Exhibit 10.1

 

THIRD AMENDMENT TO CREDIT agreement

 

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is dated as of
November 5, 2013 (the “Agreement Date”), by and among ARC PROPERTIES OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership, as successor by merger to
Caplease, LP (“ARCOP”), a Delaware limited partnership, PREFCO DIX-NEUF LLC, a
Connecticut limited liability company, PREFCO NINETEEN LIMITED PARTNERSHIP, a
Connecticut limited partnership, CLF CANE RUN MEMBER, LLC, a Delaware limited
liability company, CLF CANE RUN LOUISVILLE, LLC, a Delaware limited liability
company, CLF LANDMARK OMAHA LLC, a Delaware limited liability company, CLF DODGE
OMAHA LLC, a Delaware limited liability company, KDC BUSCH BOULEVARD LLC, a
Delaware limited liability company, CLF 555 N DANIELS WAY LLC, a Delaware
limited liability company, CLF PULCO ONE LLC, a Delaware limited liability
company, CLF PULCO TWO LLC, a Delaware limited liability company, CLF TOLLWAY
PLANO LP, a Delaware limited partnership, CLF ASHLAND LLC, a Delaware limited
liability company, and CLF WESTBROOK MALVERN BUSINESS TRUST, a Virginia business
trust (each, a “Borrower” and collectively, the “Borrowers”), the Lenders (as
defined below) party hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, in its
capacity as Administrative Agent for the Lenders (together with its successors
and assigns, the “Agent”).

 

W I T N E S S E T H :

 

WHEREAS, Borrowers, the lenders party thereto (the “Lenders”), and Agent entered
into that certain Credit Agreement dated as of June 29, 2012, as amended by that
certain First Amendment to Credit Agreement dated as of April 16, 2013, and
Second Amendment to Credit Agreement dated as of June 21, 2013 (as amended,
restated, supplemented, or otherwise modified from time to time prior to the
date hereof, the “Credit Agreement”); and

 

WHEREAS, in connection with (a) a merger between Caplease, Inc., a Maryland
corporation, and Safari Acquisition, LLC, a Delaware limited liability company
(“Safari”), which entity is wholly owned by American Realty Capital Properties,
Inc., a Maryland corporation (“ARCP”) and (b) a merger between Caplease, LP, a
Delaware limited partnership and ARCOP, an entity majority owned and controlled
by ARCP (such transactions, collectively, the “Merger”), the Borrowers and
Guarantor have requested, and the Agent and the Lenders party hereto have agreed
to, subject to the terms and conditions of this Agreement, certain amendments to
the Credit Agreement which shall, among other things, convert the facility from
revolving to non-revolving, shorten the Maturity Date, modify certain covenants,
and allow the Loan to remain outstanding notwithstanding the Merger; and

 

NOW, THEREFORE, for and in consideration of the above premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, each of the parties hereto hereby covenant
and agree as follows:

 

SECTION 1.     Definitions. Unless otherwise specifically defined herein, each
term used herein which is defined in the Credit Agreement shall have the meaning
assigned to such term in the Credit Agreement. Each reference to “hereof,”
“hereunder,” “herein,” and “hereby” and each other similar reference and each
reference to “this Agreement” and each other similar reference contained in the
Credit Agreement shall from and after the date hereof refer to the Credit
Agreement as amended hereby.

  

 
 

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SECTION 2.     Amendments to the Credit Agreement. The parties hereto hereby
agree that:

 

(a)        Modification of Maturity Date. The definition of “Maturity Date” is
hereby modified to mean “December 31, 2014”.

 

(b)        Modification of Guarantor. The definition of “Guarantor” is hereby
replaced in its entirety with the following:

 

“Guarantor” means, collectively, jointly and severally, Safari Acquisition, LLC,
a Delaware limited liability company, and American Realty Capital Properties,
Inc., a Maryland corporation.

 

(c)        Modification of Loan Party. The definition of “Loan Party” is hereby
replaced in its entirety with the following:

 

“Loan Party” means, each Borrower, Parent, Guarantor, and each other Person who
guarantees all or a portion of the Obligations and/or who pledges any Collateral
to secure all or a portion of the Obligations.

 

(d)        Modification of Parent. The definition of “Parent” is hereby replaced
in its entirety with the following:

 

“Parent” means American Realty Capital Properties, Inc., a Maryland corporation.

 

(e)        Modification of Borrowing Base Values. In order to modify the
Borrowing Base Values of certain Properties, the following changes are made:

 

(i)     Each of the following definitions are hereby amended as follows:

 

(A)     “Borrowing Base Value” means, with respect to a Borrowing Base Property,
an amount equal to (i) the Kroger Borrowing Base Value, (ii) the Michelin,
Abbott and Baxter Borrowing Base Value, as applicable, (iii) the Dodge and
Landmark Borrowing Base Value, as applicable, (iv) the CLF Pulco Borrowing Base
Value, as applicable, (v) the CLF Tollway Borrowing Base Value, (vi) the CLF
Ashland Borrowing Base Value, or (vii) the CLF Westbrook Malvern Borrowing Base
Value, as applicable.

 

(B)     “Dodge and Landmark Borrowing Base Value” means, with respect to the
Dodge Property or Landmark Property, an amount equal to the sum of the lesser of
(a) 65% of the As-Is Appraised Value of such Borrowing Base Property and (b) the
Debt Yield Amount divided by 1.0.

  

 
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(C)     “Michelin, Abbott and Baxter Borrowing Base Value” means, with respect
to the Michelin Property, Abbott Property or Baxter Property, an amount equal to
the sum of the lesser of (a) 65% of the As-Is Appraised Value of such Borrowing
Base Property and (b) the Debt Yield Amount for such Borrowing Base Property
divided by 1.0.

 

(ii)        The following new definitions are hereby inserted as follows:

 

(A)     “CLF Ashland Borrowing Base Value” means, with respect to the Vitamin
Shoppe Property, an amount equal to the lesser of (a) 65% of the As-Is Appraised
Value of such Borrowing Base Property and (ii) the Debt Yield Amount for such
Borrowing Base Property divided by 1.0.

 

(B)     “CLF Pulco Borrowing Base Value” means, with respect to the South Iola
Property or South Joliet Property, an amount equal to the sum of the lesser of
(a) 65% of the As-Is Appraised Value of such Borrowing Base Property and (ii)
the Debt Yield Amount for such Borrowing Base Property divided by 1.0.

 

(C)     “CLF Tollway Borrowing Base Value” means, with respect to the Capital
One Property, an amount equal to the lesser of (a) FOURTEEN MILLION DOLLARS
($14,000,000.00), and (ii) the Debt Yield Amount for such Borrowing Base
Property divided by 1.0.

 

(D)     “CLF Westbrook Malvern Borrowing Base Value” means, with respect to the
Teva Property, an amount equal to the lesser of (a) 65% of the As-Is Appraised
Value of such Borrowing Base Property, and (ii) the Debt Yield Amount for such
Borrowing Base Property divided by 1.0.

 

(E)     “Capital One Property” means that certain property located at 3905
Dallas Parkway, Suite 100, Plano, Texas 75093.

 

(F)     “South Iola Property” means that certain property located at 7390 South
Iola Street, Englewood, Colorado.

 

(G)     “South Joliet Property” means that certain property located at 7475
South Joliet Street, Englewood, Colorado.

 

(H)     “Teva Property” means that certain property located at 41 Moores Road,
Malvern, Pennsylvania.

 

(I)     “Vitamin Shoppe Property” means that certain property located at 12 The
Vitamin Shoppe Way, Ashland, Virginia 23005.

 

(f)        Modification of Applicable Facility Fee. The definition of
“Applicable Facility Fee” is hereby replaced in its entirety with the following:

 

“Applicable Facility Fee” means 0.25%.

  

 
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(g)        Addition of New Definitions. The following new definitions are hereby
inserted into the Credit Agreement as follows:

 

(A)     “ARC Credit Agreement” means the Credit Agreement dated as of February
14, 2013, by and among ARCOP, TIGER ACQUISITION, LLC, a Delaware limited
liability company, AMERICAN REALTY CAPITAL PROPERTIES, INC., a Maryland
corporation, the lenders party hereto, and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent, as amended by (i) the First Amendment
dated as of March 18, 2013, (ii) the Augmenting Lender and Increasing Lender
Supplement and Incremental Amendment dated as of March 28, 2013, (iii) the Third
Amendment dated as of May 28, 2013, (iv) the Fourth Amendment dated as of July
22, 2013, (v) the Augmenting Lender and Increasing Lender Supplement and
Incremental Amendment dated as of August 1, 2013 and (vi) the Sixth Amendment to
Credit Agreement dated as of November 4, 2013.

 

(B)      “ARCOP” means ARC PROPERTIES OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership

 

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

 

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its Subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all 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
Parent entitled to vote for members of the board of directors or equivalent
governing body of Parent 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);

 

(b) during any period of twelve consecutive months ending after the Effective
Date, individuals who at the beginning of any such twelve month period
constituted the Board of Directors of ARCOP (together with any new directors
whose election by such Board or whose nomination for election by the
shareholders of ARCOP 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 Directors of ARCOP then in office; or

  

 
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(c) Parent shall cease to (i) either be the sole general partner of, or wholly
own and control the general partner of, ARCOP or (ii) own, directly or
indirectly, greater than fifty percent (50%) of the Equity Interests of ARCOP;
or

 

(d) ARCOP shall cease to own, directly or indirectly, one hundred percent (100%)
of the Equity Interests of any Borrower that owns a Borrowing Base Property free
and clear of any Liens (other than Liens in favor of Administrative Agent)
unless such Borrowing Base Property is removed in accordance with Section
4.2(d).

 

(h)       Conversion to Non-Revolving Term Loan. In order to convert the
facility from a revolving facility to a term facility the following changes are
made:

 

(i)     Each of the following definitions are hereby amended as follows:

 

(A)     “Commitment” means, as to a Lender, such Lender’s Term Loan Commitment.

 

(B)     “Loan” means a Term Loan.

 

(C)     “Maximum Loan Availability” is hereby amended as follows:

 

           “Maximum Loan Availability” means, at any time, the Borrowing Base.

 

(D)     “Revolving Commitment” is hereby deleted and replaced with the
following:

 

“Term Loan Commitment” means, as to each Lender, such Lender’s obligation to
make Term Loans on the Effective Date pursuant to Section 2.1, in an amount up
to, but not exceeding, the amount set forth for such Lender on Schedule 1 as
such Lender’s “Commitment”.

 

(E)     “Revolving Credit Exposure” is hereby deleted.

 

(F)     “Revolving Lender” is hereby deleted and replaced with the following:

 

 “Term Loan Lender” means a Lender holding a Loan.

  

 
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(G)     “Revolving Loan” is hereby deleted and replaced with the following:

 

“Term Loan” means a loan made by a Lender to the Borrowers pursuant to
Section 2.1(a).

 

(H)      “Revolving Note” is hereby deleted and replaced with the following.

 

“Term Note” means a promissory note of the Borrowers, substantially in the form
of Exhibit I, payable to the order of a Lender in a principal amount equal to
the amount of such Lender’s Term Loan Commitment.

 

In furtherance of the foregoing, each usage of “Commitment”, “Loan”, “Loan
Party”, “Revolving Commitment”, “Revolving Lender”, “Revolving Loan” and
“Revolving Note” in the Credit Agreement shall be automatically replaced by the
new definitions as set forth above.

 

(ii)     Conversion. All outstanding Revolving Loans on the Agreement Date are
hereby converted to Term Loans, and Borrower may draw down any unused Revolving
Commitments on the Agreement Date as Term Loans. The Borrowers may not reborrow
any portion of the Term Loans once repaid. Accordingly, Section 2.1 of the
Credit Agreement is hereby deleted.

 

(iii)     Section 2.9(b)(ii) of the Credit Agreement is hereby amended and
restated in its entirety as follows:

 

(ii)     Maximum Loan Availability Overadvance. If at any time the aggregate
principal amount of all outstanding Loans exceeds the Maximum Loan Availability,
the Borrowers shall within ten (10) Business Days of the Borrowers obtaining
knowledge of the occurrence of any such excess, either (A) pay to the
Administrative Agent for the account of the Lenders then holding Term Loans, the
amount of such excess, or (B) deposit with Administrative Agent cash collateral
to be held in a blocked collateral account controlled by Administrative Agent
(the “Collateral Account”) in an amount sufficient to cover the amount of such
excess; provided, however, if at the end of the fiscal quarter following the
date such sums were deposited into the Collateral Account the aggregate
principal amount of all outstanding Loans continues to exceed the Maximum Loan
Availability, then Administrative Agent may apply all amounts then on deposit in
the Collateral Account to pay down the principal outstanding under the Loans;
provided further, however, if at the end of the fiscal quarter following the
date such cash collateral was deposited into the Collateral Account pursuant to
the foregoing, the Maximum Loan Availability increases in an amount necessary to
reach or exceed the aggregate principal amount of all outstanding Loans, then
provided there does not then exist a Default, any funds remaining in the
Collateral Account (including any accrued interest, if applicable), shall
thereafter be promptly released to Borrowers. Amounts repaid pursuant to this
Section 2.9 may not be reborrowed.

  

 
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(iv)    Section 2.9(b)(i), Section 2.16, Section 2.19 and Section 2.20 of the
Credit Agreement are hereby deleted in their entirety.

 

(i)         Deletion of Letters of Credit. As Letters of Credit shall no longer
be available under the Credit Agreement, Section 2.4, Section 2.15, Section
3.5(c), Section 3.9(d), Section 3.9(e), Section 3.9(g), Section 5.1(d) and
Section 11.6 of the Credit Agreement are hereby deleted in their entirety, along
with all related definitions, as the context shall dictate.

 

(j)         Deletion of Reduction of Commitment. In light of the fact that the
facility is now a term facility, Section 2.13 of the Credit Agreement is hereby
deleted in its entirety.

 

(k)         Deletion of Extension Options. In order to delete any remaining
extension options, Section 2.14 and Section 3.5(d) of the Credit Agreement are
hereby deleted in their entirety.

 

(l)         Deletion of Additional Properties. In light of the fact that the
Borrower will no longer be permitted to add Property to the Borrowing Base,
Section 4.1(b) and 4.1(c) of the Credit Agreement is hereby deleted in its
entirety.

 

(m)        Release of Properties. Section 4.2(d) of the Credit Agreement is
hereby deleted in its entirety and replaced by the following:

 

 (d)     Prior written approval of the Administrative Agent shall be required
prior to the release of any Property, and Borrower acknowledges and understands
that as a condition to approving any requested release Administrative Agent may
require a concurrent principal paydown in an amount in excess of the amount
required simply to comply with subsection (b) above.

 

(n)        Modification of Financial Covenants. Section 10.1 of the Credit
Agreement is hereby deleted in its entirety and the covenants set forth, as of
November 4, 2013, in Section 8.02, Section 8.05, Section 8.06 and Section 8.14
of the Credit Agreement dated as of February 14, 2013, by and among ARCOP, TIGER
ACQUISITION, LLC, a Delaware limited liability company, AMERICAN REALTY CAPITAL
PROPERTIES, INC., a Maryland corporation, the lenders party hereto, and WELLS
FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, as amended by (i) the
First Amendment dated as of March 18, 2013, (ii) the Augmenting Lender and
Increasing Lender Supplement and Incremental Amendment dated as of March 28,
2013, (iii) the Third Amendment dated as of May 28, 2013, (iv) the Fourth
Amendment dated as of July 22, 2013, (v) the Augmenting Lender and Increasing
Lender Supplement and Incremental Amendment dated as of August 1, 2013 and (vi)
the Sixth Amendment to Credit Agreement dated as of November 4, 2013 (as
amended, the “ARC Credit Agreement”), and all applicable definitions therein,
are hereby incorporated by reference into the Credit Agreement, which
incorporation shall survive any subsequent termination of the ARC Credit
Agreement for any reason. In the event that any such covenants (or applicable
definitions) set forth in the ARC Credit Agreement are modified or amended with
the consent of Administrative Agent (in its capacity as a “Lender” under such
ARC Credit Agreement”) then such amendments or modifications shall automatically
and without further action be deemed incorporated herein (and any modifications
or amendments made without the consent of Administrative Agent shall not be
incorporated herein).

  

 
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(o)        Modification of Negative Pledge. Section 10.2 of the Credit Agreement
is hereby deleted in its entirety and replaced by the following:

 

Section 10.2     Negative Pledge.

 

The Borrowers and Parent shall not, and shall not permit any other Loan Party or
Subsidiary to, (a) create, assume, incur, permit or suffer to exist any Lien on
any Borrowing Base Property or any direct or, except as permitted pursuant to
the ARC Credit Agreement, indirect ownership interest of the Borrowers in any
Person owning any Borrowing Base Property, now owned or hereafter acquired,
except for Permitted Liens, (b) permit any Borrowing Base Property or any direct
or, except as permitted pursuant to the ARC Credit Agreement, indirect ownership
interest of the Borrowers or in any Person owning a Borrowing Base Property, to
be subject to a Negative Pledge, or (c) create, assume, incur, permit or suffer
to exist any Lien on other Collateral, or any direct or, except as permitted
pursuant to the ARC Credit Agreement, indirect ownership interest of the
Borrowers in any Person owning any other Collateral, except for Permitted Liens.

 

(p)        Modification of Restrictions on Intercompany Transfers. Section 10.3
of the Credit Agreement is hereby deleted in its entirety and replaced by the
following:

 

Section 10.3     Restrictions on Intercompany Transfers.

 

Except as permitted pursuant to the ARC Credit Agreement, the Borrowers and
Parent shall not, and shall not permit any other Loan Party or any of their
respective Subsidiaries (other than an Excluded Subsidiary) to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to: (a)
pay dividends or make any other distribution on any of such Subsidiary’s capital
stock or other Equity Interests owned by the Borrowers or any Subsidiary to the
extent that it would cause a violation of Section 8.12,; (b) pay any
Indebtedness owed to the Borrowers or any Subsidiary; (c) make loans or advances
to the Borrowers or any Subsidiary; or (d) transfer any of its property or
assets to the Borrowers or any Subsidiary; other than (i) with respect to
clauses (a) through (d) those encumbrances or restrictions contained in any Loan
Document or, (ii) with respect to clause (d), customary provisions restricting
assignment of any agreement entered into by the Borrowers, any other Loan Party
or any Subsidiary in the ordinary course of business.

  

 
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(q)        Modification of Merger, Consolidation, Sales of Assets and Other
Arrangements. Section 10.4 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:

 

Section 10.4     Merger, Consolidation, Sales of Assets and Other Arrangements.

 

Except as permitted pursuant to the ARC Credit Agreement, the Borrowers and
Parent shall not, and shall not permit any other Loan Party to, directly or
indirectly, (a) enter into any transaction of merger or consolidation; (b)
liquidate, windup or dissolve itself (or suffer any liquidation or dissolution);
or (c) convey, sell, lease, sublease, transfer or otherwise dispose of, in one
transaction or series of transactions, all or any substantial part of its
business or assets, whether now owned or hereafter acquired; provided, however,
that:

 

(i)     any Loan Party (other than Parent or ARCOP) may merge with (a) Parent or
ARCOP, provided that Parent or ARCOP, as applicable, shall be the continuing or
surviving Person, or (b) any other Loan Party.

 

(ii)     any Loan Party may sell, transfer or dispose of its assets to another
Loan Party;

 

(iii)    Parent or any Borrower may merge or consolidate with another Person so
long as either Parent or such Borrower, as the case may be, is the surviving
entity, shall remain in pro forma compliance with the covenants set forth in the
“Financial Covenants” section of Section 10.1 above after giving effect to such
transaction, and Borrowers obtain the prior written consent of the Requisite
Lenders in their sole discretion;

 

(iv)    During the Initial Covenant Adjustment Period (as defined in the ARC
Credit Agreement) and other than with respect to the Specified Transactions (as
defined in the ARC Credit Agreement), any Loan Party may make an Acquisition (as
defined in the ARC Credit Agreement) solely with the prior consent of the
Administrative Agent in the exercise of its reasonable discretion.

 

For avoidance of doubt, the reference to Section 10.1 in Section 10.4(c)(iii)
above is made to correspond to Section 8.14 of the ARC Credit Agreement as
provided in Section 2(n) of this Agreement.

 

(r)        Modification of Transactions with Affiliates. Section 10.8 of the
Credit Agreement is hereby deleted in its entirety and replaced by the
following:

  

 
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Section 10.8     Transactions with Affiliates.

 

Except as permitted pursuant to the ARC Credit Agreement, the Borrowers and
Parent shall not permit to exist or enter into, and shall not permit any other
Loan Party or any of their respective Subsidiaries to permit to exist or enter
into, any transaction (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate other than
transactions in the ordinary course of and pursuant to the reasonable
requirements of the business of the Borrowers, such other Loan Party or such
other Subsidiary and upon fair and reasonable terms which are no less favorable
to the Borrowers, such other Loan Party or such other Subsidiary than would be
obtained in a comparable arm’s length transaction with a Person that is not an
Affiliate, except:

   

(a)     reasonable and customary fees paid to, and indemnification arrangements
with, members of the board of directors (or similar governing body) of any of
the Loan Parties or the issuance of directors’ or nominees’ qualifying shares;

 

(b)     compensation and indemnification arrangements for directors (or
equivalent), officers and employees of Parent, Borrowers 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 Interest to directors (or equivalent), officers and employees
of Parent, Borrowers and the Subsidiaries in connection with the implementation
of any such arrangement, and the funding of any such arrangement;

 

(c)     Restricted Payments permitted under Section 10.1 above;

 

(d)     Investments permitted under Section 10.1 above;

 

(e)     transactions between or among Borrowers and the Subsidiaries permitted
under Section 10.4 not involving any other Affiliate; and

 

(f)     (i) the performance of obligations under the Existing Advisory
Agreement, the Existing Property Management Agreement, the Existing Management
Agreements Side Letter (each of the Existing Advisory Agreement, the Existing
Property Management Agreement, the Existing Management Agreements Side Letter,
as defined in the ARC Credit Agreement).

 

For avoidance of doubt, the reference Section 10.1 in Section 10.8(c) and
10.8(d) above is made to correspond to Section 8.05 and Section 8.02(F) of the
ARC Credit Agreement, respectively, as provided in Section 2(n) of this
Agreement.

 

(s)        ARC Credit Agreement. The parties agree that any action permitted by
Article VIII of the ARC Credit Agreement is expressly consented to by
Administrative Agent and Lenders, except to the extent any such action relates
to a Borrowing Base Property, other Collateral or a Person directly owning a
Borrowing Base Property in which event the terms and provisions of this Credit
Agreement shall govern.

 

(t)         Change of Control/Change in Management. For avoidance of doubt, the
Merger has been consented to by Administrative Agent and Lenders and shall not
(i) constitute a default under Sections 10.4, 10.7 or 13.6 of the Credit
Agreement, or (ii) constitute an Event of Default pursuant to Section 11.1(l) of
the Credit Agreement. Such consent shall be effective only in this specific
instance and for the specific purpose for which it has been given, and shall not
be deemed to be consent to any subsequent merger or other violation of Sections
10.4, 10.7, 11.1(f) or 13.6 of the Credit Agreement.

  

 
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(u)        Section 11.1(a) of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:

 

(a)     Default in Payment. (i) The Borrowers shall fail to pay when due under
this Agreement or any other Loan Document (whether upon demand, at maturity, by
reason of acceleration or otherwise) the principal of any of the Loans or any
Reimbursement Obligation, (ii) the Borrowers shall fail to pay interest on the
Loans or any Reimbursement Obligation within five (5) days of the same being due
(iii) or the Borrowers shall fail to pay any of the other payment Obligations
owing by the Borrowers or any other Loan Party under this Agreement, any other
Loan Document or the Fee Letter within ten (10) days of the same being due.

 

(v)        Section 11.1(b)(iii) of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:

 

(iii)     Any Loan Party shall fail to perform or observe any term, covenant,
condition or agreement contained in this Agreement or any other Loan Document to
which it is a party and not otherwise mentioned in this Section, and in the case
of this subsection (b)(iii) only, such failure shall continue for a period of
thirty (30) days after the earlier of (x) the date upon which a Responsible
Officer of the Borrowers or such other Loan Party obtains knowledge of such
failure or (y) the date upon which the Borrowers has received written notice of
such failure from the Administrative Agent, and in the case of a default that
cannot be cured within such thirty (30) day period despite Borrower’s diligent
efforts but is susceptible of being cured within ninety (90) days of Borrower’s
receipt of Administrative Agent’s original notice or such other Loan Party
obtaining knowledge of such failure, as applicable, then Borrower shall have
such additional time as is reasonably necessary to effect such cure, but in no
event in excess of ninety (90) days from Borrower’s receipt of Administrative
Agent’s original notice or such other Loan Party obtaining knowledge of such
failure, as applicable.

 

(w)       Section 11.1(c) of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:

 

(c)     Misrepresentations. Any statement (written or oral), representation or
warranty made or deemed made by or on behalf of any Loan Party under this
Agreement or under any other Loan Document, or any amendment hereto or thereto,
or in any other writing or statement at any time furnished by, or at the
direction of, any Loan Party to the Administrative Agent, the Issuing Bank or
any Lender, shall at any time prove to have been incorrect or misleading in any
material respect when furnished or made or deemed made and shall not be cured or
remedied so that such representation, warranty, certification or statement of
fact is no longer incorrect or misleading in any material respect within ten
(10) days after the earlier of notice from Administrative Agent or the actual
knowledge of any Loan Party thereof.

  

 
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(x)        Section 11.1(d) of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:

 

(A)          Indebtedness Cross-Default.

 

(a)     The Borrowers or any other Loan Party shall permit there to exist any
default, event or condition resulting in (or permitting the) acceleration,
mandatory repurchase or mandatory prepayment of, or any failure to pay at
maturity, (x) any Recourse Indebtedness in excess of $35,000,000 in the
aggregate, or (y) any Nonrecourse Indebtedness in excess of $75,000,000 in the
aggregate (other than, during the thirty (30) day period following November 5,
2013 or such longer period as Administrative Agent shall determine in its
reasonable discretion, Indebtedness set forth on Schedule 11.1(d)).

 

(b)     The Borrowers or any other Loan Party shall permit there to exist a
default in, or resulting in, the payment of amounts in excess of (x) $35,000,000
in the aggregate in respect of any Derivatives Contracts related to Recourse
Indebtedness, or (y) $75,000,000 in the aggregate in respect of any Derivatives
Contracts related to Nonrecourse Indebtedness.

 

(c)     The Borrowers or any other Loan Party shall permit there to exist a
default, event or condition resulting in (or permitting the) acceleration,
mandatory repurchase or mandatory prepayment of, or any failure to pay at
maturity, the ARC Credit Agreement.

 

(y)        Section 11.1(h) of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:

 

(h)     Judgments. There is entered against any one or more Loan Party (i) one
or more final judgments or orders for the payment of money in an aggregate
amount (as to all such judgments or orders) exceeding $35,000,000.00 (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage), or (ii) any one or more non-monetary final judgments
that have, or would have, individually or in the aggregate, a Material Adverse
Effect and, in either case, (A) enforcement proceedings are commenced by any
creditor upon such judgment or order, or (B) there is a period of sixty (60)
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or

 

(z)        Section 11.1(j) of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:

 

(j)     ERISA.

 

(a)     Any ERISA Event shall have occurred that results or could reasonably be
expected to result in liability to any member of the ERISA Group aggregating in
excess of $20,000,000; or

  

 
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(b)     The “benefit obligation” of all Plans exceeds the “fair market value of
plan assets” for such Plans by more than $20,000,000, all as determined, and
with such terms defined, in accordance with FASB ASC 715.

 

(aa)      Section 11.1(l) of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:

 

(l) Change of Control. There occurs any Change of Control.

 

(bb)      The following new Section 11.1(o) is hereby added to the Credit
Agreement:

 

(o) REIT Status of Parent. Parent ceases to be treated as a REIT in any taxable
year.

 

(cc)      Modification of Exhibit I. Exhibit I to the Credit Agreement is hereby
deleted and replaced with Exhibit I attached hereto.

 

(dd)     Modification of Schedule 4.1. Schedule 4.1 to the Credit Agreement is
hereby deleted and replaced with Schedule 4.1 attached hereto.

 

(ee)      New Schedule 11.1(d). A new Schedule 11.1(d) to the Credit Agreement
is hereby added to the Credit Agreement in the form attached hereto as Schedule
11.1(d).

 

SECTION 3.     Conditions Precedent. This Agreement shall become effective only
upon the satisfaction of the following conditions precedent:

 

(a)        Receipt by the Agent of counterparts of this Agreement duly executed
by the Borrowers, Lenders and the Agent;

 

(b)        Receipt by the Agent of counterparts of an amended and restated
Guaranty executed by Safari and ARCP, jointly and severally, as Guarantors;

 

(c)        Receipt by the Agent of a fully executed Term Note, which shall
amend, restate and replace the existing Revolving Note;

 

(d)        Receipt by the Agent of a satisfactory fully executed estoppel from
Kroger with respect to the Kroger Portfolio;

 

(e)        Agent shall have received all fees and expenses pursuant to the
executed fee letter entered on even date herewith;

 

(f)         Receipt of amendments to the Security Deeds in recordable form duly
executed by the Borrowers and the Agent;

 

(g)        Receipt by the Agent of opinions of counsel to Guarantors and
appropriate authorizing resolutions and certificates with respect to Borrowers
and Guarantor.

  

 
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(h)        Receipt by the Agent of title insurance endorsements satisfactory to
the Agent insuring the continued enforceability and priority of the Liens
created under the Security Deeds, as amended; and

 

(i)         Receipt by the Agent of such other documents, agreements and
instruments as the Administrative Agent, or any Lender through the
Administrative Agent, may reasonably request.

 

SECTION 4.     Miscellaneous.

 

(a)        Effect of Agreement. Except as set forth expressly hereinabove, all
terms of the Credit Agreement and the other Loan Documents shall be and remain
in full force and effect, and shall constitute the legal, valid, binding, and
enforceable obligations of the Borrowers.

 

(b)        No Novation or Mutual Departure. Each Borrower expressly acknowledges
and agrees that (i) there has not been, and this Agreement does not constitute
or establish, a novation with respect to the Credit Agreement or any of the
other Loan Documents, or a mutual departure from the strict terms, provisions,
and conditions thereof, other than with respect to the amendments contained in
Section 2 above; and (ii) nothing in this Agreement shall affect or limit the
Agent’s or Lenders’ right to demand payment of liabilities owing from the
Borrowers to the Agent or any Lender under, or to demand strict performance of
the terms, provisions and conditions of, the Credit Agreement and the other Loan
Documents, to exercise any and all rights, powers, and remedies under the Credit
Agreement or the other Loan Documents or at law or in equity, or to do any and
all of the foregoing, immediately at any time after the occurrence of a Default
or an Event of Default under the Credit Agreement or the other Loan Documents.

 

(c)        Ratification. Each Borrower (i) hereby restates, ratifies, and
reaffirms each and every term, covenant, and condition set forth in the Credit
Agreement, the other Loan Documents and the Hazardous Materials Indemnity
Agreement to which it is a party effective as of the date hereof and (ii)
restates and renews each and every representation and warranty heretofore made
by it in the Credit Agreement, the other Loan Documents and the Hazardous
Materials Indemnity Agreement as fully as if made on the date hereof and with
specific reference to this Agreement and any other Loan Documents executed or
delivered in connection herewith (except with respect to representations and
warranties made as of an expressed date, in which case such representations and
warranties shall be true and correct as of such date).

 

(d)        No Default. To induce the Agent and the Lenders party hereto to enter
into this Agreement, each Borrower hereby acknowledges and agrees that, as of
the date hereof, and after giving effect to the terms hereof, there exists
(i) no Default or Event of Default and (ii) no right of offset, defense,
counterclaim, claim, or objection in favor of the Borrowers or arising out of or
with respect to any of the Loans or other obligations of the Borrowers owed to
the Agent and the Lenders party hereto under the Credit Agreement or any other
Loan Document.

 

(e)        Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument. This Agreement may be executed by each party on separate copies,
which copies, when combined so as to include the signatures of all parties,
shall constitute a single counterpart of the Agreement.

  

 
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(f)         Fax or Other Transmission. Delivery by one or more parties hereto of
an executed counterpart of this Agreement via facsimile, telecopy, or other
electronic method of transmission pursuant to which the signature of such party
can be seen (including, without limitation, Adobe Corporation’s Portable
Document Format) shall have the same force and effect as the delivery of an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by facsimile or other electronic method
of transmission shall also deliver an original executed counterpart, but the
failure to do so shall not affect the validity, enforceability, or binding
effect of this Agreement.

 

(g)        Recitals Incorporated Herein. The preamble and the recitals to this
Agreement are hereby incorporated herein by this reference.

 

(h)        Section References. Section titles and references used in this
Agreement shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced hereby.

 

(i)         Further Assurances. Borrowers agree to take, at Borrowers’ expense,
such further actions as the Agent shall reasonably request from time to time to
evidence the amendments set forth herein and the transactions contemplated
hereby.

 

(j)         Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the internal laws of the State of New York but
excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of New York.

 

 

[SIGNATURES ON FOLLOWING PAGES.]

  

 
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IN WITNESS WHEREOF, each of the Borrowers, the Agent, and the Lenders party
hereto has caused this Agreement to be duly executed by its duly authorized
officer as of the day and year first above written.

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Lender

 

 

By:      /s/ D. Bryan Gregory               
        D. Bryan Gregory

        Director

  

 

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

 

 

 

“BORROWERS” 

 

ARC PROPERTIES OPERATING PARTNERSHIP, L.P.,

a Delaware limited partnership

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

PREFCO DIX-NEUF LLC,
a Connecticut limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

PREFCO NINETEEN LIMITED PARTNERSHIP,
a Connecticut limited partnership

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

CLF CANE RUN LOUISVILLE, LLC,
a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

CLF CANE RUN MEMBER, LLC,
a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 
 

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

 

 

CLF LANDMARK OMAHA LLC,
a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

CLF DODGE OMAHA LLC,
a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

KDC BUSCH BOULEVARD LLC,
a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

CLF 555 N DANIELS WAY LLC,
a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

CLF PULCO ONE LLC,

a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 
 

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

 

 

 

CLF PULCO TWO LLC,

a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

CLF TOLLWAY PLANO LP,

a Delaware limited partnership

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

CLF ASHLAND LLC,

a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

CLF WESTBROOK MALVERN BUSINESS TRUST,

a Virginia business trust

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 
 

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“PARENT”

 

AMERICAN REALTY CAPITAL PROPERTIES, INC.,
a Maryland corporation

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 
 

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

 

 

Acknowledged and Agreed:

 

 

“GUARANTOR”

 

AMERICAN REALTY CAPITAL PROPERTIES, INC.,
a Maryland corporation

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

 

Safari Acquisition, LLC,

a Delaware limited liability company

 

By:      /s/ Jesse C. Galloway          

Name: Jesse C. Galloway

Title: Authorized Signatory

 

 

 

 
 

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“Exhibit I”

 

 

FORM OF TERM NOTE

 

 

 $_____________ 

   __________ __, 20__

 

FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER] (the “Borrower”) hereby
unconditionally promises to pay to the order of ___________________________ (the
“Lender”), in care of Wells Fargo Bank, National Association, as Agent (the
“Agent”), to its address at Minneapolis Loan Center of Administrative Agent, 733
Marquette Avenue, 10th Floor, Minneapolis, MN 55402, or at such other address as
may be specified by the Agent to the Borrower, the principal sum of
___________________ AND ___/100 DOLLARS ($_____________), or such lesser amount
as may be the then outstanding and unpaid balance of all Term Loans made by the
Lender to the Borrower pursuant to, and in accordance with the terms of, the
Credit Agreement (as defined below).

 

The Borrower further agrees to pay interest at said office, in like money, on
the unpaid principal amount owing hereunder from time to time on the dates and
at the rates and at the times specified in the Credit Agreement.

 

This Term Note is one of the “Term Notes” referred to in the Credit Agreement
dated as of _____________ ____, 20__ (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among the
Borrower, the financial institutions party thereto and their assignees under
Section 13.6. thereof, the Agent, and the other parties thereto, and is subject
to, and entitled to, all provisions and benefits thereof. Capitalized terms used
herein and not defined herein shall have the respective meanings given to such
terms in the Credit Agreement. The Credit Agreement, among other things,
(a) provides for the making of a Term Loan by the Lender to the Borrower in an
aggregate amount not to exceed the Dollar amount first above mentioned,
(b) permits the prepayment of the Term Loans by the Borrower subject to certain
terms and conditions and (c) provides for the acceleration of the Term Loans
upon the occurrence of certain specified events.

 

The Borrower hereby waives presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.

 

Time is of the essence for this Note.

 

This Note is given in replacement of the Term Note dated _____ __, 20__, in the
original principal amount of $_______ previously delivered to the Lender under
the Credit Agreement. THIS NOTE IS NOT INTENDED TO BE, AND SHALL NOT BE
CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING UNDER OR IN
CONNECTION WITH THE OTHER NOTE.

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF ______________ APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

  

 

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

 

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Term Note
under seal as of the date written above.

 

 

[NAME OF BORROWER]

 

 

By:                                                              

     Name: ___________________

     Title: ____________________

 

 

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

 

 

Schedule 4.1

 

3651 Peachtree Parkway, Suwanee, GA

 

6678 Covington Hwy., Lithonia, GA

 

136 Belmont Drive, Calhoun, GA

 

400 Peachtree Industrial Blvd., Suwanee, GA

 

302 Brighton Park Blvd., Frankfort, KY

 

540/ 545 Island Fort Road, Madisonville, KY

 

849 North 12th Street, Murray, KY

 

1002 South Broadway, Georgetown, KY

 

1670 Starlite Drive, Owensboro, KY

 

9501 S. Northshore Drive, Knoxville, TN

 

2020 Mallory Lane, Franklin, TN

 

5060 Cane Run Road, Louisville, KY

 

9394 West Dodge Road, Omaha, NE

 

1299 Farnam Street, Omaha, NE

 

6480 Busch Boulevard, Columbus, OH

 

555 North Daniels Way, Bloomington, IN

 

3905 Dallas Parkway, Suite 100, Plano, TX

 

7390 South Iola Street, Englewood, CO

 

7475 South Joliet Street, Englewood, CO

 

41 Moores Road, Malvern, PA

 

12 The Vitamin Shoppe Way, Ashland, VA

 

 

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Schedule 11.1(d)

 

 

Promissory Note dated August 15, 2005, in the original principal amount of
$29,500,000.00, by CLF Arlington LP to Wells Fargo Bank, NA, as Trustee for the
registered holders of Banc of America Commercial Mortgage Inc. Commercial
Mortgage Pass-Through Certificates, Series 2005-5.