall exist at such time
and (y) such reallocation does not cause the aggregate Revolving Credit Exposure
of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving
Loan Commitment. No reallocation hereunder shall constitute a waiver or release
of any claim of any party hereunder against a Defaulting Lender arising from
that Revolving Lender having become a Defaulting Lender, including any claim of
a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation.

 

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(l) Cash Collateral, Repayment of Swingline Loans.

 

(i) If the reallocation described in Section 8.13(k) cannot, or can only
partially, be effected, Borrower shall, without prejudice to any right or remedy
available to it hereunder or under law, (x) first, prepay Swingline Loans in an
amount equal to Swingline Lender’s resulting Fronting Exposure and (y) second,
Cash Collateralize the L/C Issuer’s Fronting Exposure in accordance with the
procedures set forth in this subsection.

 

(ii) At any time that there shall exist a Revolving Lender that is a Defaulting
Lender, within one (1) Business Day following the written request of
Administrative Agent or the L/C Issuer (with a copy to Administrative Agent),
Borrower shall Cash Collateralize the L/C Issuer’s Fronting Exposure with
respect to such Defaulting Lender (determined after giving effect to
Section 8.13(k) and any Cash Collateral provided by such Defaulting Lender) in
an amount not less than the aggregate Fronting Exposure of the L/C Issuer with
respect to Letters of Credit issued and outstanding at such time.

 

(iii) Borrower, and to the extent provided by any Defaulting Lender, such
Defaulting Lender, hereby grant to Administrative Agent, for the benefit of
Issuing Bank, and agree to maintain, a first priority security interest in all
such Cash Collateral as security for the Defaulting Lenders’ obligation to fund
participations in respect of L/C Obligations, to be applied pursuant to the
immediately following clause (iv). If at any time Administrative Agent
determines that Cash Collateral is subject to any right or claim of any Person
other than Administrative Agent and the L/C Issuer as herein provided, or that
the total amount of such Cash Collateral is less than the aggregate Fronting
Exposure of the L/C Issuer with respect to Letters of Credit issued and
outstanding at such time, Borrower will, promptly upon demand by Administrative
Agent, pay or provide to Administrative Agent additional Cash Collateral in an
amount sufficient to eliminate such deficiency (after giving effect to any Cash
Collateral provided by the Defaulting Lender).

 

(iv) Notwithstanding anything to the contrary contained in this Agreement, Cash
Collateral provided under this Section in respect of Letters of Credit shall be
applied to the satisfaction of the Defaulting Lender’s obligation to fund
participations in respect of L/C Obligations (including, as to Cash Collateral
provided by a Defaulting Lender, any interest accrued on such obligation) for
which the Cash Collateral was so provided, prior to any other application of
such property as may otherwise be provided for herein.

 

(v) Cash Collateral (or the appropriate portion thereof) provided to reduce the
L/C Issuer’s Fronting Exposure shall no longer be required to be held as Cash
Collateral pursuant to this subsection following (x) the elimination of the
applicable Fronting Exposure (including by the termination of Defaulting Lender
status of the applicable Revolving Lender), or (y) the determination by
Administrative Agent and the L/C Issuer that there exists excess Cash
Collateral; provided that the Person providing Cash Collateral and L/C Issuer
may (but shall not be obligated to) agree that Cash Collateral shall be held to
support future anticipated Fronting Exposure or other obligations and provided
further that to the extent that such Cash Collateral was provided by Borrower,
such Cash Collateral shall remain subject to the security interest granted
pursuant to the Loan Documents.

 

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(m) Defaulting Lender Cure. If Borrower, Administrative Agent, Swingline Lender
and Issuing Bank agree in writing that a Revolving Lender is no longer a
Defaulting Lender, 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 (which may include arrangements with respect to any
Cash Collateral), that such Revolving Lender will, to the extent applicable,
purchase at par that portion of outstanding Revolving Loans of the other
Revolving Lenders or take such other actions as Administrative Agent may
determine to be necessary to cause the Revolving Loans and funded and unfunded
participations in Letters of Credit and Swingline Loans to be held pro rata by
the Revolving Lenders in accordance with their respective Revolving Loan
Applicable Percentages (determined without giving effect to Section 8.13(k)),
whereupon such Lender will cease to be a Defaulting Lender; provided that no
adjustments will be made retroactively with respect to fees accrued or payments
made by or on behalf of Borrower while that Revolving 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.

 

(n) New Swingline Loans/Letters of Credit. Notwithstanding anything to the
contrary in this Agreement, so long as any Revolving Lender is a Defaulting
Lender, (i) Swingline Lender shall not be required to fund any Swingline Loans
unless it is satisfied that it will have no Fronting Exposure after giving
effect to such Swingline Loan and (ii) the L/C Issuer shall not be required to
issue, extend, renew or increase any Letter of Credit unless it is satisfied
that it will have no Fronting Exposure after giving effect thereto.

 

Section 8.14 Liability of Administrative Agent. Administrative Agent shall not
have any liabilities or responsibilities to Borrower on account of the failure
of any Lender (other than Administrative Agent in its capacity as a Lender) to
perform its obligations hereunder or to any Lender on account of the failure of
Borrower to perform its obligations hereunder or under any other Loan Document.

 

Section 8.15 Transfer of Agency Function. Without the consent of Borrower or any
Lender, Administrative Agent may at any time or from time to time transfer its
functions as Administrative Agent hereunder to any of its Affiliates or offices
wherever located in the United States; provided that Administrative Agent shall
promptly notify Borrower and the Lenders thereof.

 

Section 8.16 Administrative Agent May File Proofs of Claim. In case of the
pendency of any proceeding under the Federal Bankruptcy Code, as amended from
time to time, or other similar debtor relief laws or any other judicial
proceeding relative to Borrower, Administrative Agent (irrespective of whether
the Loans shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether Administrative Agent shall have made any
demand on Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

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(1) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loan 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 Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Lenders and Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders and Administrative Agent under Section 2.02
and Section 10.03) allowed in such judicial proceeding; and

 

(2) to collect and receive any monies or other property payable or deliverable
on any such claims for the account of the Lenders and to distribute the same in
accordance with this Agreement;

 

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 Administrative Agent and, if Administrative
Agent shall consent to the making of such payments directly to the Lenders, to
pay to Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of Administrative Agent and its agents and
counsel, and any other amounts due Administrative Agent under Article II and
Section 10.03.

 

Nothing contained herein shall be deemed to authorize 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 or to authorize Administrative Agent to vote in
respect of the claim of any Lender or in any such proceeding.

 

Section 8.17 Several Obligations; No Liability, No Release. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of Administrative Agent in its capacity as such, and not by
or in favor of Lenders, any and all obligations on the part of Administrative
Agent (if any) to make any advances of the Loans or reimbursements for other
Lender Funding Amounts shall constitute the several (and not joint) obligations
of the respective Lenders on a ratable basis, according to their respective
Revolving Loan Applicable Percentages and Term Loan Applicable Percentages. 
Except as may be specifically provided in this Agreement, no Lender shall have
any liability for the acts of any other Lender.  No Lender shall be responsible
to Borrower or any other person for any failure by any other Lender to fulfill
its obligations to make advances of the Loans or reimbursements for other Lender
Funding Amounts, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.  The failure of any Lender to
pay to Administrative Agent its Applicable Percentage of a Lender Funding Amount
shall not relieve any other Lender of any obligation hereunder to pay to
Administrative Agent its Applicable Percentage of such Lender Funding Amounts as
and when required herein, but no Lender shall be responsible for the failure of
any other Lender to so fund its Applicable Percentage of the Lender Funding
Amount.  In furtherance of the foregoing, Lenders shall comply with their
obligation to pay Administrative Agent their Applicable Percentage of such
Lender Funding Amounts regardless of (i) the occurrence of any Event of Default
hereunder or under any Loan Document; (ii) any failure of consideration, absence
of consideration, misrepresentation, fraud, or any other event, failure,
deficiency, breach or irregularity of any nature whatsoever in the Loan
Documents; or (iii) any bankruptcy, insolvency or other like event with regard
to Borrower or any Guarantor.  The obligations of Lenders to pay to such Lender
Funding Amounts are in all regards independent of any claims between
Administrative Agent and any Lender.

 

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Section 8.18 No Reliance on Administrative Agent’s Customer Identification
Program. Each Lender acknowledges and agrees that neither such Lender, nor any
of its Affiliates, participants or assignees, may rely on Administrative Agent
to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer
identification program, or other obligations required or imposed under or
pursuant to the Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 1020.220 (as hereafter amended or replaced, the
“CIP Regulations”), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with any
Credit Party or any other loan parties, their Affiliates or their agents, the
Loan Documents or the transactions hereunder or contemplated hereby: (i) any
identity verification procedures, (ii) any recordkeeping, (iii) comparisons with
Government Lists, (iv) customer notices or (v) other procedures required under
the CIP Regulations or such other Anti-Terrorism Law.

 

Section 8.19 Lenders with Titles. Anything herein to the contrary
notwithstanding, the [Documentation Agent] listed on the cover page of this
Agreement shall not have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity as a
Lender.

 

Section 8.20 Arranger; Bookrunner. Anything herein to the contrary
notwithstanding, neither the Sole Lead Arranger nor the Sole Bookrunner listed
on the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as Administrative Agent, the L/C Issuer or a Lender hereunder.

 

ARTICLE IX

BORROWING BASE PROPERTIES

 

Section 9.01 Borrowing Base Properties.

 

(a) At all times, the REIT and Borrower shall maintain the Borrowing Base
Properties in accordance with this Article IX and the other terms and conditions
of the Loan Documents.

 

(b) In addition to the other requirements that are set forth in the definition
of “Borrowing Base Property,” in order for a Real Property to qualify as a
Borrowing Base Property, it shall comply with the following conditions at all
times:

 

(i) Such Borrowing Base Property shall be wholly owned by a Subsidiary Guarantor
(other than the Borrowing Base Property known as 163 Washington Street,
Brooklyn, New York, which shall be wholly owned by the 163 Washington SPE) that
complies with the covenants and provisions of this Agreement relating to
Subsidiary Guarantors and the 163 Entities; provided, however, that a Borrowing
Base Property may, with Administrative Agent’s written consent, be leased to a
Subsidiary Guarantor under an Approved Ground Lease;

 

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(ii) The representations and warranties contained in Sections 3.05(a), 3.06(b),
3.22, and 3.23 shall at all times be true and correct with respect to such
Borrowing Base Property and such Borrowing Base Property shall be in compliance
with the covenants set forth in Section 9.01(c);

 

(iii) Such Borrowing Base Property shall be an income producing, multi-family,
mixed-use, retail, distribution, parking or office property, provided that
parking facilities shall be permitted only if operated by a third-party operator
and distribution facilities shall be permitted only to the extent they meet the
conditions set forth in clause (v) of this Section 9.01(b);

 

(iv) At least eighty percent (80%) of the (x) units in any multi-family
Borrowing Base Property, and (y) net rentable square footage of any other type
of Borrowing Base Property (other than a parking facility), shall be subject to
executed Leases from tenants in occupancy who are not in default beyond the
expiration of all applicable notice and grace periods under their Lease and not
in bankruptcy (the “Occupancy Rate”); provided, however, that if (A) on any
date, the Occupancy Rate is less than eighty percent (80%), there shall be a
grace period of two (2) fiscal quarters to increase such occupancy provided that
(i) Borrower delivers written notice of the failure to comply with such
occupancy requirement within three (3) Business Days after a Responsible Officer
of Borrower obtains knowledge of such failure, and (ii) at all times during such
grace period, the Occupancy Rate does not fall below seventy percent (70%) at
any time and (B) on any date, the Occupancy Rate is less than seventy percent
(70%), there shall be a grace period of two (2) fiscal quarters (which shall be
concurrent with and not in addition to the two (2) fiscal quarter grace period
referred to in clause (A), above) to increase such occupancy provided that (i)
Borrower delivers written notice of the failure to comply with such occupancy
requirement within three (3) Business Days after a Responsible Officer of
Borrower obtains knowledge of such failure, (ii) at all times during such grace
period, the Occupancy Rate does not fall below fifty percent (50%) at any time,
and (iii) during the pendency of such grace period, the percentage applicable in
calculating the Value-Based Borrowing Base Limit for the applicable Borrowing
Base Property shall be reduced by fifty percent (50%); thereafter, and in the
event any Borrowing Base Property has an Occupancy Rate below fifty percent
(50%) at any time, such Borrowing Base Property shall be removed from the
Borrowing Base pursuant to Section 9.03;

 

(v) If such Borrowing Base Property is a distribution facility, it shall be an
Investment Grade Borrowing Base Property having at least eight (8) years
remaining on the term of the Lease to the applicable Investment Grade Tenant at
the time such facility is added to the Borrowing Base (excluding any extension
options) and where the applicable Investment Grade Tenant shall be in occupancy,
not in default beyond the expiration of all applicable notice and grace periods
under its Lease and not in bankruptcy;

 

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(vi) If such Borrowing Base Property is a Single Tenant Asset, then the
remaining Lease term related thereto shall be no less than six (6) years
(excluding any extension options);

 

(vii) An Appraisal shall be required for each Borrowing Base Property during the
term of this Agreement as follows: (A) within six (6) months prior to the
Effective Date (with respect to each initial Borrowing Base Property that is
added to the Borrowing Base upon the Effective Date, and (B) within six (6)
months prior to the date that any Borrowing Base Property is added to the
Borrowing Base in accordance with the Loan Documents (which respect to Borrowing
Base Properties added after the Effective Date), and that in each case that is
acceptable to Administrative Agent in its reasonable discretion, subject to the
provisions of Sections 9.01(b)(viii) and (ix);

 

(viii) Notwithstanding anything to the contrary in clause (vii) above, in
Administrative Agent’s sole discretion, a new Appraisal may be required, at
Borrower’s expense, for each Borrowing Base Property commencing (i) twenty four
(24) months after the Effective Date (with respect to each initial Borrowing
Base Property that is added to the Borrowing Base upon the Effective Date), (ii)
twenty four (24) months after the date that any Borrowing Base Property is
thereafter added to the Borrowing Base (with respect to any such
subsequently-added Borrowing Base Property), and (iii) twenty four (24) months
after the date of any Appraisal obtained pursuant to this Section 9.01(viii).
Borrower may, at its election and expense, also request a new Appraisal at any
of such times. For purposes of this Section 9.01(b)(viii), an Appraisal that has
a date of value that is no earlier than six (6) months prior to the end of any
applicable 24-month period described in this Section 9.01(b)(viii) shall, if it
is approved by Administrative Agent and complies with the requirements of this
Agreement, be deemed to satisfy the requirements herein for a new Appraisal to
be obtained commencing on each such 24-month period.

 

(ix) If the Net Operating Income for any Borrowing Base Property shall decrease
(A) by more than five percent (5%) from one fiscal quarter to the next and the
Net Operating Income of such Borrowing Base Property for the next succeeding
fiscal quarter does not make up for such decline in Net Operating Income or (B)
ten percent (10%) or more from the Net Operating Income of such Borrowing Base
Property for the previous calendar year, then a new Appraisal for such Borrowing
Base Property shall be required to be obtained at Borrower’s cost.

 

(x) For purposes of determining the Appraised Value of any Borrowing Base
Property hereunder, the most recent Appraisal thereof obtained by in accordance
with the terms hereof shall govern the determination of the Appraised Value
thereof; provided, however that if a new Appraisal is not required to be
obtained for such Borrowing Base Property pursuant to Section 9.01(b)(viii) or
(ix), until such time as the new Appraisal shall have been obtained in
accordance with this Agreement, then the Borrowing Base Asset Value of such
Borrowing Base Property shall equal the lesser of the Acquisition Cost of such
Borrowing Base Property or the Estimated Value thereof.

 

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(xi) Borrower may elect, pursuant to the definition of “Borrowing Base Asset
Value,” to require the determination of the component of the definition of
Borrowing Base Asset Value referenced in clause (b) of the definition thereof to
be based upon the Estimated Values of the Borrowing Base Properties or the
Appraised Values of the Borrowing Base Properties only once per fiscal quarter,
in connection with the delivery by Borrower to Administrative Agent of the
Borrowing Base Certificate that is due to be delivered during such fiscal
quarter, and such election shall be made on an “all or none” basis such that, if
Borrower elects to require such determination to be based on Appraised Values,
such election must be made as to all Borrowing Base Properties, and if Borrower
elects to require such determination to be based on Estimated Values, such
election must be made as to all Borrowing Base Properties (provided, however,
that in the event that Borrower obtains an updated Appraisal pursuant to Section
9.01(b)(viii) Borrower shall be permitted to required that such determination be
made on the basis of such updated Appraised Value); provided, further, that if
the Appraised Value of one or more Borrowing Base Properties cannot be
calculated solely because Appraisals have been ordered but have not yet been
delivered for such Borrowing Base Property, as required hereby, the Borrowing
Base Appraised Value may nonetheless be determined according to the Estimated
Value of each such affected Borrowing Base Property and the Appraised Value of
all other Borrowing Base Properties until such time as an Appraisal for such
affected Borrowing Base Property has been obtained as provided herein.

 

(xii) The survey for such Borrowing Base Property delivered to the
Administrative Agent in connection with this Agreement shall be prepared in
accordance with the 2011 Minimum Standard Detail Requirements for ALTA/ASM Land
Title Surveys. Except for those matters reflected on such survey or in the title
policy for such Borrowing Base Property delivered to the Administrative Agent in
connection with this Agreement or as otherwise disclosed to the Administrative
Agent, as of the date such Real Property is accepted as a Borrowing Base
Property, there shall not be any construction or commencement of construction on
such Borrowing Base Property of any new external structures, or additions or
extensions thereto, or other external improvements, whether to existing
structures or not. Except as may be disclosed on the surveys delivered pursuant
to this Agreement and in the title policy for such Borrowing Base Property:
(i) none of the material improvements comprising part of such Borrowing Base
Property shall be outside the boundaries of such Borrowing Base Property (or
building restriction or setback lines applicable thereto); (ii) no material
improvements on adjoining properties shall encroach upon such Borrowing Base
Property; and (iii) no material improvements comprising part of such Borrowing
Base Property shall encroach upon or violate any easements or any other
encumbrance upon such Borrowing Base Property, in each case other than minor
encumbrances which could not reasonably be expected to have a (x) material
adverse effect with respect to the financial condition or the operations of such
Borrowing Base Property, (y) material adverse effect on the Borrowing Base Asset
Value of such Borrowing Base Property, or (z) material adverse effect on the
ownership of such Borrowing Base Property.

 

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(xiii) All transfer taxes, deed stamps, intangible taxes or other amounts in the
nature of transfer taxes required to be paid by any Credit Party under
applicable legal requirements currently in effect in connection with the
transfer of such Borrowing Base Property to the Borrower, any transfer of a
controlling interest in the Borrower or the formation of the REIT, as
applicable, shall have been paid or will be paid prior to delinquency. All
mortgage, mortgage recording, stamp, intangible or other similar tax required to
be paid by any Credit Party under applicable legal requirements currently in
effect in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents, including,
without limitation, the Mortgage, shall have been paid prior to delinquency.

 

(xiv) The Borrower shall have delivered to Administrative Agent copies of all
Leases and all unrecorded easement agreements, reciprocal easement agreements,
management agreements and material agreements in Borrower’s possession or
custody which affect in any material respect the Borrower’s interest in such
Borrowing Base Property.

 

(xv) Borrower shall have received no notice of any condemnation proceeding
involving such Borrowing Base Property or any portion thereof or parking
facility used in connection therewith, nor shall any portion of such Borrowing
Base Property or any parking facility used in connection therewith be damaged
due to fire or other casualty, except those proceedings or casualties that could
not reasonably be expected to materially interfere with the current use and
value of such Borrowing Base Property or to cause such property to otherwise no
longer qualify as a Borrowing Base Property.

 

(xvi) Such Borrowing Base Property shall have adequate rights of access to
public ways and is currently served by adequate electric, gas, water, sewer,
sanitary sewer and storm drain facilities. All public utilities necessary to the
use and enjoyment of such Borrowing Base Property as intended to be used and
enjoyed shall be located in the public right-of-way abutting such Borrowing Base
Property or in private easements or license areas benefitting such Borrowing
Base Property.

 

(xvii) No Credit Party shall have suffered, permitted or initiated the joint
assessment of such Borrowing Base Property with any other real property
constituting a tax lot separate and apart from the tax lot comprising such
Borrowing Base Property.

 

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(xviii) As of the date of its inclusion as a Borrowing Base Property, such
Borrowing Base Property, including all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, shall be in good condition, order and repair in all material
respects subject to reasonable and customary wear and tear; and there shall
exist no structural or other material defects or damages in such Borrowing Base
Property, whether latent or otherwise, and no Credit Party shall have received
written notice from any insurance company or bonding company of any defects or
inadequacies in such Borrowing Base Property, or any part thereof, which would,
in either case, adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.

 

(xix) The Borrower shall have delivered to the Administrative Agent a true and
correct copy of the Management Agreement that is in effect with respect to such
Borrowing Base Property. The Management Agreement with respect to such Borrowing
Base Property delivered to the Administrative Agent shall be the only Management
Agreement related to such Borrowing Base Property, and shall be in full force
and effect with no default or event of default, in either case beyond all
applicable notice and grace periods, existing thereunder.

 

(xx) To the knowledge of Borrower, no portion of such Borrowing Base Property
shall have been purchased with proceeds of any illegal activity and no part of
the proceeds of any Credit Extension will be used in connection with any illegal
activity.

 

(c) The REIT and Borrower hereby covenant and agrees with respect to any
Borrowing Base Property (i) to comply with Sections 5.05, 5.12, 5.18, 5.19,
5.21, 6.02, 6.11, and 6.18, and (ii) as follows:

 

(i) Leases. The REIT and Borrower shall not, and shall not permit the Subsidiary
Guarantor or any 163 Entity to, enter into, amend, modify, supplement or
terminate any Lease of any Borrowing Base Property, without the prior written
consent of Administrative Agent, other than (A) modifications that do not affect
the economic terms or length of the term of such Lease, and (B) modifications
that do not materially affect the obligations of the tenants thereunder (other
than modifications that would increase the obligations of any such tenant and
are more favorable to the applicable Subsidiary Guarantor or such 163 Entity, as
applicable).

 

(ii) Management Contracts. The REIT and Borrower shall obtain the prior written
approval of Administrative Agent prior to entering into, or causing any
Subsidiary Guarantor or 163 Entity to enter into, any property management
agreement or replacing or terminating the property manager for any Borrowing
Base Property.

 

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(d) In calculating the Value-Based Borrowing Base Limit and DSCR-Based Borrowing
Base Limit, unless Administrative Agent and the Required Lenders, in each of
their sole and absolute discretion, shall agree otherwise, the following
requirements shall apply, and adjustments shall be made to the Borrowing Base
(calculated in accordance with the most recent Borrowing Base Certificate
delivered hereunder) in order for the amount of such Borrowing Base to comply
with the following requirements:

 

(i) The Borrowing Base Asset Values of Single Tenant Assets that are not
Investment Grade Borrowing Base Properties shall not comprise more than thirty
percent (30%) of the aggregate Borrowing Base Asset Values of all Borrowing Base
Properties;

 

(ii) The Borrowing Base Asset Values of Single Tenant Assets that are Investment
Grade Borrowing Base Properties shall not comprise more than fifty percent (50%)
of the aggregate Borrowing Base Asset Values of all Borrowing Base Properties;

 

(iii) Commencing with the second (2nd) fiscal quarter after the Effective Date,
cash rent generated from any single tenant (or group of affiliated tenants) or
from any single distribution facility or parking facility shall not account for
more than twenty percent (20%) of the cash rent of the Borrowing Base assets in
the Borrowing Base measured for any period, whether for purposes of determining
the Estimated Values of the Borrowing Base Properties or for purposes of
determining the DSCR-Based Borrowing Base Limit;

 

(iv) The Borrowing Base Asset Value of no single Borrowing Base Property shall
comprise more than 30% of the aggregate Borrowing Base Asset Values of all
Borrowing Base Properties, except for the Borrowing Base Property known as and
located at 216 West 18th Street, New York, New York;

 

(v) The Adjusted Borrowing Base Net Operating Income derived from Borrowing Base
Properties subject to an Approved Ground Lease shall not comprise more than
thirty percent (30%) of the aggregate Adjusted Borrowing Base Net Operating
Income of all Borrowing Base Properties measured for any period, whether for
purposes of determining the Estimated Values of the Borrowing Base Properties or
for purposes of determining the DSCR-Based Borrowing Base Limit;

 

(vi) A minimum of fifty percent (50%) of the aggregate Borrowing Base Asset
Values of the Borrowing Base Properties shall be comprised of the Borrowing Base
Asset Values of Borrowing Base Properties located in New York County, New York
State;

 

(vii) Commencing with the second (2nd) fiscal quarter after the Effective Date,
the rents that are included in the Adjusted Borrowing Base Net Operating Income
of the Borrowing Base Properties for any fiscal quarter that are derived from
Lease-Back Master Leases shall not exceed five percent (5%) of the aggregate
rents that are included in the Adjusted Borrowing Base Net Operating Income of
the Borrowing Base Properties for such fiscal quarter;

 

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(viii) Administrative Agent shall have the right to mark to market any rents
that are derived from Lease-Back Master Leases that are included in the Adjusted
Borrowing Base Net Operating Income of the Borrowing Base Properties for any
fiscal quarter.

 

Section 9.02 Exclusion Events. Notwithstanding anything contained herein to the
contrary, if any Real Property previously-qualifying as a Borrowing Base
Property ceases to meet the criteria for qualification as such, as set forth in
the definition of “Borrowing Base Property” (inclusive of the requirements of
Section 9.01(b), or if any of the following events shall occur:

 

(a) any violation of Environmental Law with respect to such Borrowing Base
Property, or presence of Hazardous Materials on, about or under such Borrowing
Base Property, regardless of the time when it arose, which could reasonably be
expected to have a (a) material adverse effect with respect to the financial
condition or the operations of such Borrowing Base Property, (b) material
adverse effect on the Borrowing Base Asset Value of such Borrowing Base
Property, or (c) material adverse effect on the ownership of such Borrowing Base
Property, or that would involve more than $5,000,000 or take longer than six (6)
months to repair or remediate (measured from the date that all required permits
pertaining thereto have been obtained) or such repairs or remediation would be
completed after the Maturity Date;

 

(b) Any of the Black Walnut JV Partner or 163 Washington Avenue, LLC shall
exercise any of their Option Rights and as a result thereof 163 Washington shall
be owned 100%, directly or indirectly, by either such Person;

 

(c) (i) any default by any Subsidiary Guarantor or 163 Entity, as tenant under
any applicable Approved Ground Lease, in the observance or performance of any
material term, covenant, or condition of any applicable Approved Ground Lease on
the part of such Subsidiary Guarantor or 163 Entity to be observed or performed
and said default is not cured following the expiration of any applicable grace
and notice periods therein provided, or (ii) the leasehold estate created by any
applicable Approved Ground Lease shall be surrendered or (iii) any applicable
Approved Ground Lease shall cease to be in full force and effect or (iv) any
applicable Approved Ground Lease shall be terminated or canceled for any reason
or under any circumstances whatsoever, or any of the material terms, covenants
or conditions of any applicable Approved Ground Lease shall be modified,
changed, supplemented, altered, or amended in any manner not otherwise permitted
hereunder without the consent of Administrative Agent; or

 

(d) The improvements comprising a Borrowing Base Property have been damaged
(ordinary wear and tear excepted) and not repaired or are the subject of any
pending or, to any Credit Party’s knowledge, threatened condemnation or adverse
zoning proceeding, except as could not reasonably be expected to cause a (a)
material adverse effect with respect to the financial condition or the
operations of such Borrowing Base Property, (b) material adverse effect on the
Borrowing Base Asset Value of such Borrowing Base Property, (c) material adverse
effect on the ownership of such Borrowing Base Property, or to involve more than
$5,000,000 or take longer than six (6) months to repair or remediate (measured
from the date of receipt of insurance proceeds with respect to such damage or
event) or to be completed after the Maturity Date

 

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(any such condition or event, an “Exclusion Event”) such property shall be
immediately removed from all financial covenant and Borrowing Base-related
calculations contained herein, and applicable provisions of Section 9.03(b)
shall apply. Any such property shall immediately cease to be a “Borrowing Base
Property” hereunder, Schedule III attached hereto shall be deemed to have been
immediately amended to remove such Real Property from the list of Borrowing Base
Properties and the Borrower shall be required, within five (5) Business Days
after such property ceases to qualify as a Borrowing Base Property, to satisfy
all of the conditions set forth in Article IX with respect to a Borrowing Base
Removal with respect to such property; provided, however, that, if any Real
Property removed as a Borrowing Base Property as a result of an Exclusion Event
or because it ceases to meet the criteria for qualification as such, as set
forth in the definition of “Borrowing Base Property”, subsequently meets such
criteria for qualification, and provided that any applicable Exclusion Event
shall have been cured, repaired or remedied to the reasonable satisfaction of
Administrative Agent, such Real Property shall thereafter be included once again
as a Borrowing Base Property, provided that the conditions set forth in Section
9.03 (other than those which remain in effect from its prior inclusion as a
Borrowing Base Property) are satisfied.

 

Section 9.03 Addition and Removal of Borrowing Base Properties. At any time
after the Effective Date hereof, Borrower shall have the right to cause one or
more Real Properties to be released as a Borrowing Base Property (a “Borrowing
Base Removal”) or to be added as a Borrowing Base Property (a “Borrowing Base
Addition”), provided that no Default or Event of Default shall exist or shall
result therefrom and that each of the following conditions are satisfied:

 

(a) In connection with a Borrowing Base Addition (including addition of the Real
Properties listed on Schedule III as the initial Borrowing Base Properties on
the Effective Date), upon the satisfaction of the following conditions, Schedule
III attached hereto shall be deemed to have been immediately amended to add the
applicable Real Properties to the list of Borrowing Base Properties set forth
therein:

 

(i) At least ten (10) Business Days prior to the date on which Borrower intends
for the Borrowing Base Addition to occur, Borrower shall provide (or shall have
provided) to Administrative Agent (A) the Real Property location, (B) the Real
Property purchase price, (C) either (1) if either not yet acquired, directly or
indirectly, or acquired within six (6) months of Borrower’s intended date for
the Borrowing Base Addition to occur, pro forma revenues and expenses for the
Real Property breaking out the first ninety (90) days following the acquisition
of such Real Property and the existing occupancy level of the Real Property,
along with the applicable purchase and sale agreement, or (2) if such Real
Property has been owned, directly or indirectly, for more than six (6) months,
then the financial statements required pursuant to Sections 5.01(a) and (b)
hereof, along with the applicable deed, in each case reasonably acceptable to
the Administrative Agent and the Required Lenders, (D) UCC Searches relating to
such Real Property;

 

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(ii) Immediately subsequent to the proposed Borrowing Base Addition, the REIT
and Borrower shall remain in compliance with the financial covenants contained
in Section 6.01;

 

(iii) Such Real Property shall comply with the criteria for qualification as a
Borrowing Base Property as set forth in the definition of “Borrowing Base
Property” inclusive of the requirements of Section 9.01(b) hereof, and Borrower
shall have delivered to Administrative Agent a Borrowing Base Certificate and an
officer’s certificate of a Responsible Officer certifying as to the compliance
of such Real Property with such criteria and containing such detail in respect
thereof as Administrative Agent may require;

 

(iv) Administrative Agent shall have received and approved (which approval shall
not be unreasonably withheld, conditioned, or delayed) all due diligence
reasonably required by Administrative Agent with respect to such Real Property,
a title commitment if the Real Property has not yet been acquired or a title
policy if the Real Property has been acquired and an updated title report if the
Real Property has been owned for more than six (6) months, an Appraisal, survey,
engineering and Phase I environmental site assessment reports (together with
reliance letters in favor of Administrative Agent with respect thereto or
reports addressed directly to Administrative Agent), UCC Searches and rent
rolls;

 

(v) Administrative Agent shall have received and approved Organizational
Documents with respect to any new Subsidiary Guarantor, which approval shall not
be unreasonably withheld, conditioned, or delayed;

 

(vi) Borrower shall execute and deliver to Administrative Agent, on behalf of
the Lenders, a Pledge with respect to Borrower’s Equity Interests in the new
Subsidiary Guarantor, substantially in the form of the Pledge executed and
delivered on the Effective Date;

 

(vii) If required by Section 5.18 hereof, the applicable Subsidiary Guarantor
which owns the proposed Borrowing Base Property shall, execute and deliver to
Administrative Agent, on behalf of the Lenders and the L/C Issuer, a Mortgage
encumbering the proposed Borrowing Base Addition in accordance with Section 5.18
hereof, substantially in the form of the Mortgages executed and delivered on the
Effective Date;

 

(viii) Any new Subsidiary Guarantor shall execute and deliver to Administrative
Agent a Joinder Agreement;

 

(ix) Administrative Agent shall have received (A) written opinions from
Borrower’s counsel covering the enforceability, perfection and due authorization
of the new Pledge, the Joinder Agreement (including the Guaranty as modified by
such Joinder Agreement), the new Mortgage, if applicable, and (1) in connection
with any opinion of counsel delivered on behalf of Borrower or Guarantor on the
Effective Date, in form and substance substantially similar to such opinion or
(2) in connection with any opinion of counsel not delivered on behalf of
Borrower or Guarantor on the Effective Date, such other matters as
Administrative Agent shall reasonably request and (B) such financing statements
or other documents necessary in order to perfect the security interest created
pursuant to such new Pledge and Mortgage, if applicable, as Administrative Agent
shall reasonably request;

 

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(x) If such Real Property is held pursuant to an Approved Ground Lease,
Administrative Agent shall have received true and correct copies of such
Approved Ground Lease and any guarantees thereof; and (ii) to the extent
required by Administrative Agent in its reasonable discretion, recognition
agreements and estoppel certificates executed by the lessor under such Approved
Ground Lease, in form and content reasonably satisfactory to Administrative
Agent or the Required Lenders, as applicable;

 

(xi) Administrative Agent shall have received a current property conditions
report performed by an engineer reasonably satisfactory to Administrative Agent;

 

(xii) Administrative Agent shall have received such additional information that
Administrative Agent (on its own behalf or on behalf of any Lender) reasonably
requests in order to comply with its ongoing obligations under applicable “know
your customer” and anti-money laundering rules and regulations; and

 

(xiii) (A) Until the first date upon which there are at least five (5) Borrowing
Base Properties and the Borrowing Base Asset Value is at least $75,000,000, the
approval of the Borrowing Base Approval Lenders to the addition of such Real
Property as a Borrowing Base Property shall have been obtained or (B) on and
after such date, the approval of the Required Lenders to the addition of such
Real Property as a Borrowing Base Property shall have been obtained.

 

(b) In connection with a Borrowing Base Removal:

 

(i) Borrower shall deliver to the Administrative Agent a Borrowing Base
Certificate that reflects the removal of such property from the Borrowing Base;

 

(ii) Upon the removal of any Borrowing Base Property, based upon the then most
recent information provided by Borrower to Administrative Agent and each Lender
pursuant to Section 5.01 hereof, and the Borrowing Base Certificate delivered
pursuant to Section 9.03(b)(i), and after adjusting that information to exclude
the Net Operating Income and value attributable to the Borrowing Base Property
to be so removed, and recalculating the Value – Based Borrowing Base Limit and
DSCR – Based Borrowing Base Limit, the REIT and Borrower shall be in compliance
with the financial covenants contained in Section 6.01;

 

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(iii) The Real Properties that remain in the Borrowing Base shall be in
compliance with the requirements in the definition of “Borrowing Base Property”
and the covenants set forth in Section 9.01(b) hereof;

 

(iv) Immediately subsequent to the proposed Borrowing Base Removal, and after
giving effect to the adjustments referenced in Section 9.03(b)(i), Borrower
shall be in compliance with the prepayment covenants contained in
Section 2.09(b).

 

Upon a Borrowing Base Removal in compliance with this Section 9.03(b),
Administrative Agent and each of the Lenders promptly shall release in writing
the applicable Pledge of interests in the Subsidiary Guarantor that owns such
removed Borrowing Base Property and the applicable Subsidiary Guarantor from the
Guaranty, shall return any Mortgage that was theretofore delivered with respect
to such Borrowing Base Property, and shall execute and file all documents
necessary to effectuate such releases, including, without limitation, a
termination of the UCC financing statement filed in connection with the
applicable Pledge; provided, that if the Borrowing Base Removal is of a
Borrowing Base Property which was any of the Mortgaged Borrowing Base
Properties, then, simultaneously with or before such Borrowing Base Removal,
Borrower shall cause one or more Real Properties to be added to the Borrowing
Base in compliance with the requirements for a Borrowing Base Addition, in
accordance with the terms hereof, having equal or greater Borrowing Base Asset
Value and Adjusted Borrowing Base Net Operating Income to the Real Property that
is to be removed and, notwithstanding anything to the contrary contained herein,
shall, in connection therewith, satisfy all of the conditions of Section 9.03,
including, without limitation, Section 9.03(a)(iii) and such Borrowing Base
Addition shall be considered one of the Mortgaged Borrowing Base Properties.

 

Notwithstanding anything herein to the contrary, no Borrowing Base Removal shall
be permitted without Administrative Agent’s and Required Lender’s consent if
such Borrowing Base Removal shall result in (i) there being less than five (5)
Borrowing Base Properties or (ii) the total Borrowing Base Asset Value of the
Borrowing Base Properties being less than Seventy Five Million Dollars
($75,000,000).

 

ARTICLE X

MISCELLANEOUS

 

Section 10.01 Notices.

 

(a) All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document (a “Notice”) shall be given in
writing and shall be effective for all purposes if either hand delivered with
receipt acknowledged, or delivered by a nationally recognized overnight delivery
service (such as Federal Express), or by certified or registered United States
mail, return receipt requested, postage prepaid, or, with respect to routine or
administrative notices (but specifically excluding notices of Default, Events of
Default or acceleration of the Loan) by electronic mail, in each case addressed
as follows (or to such other address or Person as a party shall designate from
time to time by notice to the other party): If to Borrower or Guarantor, to it
at c/o American Realty Capital, 405 Park Avenue, 15th Floor, New York, New York
10022, Attention: General Counsel, with a copy to c/o American Realty Capital,
405 Park Avenue, 15th Floor, New York, New York 10022, Attention: Jesse C.
Galloway; if to Administrative Agent, Swingline Lender or L/C Issuer: Capital
One, National Association, 275 Broadhollow Road, Melville, New York 11747,
Attention: Patricia Visone, with a copy to Capital One, National Association, 90
Park Avenue, New York, New York 10016, Attention: Paul Verdi, and with a copy to
Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, New York 10104,
Attention: Jeffrey J. Temple, Esq.; if to any Lender, to the address set forth
on the signature page hereto for such Lender or at its address (or facsimile
number) set forth in its Administrative Questionnaire. A notice shall be deemed
to have been given: in the case of hand delivery, at the time of delivery; in
the case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; in the case of overnight delivery, upon the first
attempted delivery on a Business Day; or, in the case of electronic mail (as set
forth in Section 10.01(c) below).

 

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(b) 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 Administrative Agent.
Administrative Agent or the REIT or Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.

 

(c) Unless 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 acknowledgment from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgment), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient, at its e-mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses (i)
and (ii) above, if such notice, email 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.

 

(d) Each of the REIT and Borrower agrees that Administrative Agent, Sole Lead
Arranger and Sole Bookrunner may, but shall not be obligated to, make the
Communications (as defined below) available to the Lenders by posting the
Communications on Debt Domain, IntraLinks, Syndtrak or a substantially similar
electronic transmission system (the “Platform”).

 

(e) Each of the REIT and Borrower hereby acknowledges that certain of the
Lenders (each, a “Public Lender”) may have personnel who do not wish to receive
material non-public information with respect to the REIT, Borrower or their
Affiliates, or the respective securities of any of the foregoing, and who may be
engaged in investment and other market-related activities with respect to such
Persons’ securities. Each of the REIT and Borrower hereby agrees that (i) all
Communications that are to be made available to Public Lenders shall be clearly
and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (ii) by marking
Communications “PUBLIC,” the REIT and Borrower shall be deemed to have
authorized Administrative Agent, the Lenders, the L/C Issuer, Sole Lead Arranger
and Sole Bookrunner to treat such Communications as not containing any material
non-public information with respect to the REIT, Borrower or any Affiliate
thereof or their respective securities for purposes of United States Federal and
state securities laws; (iii) all Communications marked “PUBLIC” are permitted to
be made available through the Platform; and (iv) Administrative Agent, Sole Lead
Arranger and Sole Bookrunner shall be entitled to treat any Communications that
are not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform designated as “Non-Public Information.”

 

157

 

(f) The Platform is provided “as is” and “as available.” The Agent Parties (as
defined below) do not warrant the accuracy or completeness of the Communications
or the adequacy of the Platform and expressly disclaim liability for errors or
omissions in the Communications. No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third-party rights or
freedom from viruses or other code defects, is made by any Agent Party in
connection with the Communications or the Platform. In no event shall
Administrative Agent, Sole Lead Arranger, Sole Bookrunner or any of their
Affiliates (collectively, the “Agent Parties”) have any liability to Borrower,
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
Borrower’s or Agent Party’s transmission or posting of Borrower Materials
through the Platform or via email, except to the extent that such losses,
claims, damages, liabilities or expenses are determined by a court of competent
jurisdiction by a final and non-appealable judgment to have resulted from the
gross negligence or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to Borrower, any
Lender or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages). “Communications”
means, collectively, any notice, demand, communication, information, document or
other material provided by or on behalf of Borrower or any Guarantor pursuant to
any Loan Document or the transactions contemplated therein which is distributed
to Administrative Agent, Sole Lead Arranger, Sole Bookrunner, the L/C Issuer or
any Lender by means of electronic communications pursuant to this Section,
including through the Platform.

 

Section 10.02 No Deemed Waivers; Remedies Cumulative. (a) No failure or delay by
Administrative Agent, the L/C Issuer or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of Administrative Agent, the L/C Issuer and the Lenders hereunder
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Credit Party therefrom shall in any event be effective unless
the same shall be permitted by this Section 10.02, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of a
Loan or issuance of any Letter of Credit shall not be construed as a waiver of
any Default, regardless of whether Administrative Agent, the L/C Issuer or any
Lender may have had notice or knowledge of such Default at the time.

 

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(b) Notwithstanding anything contained herein to the contrary, any covenant
calculation or financial formula required to be calculated and submitted under
this Agreement by Borrower and/or the REIT, any Subsidiary Guarantor or any 163
Entity to the Administrative Agent (including, without limitation, pursuant to
Section 5.01 or Section 6.01 hereof) shall not be deemed automatically approved
by the Administrative Agent and shall be subject to the right of the
Administrative Agent to review and reasonably contest any such calculation with
respect to manifest error, subject to Borrower’s right to resubmit any such
deliverable with such errors or miscalculations corrected.

 

Section 10.03 Expenses; Indemnity; Damage Waiver.

 

(a) Costs and Expenses. Each of the REIT and Borrower shall pay (i) all
reasonable and documented out-of-pocket expenses incurred by Administrative
Agent and its Affiliates, including the reasonable and documented out-of-pocket
fees, charges and disbursements of counsel for Administrative Agent, in
connection with the preparation of this Agreement and the other Loan Documents,
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the Transactions contemplated hereby or thereby shall be
consummated) or in connection with the administration of this Agreement and the
other Loan Documents, the Syndication, any Borrowing Base Addition or Borrowing
Base Removal, (ii) all reasonable and documented out-of-pocket costs and
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any draw thereunder, (iii) all
reasonable and actual out-of-pocket expenses incurred by Administrative Agent,
the L/C Issuer or any Lender, including the fees, charges and disbursements of
any counsel for Administrative Agent, the L/C Issuer or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such reasonable out-of-pocket expenses incurred in
connection with any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit, and (iii) and all reasonable out-of-pocket costs,
expenses, Taxes (other than Excluded Taxes), assessments and other charges
incurred in connection with any filing, registration, recording or perfection of
any security interest contemplated by any Security Document or any other
document referred to therein.

 

(b) Indemnification by Borrower Group. Each of the REIT and Borrower shall
indemnify Administrative Agent, L/C Issuer, Swingline Lender, 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 actual, out-of-pocket losses, claims, damages (excluding consequential
damages, other than to the extent such damages are awarded to a third-party),
liabilities and actual related out-of-pocket expenses, including the reasonable
out-of-pocket fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
Transactions contemplated hereby (including, without limitation, any claim
asserted against any Indemnitee by the Black Walnut Partner or 163 Washington
Avenue, LLC, (ii) any Loan to Borrower or Letter of Credit issued for the
account of Borrower or the use of the proceeds therefrom, (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property owned
or operated by a Credit Party, or any Environmental Liability related in any way
to a Credit Party, (iv) misappropriation or misapplication by any Credit Party
or any Affiliate of any Credit Party of any operating revenues, cash flow or
other revenue derived from or in respect of any Asset, including security
deposits, insurance proceeds, condemnation awards, or any rental, sales or other
income derived directly or indirectly from any Asset; (v) fraud or
misrepresentation or inaccurate certification by any Credit Party or any
Affiliate of any Credit Party made at any time in connection with the Loan
Documents or the Loans; (vi) intentional interference by any Credit Party or any
Affiliate of any Credit Party with Administrative Agent’s (or the Lenders’ or
the L/C Issuer’s) exercise of its rights under any of the Loan Documents;
(vii) commission of waste to or of any Real Property or any portion thereof by
any Credit Party or any Affiliate of any Credit Party or failure to maintain any
Real Property by any Credit Party in the manner required by the Loan Documents,
(viii) any claim by any Person that such Person acted on behalf of Borrower in
connection with the transactions contemplated hereby, and/or (ix) any actual
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, (A) be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the bad
faith, gross negligence or willful misconduct of such Indemnitee or its
shareholders, directors, officers, Affiliates or subsidiaries or (B) include any
consequential damages or punitive damages. For the avoidance of doubt, this
Section 10.03 shall not apply with respect to Taxes other than any Taxes that
represent claims on damages arising from a non-Tax claim.

 

159

 

(c) [Reserved].

 

Section 10.04 Waiver of Consequential Damages, Etc. To the extent permitted by
applicable Legal Requirements, no party hereto shall assert, and hereby waives,
any claim against any other party hereto or any Related Party thereof, 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 or any agreement or instrument contemplated
hereby, the Transactions, any Loan or the use of the proceeds thereof.

 

(a) Payments. All amounts due under this Section shall be payable not later than
ten (10) days after written demand therefor.

 

Section 10.05 Successors and Assigns.

 

(a) Assignments 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 (i) no Credit Party may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by a Credit Party without such consent shall be null and void) and (ii)
no Lender may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section. 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 paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of Administrative
Agent and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

 

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(b) Assignments by Lenders.

 

(i) Each Lender may assign any of its Loans, its Note and its Commitment (but
only with the consent of Administrative Agent, which consent shall not be
unreasonably withheld if the proposed assignee is an Eligible Institution and
shall not be required if the Lender assigning its Loan is Administrative Agent),
provided that:

 

(A) no such consent by Administrative Agent shall be required in the case of any
assignment by any Lender to another Lender (provided such other Lender is not a
Defaulting Lender) or an Affiliate of the assigning Lender or another Lender
(provided such other Lender is not a Defaulting Lender) except to the extent
that Administrative Agent has reserved the right to consent to further
assignments to a Lender in connection with the granting of its consent to the
initial assignment to such Lender;

 

(B) except to the extent Administrative Agent shall otherwise consent, any such
partial assignment (other than to another Lender or an Affiliate of a Lender)
shall be in an amount at least equal to $5,000,000 or, if less, the entire
amount of the assigning Lender’s Loans and Commitment;

 

(C) each such assignment (including an assignment to another Lender or an
Affiliate of a Lender) by a Lender of its Loans or Commitment shall be made in
such manner so that the same portion of its Loans and Commitment is assigned to
the respective assignee;

 

(D) upon execution and delivery by the assignee (even if already a Lender) to
Borrower and Administrative Agent of an Assignment and Assumption pursuant to
which such assignee agrees to become a “Lender” hereunder (if not already a
Lender) having the Commitment and Loans specified in such instrument, and upon
consent thereto by Administrative Agent to the extent required above, the
assignee shall have, to the extent of such assignment (unless otherwise
consented to by Administrative Agent), the obligations, rights and benefits of a
Lender hereunder holding the Commitment and Loans (or portions thereof) assigned
to it (in addition to the Commitment and Loans, if any, theretofore held by such
assignee) and the assigning Lender shall, to the extent of such assignment, be
released from the Commitment (or portion thereof) so assigned. Upon each such
assignment the assigning Lender shall pay Administrative Agent a processing and
recording fee of $3,500 and the reasonable fees and disbursements of
Administrative Agent’s counsel incurred in connection therewith. The assignee,
if it is not already a Lender, shall deliver to Administrative Agent an
Administrative Questionnaire;

 

161

 

(E) the consent of the L/C Issuer and the Swingline Lender shall be required for
any assignment in respect of a Revolving Commitment; and

 

(F) the consent of Borrower (which consent shall not be unreasonably withheld or
delayed) shall be required for any assignment unless (x) an Event of Default
shall exist at the time of such assignment or (y) such assignment is to a
Lender, an Affiliate of a Lender or an Approved Fund; provided that Borrower
shall be deemed to have consented to any such assignment unless it shall object
thereto by written notice to Administrative Agent within seven (7) Business Days
after having received notice thereof; and provided, further, that unless an
Event of Default as described in Section 7.01(a), 7.01(f) or 7.01(g) exists, the
consent of Borrower (which consent shall not be unreasonably withheld or
delayed) shall be required for any assignment to a Competitor; provided that
Borrower shall be deemed to have consented to any such assignment unless it
shall object thereto by written notice to Administrative Agent within seven (7)
Business Days after having received notice thereof.

 

(ii) From and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto 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 Section 2.13,
Section 2.14, Section 2.15 and Section 10.03); provided, however, that in no
event shall such assigning Lender be released with respect to any defaults by or
liabilities of such Lender under the Loan Documents which accrued prior to such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 10.05(b) 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
Section 10.05(e).

 

(iii) The words “execution,” “signed,” “signature,” and words of like import in
any Assignment and Assumption 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 Legal Requirements, 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.

 

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(iv) 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 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 Borrower and 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 Administrative Agent, the L/C Issuer, Swingline Lender
and each other Lender hereunder (and interest accrued thereon) and (y) acquire
(and fund as appropriate) its full pro rata share of all Loans and
participations in Letters of Credit and Swingline Loans in accordance with its
Revolving Loan Applicable Percentage and Term Loan Applicable Percentage, as
applicable. 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.

 

(c) Maintenance of Register by Administrative Agent. Administrative Agent,
acting solely for this purpose as an agent of Borrower, shall maintain at one of
its offices a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount 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, and the Credit Parties, Administrative Agent, the
L/C Issuer and the Lenders may 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. The Register shall be
available for inspection by any Credit Party, by the L/C Issuer and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.

 

(d) Effectiveness of Assignment. Upon its receipt of a duly completed Assignment
and Assumption executed by an assigning Lender and an assignee, and consented
to, if required, by the Borrower, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, Administrative Agent shall accept such Assignment and Assumption and
record the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 

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(e) Participations.

 

(i) Any Lender may, without the consent of any Credit Party or Administrative
Agent, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement and the other Loan Documents (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement and the other Loan Documents shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) Borrower, Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and the other Loan Documents, and (iv) provided, further, that unless
an Event of Default as described in Section 7.01(a), 7.01(f) or 7.01(g) exists,
the consent of Borrower (which consent shall not be unreasonably withheld or
delayed) shall be required for any participation to a Competitor; provided that
Borrower shall be deemed to have consented to any such participation unless it
shall object thereto by written notice to Administrative Agent within seven (7)
Business Days after having received written notice thereof. 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 the
other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(a) that affects such
Participant. Subject to paragraph (c)(ii) of this Section, Borrower agrees that
each Participant shall be entitled to the benefits of Section 2.13, Section 2.14
and Section 2.15 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.09 as though it were a Lender; provided such Participant agrees to be
subject to Section 2.16(c) as though it were a Lender.

 

(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.13 or Section 2.15 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.15 unless Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of Borrower, to comply with Section 2.15(e) as though it
were a Lender.

 

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(iii) Each Lender that sells a participation shall, acting solely for this
purpose as an agent of Borrower, maintain a register on which it enters the name
and address of each Participant and the principal amounts (and stated interest)
of each Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any commitments, loans, letters of credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the Code. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, Administrative Agent (in its capacity as Administrative Agent) shall have
no responsibility for maintaining a Participant Register

 

(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 to secure
obligations of such Lender, including any such pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

(g) No Assignments to the Credit Parties or Affiliates. Anything in this Section
to the contrary notwithstanding, no Lender may assign or participate any
interest in any Loan held by it hereunder to any Credit Party or any of its
Affiliates or Subsidiaries of any Credit Party without the prior consent of the
Administrative Agent and each Lender.

 

(h) Syndication. Each of the REIT and Borrower acknowledges that Administrative
Agent intends to syndicate a portion of the Commitments to one or more Lenders
(the “Syndication”) and in connection therewith, the REIT and Borrower shall
take all actions as Administrative Agent may reasonably request to assist
Administrative Agent in its Syndication effort. Without limiting the generality
of the foregoing, the REIT and Borrower shall, at the reasonable request of
Administrative Agent (i) facilitate the review of the Loans, the Borrowing Base
Properties and the other collateral for the Loans by any prospective Lender;
(ii) assist Administrative Agent and otherwise cooperate with Administrative
Agent in the preparation of information offering materials (which assistance may
include reviewing and commenting on drafts of such information materials and
drafting portions thereof); (iii) deliver updated information on Borrower,
Guarantor, the Borrowing Base Properties and the other collateral for the Loans;
(iv) make representatives of the REIT and Borrower available to meet with
prospective Lenders at tours of the Borrowing Base Properties and bank meetings
at reasonable times and upon reasonable notice; (v) facilitate direct contact
between the senior management and advisors of the REIT and Borrower and any
prospective Lender at reasonable times and upon reasonable notice; (vi) use its
best efforts to ensure that the Syndication efforts of Administrative Agent
benefit materially from their existing banking relationships; and (vii) provide
Administrative Agent with all information reasonably deemed necessary by it to
complete the Syndication successfully.

 

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Section 10.06 Survival. All covenants, agreements, representations and
warranties made by the Credit Parties herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that Administrative Agent, or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
and so long as the Commitments have not expired or terminated. The provisions of
Section 2.13, Section 2.14, Section 2.15, Section 10.03 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the Transactions, the repayment of the Loans and the Commitments or the
termination of this Agreement or any provision hereof.

 

Section 10.07 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to Administrative Agent
constitute the entire contract between and 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 Administrative Agent and when Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement. The words “execution,” “signed,”
“signature,” and words of like import in this Agreement and any Loan Document
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 Legal Requirements, 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.

 

Section 10.08 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

Section 10.09 Set-off. If an Event of Default shall have occurred and be
continuing, each Lender and the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, after
obtaining the prior written consent of the Required Lenders exercised in their
sole discretion, to the fullest extent permitted by applicable Legal
Requirements, 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 the
L/C Issuer to or for the credit or the account of any Borrower or Guarantor
against any and all of the obligations of the REIT, Borrower or such Credit
Party now or hereafter existing under this Agreement or any other Loan Document
to such Lender or the L/C Issuer, irrespective of whether or not such Lender or
the L/C Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the REIT, Borrower or such Credit
Party may be contingent or unmatured or are owed to a branch or office of such
Lender or the L/C Issuer 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 Administrative Agent for further
application in accordance with the provisions of this Agreement applicable to
payments and, pending such payment, shall be segregated by such Defaulting
Lender from its other funds and deemed held in trust for the benefit of
Administrative Agent, the L/C Issuer and the Lenders, and (y) the Defaulting
Lender shall provide promptly to 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 the L/C Issuer
under this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender and the L/C Issuer may have.

 

166

 

Section 10.10 Governing Law; Jurisdiction; Etc.

 

(a) THIS AGREEMENT, THE NOTES AND THE LOAN DOCUMENTS WERE NEGOTIATED IN THE
STATE OF NEW YORK AND THE PROCEEDS OF THE NOTES DELIVERED PURSUANT HERETO WERE
DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE LOAN DOCUMENTS AND
THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LEGAL REQUIREMENTS
OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS CREATED PURSUANT TO THE LOAN
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE
IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST
EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN THE VALIDITY AND THE ENFORCEABILITY OF ALL LOAN DOCUMENTS AND THE
OBLIGATIONS. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE REIT AND
BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AND THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

167

 

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ADMINISTRATIVE AGENT, THE L/C
ISSUER, ANY LENDER, THE REIT OR BORROWER ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK COUNTY,
NEW YORK PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND
EACH PARTY HERETO WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH OF THE REIT AND
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING.

 

Section 10.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY AGREES NOT TO ELECT
A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THE LOAN DOCUMENTS OR TRANSACTIONS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH PARTY HERETO,
AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO
WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EITHER PARTY IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER.

 

Section 10.12 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

Section 10.13 No Broker. Administrative Agent and each of the Lenders hereby
represent to Borrower that neither Administrative Agent nor any Lender Party has
dealt with, and the REIT and Borrower represent to the Administrative Agent, the
L/C Issuer and each Lender that they have not dealt with, any broker or finder
with respect to the Transactions contemplated by the Loan Documents or otherwise
in connection with the Loan Documents.

 

Section 10.14 Obligations of the Credit Parties Independent; Joint and Several.
The obligations of each Credit Party under the Loan Documents are independent of
the obligations of the other Credit Party, and a separate action or actions may
be brought or prosecuted against each of the Credit Parties irrespective of
whether action is brought against the other Credit Party or whether the other
Credit Party be joined in any such action or actions. The obligations of the
REIT and Borrower under this Agreement with respect to the representations,
warranties and covenants made by both of them are joint and several.

 

Section 10.15 Confidentiality. Each of Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Subsidiaries and
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and shall agree to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable Legal Requirements or regulations or by any subpoena or similar legal
process, (d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any suit,
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 eligible assignee of or Participant in, or any prospective eligible assignee
of or Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Credit Parties and their obligations, (g)
with the consent of Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to Administrative Agent or any Lender on a non-confidential
basis from a source other than the Credit Parties; provided that Information may
not in any circumstance be disclosed to a Competitor. For the purposes of this
Section, “Information” means all information received from or on behalf of the
Credit Parties relating to the Credit Parties, their Subsidiaries or Affiliates
or their respective businesses, other than any such information that is
available to Administrative Agent or any Lender on a non-confidential basis
prior to disclosure by the Credit Parties; provided that, in the case of
information received from the Credit Parties after the Effective Date, 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.

 

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Section 10.16 No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated by the Loan Documents, Borrower
acknowledges and agrees that: (i) the credit facilities provided for under this
Agreement and any related arranging or other services in connection therewith
(including in connection with any amendment, waiver or other modification of any
Loan Document) are an arm’s-length commercial transaction between Borrower, the
Guarantors, the other Credit Parties and their respective Affiliates, on the one
hand, and the Administrative Agent, the Lenders, the L/C Issuer, the Sole Lead
Arranger and the Sole Bookrunner, on the other hand, and Borrower is capable of
evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by the Loan Documents (including any
amendment, waiver or other modification thereof); (ii) in connection with the
process leading to such transactions, each of the Administrative Agent, the
Lenders, the L/C Issuer, the Sole Lead Arranger and the Sole Bookrunner is and
has been acting solely as a principal and is not the financial advisor, agent or
fiduciary for Borrower, the Guarantors, any other Credit Party or any of the
respective Affiliates, stockholders, creditors or employees or any other Person;
(iii) neither the Administrative Agent, nor any of the Lenders, nor the L/C
Issuer, nor the Sole Bookrunner, nor the Sole Lead Arranger has assumed or will
assume an advisory, agency or fiduciary responsibility in favor of Borrower, the
Guarantors or any other Credit Party with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to
any amendment, waiver or other modification of any Loan Document (irrespective
of whether the Administrative Agent, any of the Lenders, the L/C Issuer, the
Sole Bookrunner or the Sole Lead Arranger has advised or is currently advising
Borrower, the Guarantors, any other Credit Party or any of their respective
Affiliates on other matters) and neither the Administrative Agent, nor any of
the Lenders, nor the L/C Issuer, nor the Sole Bookrunner, nor the Sole Lead
Arranger has any obligation to Borrower, the Guarantors, any other Credit Party
or any of their respective Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth in the Loan
Documents; (iv) the Administrative Agent, the Lenders, the L/C Issuer, the Sole
Bookrunner and the Sole Lead Arranger and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of Borrower, the Guarantors, the other Credit Parties and their respective
Affiliates, and neither the Administrative Agent, nor any of the Lenders, nor
the L/C Issuer, nor the Sole Bookrunner, nor the Sole Lead Arranger has any
obligation to disclose any of such interests by virtue of any advisory, agency
or fiduciary relationship; and (v) the Administrative Agent, the Lenders, the
L/C Issuer, the Sole Bookrunner and the Sole Lead Arranger have not provided and
will not provide any legal, accounting, regulatory or tax advice with respect to
any of the transactions contemplated hereby (including any amendment, waiver or
other modification of any Loan Document) and Borrower has consulted its own
legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate. Borrower hereby waives and releases, to the fullest extent
permitted by law, any claims that it may have against the Administrative Agent,
the Lenders, the L/C Issuer, the Sole Bookrunner and the Sole Lead Arranger with
respect to any breach or alleged breach of agency or fiduciary duty.

 

169

 

Section 10.17 Additional Commitments. Borrower shall have the right, no more
than two (2) times during the term of the Loan, to request that Administrative
Agent permit additional Revolving Loan Commitments and/or Term Loan Commitments
to be added under the terms of this Agreement in excess of the Lenders’ then
outstanding Revolving Loan Commitments and Term Loan Commitments in a minimum
increment of at least Twenty Five Million Dollars ($25,000,000.00) in excess of
the Lenders’ then outstanding Revolving Loan Commitments and Term Loan
Commitments (the requested amount being, the “Additional Commitment Amount”),
subject to the following:

 

(a) The aggregate amount of the Lenders’ Commitments shall not exceed Three
Hundred Twenty Five Million Dollars ($325,000,000.00).

 

(b) Any such request shall be made by Borrower giving written notice (the
“Additional Commitment Notice”) to Administrative Agent, which notice shall set
forth such details with respect thereto as are reasonably requested by
Administrative Agent, including, without limitation, whether the Additional
Commitment Amount shall increase the then outstanding Revolving Loan Commitments
or the then outstanding Term Loan Commitments. Upon receipt of the Additional
Commitment Notice, Administrative Agent shall notify the then existing
non-Defaulting Lenders of the terms of such Additional Commitment Notice and
each such Lender’s pro rata share (in proportion to the Applicable Percentages
of the non-Defaulting Lenders) of the proposed Additional Commitment Amount and
whether such Additional Commitment Amount shall increase the then outstanding
Revolving Loan Commitments or Term Loan Commitments. If any Lender rejects the
offer to increase its respective Revolving Loan Commitments or Term Loan
Commitments or accepts only a portion thereof, which each Lender may do in its
sole and absolute discretion, Administrative Agent shall further offer the
rejected shares (or rejected portions thereof) to the non-Defaulting Lenders
that have accepted the proposed increase in their Commitments (each an
“Accepting Lender”), pro rata in proportion to

 

170

 

the sum of their then existing Commitments plus any additional portion of the
Additional Commitment Amount which they have previously accepted. If any Lender
shall not respond to a request by Administrative Agent pursuant to this
clause (b) within ten (10) Business Days after receipt of an offer (including
any offer for a portion of the Additional Commitment Amount rejected by another
Lender), such Lender shall be deemed to have rejected such offer. No Defaulting
Lender may accept any portion of any Additional Commitment Amount.
Administrative Agent shall notify Borrower of all acceptances and rejections
with respect to the Additional Commitment Amount by the Lenders. If such
acceptances are satisfactory to Borrower, the Commitments of the Accepting
Lenders shall be increased by their respective portions of the Additional
Commitment Amount without the consent of any other Lender, subject, however, to
(i) no Default or Event of Default being in existence at such time,
(ii) Borrower issuing additional or substitute Notes to the Accepting Lenders
and reaffirming its obligations under the original Notes and Loan Documents, as
amended pursuant to this Section 10.17, (iii) with respect to any Additional
Commitment Amount that results in an increase in the Revolving Loan Commitments,
the Accepting Lenders that have agreed to increase their respective Revolving
Loan Commitments paying to Administrative Agent (on behalf of the other Lenders)
the aggregate amount determined by Administrative Agent to be necessary so that
each Accepting Lender’s pro rata share of outstanding Revolving Loans and
participations in L/C Obligations and Swingline Loans matches the ratio of its
increased Revolving Commitment to the aggregate amount of all increased
Revolving Commitments after giving effect to such Additional Commitment Amount
and, after giving effect to their receipt of such payment, the other Revolving
Lenders’ pro rata shares of outstanding Revolving Loans and participations in
L/C Obligations and Swingline Loans matches the ratio of their respective
Revolving Commitments to the aggregate amount of all increased Revolving
Commitments after giving effect to such Additional Commitment Amount,
(iv) Borrower, the Accepting Lenders and Administrative Agent executing such
other documents evidencing such adjustments in the Commitments and the Loans
(including, without limitation, modifications to the Security Documents) as
shall be reasonably acceptable to Borrower, the Accepting Lenders and
Administrative Agent and, if the Additional Commitment Amount involves an
increase in the Revolving Loan Commitments, the Swingline Lender and the L/C
Issuer, (v) the Guarantors executing and delivering reaffirmations of the
Guaranties in form and substance reasonably satisfactory to Administrative
Agent, (vi) Borrower paying all of Administrative Agent’s reasonable and
documented out-of-pocket expenses in connection with the foregoing, (vii)
Borrower paying to the Sole Lead Arranger, the Sole Bookrunner and the Accepting
Lenders such fees as are due in connection with the Additional Commitment Amount
pursuant to the Fee Letter, and (viii) the understanding that, with respect to
any Additional Commitment Amount that results in an increase in the Term Loan
Commitments, the only Term Loan Lenders that shall have any obligation to fund
such Additional Commitment Amount shall be the Accepting Lenders that increase
their Term Loan Commitments, which shall be several obligations of such
Accepting Lenders and which funding shall be in proportion to the respective
shares of such Additional Commitment Amount that such Accepting Lenders were
allocated in response to the Additional Commitment Notice. Administrative Agent
shall promptly pay to the applicable Lenders their share of any payments
received from the Accepting Lenders in accordance with clause (vii) of the
immediately preceding sentence. Notwithstanding the foregoing, no Additional
Commitment Amount shall become effective under this Section 10.17 unless, (i) on
the date of such effectiveness, (x) Administrative Agent shall have received
such customary certificates, documents and opinion letters as it may reasonably
request, (y) the conditions set forth in Section 4.02 shall be satisfied, and
(z) the REIT and Borrower shall be in pro forma compliance with the covenants
set forth in Section 6.01 after giving effect to any Loans to be made on such
date and the Additional Commitment Amount, and the application of the proceeds
therefrom as if made and applied on such date, and, Administrative Agent shall
have received a certificate certifying as to the satisfaction of each of clauses
(x), (y) and (z) dated such date (including calculations in reasonable detail
showing pro forma compliance with the covenants in Section 6.01) and executed by
a Responsible Officer of the REIT and Borrower. The Administrative Agent shall
provide written notice to all of the Lenders when the Additional Commitment
Amount becomes effective. Each of the REIT and Borrower agrees to take such
further reasonable action as may reasonably be requested by Administrative Agent
in connection with any request pursuant to this Section 10.17.

 

171

 

(c) Notwithstanding anything to the contrary contained herein, if the Lenders do
not accept increases in their aggregate Commitments in the full amount of the
Additional Commitment Amount in accordance with clause (b) above, Borrower may
designate one or more proposed lenders to Administrative Agent (and, if such
Additional Commitment Amount would involve an increase in the Revolving
Commitments, the Swingline Lender and the L/C Issuer) to become Lenders under
this Agreement with respect to such balance of the Additional Commitment Amount,
subject in each case to the prior consent by Administrative Agent (and, if such
Additional Commitment Amount would involve an increase in the Revolving
Commitments, the Swingline Lender and the L/C Issuer), which approvals shall not
be unreasonably withheld or delayed if such proposed lenders meet the standards
of an Eligible Institution. If such proposed lenders are so approved, such
lenders shall become additional Lenders under this Agreement in accordance with
their respective Commitments without the consent of any other Lenders, subject,
however, to (i) no Default or Event of Default being in existence at such time,
(ii) Borrower issuing new Notes to the new Lenders and reaffirming its
obligations under the original Notes and Loan Documents, as amended pursuant to
this Section 10.17, (iii) with respect to any Additional Commitment Amount that
results in an increase in the Revolving Loan Commitments, such New Lenders that
have agreed to provide Revolving Loan Commitments and Accepting Lenders paying
to Administrative Agent (on behalf of the other Lenders) the aggregate amount
determined by Administrative Agent to be necessary so that such new Lender’s
and, if applicable, Accepting Lenders’ respective pro rata shares of outstanding
Revolving Loans and participations in L/C Obligations and Swingline Loans
matches the ratio of their Revolving Commitments as so increased to the
aggregate amount of all increased Revolving Commitments after giving effect to
such Additional Commitment Amount and, after giving effect to their receipt of
such payment, the other Revolving Lenders’ pro rata shares of outstanding
Revolving Loans and participations in L/C Obligations and Swingline Loans
matches the ratio of their respective Revolving Commitments to the aggregate
amount of all increased Revolving Commitments after giving effect to such
Additional Commitment Amount, (iv) Borrower, the new Lenders, any Accepting
Lenders (if applicable) and Administrative Agent executing such other documents
evidencing the addition of the new Lenders as Lenders hereunder and the
adjustment of the Commitments and the Loans (including, without limitation,
modifications to the Security Documents) as shall be reasonably

 

172

 

acceptable to Borrower, the new Lenders, the Accepting Lenders and
Administrative Agent and, if the Additional Commitment Amount involves an
increase in the Revolving Loan Commitments, the Swingline Lender and the L/C
Issuer, (v) the Guarantors executing and delivering reaffirmations of the
Guaranties in form and substance reasonably satisfactory to Administrative
Agent, (vi) Borrower paying all of Administrative Agent’s reasonable
out-of-pocket expenses in connection with the foregoing, (vii) Borrower paying
to the Sole Lead Arranger, the Sole Bookrunner, the new Lenders and the
Accepting Lenders such fees as are due in connection with the Additional
Commitment Amount and (viii) the understanding that, with respect to any
Additional Commitment Amount that results in an increase in the Term Loan
Commitments, the only Term Loan Lenders that shall have any obligation to fund
such Additional Commitment Amount shall be the new Lenders that have been
approved pursuant to this Section 10.17(c) and any Accepting Lenders that are
Term Loan Lenders, which shall be several obligations of such new Lenders and
Accepting Lenders and which funding shall be in proportion to the respective
shares of such Additional Commitment Amount that such new Lender and Accepting
Lenders were allocated in response to the Additional Commitment Notice.
Administrative Agent shall promptly pay to the applicable Lenders their share of
any payments received from the Accepting Lenders in accordance with clause (vii)
of the immediately preceding sentence. Notwithstanding the foregoing, no
Additional Commitment Amount shall become effective under this Section 10.17
unless, (i) on the date of such effectiveness, (x) Administrative Agent shall
have received such customary certificates, documents and opinion letters as it
may reasonably request, (y) the conditions set forth in Section 4.02 shall be
satisfied, and (z) the REIT and Borrower shall be in pro forma compliance with
the covenants set forth in Section 6.01 after giving effect to any Loans to be
made on such date and the Additional Commitment Amount, and the application of
the proceeds therefrom as if made and applied on such date, and, Administrative
Agent shall have received a certificate certifying as to the satisfaction of
each of clauses (x), (y) and (z) dated such date (including calculations in
reasonable detail showing pro forma compliance with the covenants in Section
6.01) and executed by a Responsible Officer of the REIT and Borrower. The
Administrative Agent shall provide written notice to all of the Lenders when the
Additional Commitment Amount becomes effective.

 

(d) Notwithstanding anything to the contrary contained in this Agreement or the
other Loan Documents, each Lender hereby authorizes Administrative Agent (on
behalf of the Lenders) to enter into amendments and modifications of this
Agreement and the other Loan Documents to the extent necessary to reflect the
adjustment of the Commitments and the Loans, the addition of new Lenders and the
other matters contemplated by this Section.

 

Section 10.18 Amendments. No amendment, waiver or other modification of any
provision of this Agreement or any other Loan Document shall in any event be
effective unless the same shall be in writing and signed by the Borrower and any
other Credit Parties party thereto.

 

[Signature pages follow.]

 

Section 1.01

 

173

 

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

 

  BORROWER:       NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership       By: American Realty Capital New York
Recovery REIT, Inc.,
a Maryland corporation, its general partner                 By: /s/ Michael
Happel         Name: Michael  Happel         Title: Managing Director        
(Signatures continue on following pages.)

 

 

 

  ADMINISTRATIVE AGENT, L/C ISSUER AND SWINGLINE LENDER       CAPITAL ONE,
NATIONAL ASSOCIATION,
as Administrative Agent, L/C Issuer and Swingline Lender           By: /s/
Patricia Visone     Name: Patrica Visone     Title: Vice President

 

 

 

  LENDERS       CAPITAL ONE, NATIONAL ASSOCIATION,
as a Lender           By: /s/ Patricia Visone     Name: Patricia Visone    
Title: Vice President

 

 

 

 

  LENDERS       U.S. BANK NATIONAL ASSOCIATON,
as a Lender           By: /s/ Michael E. Hussey     Name: Michael E. Hussey    
Title: Senior Vice President

 

-2-

 

 

  LENDERS       KEYBANK NATIONAL ASSOCIATION,
as a Lender           By: /s/ Sara Smith     Name: Sara Smith     Title:
Assistant Vice President

 

-3-

 

 

  LENDERS       TD BANK, N.A.,
as a Lender           By: /s/ Aaron C. Miller     Name: Aaron C. Miller    
Title: Vice President

 

-4-

 

 

  LENDERS       PEOPLE’S UNITED BANK,
as a Lender           By: /s/ Christopher McDaniel     Name: Christopher
McDaniel     Title: Vice President

-5-

 

EXHIBIT A

[Form of Revolving Note]

 

PROMISSORY NOTE

 

$_______________ _______ __, 201[_]
New York, New York  

FOR VALUE RECEIVED, NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership (the “Borrower”), hereby promises to pay to the order of
__________________ (the “Lender”), in accordance with the Credit Agreement
referred to below, the principal sum of _______________ Dollars (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Loans made by
the Lender to Borrower under the Credit Agreement), in lawful money of the
United States of America and in immediately available funds, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.

 

This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of [____ ___], 2013 (as modified and supplemented and in effect from
time to time, the “Credit Agreement”) among Borrower, American Realty Capital
New York Recovery REIT, Inc., the lenders party thereto (including the Lender)
and Capital One, National Association, as Administrative Agent, L/C Issuer and
Swingline Lender, and evidences Loans made by the Lender thereunder. Terms used
but not defined in this Note have the respective meanings assigned to them in
the Credit Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.

 

Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceeding (whether at the trial or appellate level), or should this Note be
placed in the hands of attorneys for collection upon default, Borrower agrees to
pay, in addition to the principal, interest and other sums due and payable
hereon, all costs of collecting or attempting to collect this Note, including
reasonable attorneys’ fees and disbursements.

 

All parties to this Note, whether principal, surety, guarantor or endorser,
hereby waive presentment for payment, demand (except as set forth in the Credit
Agreement), protest, notice of protest and notice of dishonor.

 

Except as permitted by Section 10.05 of the Credit Agreement, this Note may not
be assigned by the Lender.

 

In the event that this Note is transferred by the Lender to another party,
Borrower shall not be required to recognize such transfer until Borrower has
been sent a notice of the transfer of this Note by the transferor and the
transferee.

 

-6-

 

This Note may only be amended by an instrument in writing executed by Borrower
and the Lender.

 

This Note shall be governed by, and construed in accordance with, the law of the
State of New York.

 

  NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership       By: American Realty Capital New York Recovery
REIT, Inc.,
a Maryland corporation,
its general partner           By:       Name:     Title:        

 

-7-

 

EXHIBIT B

 

[Form of Swingline Note]

 

SWINGLINE PROMISSORY NOTE

 

$25,000,000.00 _______ __, 201[_]
New York, New York  

FOR VALUE RECEIVED, NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership (the “Borrower”), hereby promises to pay to the order of
CAPITAL ONE, NATIONAL ASSOCIATION (the “Swingline Lender”), in accordance with
the Credit Agreement referred to below, the principal sum of TWENTY MILLION
DOLLARS (or such lesser amount as shall equal the aggregate unpaid principal
amount of the Swingline Loans made by the Swingline Lender to Borrower under the
Credit Agreement), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided
in the Credit Agreement, and to pay interest on the unpaid principal amount of
each such Swingline Loan, at such office, in like money and funds, for the
period commencing on the date of such Swingline Loan until such Swingline Loan
shall be paid in full, at the rates per annum and on the dates provided in the
Credit Agreement.

 

This Swingline Note is one of the Swingline Notes referred to in the Credit
Agreement dated as of [____ ___], 2013 (as modified and supplemented and in
effect from time to time, the “Credit Agreement”) among Borrower, American
Realty Capital New York Recovery REIT, Inc., the lenders party thereto
(including the Swingline Lender) and Capital One, National Association, as
Administrative Agent, L/C Issuer and Swingline Lender, and, among other things,
evidences Swingline Loans made by the Swingline Lender thereunder. Terms used
but not defined in this Swingline Note have the respective meanings assigned to
them in the Credit Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of this
Swingline Note upon the occurrence of certain events and for prepayments of
Swingline Loans upon the terms and conditions specified therein.

 

Should the indebtedness represented by this Swingline Note or any part thereof
be collected at law or in equity, or in bankruptcy, receivership or any other
court proceeding (whether at the trial or appellate level), or should this
Swingline Note be placed in the hands of attorneys for collection upon default,
Borrower agrees to pay, in addition to the principal, interest and other sums
due and payable hereon, all costs of collecting or attempting to collect this
Swingline Note, including reasonable attorneys’ fees and disbursements.

 

All parties to this Swingline Note, whether principal, surety, guarantor or
endorser, hereby waive presentment for payment, demand (except as set forth in
the Credit Agreement), protest, notice of protest and notice of dishonor.

 

Except as permitted by Section 10.05 of the Credit Agreement, this Swingline
Note may not be assigned by the Swingline Lender.

 

 

 

In the event that this Swingline Note is transferred by the Swingline Lender to
another party, Borrower shall not be required to recognize such transfer until
Borrower has been sent a notice of the transfer of this Swingline Note by the
transferor and the transferee.

 

This Swingline Note may only be amended by an instrument in writing executed by
Borrower and the Swingline Lender.

 

This Swingline Note shall be governed by, and construed in accordance with, the
law of the State of New York.

 

  NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership       By: American Realty Capital New York
Recovery REIT, Inc.,
a Maryland corporation,
its general partner           By:       Name:     Title:        

 

-2-

 

EXHIBIT C

 

[Form of Term Note]

 

PROMISSORY NOTE

 

$_______________ _______ __, 201[_]
New York, New York  

FOR VALUE RECEIVED, NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership (the “Borrower”), hereby promises to pay to the order of
__________________ (the “Lender”), in accordance with the Credit Agreement
referred to below, the principal sum of _______________ Dollars (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Loans made by
the Lender to Borrower under the Credit Agreement), in lawful money of the
United States of America and in immediately available funds, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.

 

This Note is one of the Term Notes referred to in the Credit Agreement dated as
of [____ ___], 2013 (as modified and supplemented and in effect from time to
time, the “Credit Agreement”) among Borrower, American Realty Capital New York
Recovery REIT, Inc., the lenders party thereto (including the Lender) and
Capital One, National Association, as Administrative Agent, L/C Issuer and
Swingline Lender, and evidences Loans made by the Lender thereunder. Terms used
but not defined in this Note have the respective meanings assigned to them in
the Credit Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.

 

Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceeding (whether at the trial or appellate level), or should this Note be
placed in the hands of attorneys for collection upon default, Borrower agrees to
pay, in addition to the principal, interest and other sums due and payable
hereon, all costs of collecting or attempting to collect this Note, including
reasonable attorneys’ fees and disbursements.

 

All parties to this Note, whether principal, surety, guarantor or endorser,
hereby waive presentment for payment, demand (except as set forth in the Credit
Agreement), protest, notice of protest and notice of dishonor.

 

Except as permitted by Section 10.05 of the Credit Agreement, this Note may not
be assigned by the Lender.

 

 

 

In the event that this Note is transferred by the Lender to another party,
Borrower shall not be required to recognize such transfer until Borrower has
been sent a notice of the transfer of this Note by the transferor and the
transferee.

 

This Note may only be amended by an instrument in writing executed by Borrower
and the Lender.

 

This Note shall be governed by, and construed in accordance with, the law of the
State of New York.

 

    NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership               By: American Realty Capital New
York Recovery REIT, Inc.,
a Maryland corporation,
its general partner                 By:           Name:         Title:          
           

 

 

-2-

 

EXHIBIT D

 

[Form of Assignment and Assumption]

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a [Revolving] [Term] Lender under the Credit
Agreement and any other documents or instruments delivered pursuant thereto to
the extent related to the amount and percentage interest identified below of all
of such outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any letters of credit included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
Legal Requirements, all claims, suits, causes of action and any other right of
the Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1. Assignor:                 2. Assignee:             [and is an Affiliate of
[identify Lender]1]           3. Borrower:   New York Recovery Operating
Partnership, L.P.         4. Administrative Agent:   Capital One, National
Association, as Administrative Agent under the Credit Agreement            

 

 

 

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

1Select as applicable

 

 

 

 

 

        5. Credit Agreement:   The $220,000,000 (increasable to $325,000,000)
Credit Agreement dated as of [____ ___], 2013 among Borrower, American Realty
Capital New York Recovery REIT, Inc., the Lenders parties thereto, and Capital
One, National Association, as Administrative Agent, L/C Issuer and Swingline
Lender         6. Assigned Revolving Loan Interest:   Revolving Loan Commitment
Aggregate Amount
of Revolving Loan Commitment /
Revolving Loans for
all Revolving
Lenders Amount of
Revolving Loan Commitment /
Revolving Loans
Assigned Percentage Assigned
of Revolving Loan
Commitment /
Revolving Loans 2   $ $ %   $ $ %   $ $ %     7. Assigned Term Loan Interest:  
  Term Loan Commitment Aggregate Amount
of Term Loan
Commitment / Term
Loans for all Term
Lenders Amount of Term
Loan Commitment
/ Term Loans
Assigned Percentage Assigned
of Term Loan
Commitment / Term
Loans 3   $ $ %   $ $ %   $ $ %                

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

 

 

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

2Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

3Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 

-2-

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

      ASSIGNOR                 [NAME OF ASSIGNOR]                           By:
          Name:         Title:                           ASSIGNEE              
  [NAME OF ASSIGNEE]                           By:           Name:        
Title:            

-3-

 

Consented4  to and Accepted:                 CAPITAL ONE, NATIONAL ASSOCIATION,
as Administrative Agent                         By:           Name:        
Title:                 [Consented to and]5 Accepted:                 CAPITAL
ONE, NATIONAL ASSOCIATION,
as L/C Issuer and Swing Line Lender                         By:           Title:
                                    Consented to:6                 NEW YORK
RECOVERY OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership             By: American Realty Capital New York
Recovery, REIT, Inc.,
a Maryland corporation,
its general partner             By:           Name:         Title:              
       

 

 

 

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

4To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.

5To be added only if the consent of the Swing Line Lender or L/C Issuer is
required by the terms of the Credit Agreement.

6To be added only if the consent of the Borrower is required by the terms of the
Credit Agreement.

 

-4-

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

 

1. Representations and Warranties.

 

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by Borrower,
any of its Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.

 

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

2. Payments. From and after the Effective Date, Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

 

 

 

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 

-2-

 

EXHIBIT E

 

[Form of Borrowing Base Certificate]

 

BORROWING BASE CERTIFICATE

 

 

 

 

 

EXHIBIT F

 

[Form of Compliance Certificate]

 

 

 

 

 

EXHIBIT G

[Form of Solvency Certificate]