Exhibit 10.2

Execution Version

CONFIDENTIAL

ATHENE USA CORPORATION

7700 Mills Civic Parkway

West Des Moines, IA 50266

February 26, 2016

Project Apple

Commitment Letter

Apollo Commercial Real Estate Finance, Inc.

Arrow Merger Sub, Inc.

c/o Apollo Global Management

9 W 57th Street

New York, NY 10019

Attn: Stuart A. Rothstein

Ladies and Gentlemen:

You have advised Athene USA Corporation, an Iowa corporation (“AUSA”, “us” or
“we”), that you intend to (i) acquire, directly or indirectly, all of the
outstanding stock of Apollo Residential Mortgage, Inc., a Maryland corporation
(the “Company”) in accordance with that certain Agreement and Plan of Merger
dated as of February 26, 2016 (the “Acquisition Agreement”), by and among Arrow
Merger Sub, Inc., a Maryland corporation (“AcquisitionCo”), Apollo Commercial
Real Estate Finance, Inc. (“ARI”, and collectively with AcquisitionCo, the
“Borrowers”) and the Company, pursuant to which (a) AcquisitionCo will merge
with and into the Company, with the Company as the surviving entity and
(b) promptly thereafter, the Company will merge with and into ARI, with ARI as
the surviving entity (collectively, the “Acquisition”), (ii) sell the
Athene-Acquired Assets (as defined in the Form Credit Agreement attached hereto
as Exhibit A) pursuant to the Asset Purchase and Sale Agreement, dated as of
February 26, 2016, by and among Athene Annuity & Life Assurance Company, Athene
Annuity and Life Company and ARI (the “Athene Purchase Agreement”) and (iii)
enter into that certain Stock Purchase Agreement, dated as of February 26, 2016,
by and among AUSA and ARI (the “Stock Purchase Agreement”) (the transactions
described in clauses (i), (ii) and (iii) above, collectively, the
“Transactions”). For purposes of this Commitment Letter and the Fee Letter
(defined below), “Closing Date” shall mean the date of the consummation of the
Acquisition, the satisfaction or waiver of the relevant conditions set forth on
Exhibit B and the funding of the Term Loan Facility (as defined below).
Capitalized terms used but not otherwise defined herein are used with the
meanings assigned to such terms in this letter or the Exhibits hereto (this
letter together with all Exhibits, including the annexes, collectively, this
“Commitment Letter”).

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1. Commitments.

In connection with the Transactions, AUSA (individually or collectively with one
or more of its affiliates, the “Lender”) hereby commits to provide the Borrowers
a term loan in an aggregate principal amount of up to $200,000,000 less 100% of
the Net Cash Proceeds (as defined in the Form Credit Agreement) received by ARI
or any of its subsidiaries as a result of the disposition of any Athene-Acquired
Asset on or prior to the Closing Date (the “Term Loan Facility”) (i) upon the
terms set forth or referred to in this letter and the Form Credit Agreement
attached as Exhibit A hereto (the “Form Credit Agreement”), as applicable and
(ii) the initial funding of which is subject only to the conditions set forth on
Exhibit B hereto.

 

2. Information.

You hereby represent that, all factual information (taken as a whole) furnished
by or on behalf of any Loan Party in writing to the Lender for purposes of or in
connection with the Loan Documents or otherwise filed with any Governmental
Authority and publicly available for purpose of or in connection with the
transactions contemplated hereby or thereby (the “Information”), does not or
will not, when furnished, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made (after giving effect to all supplements and
updates thereto from time to time). You agree that if, at any time prior to the
Closing Date, you become aware that any of the representations in the preceding
sentence would be incorrect in any material respect if the Information were
being furnished and such representations were being made at such time, you will
promptly supplement the Information so that such representations remain true in
all material respects under those circumstances (and such supplementation shall
cure any breach of any such representation). Notwithstanding anything to the
contrary contained in this Commitment Letter or the Fee Letter, none of the
making of any representation under this Section 2, the provision of any
supplement thereto, nor the accuracy of any such representation or supplement
shall constitute a condition precedent to the availability and initial funding
of the Term Loan Facility on the Closing Date.

 

3. Fee Letter.

As consideration for the commitments and agreements of the Lender, you agree to
pay or cause to be paid the fees described in the Fee Letter, dated as of the
date hereof, by and among ARI, AcquisitionCo and AUSA (the “Fee Letter”) on the
terms and subject to the conditions (including as to timing and amount) set
forth therein.

 

4. Certain Funds Provision.

Notwithstanding anything in this Commitment Letter, the Fee Letter, the Loan
Documents or any other letter agreement or other undertaking concerning the
financing of the transactions contemplated hereby to the contrary:

 

  (a)

the only representations and warranties relating to the Borrowers, the Company
and the Borrowers and the Company’s respective subsidiaries and respective
businesses, the accuracy of which shall be a condition to the

 

2

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  availability and initial funding of the Term Loan Facility on the Closing
Date, shall be (i) such of the representations and warranties made by or with
respect to the Company, its subsidiaries and their respective businesses in the
Acquisition Agreement as are material to the interests of the Lender, but only
to the extent that you have the right to terminate your obligations under the
Acquisition Agreement or to decline to consummate the Acquisition as a result of
a breach of such representations in the Acquisition Agreement (to such extent,
the “Specified Acquisition Agreement Representations”) and (ii) the Specified
Representations (as defined below),

 

  (b) the terms of the Loan Documents and any closing deliverables shall be in a
form reasonably satisfactory to the Lender; it being understood that, the Credit
Agreement shall be substantially in the form of the Form Credit Agreement,
appropriately completed for the insertion of dates, administrative details and
other items shown in blank, bullets or footnotes and all schedules thereto shall
be reasonably acceptable to us, and

 

  (c) there are no other conditions (implied or otherwise) to the commitments
hereunder, including compliance with the terms of this Commitment Letter, the
Fee Letter or the Loan Documents, except those expressly set forth on Exhibit B
hereto, and such conditions shall be subject in all respects to the provisions
of this Section 4.

Upon the satisfaction (or waiver by the Lender) of the conditions set forth on
Exhibit B hereto, the Lender will execute and deliver the Loan Documents to
which it is a party and the initial funding of the Term Loan Facility shall
occur.

For purposes hereof, “Specified Representations” means the representations and
warranties set forth in the Loan Documents relating to: due organization and
existence of the Loan Parties; organizational power and authority (as each
relates to due authorization, execution, delivery and performance of the Loan
Documents) of the Loan Parties; due authorization, execution and delivery of the
relevant Loan Documents by the Loan Parties, and enforceability as it relates to
the entering into and performance of the relevant Loan Documents against the
Loan Parties; solvency as of the Closing Date (after giving effect to the
Transactions) of the Loan Parties taken as a whole (in form and scope consistent
with the solvency certificate to be delivered pursuant to paragraph 1(b) of
Exhibit B hereto); no conflicts of the Loan Documents with the charter documents
of the Loan Parties; Federal Reserve margin regulations; the Investment Company
Act; the PATRIOT Act, OFAC and the FCPA (as it relates to the use of the
proceeds of the Term Loan Facility); REIT status; and the creation, validity,
perfection and priority of security interests (subject in all respects to
security interests and liens permitted under the Loan Documents and to the
foregoing provisions of this paragraph). This Section 4, and the provisions
contained herein, shall be referred to as the “Certain Funds Provision”.

 

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5. Indemnification; Expenses.

You agree (a) to indemnify, defend and hold harmless the Lender, its affiliates
and controlling persons (and their permitted successors and assigns) and its and
their directors, officers, employees, partners, agents and other representatives
(each, an “indemnified person”) from and against any and all liabilities,
obligations, losses, penalties, claims, demands, suits, actions, judgments
investigations, proceedings and damages, and all attorneys’ fees and
disbursements (which attorneys’ fees, in the case of counsel to the indemnified
persons, shall be reasonable) and other fees, costs and expenses of any kind or
nature whatsoever which may at any time be imposed upon, incurred by or asserted
against such indemnified person in any way in connection with, as a result of,
related to or arising under or out of this Commitment Letter, the Fee Letter,
the Term Loan Facility, and the use of the proceeds thereof or any claim,
litigation, investigation or proceeding relating to any of the foregoing,
including but not limited to, any investigation, litigation or proceeding
commenced by any shareholder, debt holder or other Person in connection with, as
a result of, related to or arising under or out of the Acquisition or the
Transactions (in such indemnified person’s role as the Lender or a director,
officer, employee, partner, agent or other representative of the Lender, its
affiliates or controlling persons) (a “Proceeding”), regardless of whether any
indemnified person is a party thereto or whether such Proceeding is brought by
you, any of your affiliates or any third party, and to reimburse each
indemnified person promptly following written demand therefor for any legal or
other out-of-pocket expenses incurred in connection with investigating or
defending any Proceeding; provided, that the foregoing indemnity will not, as to
any indemnified person, apply to liabilities, obligations, losses, penalties,
claims, demands, suits, actions, judgments investigations, proceedings and
damages or related expenses to the extent they arise from the bad faith, willful
misconduct or gross negligence of such indemnified person as determined by a
final, non-appealable judgment of a court of competent jurisdiction and
(b) whether or not the Closing Date occurs, to reimburse the Lender for all (i)
out-of-pocket costs or expenses paid or incurred by the Lender in connection
with, as a result of, related to or arising under or out of the Term Loan
Facility and any related documentation (including this Commitment Letter, the
Fee Letter and the Loan Documents), (ii) reasonable out-of-pocket fees, expenses
and disbursements of outside counsel for the Lender in connection with, related
to or arising under or out of the Term Loan Facility and any related
documentation (including this Commitment Letter, the Fee Letter and the Loan
Documents), (iii) out-of-pocket costs and expenses of third-party claims or any
other suit paid or incurred by the Lender in enforcing or defending the this
Commitment Letter, the Fee Letter or any of the Loan Documents or in connection
with the transactions contemplated by this Commitment Letter or the Loan
Documents or the Lender’s relationship with the Borrowers or any of their
subsidiaries (including any investigation, litigation or proceeding commenced by
any shareholder, debt holder or other Person in connection with, as a result of,
related to or arising under or out of the Acquisition or the Transactions (in
its role as the Lender)) and (iv) the Lender’s third-party out-of-pocket costs
and expenses (including reasonable attorneys’ fees) incurred in connection with
this Commitment Letter or the Loan Documents.

No indemnified person shall be liable for any damages arising from the use by
any person (other than such indemnified person) of Information or other
materials obtained through electronic, telecommunications or other information
transmission systems, except to the extent any such damages arise from the bad
faith, gross negligence or willful misconduct of such indemnified

 

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person, in each case as determined by a final non-appealable judgment of a court
of competent jurisdiction. None of the indemnified persons, their affiliates or
their directors, officers, employees, agents, or other representatives of any of
the foregoing shall be liable for any special, indirect, consequential or
punitive damages in connection with this Commitment Letter, the Fee Letter or
the Term Loan Facility (including the use or intended use of the proceeds of the
Term Loan Facility) or the transactions contemplated hereby or thereby.

You shall not be liable for any settlement of any Proceeding effected by any
indemnified person without your consent (which consent shall not be unreasonably
withheld or delayed), but if any Proceeding is settled with your written
consent, you agree to indemnify and hold harmless such indemnified person in the
manner set forth above. You shall not, without the prior written consent of the
affected indemnified person (which consent shall not be unreasonably withheld or
delayed), effect any settlement of any pending or threatened Proceeding against
such indemnified person in respect of which indemnity could have been sought
hereunder by such indemnified person unless such settlement (a) includes an
unconditional release of such indemnified person from all liability or claims
that are the subject matter of such Proceeding and (b) does not include any
statement as to any admission of fault or culpability.

 

6. Sharing of Information, Absence of Fiduciary Relationship.

You acknowledge and agree that the Lender has no obligation to use in connection
with the transactions contemplated hereby, or to furnish to you, confidential
information obtained from other companies or other persons. The Lender may have
economic interests that conflict with your economic interests and those of the
Company. You acknowledge and agree that (a)(i) the arranging and other services
described herein regarding the Term Loan Facility are arm’s-length commercial
transactions between you and your affiliates, on the one hand, and the Lender,
on the other hand, that do not directly or indirectly give rise to, nor do you
rely on, any fiduciary duty on the part of the Lender, (ii) the Lender has not
provided any legal, accounting, regulatory or tax advice with respect to any of
the Transactions and you have consulted your own legal, accounting, regulatory
and tax advisors to the extent you have deemed appropriate and (iii) you are
capable of evaluating, and understand and accept, the terms, risks and
conditions of the transactions contemplated hereby; and (b) in connection with
the transactions contemplated hereby, (i) the Lender has been, is, and will be
acting solely as a principal and, except as otherwise expressly agreed in
writing by the relevant parties, has not been, is not, and will not be acting as
an advisor, agent or fiduciary for you or any of your affiliates and (ii) the
Lender does not have any obligation to you or your affiliates except those
obligations expressly set forth in this Commitment Letter and any other
agreement with you or any of your affiliates.

 

7. Confidentiality.

This Commitment Letter is entered into by the parties hereto on the
understanding that neither this Commitment Letter nor the Fee Letter nor any of
their terms or substance shall be disclosed by you to any other person except
(a) to your subsidiaries, to the Company and its subsidiaries, and to your and
their respective directors, officers, employees, affiliates, members, partners,
stockholders, attorneys, accountants, independent auditors, agents and other
advisors and the Company and its subsidiaries, in each case on a confidential
basis (provided, that any disclosure of

 

5

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the Fee Letter or its contents, until the Closing Date, to the Company or its
subsidiaries or their respective directors, officers, employees, affiliates,
members, partners, stockholders, attorneys, accountants, independent auditors,
agents or other advisors shall be, until the Closing Date, (i) redacted in
respect of the amounts, percentages and basis points of compensation set forth
therein or (ii) used for customary accounting purposes, including accounting for
deferred financing costs), (b) in any legal, judicial or administrative
proceeding or as otherwise required by applicable law, rule or regulation or as
requested by a governmental regulatory or self-regulatory authority (in which
case you agree, to the extent permitted by law, rule or regulation, to inform us
promptly in advance thereof), (c) in connection with the exercise of any remedy
or enforcement of any right under this Commitment Letter and/or the Fee Letter,
and (d) this Commitment Letter, including the existence and contents of this
Commitment Letter (but not the Fee Letter or the contents thereof, other than
the existence thereof and the contents thereof as part of projections, pro forma
information and a generic disclosure of aggregate sources and uses in marketing
materials and other related disclosures), may be disclosed in any proxy
statement, periodic report or similar public filing related to the Acquisition
or in connection with any public filing requirement. The foregoing restrictions
shall cease to apply in respect of the existence and contents of this Commitment
Letter (but not in respect of the Fee Letter and its contents) on the earlier of
the Closing Date and two year following the date of this Commitment Letter.

The Lender shall use all material, non-public information received by it in
connection with the Acquisition and the related transactions solely for the
purpose of providing the services that are the subject of this Commitment Letter
and the Loan Documents, and entering into the Athene Purchase Agreement and the
Stock Purchase Agreement and shall treat confidentially all such information and
the terms and contents of this Commitment Letter, the Fee Letter and the Loan
Documents and shall not publish, disclose or otherwise divulge such information;
provided, however, that nothing herein shall prevent the Lender from disclosing
any such information that it is permitted to disclose pursuant to Section 16.7
of the Form Credit Agreement attached hereto as Exhibit A. The provisions of
this paragraph (other than with respect to the Fee Letter and its contents)
shall automatically terminate on the date that is two years after the date
hereof, unless earlier superseded by the relevant Loan Documents.

 

8. Miscellaneous.

This Commitment Letter shall not be assignable by any party hereto without the
prior written consent of each other party hereto (and any purported assignment
without such consent shall be null and void), is intended to be solely for the
benefit of the parties hereto and is not intended to and does not confer any
benefits upon, or create any rights in favor of, any person other than the
parties hereto and, to the extent expressly set forth herein, the indemnified
persons. This Commitment Letter may not be amended or waived except by an
instrument in writing signed by you and the Lender. This Commitment Letter may
be executed in any number of counterparts, each of which shall be deemed to be
an original, and all of which, when taken together, shall constitute one
agreement. Delivery of an executed signature page of this Commitment Letter by
facsimile or other electronic transmission (including “.pdf”, “.tif” or similar
format) shall be effective as delivery of a manually executed counterpart
hereof. This Commitment Letter and the Fee Letter are the only agreements that
have been entered into among us and you with respect to the Term Loan Facility
and set forth the entire understanding of the parties with respect hereto and
thereto, and supersede all prior agreements and understandings related to the
subject matter hereof.

 

6

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This Commitment Letter, and any claim, controversy or dispute arising under or
related to this Commitment Letter, whether in tort, contract (at law or in
equity) or otherwise, shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York; provided, that,
notwithstanding the preceding sentence and the governing law provisions of this
Commitment Letter and the Fee Letter, it is understood and agreed that (a) the
interpretation of the definition of “Material Adverse Effect” (and whether or
not a Material Adverse Effect has occurred), (b) the determination of the
accuracy of any Specified Acquisition Agreement Representation and whether as a
result of any inaccuracy thereof you or your applicable affiliate has the right
to terminate your or their obligations under the Acquisition Agreement or to
decline to consummate the Acquisition and (c) the determination of whether the
Acquisition has been consummated in accordance with the terms of the Acquisition
Agreement and, in any case, claims or disputes arising out of any such
interpretation or determination or any aspect thereof, in each case, shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Maryland, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.

EACH OF THE PARTIES HERETO IRREVOCABLY AGREES TO WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THE ACQUISITION, THIS
COMMITMENT LETTER, THE FEE LETTER OR THE PERFORMANCE BY US OR ANY OF OUR
AFFILIATES OF THE SERVICES CONTEMPLATED HEREBY.

Each of the parties hereto irrevocably and unconditionally (a) submits to the
exclusive jurisdiction of any state or federal court sitting in the Borough of
Manhattan in the City of New York (or any appellate court therefrom) over any
suit, action or proceeding arising out of or relating to this Commitment Letter
or the Fee Letter, (b) agrees that all claims in respect of any such suit,
action or proceeding shall be heard and determined in such New York state or
federal court and (c) agrees that a final, non-appealable judgment in any such
suit, action or proceeding may be enforced in other jurisdictions in any manner
provided by law; provided, that with respect to any suit, action or proceeding
arising out of or relating to the Acquisition Agreement or the transactions
contemplated thereby and which do not involve claims against us or any other
Lender, this sentence shall not override any jurisdiction provision set forth in
the Acquisition Agreement. You and we agree that service of any process,
summons, notice or document by registered mail addressed to such person shall be
effective service of process against such person for any suit, action or
proceeding brought in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any such suit, action or proceeding brought in any such court and any claim that
any such suit, action or proceeding has been brought in an inconvenient
forum. Each party hereto agrees to service of process for purposes of the
submission to jurisdiction set forth above by the mailing of such process by
registered or certified mail, postage prepaid, to its address specified on the
first page of this Commitment Letter.

 

7

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The Lender hereby notifies you that, pursuant to the requirements of the USA
PATRIOT Act, Title III of Pub. L. 107-56 (signed into law on October 26, 2001)
(the “PATRIOT Act”), it is required to obtain, verify and record information
that identifies each Loan Party, which information includes names, addresses,
tax identification numbers and other information that will allow each Lender to
identify each Loan Party in accordance with the PATRIOT Act. This notice is
given in accordance with the requirements of the PATRIOT Act and is effective
for the Lender.

The Fee Letter and the indemnification and expenses, confidentiality,
jurisdiction, governing law, sharing of information, no agency or fiduciary
duty, waiver of jury trial, service of process and venue provisions contained
herein shall remain in full force and effect regardless of whether the Loan
Documents are executed and delivered and notwithstanding the termination or
expiration of this Commitment Letter or the commitments hereunder; provided,
that your obligations under this Commitment Letter (other than confidentiality
of the Fee Letter and the contents thereof) shall automatically terminate and be
of no further force and effect (and be superseded by the Loan Documents) on the
Closing Date and you shall automatically be released from all liability
hereunder in connection therewith at such time. Subject to the preceding
sentence, you may terminate this Commitment Letter upon written notice to the
Lender at any time.

If the foregoing correctly sets forth our agreement, please indicate your
acceptance of our offer as set forth in this Commitment Letter and the Fee
Letter by returning to us executed counterparts of this Commitment Letter and of
the Fee Letter and making payment of the fees due under the Fee Letter not later
than 5:00 p.m., New York City time, on February 26, 2016. Such offer will remain
available for acceptance until such time, but will automatically expire at such
time if we have not received such executed counterparts and payment of the fees
in the manner contemplated by the Fee Letter in accordance with the preceding
sentence. In the event that the Closing Date does not occur on or before 11:59
p.m., New York City time, on the earliest of (a) the Initial Outside Date (as
defined in the Acquisition Agreement) or if extended in accordance with the
terms of the Acquisition Agreement as in effect on the date hereof, the Second
Outside Date (as defined in the Acquisition Agreement), (b) the date of the
termination of the Acquisition Agreement by you or with your written consent, in
each case prior to the closing of the Acquisition, (c) the date of the closing
of the Acquisition without the use of the Term Loan Facility, and (d) the date
of the termination of the Athene Purchase Agreement by you or with your written
consent, then this Commitment Letter and the commitments hereunder shall
automatically terminate unless we, in our discretion, agree to an extension;
provided that the termination of any commitment pursuant to this sentence shall
not prejudice your rights and remedies in respect of any breach of this
Commitment Letter that occurred prior to any such termination.

[The remainder of this page is intentionally left blank]

 

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We are pleased to have been given the opportunity to assist you in connection
with this important financing.

 

Very truly yours, ATHENE USA CORPORATION By: ATHENE ASSET MANAGEMENT, L.P., its
investment advisor By: AAM GP Ltd., its general partner By:  

/s/ James R. Belardi

Name:   James R. Belardi Title:   Chief Executive Officer

 

Signature Page to Commitment Letter

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Accepted and agreed to as of

the date first above written:

 

APOLLO COMMERCIAL REAL ESTATE FINANCE, INC. By:  

/s/ Stuart A. Rothstein

Name:   Stuart A. Rothstein Title:   President and Chief Executive Officer ARROW
MERGER SUB, INC. By:  

/s/ Stuart A. Rothstein

Name:   Stuart A. Rothstein Title:   President

 

Signature Page to Commitment Letter

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EXHIBIT A

Form of Credit Agreement

[Attached]

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LOAN AGREEMENT

by and among

APOLLO COMMERCIAL REAL ESTATE FINANCE, INC.

and

ARROW MERGER SUB, INC.,

as the Borrowers,

and

ATHENE USA CORPORATION,

as the Lender

Dated as of [●][●], 2016

 

 

 

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TABLE OF CONTENTS

 

                   Page  

1.

    

DEFINITIONS AND CONSTRUCTION.

     1         1.1     

Definitions

     1         1.2     

Accounting Terms

     17         1.3     

Construction

     17         1.4     

Schedules and Exhibits

     18   

2.

    

LOAN AND TERMS OF PAYMENT.

     18         2.1     

Term Loan

     18         2.2     

Prepayments

     19         2.3     

Interest Rates: Rates, Payments, and Calculations

     20         2.4     

Representations and Warranties of Lender

     20         2.5     

Concerning Joint and Several Liability of the Borrowers

     21   

3.

    

CONDITIONS; TERM OF AGREEMENT.

     22         3.1     

Conditions Precedent to Effectiveness

     22         3.2     

Term

     23         3.3     

Effect of Termination

     23   

4.

    

REPRESENTATIONS AND WARRANTIES.

     23         4.1     

No Encumbrances

     23         4.2     

[Reserved]

     23         4.3     

State of Organization; Location of Chief Executive Office; Organizational
Identification Number

     24         4.4     

Due Organization and Qualification; Power and Authority; Subsidiaries

     24         4.5     

Due Authorization; No Conflict

     24         4.6     

Litigation

     25         4.7     

No Material Adverse Change

     25         4.8     

Solvency

     26         4.9     

Employee Benefits; ERISA Plan Assets

     26         4.10     

Environmental Condition

     26         4.11     

Brokerage Fees

     26         4.12     

Intellectual Property

     26         4.13     

[Reserved]

     27   

 

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TABLE OF CONTENTS

(continued)

 

                   Page        4.14     

Complete Disclosure

     27         4.15     

[Reserved]

     27         4.16     

PATRIOT Act; Anticorruption

     27         4.17     

Sanctions

     27         4.18     

Investment Company

     28         4.19     

Insurance

     28         4.20     

Margin Stock

     28         4.21     

Taxes

     28         4.22     

Collateral Matters

     28         4.23     

REIT Status

     29   

5.

    

AFFIRMATIVE COVENANTS

     29         5.1     

Financial Statements, Reports, Certificates

     29         5.2     

Maintenance of Properties

     30         5.3     

Taxes

     31         5.4     

Insurance

     31         5.5     

Compliance with Laws

     31         5.6     

[Reserved]

     31         5.7     

Existence

     31         5.8     

Books and Records

     31         5.9     

Environmental

     32         5.10     

Obligations Relating to Athene Purchase Agreement

     32         5.11     

Maintenance of REIT Status

     33         5.12     

Certain Regulatory Matters

     33         5.13     

Further Assurances

     33   

6.

    

NEGATIVE COVENANTS

     34         6.1     

Indebtedness

     34         6.2     

Liens

     34         6.3     

Disposal of Assets

     34         6.4     

Restrictions on Fundamental Changes

     34         6.5     

Change Name

     35         6.6     

Change Nature of Business

     35   

 

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TABLE OF CONTENTS

(continued)

 

                   Page        6.7     

Employee Benefits; ERISA Plan Assets

     35         6.8     

Amendment to Permitted Indebtedness; Restrictive Agreements

     36         6.9     

Restricted Payments

     37         6.10     

Accounting Methods

     37         6.11     

Investments

     37         6.12     

Transactions with Affiliates

     37         6.13     

Use of Proceeds

     38         6.14     

Amendments or Waivers and Prepayments with respect to Certain Indebtedness

     38   

7.

    

EVENTS OF DEFAULT

     38   

8.

    

THE LENDERS’ RIGHTS AND REMEDIES

     40         8.1     

Acceleration

     40         8.2     

Other Remedies

     40         8.3     

Remedies Cumulative

     41   

9.

    

TAXES AND EXPENSES

     41   

10.

    

WAIVERS; INDEMNIFICATION

     41         10.1     

Demand; Protest; etc.

     41         10.2     

Indemnification

     41         10.3     

Expenses

     42         10.4     

Waiver

     42   

11.

    

NOTICES

     43   

12.

    

CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

     44   

13.

    

ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS

     45         13.1     

Assignments and Participations

     45         13.2     

Successors

     48   

14.

    

AMENDMENTS; WAIVERS

     48         14.1     

Amendments and Waivers

     48         14.2     

No Waivers; Cumulative Remedies

     49   

15.

    

THE LENDERS

     49         15.1     

Lender in Individual Capacity

     49         15.2     

Withholding Taxes; Increased Costs

     49   

 

iii

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TABLE OF CONTENTS

(continued)

 

                   Page        15.3     

Restrictions on Actions by Lenders; Sharing of Payments

     53         15.4     

Payments to the Lenders

     53         15.5     

Several Obligations; No Liability

     53   

16.

    

GENERAL PROVISIONS

     53         16.1     

Effectiveness

     53         16.2     

Section Headings

     53         16.3     

Interpretation

     54         16.4     

Severability of Provisions

     54         16.5     

Counterparts; Electronic Execution

     54         16.6     

Revival and Reinstatement of Obligations

     54         16.7     

Confidentiality

     54         16.8     

Integration

     55         16.9     

USA PATRIOT Act Notice

     55         16.10     

Recourse Against Certain Parties

     55   

 

iv

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EXHIBITS AND SCHEDULES

 

Exhibit A-1    Form of Assignment and Acceptance Schedule 1.1    Excluded
Subsidiaries Schedule 4.3(a)    States of Organization Schedule 4.3(b)    Chief
Executive Offices Schedule 4.3(c)    Organizational Identification Numbers and
Federal Employer Identification Numbers Schedule 4.4    Capitalization of
Borrower’s Subsidiaries Schedule 4.6    Litigation Schedule 4.21    Taxes
Schedule 6.1    Permitted Indebtedness Schedule 6.2    Permitted Liens Schedule
6.8    Existing Restrictions Schedule 6.11    Permitted Investments Schedule
6.12    Transactions with Affiliates

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LOAN AGREEMENT

THIS LOAN AGREEMENT (this “Agreement”), is entered into as of [●][●], 2016, by
and among ATHENE USA CORPORATION, an Iowa corporation (“AUSA”), ARROW MERGER
SUB, INC., a Maryland corporation (“AcquisitionCo”), and APOLLO COMMERCIAL REAL
ESTATE FINANCE, INC., a Maryland corporation (“ARI”, and together with
AcquisitionCo, the “Borrowers” and each, a “Borrower”).

WHEREAS, ARI intends to acquire, directly or indirectly, all of the outstanding
Stock of Apollo Residential Mortgage, Inc., a Maryland corporation (“AMTG”), in
accordance with that certain Agreement and Plan of Merger dated as of February
26, 2016 (the “Acquisition Agreement”), by and among AcquisitionCo, ARI and
AMTG, pursuant to which (i) AcquisitionCo will merge with and into AMTG, with
AMTG as the surviving company, and (ii) promptly thereafter, AMTG will merge
with and into ARI, with ARI as the surviving company (collectively, the
“Acquisition”);

WHEREAS, the Borrowers have requested that, simultaneously with the consummation
of the Acquisition, AUSA extend credit to the Borrowers in the form of a term
loan in an aggregate principal amount of up to the Commitment (as defined below)
to be used on the Closing Date (as defined below) to fund a portion of the
purchase price in connection with the Acquisition and Transaction Expenses (as
defined below).

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1. DEFINITIONS AND CONSTRUCTION.

1.1 Definitions. As used in this Agreement, the following terms shall have the
following definitions:

“Acquisition” has the meaning set forth in the recitals hereto.

“Acquisition Agreement” has the meaning set forth in the recitals hereto.

“Acquisition Agreement Representations” means the representations made by or
with respect to AMTG, its Subsidiaries and their respective businesses in the
Acquisition Agreement as are material to the interests of the Lenders, but only
to the extent that ARI has the right to terminate its obligations under the
Acquisition Agreement or to decline to consummate the Acquisition as a result of
a breach of such representations in the Acquisition Agreement

“AcquisitionCo” has the meaning set forth in the preamble hereto.

“Affiliate” means, as applied to any Person, any other Person who, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. For purposes of this definition,
“control” means the possession, directly or indirectly through one or more
intermediaries, of the power to direct the management and

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policies of a Person, whether through the ownership of Stock, by contract, or
otherwise. Neither ARI nor any of its Subsidiaries shall be deemed to be an
Affiliate of any Lender for purposes of this Agreement.

“Agreement” has the meaning set forth in the preamble hereto.

“AMTG” has the meaning set forth in the recitals hereto.

“Anticorruption Laws” has the meaning set forth in Section 4.16 hereto.

“Applicable Interest Rate” means, for any day with respect to the Term Loan, a
rate per annum equal to the Eurodollar Base Rate plus 7.00%.

“Applicable Laws” means all applicable laws, rules, regulations and orders of
any Governmental Authority, including without limitation, usury and Credit
Protection Laws.

“ARI” has the meaning set forth in the preamble hereto.

“Assignee” has the meaning set forth in Section 13.1(a).

“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1.

“Athene-Acquired Assets” means the assets described on Schedule I hereto.1

“Athene Purchase Agreement” means the Asset Purchase and Sale Agreement, dated
as of February 26, 2016, by and among Athene Annuity & Life Assurance Company,
Athene Annuity and Life Company and ARI.

“AUSA” has the meaning set forth in the preamble hereto.

“Authorized Person” means, with respect to any Person, the chief executive
officer, president, chief financial officer or chief investment officer of such
Person or the trustee of such Person, as applicable.

“Bankruptcy Code” means title 11 of the United States Code.

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA) for which a Borrower or any Subsidiary or ERISA Affiliate of a Borrower
has been an “employer” (as defined in Section 3(5) of ERISA) within the past six
years, but does not include any defined contribution plan qualified as a “401(k)
Plan” under the IRC.

“Board of Directors” means the board of directors (or comparable managers or
managing members or management committee) of a Person or any committee thereof
duly authorized to act on behalf of the board of directors (or comparable
managers or managing members or management committee).

 

1  To contain a list of the final “Assets” (as defined in the Athene Purchase
Agreement) to be acquired by Athene pursuant to the Athene Purchase Agreement as
of the Closing Date.

 

2

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“Borrowers” has the meaning set forth in the preamble hereto.

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the state of New York or that
is otherwise a day on which banks are closed for dealings in Dollar deposits in
the London interbank market.

“Buyer Representative” has the meaning assigned to such term in the Athene
Purchase Agreement.

“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.

“Captive Insurance Subsidiary” means any Subsidiary of the Borrower that is
subject to regulation as an insurance company (or any Subsidiary thereof).

“Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency thereof and backed
by the full faith and credit of the United States, in each case, having
maturities of not more than one (1) year from the date of acquisition; (b)
commercial paper maturing no more than one (1) year after its creation and
having the highest rating from either Standard & Poor’s or Moody’s; (c)
certificates of deposit of any United States depository institution or trust
company incorporated under the laws of the United States or any state thereof
and subject to supervision and examination by a federal and/or state banking
authority of the United States, in each case, having capital and surplus in
excess of $500,000,000, maturing no more than one (1) year after issue; and (d)
money market funds at least ninety-five percent (95%) of the assets of which
constitute Cash Equivalents of the kinds described in clauses (a) through (c) of
this definition.

“Closing Date” means [●] [●], 2016.2

“Collateral” means (a) all Stock of the direct and indirect Subsidiaries of the
Borrowers and each Guarantor, other than Excluded Stock and (b) all other assets
on which Liens are purported to be created pursuant to the Loan Documents.

“Collateral Agreement” means the (a) Guaranty and Pledge Agreement executed and
delivered by the Borrowers and the Guarantors party thereto in favor of the
Lenders and (b) and each other agreement or instrument pursuant to or in
connection with which any Loan Party or any other Person grants a Lien in any
Collateral to secure the Obligations.

“Commitment” means $200,000,000 less 100% of the Net Cash Proceeds received by
ARI or any of its Subsidiaries as a result of the Disposition (whether to AUSA,
its Affiliates or any other Person) of any Athene-Acquired Asset on or prior to
the Closing Date.

 

2  To be the date of the consummation of the Acquisition, the satisfaction of
the conditions set forth in Section 3.1 and the funding of the Term Loan.

 

3

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“Credit Protection Laws” means all federal, state, provincial, foreign and local
laws in respect of the business of extending credit to borrowers, including
without limitation, the Truth in Lending Act (and Regulation Z promulgated
thereunder), Equal Credit Opportunity Act, Fair Credit Reporting Act, Fair Debt
Collection Practices Act, Gramm-Leach-Bliley Financial Privacy Act, Real Estate
Settlement Procedures Act, Home Mortgage Disclosure Act, Fair Housing Act,
anti-discrimination and fair lending laws, laws relating to servicing procedures
or maximum charges and rates of interest, and other similar laws, each to the
extent applicable, and all applicable regulations in respect of any of the
foregoing.

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

“Default Rate” has the meaning set forth in Section 2.3(b).

“Disposition” has the meaning set forth in Section 6.3. The terms “Dispose” and
“Disposed” shall have the correlative meanings.

“Disregarded Domestic Subsidiary” means any Domestic Subsidiary (a)
substantially all of the assets of which consist directly (or indirectly through
Subsidiaries that do not conduct material business activities or have material
debt or obligations) of Stock of one or more Foreign Subsidiaries or (b) that is
treated as a disregarded entity for U.S. federal income tax purposes and holds
the equity of one or more Foreign Subsidiaries.

“Dollars” or “$” means the lawful currency of the United States of America.

“Domestic Subsidiary” means any Subsidiary incorporated or organized under the
laws of the United States, any state thereof or the District of Columbia.

“Environmental Actions” means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other communication from any Governmental
Authority, or any third party involving liability under or violations of
Environmental Laws or releases of Hazardous Materials at, on, from or onto (a)
any assets, properties, Investments or businesses of the Borrowers, their
Subsidiaries, or any of their predecessors in interest, (b) adjoining properties
or businesses, or (c) any facilities which received Hazardous Materials
generated by the Borrowers, their Subsidiaries, or any of their predecessors in
interest.

“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on either
Borrower or any of its Subsidiaries, relating to the environment, protection of
health, safety or natural resources, or Hazardous Materials, including the
Comprehensive Environmental Response Compensation and Liability Act, 42 USC §
9601 et seq.; the Resource Conservation and Recovery Act, 42 USC § 6901 et seq.;
the Federal Water Pollution Control Act, 33 USC § 1251 et seq.; the Toxic
Substances Control Act, 15 USC § 2601 et seq.; the Clean Air Act, 42 USC § 7401
et seq.; the Safe Drinking Water Act, 42 USC § 3803 et seq.; the Oil Pollution
Act

 

4

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of 1990, 33 USC § 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 USC § 11001 et seq.; the Hazardous Material
Transportation Act, 49 USC § 1801 et seq.; and the Occupational Safety and
Health Act, 29 USC §651 et seq. (to the extent it regulates occupational
exposure to Hazardous Materials); any state, provincial, foreign and local
counterparts or equivalents.

“Environmental Liabilities and Costs” means all liabilities, monetary
obligations, losses, damages, punitive damages, consequential damages, treble
damages, fees, costs and expenses (including all fees, disbursements and
expenses of counsel, experts, and consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest required under
Environmental Law or incurred as a result of any Environmental Action, or
Remedial Action required, by any Governmental Authority or other Person.

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

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

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of the Borrowers or
their Subsidiaries under IRC Section 414(b), (b) any trade or business subject
to ERISA whose employees are treated as employed by the same employer as the
employees of the Borrowers or their Subsidiaries under IRC Section 414(c), (c)
solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which either Borrower or any of its Subsidiaries is a member under IRC Section
414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of
the IRC, any Person subject to ERISA that is a party to an arrangement with
either Borrower or any of its Subsidiaries and whose employees are aggregated
with the employees of such Borrower or its Subsidiaries under IRC Section
414(o).

“Eurodollar Base Rate” means (a) the rate (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by AUSA to be the rate last quoted by The Wall
Street Journal as the “London Interbank Offered Rate” (the “LIBO Rate”) for
deposits in Dollars with a term equivalent to one month on the Closing Date and
as re-determined every 30 days thereafter (it being understood, that if the 30th
day following the previously determined LIBO Rate is not a Business Day, then
the rate quoted on the immediately preceding Business Day shall be used for the
following 30 days) or, if The Wall Street Journal ceases to quote such rate or
if such rate is not otherwise available, then (b) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by AUSA to be the
rate last quoted by The Wall Street Journal as the yield for the 6-month United
States Treasury Bills on the date which the LIBO Rate ceases to be quoted and as
re-determined every 6 months following such date (it being understood, that if
the date that is 6 months following the date on which the LIBO Rate ceased to be
quoted or so determined by reference to 6-month United States Treasury Bills is
not a Business Day, then the rate quoted on the immediately preceding Business
Day shall be used for the following 6 months); provided, that in no event shall
the Eurodollar Base Rate be less than zero. To the extent that The Wall Street
Journal ceases to be published, the rates referenced in clauses (a) and (b)
shall be determined by reference to a similar publication as selected by AUSA.

 

5

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“Event of Default” has the meaning set forth in Section 7.

“Exchange Act” means the Securities Exchange Act of 1934.

“Excluded Stock” means (a) the Stock of any Foreign Subsidiary or Disregarded
Domestic Subsidiary of a Loan Party (or any Subsidiary thereof), other than 65%
of the issued and outstanding voting Stock and 100% of the issued and
outstanding non-voting Stock of each first-tier Foreign Subsidiary or
Disregarded Domestic Subsidiary of such Loan Party, as applicable, (b) the Stock
of any special purpose entity used for securitization facilities to the extent
prohibited by any such securitization facility and (c) any Stock that is
prohibited by law, regulation or contractual obligations from being pledged or
that would require a governmental (including regulatory) consent, approval,
license or authorization to make such pledge.

“Excluded Subsidiary” means (a) any Domestic Subsidiary that is not a
wholly-owned Subsidiary, (b) any Immaterial Subsidiary, (c) any Domestic
Subsidiary that is prohibited by law, regulation or contractual obligations from
providing a guaranty or that would require a governmental (including regulatory)
consent, approval, license or authorization to provide such guaranty, (d) any
special purpose entities used for securitization facilities, (e) any Disregarded
Domestic Subsidiary, (f) any direct or indirect Domestic Subsidiary of a Foreign
Subsidiary, (g) any Subsidiary for which the provision of a guaranty would
result in material adverse tax consequences (as reasonably agreed in good faith
by ARI and AUSA), (h) any Foreign Subsidiary, (i) any Captive Insurance
Subsidiary and (j) any other Domestic Subsidiary with respect to which, in the
reasonable judgment of AUSA and ARI, the burden or cost of providing a guaranty
or a Lien to secure such guaranty shall outweigh the benefits to be afforded
thereby. The Excluded Subsidiaries as of the Closing Date are set forth on
Schedule 1.1.

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

“FCPA” means the United States Foreign Corrupt Practices Act of 1977 and the
regulations promulgated thereunder.

“Fee Letter” means the letter, dated February 26, 2016, between ARI,
AcquisitionCo and AUSA with respect to certain fees to be paid from time to time
to the Lenders.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.

“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation or organization or formation, by-laws, or partnership
agreement, limited liability company agreement or operating agreement, trust
certificate, trust agreement or other constituent documents of such Person.

 

6

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“Governmental Authority” means any federal, state, provincial, foreign, local,
or other political subdivision or other governmental or administrative body,
instrumentality, board, department, or agency or any court, tribunal,
administrative hearing body, arbitration panel, commission, or other similar
dispute-resolving panel or body.

“Guarantor” means each Subsidiary of the Borrowers, other than Excluded
Subsidiaries.

“Hazardous Materials” means (a) substances that are regulated, defined or listed
in, or otherwise classified pursuant to, any Environmental Laws as pollutants,
contaminants, “hazardous substances,” “hazardous materials,” “hazardous wastes,”
“toxic substances,” or any other formulation intended to define, list, or
classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity or toxicity, (b) oil, petroleum, or
petroleum derived substances, natural gas, natural gas liquids, synthetic gas,
drilling fluids, produced waters, and other wastes associated with the
exploration, development, or production of crude oil, natural gas, or geothermal
resources, (c) any flammable substances or explosives or any radioactive
materials, and (d) asbestos in any form or electrical equipment that contains
any oil or dielectric fluid containing polychlorinated biphenyls.

“Hedge Agreement” means any and all agreements or documents now existing or
hereafter entered into by any Borrower or any of its Subsidiaries that provide
for one or more interest rate, credit, commodity or equity swaps, caps, floors,
collars, forward foreign exchange transactions, currency swaps, cross currency
rate swaps, currency options, or any combination of, or option with respect to,
these or similar transactions, for the purpose of hedging such Borrower’s or
Subsidiary’s exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices.

“Immaterial Subsidiary” means, as of any date, any Subsidiary of the Borrowers
having consolidated total assets in an amount of less than 5.0% of consolidated
total assets of ARI; provided that Immaterial Subsidiaries (taken as a whole)
shall not comprise more than 20% of consolidated total assets of ARI.

“Indebtedness” of a Person means (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments and all reimbursement or other obligations in
respect of letters of credit, bankers acceptances, interest rate swaps or other
financial products, (c) all obligations of such Person as a lessee under Capital
Leases, (d) all obligations or liabilities of others secured by a Lien on any
asset of such Person or its Subsidiaries, irrespective of whether such
obligation or liability is assumed, (e) all obligations of such Person to pay
the deferred purchase price of assets (other than trade payables incurred in the
ordinary course of business and repayable in accordance with customary trade
practices), (f) all obligations of such Person owing under Hedge Agreements, (g)
all obligations with respect to a Permitted Asset Securitization not wholly
owned by a Borrower or its Subsidiaries, directly or indirectly, whether or not
recorded on the balance sheet of such Person, (h) obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of a default are limited to
repossession or purchase price of property or services), (i) obligations under
Synthetic Leases, (j) all obligations of such Person, contingent or otherwise,
to purchase redeem, retire or otherwise

 

7

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acquire for value any Stock of such Person on or prior to the date which is 91
days after the Maturity Date (other than as a result of a change of control,
initial public offering, asset sale or similar event, so long as such
redemption, retirement or acquisition is contingent upon the repayment in full
of the non-contingent Obligations), valued in the case of a redeemable preferred
equity interest, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, and (k) any obligation
guaranteeing or intended to guarantee (whether directly or indirectly
guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation
of any other Person that constitutes Indebtedness under any of clauses (a)
through (j) above.

“Indemnified Liabilities” has the meaning set forth in Section 10.2.

“Indemnified Person” has the meaning set forth in Section 10.2.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other federal, state,
provincial, foreign or other political subdivision, bankruptcy or insolvency
law, assignments for the benefit of creditors, formal or informal moratoria,
compositions, marshalling of assets, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, liquidation, receivership,
dissolution, or other similar relief.

“Intellectual Property” has the meaning set forth in Section 4.11.

“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, or capital contributions (excluding (a) commission, travel, and
similar advances to officers and employees of such Person made in the ordinary
course of business, and (b) bona fide accounts arising in the ordinary course of
business consistent with past practice), purchases or other acquisitions of
Indebtedness, Stock, or all or substantially all of the assets or line of
business or division of such other Person all investments consisting of any
exchange traded or over the counter derivative transaction, including any Hedge
Agreement, and any other items that are or would be classified as investments on
a balance sheet prepared in accordance with GAAP.

“IRC” means the Internal Revenue Code of 1986.

“IRS” means the Internal Revenue Service.

“Lender” means AUSA and any other Person made a party to this Agreement in
accordance with the provisions of Section 13.1.

“Lender Expenses” means all (a) out-of-pocket costs or expenses paid or incurred
by a Lender in connection with, as a result of, related to or arising under or
out of the Loan Documents and any transactions related thereto, (b) reasonable
out-of-pocket fees, expenses and disbursements of outside counsel for each
Lender in connection with, related to or arising under or out of the Loan
Documents and any transactions related thereto, (c) costs and expenses of
third-party claims or any other suit paid or incurred by a Lender in enforcing
or defending the Loan Documents or in connection with the transactions
contemplated by the Loan Documents or a Lender’s relationship with the Borrowers
or any of its Subsidiaries (including any

 

8

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investigation, litigation or proceeding commenced by any shareholder, debt
holder or other Person in connection with, as a result of, related to or arising
under or out of the Acquisition or the Transactions), (d) each Lender’s
third-party out-of-pocket costs and expenses (including reasonable attorneys’
fees) incurred in connection with the Loan Documents, and (e) each Lender’s
out-of-pocket costs and expenses (including reasonable attorneys’, accountants’,
consultants’, and other advisors’ fees and expenses) incurred in terminating,
enforcing (including reasonable attorneys’, accountants’, consultants’, and
other advisors’ fees and expenses incurred in connection with a “workout,” a
“restructuring,” or an Insolvency Proceeding concerning any Loan Party or in
exercising rights or remedies under the Loan Documents), or defending the Loan
Documents, irrespective of whether suit is brought.

“Lender-Related Person” means with respect to any Lender, such Lender, its
Affiliates, and its and its Affiliates officers, directors, employees, members,
attorneys, and agents.

“Lien” means any interest in an asset securing an obligation owed to, or a claim
by, any Person other than the owner of the asset, irrespective of whether (a)
such interest is based on the common law, statute, or contract, (b) such
interest is recorded or perfected, and (c) such interest is contingent upon the
occurrence of some future event or events or the existence of some future
circumstance or circumstances. Without limiting the generality of the foregoing,
the term “Lien” includes the lien or security interest arising from a Lien
Instrument, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
security agreement, conditional sale or trust receipt, or from a lease,
consignment, or bailment for security purposes and also includes reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other title exceptions and encumbrances affecting real
property.

“Lien Instrument” means a mortgage, deed of trust, deed to secure debt or other
lien instrument covering real property.

“Loan Documents” means this Agreement, Collateral Agreement, the Fee Letter, any
note or notes executed by any Borrower in connection with this Agreement and
payable to a Lender, and any other agreement entered into, now or in the future,
by any Loan Party and a Lender in connection with this Agreement.

“Loan Party” means the Borrowers and the Guarantors.

“Margin Stock” has the meaning set forth in Section 4.20.

“Material Adverse Change” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrowers and their Subsidiaries, taken as a
whole, (b) a material impairment of the ability of the Loan Parties, taken as a
whole, to perform their obligations under the Loan Documents to which they are
parties or of a Lender’s ability to enforce the Obligations or (c) a material
impairment of the rights under, benefits of or remedies available to the Lenders
under any Loan Document.

“Maturity Date” means the earliest to occur of (a) the date that is 364 days
after the Closing Date, (b) the date on which all of the Athene-Acquired Assets
have been sold by the Borrowers or their relevant Subsidiaries to Athene Annuity
& Life Assurance Company, Athene

 

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Annuity and Life Company or their Affiliates, any designee of the Buyer
Representative or any other Person (irrespective of whether or not the Athene
Purchase Agreement has been terminated) and (c) ARI’s breach of the last
sentence of Section 5.1(c) of the Athene Purchase Agreement and such breach is
not outside of ARI’s control (it being understood and agreed that the
termination of any financing of the type permitted under clauses (a), (b), (f),
(g) and (i) of the definition of Permitted Indebtedness is within ARI’s
control).

“Net Cash Proceeds” means the gross cash proceeds received on account of a
Disposition of any Athene-Acquired Assets by ARI or any of its Subsidiaries, net
of the payment obligations under any financing with respect to such assets
including any obligation to pay the repurchase price under any repurchase
agreement and any like obligations arising under other similar types of
financing arrangements (including any repurchase agreement, global master
repurchase agreement, master securities forward transaction agreement or other
similar agreement used to finance the investment in such assets) but exclusive
of any prepayment, termination or similar fees paid to obtain the release of
such assets from such financing arrangement, in excess of $2,500,000, in the
aggregate for all such financing.

“Note Receivable” means a promissory note evidencing a loan made or acquired by
any Subsidiary of a Borrower.

“Obligations” means all loans, the Term Loan, debts, principal, interest
(including any interest that, but for the commencement of an Insolvency
Proceeding, would have accrued), premiums, liabilities (including all amounts
charged to any Borrower pursuant hereto), obligations (including indemnification
obligations), fees, charges, costs, Lender Expenses (including any fees or
expenses that, but for the commencement of an Insolvency Proceeding, would have
accrued), payments, guaranties, covenants, and duties of any kind and
description owing by any Borrower to a Lender pursuant to or evidenced by the
Loan Documents and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and including all interest not paid when due and all
Lender Expenses that, in each case, any Borrower is required to pay or reimburse
by the Loan Documents, by law, or otherwise. Any reference in this Agreement or
in the Loan Documents to the Obligations shall include all extensions,
modifications, renewals, supplements, restatements or alterations thereof, both
prior and subsequent to any Insolvency Proceeding.

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

“Originating Lender” has the meaning set forth in Section 13.1(e).

“Participant” has the meaning set forth in Section 13.1(e).

“PATRIOT Act” has the meaning set forth in Section 3.1(i).

“Payment Date” has the meaning set forth in Section 2.3(c).

“Permitted Asset Securitization” means any securitization of or similar
structured finance process aggregating pools of Notes Receivable established,
managed, serviced or seeded by any

 

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Borrower or any of its Subsidiaries, or other co-origination, co-investment,
co-financing or similar programmatic funding arrangement, in each case in the
ordinary course of business upon fair and reasonable terms no less favorable to
such Borrower or such Subsidiary, as applicable, than would be obtained in an
arm’s-length transaction with a non-Affiliate.

“Permitted Indebtedness” means the following:

(a) Indebtedness evidenced by this Agreement and the other Loan Documents,

(b) Indebtedness set forth on Schedule 6.1,

(c) Permitted Purchase Money Indebtedness,

(d) Indebtedness of any Subsidiary of the Borrowers under any senior financing
whether in the form of a revolving loan, a term loan, a structured sale of
pooled loans or otherwise, entered into from time to time after the Closing Date
by a Subsidiary of a Borrower, in each case incurred to finance the acquisition
of any Note Receivable; provided that (a) if secured, such facility is secured
exclusively by assets held only by or on behalf of such Subsidiary and, as
applicable, the Stock of such Subsidiary, and (b) if guaranteed, such facility
is supported solely by a guaranty by ARI which is unsecured, in each case, as
such agreement may be amended or modified from time to time in accordance with
the terms hereof,

(e) endorsement of instruments or other payment items for deposit,

(f) obligations of the Borrowers or any Subsidiary in respect of participations,
securitizations (including Permitted Asset Securitizations) and syndications of
Notes Receivable, and contribution or sale of such assets, including, but not
limited to, obligations to make whole or indemnify the purchaser thereof, in
each case whether characterized as a guarantee, an obligation to repurchase the
securitized or syndicated asset or otherwise,

(g) obligations under any Hedge Agreement that is obtained by any Subsidiary of
a Borrower (but may be guaranteed by ARI on an unsecured basis) to provide
protection against fluctuations in interest or currency exchange rates, and not
for speculative purposes, in respect of Permitted Investments and Notes
Receivable of a Borrower or any of its Subsidiaries,

(h) the 5.50% Convertible Senior Notes of ARI due 2019,

(i) Indebtedness of the Borrowers or any Subsidiary under any transaction or
financing arrangement, including any repurchase agreement, global master
repurchase agreement, master securities forward transaction agreement, warehouse
line or other similar agreement, used to finance the acquisition of or otherwise
in connection with Investments described in clauses (d) or (j) of the definition
of Permitted Investments,

(j) unsecured intercompany Indebtedness among a Borrower and any of its
Subsidiaries,

(k) other unsecured Indebtedness of ARI so long as the net issuance proceeds of
such Indebtedness are used to prepay the Term Loans,

 

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(l) to the extent constituting Indebtedness, liabilities in respect of taxes,
assessments or governmental charges that are not yet delinquent or not material
or that are the subject of Permitted Protests,

(m) unsecured guarantees of ARI of Indebtedness permitted under clauses (f), (g)
and (i) above, and

(n) Indebtedness refinancing, refunding or replacing any Indebtedness permitted
under clauses (b), (c), (d), (f), (h), (i) and (k) above so long as (i) the
principal amount of such Indebtedness is not increased (except in respect of (A)
costs and expenses in connection therewith and (B) an amount equal to unpaid
accrued interest and premiums (including tender premiums) thereon plus
underwriting discounts, other reasonable and customary fees, commissions and
expenses incurred in connection with such refinancing, refunding or replacing)
from the Indebtedness being refinanced, refunded or replaced, (ii) such
refinancing, refunding or replacing is not secured by a Lien on any assets other
than the assets (together with additions, attachments and accessions to such
assets, and replacements and proceeds thereof, in each case, in the ordinary
course of business) securing the Indebtedness being refinanced, refunded or
replaced, (iii) the obligors are the same as the obligors of the Indebtedness
being refinanced, refunded or replaced, (iv) such refinancing, refunding or
replacing Indebtedness has at the time incurred a final maturity date equal to
or later than the final maturity date of, and has a weighted average life to
maturity equal to or greater than the weighted average life to maturity of, the
Indebtedness being refinanced, refunded or replaced and (v) such Indebtedness
has covenants and default and remedy provisions that are not, taken as a whole,
materially more favorable to the lenders or counterparties providing such
Indebtedness than those set forth in the Indebtedness being refinanced, refunded
or replaced.

“Permitted Investments” means:

(a) Investments in cash and Cash Equivalents,

(b) Investments in negotiable instruments for collection,

(c) advances made in connection with purchases of goods or services in the
ordinary course of business,

(d) amounts evidenced by a Note Receivable made, acquired or created in the
ordinary course of business,

(e) Investments received in settlement of amounts due to a Borrower or any of
its Subsidiaries effected in the ordinary course of business or owing to a
Borrower or any of its Subsidiaries as a result of Insolvency Proceedings of an
account debtor or other maker or guarantor of a Note Receivable or upon the
foreclosure or enforcement of any Lien in favor of a Borrower or its
Subsidiaries,

(f) Stock representing minority interests purchased or received pursuant to
equity co-invest arrangements granted as part of a Notes Receivable financing,
by any Subsidiary of a Borrower in connection with the origination or purchase
of any Note Receivable in the ordinary course of such Person’s business,

 

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(g) Investments in Hedge Agreements which qualify as Permitted Indebtedness,

(h) deposits made in the ordinary course of business to secure the performance
of leases, licenses, service agreements, surety or appeal bonds,

(i) in connection with any Permitted Asset Securitization, Investments in
conduit, securitization and other asset financing vehicles whose holdings, on
the date such Investment is made, consist primarily of assets contributed or
sold by a Borrower or any Subsidiary,

(j) Investments in mortgage backed or linked securities, mortgages, subordinate
financings and real estate related securities and loans,

(k) Investments set forth on Schedule 6.11 and any modification, replacement,
renewal or extension thereof that does not increase the amount of such
Investment,

(l) Investments in KBC Bank Deutschland AG and Bremer Kreditbank AG, whether
held directly or indirectly, and future Investments in connection therewith, and

(m) other Investments in an amount not exceeding $25,000,000 in the aggregate at
any time outstanding.

“Permitted Liens” means:

(a) Liens held by any Lender pursuant to the Loan Documents,

(b) Liens for unpaid taxes that either (i) are not yet delinquent, (ii) are not
material or (iii) are the subject of Permitted Protests,

(c) Liens set forth on Schedule 6.2,

(d) the interests of lessors under operating leases,

(e) Liens that secure Permitted Purchase Money Indebtedness, including the
interests of lessors under Capital Leases to the extent that such Liens or
interests secure Permitted Purchase Money Indebtedness and so long as such Lien
attaches only to the asset purchased or acquired and the proceeds thereof,

(f) Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers, incurred in the
ordinary course of business and not in connection with the borrowing of money,
and which Liens either (i) are for sums not yet delinquent, or (ii) are the
subject of Permitted Protests,

(g) Liens on amounts deposited in connection with obtaining worker’s
compensation or other unemployment insurance,

(h) Liens on amounts deposited in connection with the making or entering into of
bids, tenders, or leases (other than Capital Leases) in the ordinary course of
business and not in connection with the borrowing of money,

 

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(i) Liens on amounts deposited as security for surety or appeal bonds, license,
or other contract in the ordinary course of business,

(j) Liens resulting from any judgment or award that is not an Event of Default
hereunder,

(k) with respect to any Real Property, easements, rights of way, and zoning
restrictions that do not materially interfere with or impair the use or
operation thereof,

(l) Liens securing the Indebtedness permitted pursuant to clauses (d), (f), (g)
and (i) of the definition of Permitted Indebtedness, and

(m) Liens against Notes Receivable which are the subject of participation,
syndication or securitization agreements.

“Permitted Protest” means the right of any Borrower, or any of its Subsidiaries
to protest any Lien (other than any Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on its books and records in such amount as is
required under GAAP, and (b) any such protest is instituted promptly and
diligently prosecuted by such Borrower or such Borrower’s relevant Subsidiary,
as applicable, in good faith.

“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness in an aggregate amount outstanding at any one time
not in excess of $25,000.

“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and any Governmental Authority.

“Pledged Equity Interests” [has the meaning set forth in the Collateral
Agreement.]3

“Pro Rata Share” means with respect to all matters relating to any Lender with
respect to the Term Loan, the percentage obtained by dividing (a) the
outstanding principal balance of the Term Loan held by such Lender by (b) the
aggregate outstanding principal balances of the Term Loan held by all Lenders.

“Purchase Money Indebtedness” means Indebtedness (other than the Obligations,
but including Capitalized Lease Obligations), incurred at the time of, or within
two hundred and seventy (270) days after, the acquisition of any fixed assets
for the purpose of financing all or any part of the acquisition cost thereof.

 

3  To pick up all Stock pledged to Lenders.

 

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“Real Property” means any estates or interests in real property (other than
Liens) now owned or hereafter acquired by any Borrower or any of its
Subsidiaries and the improvements thereto.

“Record” means information that is inscribed on a tangible medium or which is
stored in an electronic or other medium and is retrievable in perceivable form.

“Register” has the meaning set forth in Section 13.1(d).

“REIT” means a domestic trust or corporation that qualifies as a real estate
investment trust under the provisions of Sections 856, et seq. of the IRC.

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Materials into or through the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials).

“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
Release or threatened Release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials authorized by Environmental Laws.

“Required Lenders” means, at any time, Lenders whose aggregate Pro Rata Shares
shall exceed 50%.

“Restricted Payments” means, with respect to any Person, (a) any dividend or
other distribution, in cash or other property, direct or indirect, on account of
any class of Stock of such Person, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any class of Stock of such Person,
now or hereafter outstanding, or (c) any payment made to retire, or obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of Stock of such Person, now or hereafter outstanding.

“Sanctioned Country” shall mean any other country or territory with which
dealings are broadly restricted or prohibited by any Sanctions Laws (as of the
Closing Date, the territory of Crimea, Cuba, Iran, North Korea, Sudan, and
Syria).

“Sanctioned Person” means a person named on the list of Specially Designated
Nationals maintained by OFAC.

“Sanctions Authority” means the respective governmental institutions and
agencies of the United States (including the U.S. Treasury Department, the U.S.
Commerce Department and the U.S. State Department), the United Kingdom, the
European Union, the United Nations Security Council, or any other governmental
authority with jurisdiction over Borrower or any Subsidiary of Borrower.

 

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“Sanctions Laws” means the economic or financial sanctions laws and/or
regulations, trade embargoes, prohibitions, restrictive measures, decisions,
executive orders or notices from regulators implemented, adopted, imposed,
administered, enacted and/or enforced by any Sanctions Authority.

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

“Securities Act” shall mean the Securities Act of 1933.

“Solvent” means, with respect to any Person on a particular date, that (a) the
fair value of the property of such Person is greater than the total amount of
liabilities, including contingent, subordinated, unmatured and unliquidated
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person has not incurred, does not intend to incur, and does
not believe that it will incur debts or liabilities (subordinated, contingent or
otherwise) beyond such Person’s ability to pay such debts and liabilities as
they become due (whether at maturity or otherwise), (d) such Person will not
have unreasonably small capital with which to conduct its business operations as
contemplated to be conducted and (e) such Person is not “insolvent” as such term
is defined under any applicable laws relating to fraudulent transfers and
conveyances, or any bankruptcy, insolvency, or similar laws in any jurisdiction
where the Person is organized.

“Specified Representations” means the representations and warranties set forth
in Sections 4.4(a)(i), 4.4(b)(ii), 4.5(a), 4.5(b)(i)(B), 4.5(d), 4.8,
4.16(a)(i), 4.16(b) and 4.17 (in each case, solely in respect of use of proceeds
of the Term Loans), 4.16(a)(ii), 4.18, 4.20, 4.22 and 4.23.

“Stock” means all shares, partnership interests, options, warrants, membership
interests, units of membership interests, beneficial interests in a trust, other
interests, participations, or other equivalents (regardless of how designated)
of or in a Person, whether voting or nonvoting, including common stock,
preferred stock, or any other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under
the Exchange Act).

“Stock Purchase Agreement” means the Stock Purchase Agreement, dated as of
February 26, 2016, by and between AUSA and ARI.

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, trust or other entity in which that Person directly or indirectly owns
or controls the shares of Stock (a) having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable managers or
trustees) of such corporation, partnership, limited liability company, trust or
other entity, or (b) in the case of a limited partnership, of the general
partner of such partnership.

 

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“Synthetic Lease” means as to any Person (a) any lease (including leases that
may be terminated by the lessee at any time) of any property (i) that is
accounted for as an operating lease under GAAP and (ii) in respect of which the
lessee retains or obtains ownership of the property so leased for United States
federal income tax purposes, other than any such lease under which such Person
is the lessor, or (b)(i) a synthetic, off-balance sheet or tax retention lease,
or (ii) an agreement for the use or possession of property (including a sale and
leaseback transaction), in each case under this clause (b), creating obligations
that do not appear on the balance sheet of such Person but which, upon the
application of any bankruptcy, insolvency or similar laws to such Person, would
be characterized as the indebtedness of such Person (without regard to
accounting treatment).

“Taxes” has the meaning set forth in Section 15.2(a).

“Term Loan” has the meaning set forth in Section 2.1.

“Transaction Expenses” means any fees or expenses incurred by the Borrowers in
connection with the Acquisition and the other Transactions.

“Transactions” means, collectively, (a) the execution, delivery and performance
by the Loan Parties of the Loan Documents to which they are a party and the
borrowing of Term Loans hereunder, (b) the transactions contemplated by the
Acquisition Agreement, the Athene Purchase Agreement and the Stock Purchase
Agreement and (c) the payment of Transaction Expenses.

“United States” means the United States of America.

“Voidable Transfer” has the meaning set forth in Section 16.6.

1.2 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. When used herein, the term “financial
statements” shall include the notes and schedules thereto. Whenever the term
“Borrower” or Borrowers is used in respect of a financial definition, it shall
be understood to mean ARI and its Subsidiaries on a consolidated basis unless
the context clearly requires otherwise. For the avoidance of doubt,
consolidation shall include any so called “Off-Balance Sheet Subsidiary” created
in connection with a Permitted Asset Securitization or otherwise.

1.3 Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in the other Loan
Documents to any agreement, instrument, or document (including any Loan
Document) shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes,

 

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extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements set forth herein). Any reference in this Agreement or any other Loan
Document to any law or regulation and regulatory provisions consolidating,
amending, replacing or interpreting such law and any reference to any law or
regulation shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time. 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. Any reference herein to the
satisfaction or repayment in full of the Obligations shall mean the repayment in
full in cash (or cash collateralization in accordance with the terms hereof) of
all Obligations other than contingent indemnification Obligations, at such time,
that are not required to be repaid or cash collateralized pursuant to the
provisions of this Agreement. Any reference herein to any Person shall be
construed to include such Person’s successors and assigns. Any requirement of a
writing contained herein or in the other Loan Documents shall be satisfied by
the transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.

1.4 Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.

 

2. LOAN AND TERMS OF PAYMENT.

2.1 Term Loan.

(a) Subject to the terms and conditions of this Agreement, and relying upon the
representations and warranties set forth herein, each Lender hereby agrees to
make a term loan to the Borrowers on the Closing Date in the aggregate principal
amount of up to the Commitment (the “Term Loan”). No part of the Term Loan may,
on the repayment thereof, be redrawn or reborrowed by the Borrowers.

(b) The Term Loan shall be funded on the Closing Date upon request of the
Borrowers pursuant to a loan notice delivered to AUSA no later than 12:00 p.m.
(New York time) three (3) Business Days prior to the requested date of the
borrowing. Upon satisfaction of the applicable conditions set forth in Section
3.1, each Lender shall make available to the Borrowers in immediately available
funds in accordance with instructions provided to (and reasonably acceptable to)
such Lender by the Borrowers such Lender’s Pro Rata Share of the Term Loan. Each
loan notice shall be irrevocable, and shall specify the requested amount and
date of the borrowing (which, for the avoidance of doubt, shall be a Business
Day) and each Lender’s Pro Rata Share thereof.

(c) The Lenders shall only be obligated to make the Term Loan available to the
Borrowers on the Closing Date and the unused Commitment not funded on the
Closing Date shall automatically terminate on the Closing Date.

 

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2.2 Prepayments. Except as otherwise expressly provided herein, all payments by
the Borrowers shall be made in immediately available funds, no later than 12:00
p.m. (New York City time) on the date specified herein. Any payment received by
a Lender later than 12:00 p.m. (New York City time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue until such following Business Day.

(a) Optional Prepayments. The Borrowers may prepay the Term Loan in cash, in
whole or in part at any time or from time to time (subject to Section 2.2(c)
below) without premium or penalty; provided, that (i) the Borrowers shall
provide each Lender with written notice of such prepayment not later than 10:00
a.m. (New York City time) three (3) Business Days prior to any date of
prepayment of the Term Loan; and (ii) any such prepayment of the Term Loan shall
be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in
excess thereof or, if less, the entire principal amount thereof then
outstanding. Each such notice shall specify the date and amount of such
prepayment and the amount of each Lender’s Pro Rata Share of such
prepayment. Any such notice shall be irrevocable and the Borrowers shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.

(b) Mandatory Prepayments.

(i) Incurrence of Indebtedness. Upon the incurrence by ARI or any of its
Subsidiaries of any Indebtedness (other than, except with respect to clause (k)
of the definition thereof, Permitted Indebtedness), the Borrowers shall
immediately prepay the Term Loan in cash, in whole (or, if less in an amount
equal to the aggregate principal amount of such Indebtedness), together with any
and all accrued but unpaid interest thereon and all costs, expenses and
indemnities then due and owing.

(ii) Athene-Acquired Assets. Upon the Disposition of any Athene-Acquired Asset,
the Borrowers shall immediately prepay the Term Loan in an amount equal to 100%
of the Net Cash Proceeds received by ARI or any of its Subsidiaries in
connection with such Disposition. Without limiting the generality of Section
15.3(a), the Lender and the Borrowers agree that any Lender may, at its option,
set off and apply against the Obligations, any and all amounts owing by such
Lender or any of its Affiliates to any Borrower or any of its Affiliates as
consideration for the purchase of any of the Athene-Acquired Assets in an amount
up to the Net Cash Proceeds of such Athene-Acquired Asset.

(c) Application of Payments. All prepayments pursuant to Section 2.2(a) and
Section 2.2(b) shall be accompanied by any and all accrued but unpaid interest
and fees thereon and all costs, expenses and indemnities then due and owing and
shall be shared by the Lenders in accordance with their Pro Rata Share. If the
Term Loan is being prepaid in whole, the Borrowers shall also pay all other
non-contingent Obligations prior to or contemporaneously with such
prepayment. Once repaid, no portion of the Term Loan may be reborrowed.

(d) Repayment of Term Loan. The Borrowers unconditionally promise to pay in full
on the Maturity Date (or sooner upon acceleration of the Obligations or
otherwise as provided for herein) the aggregate principal amount of Term Loan

 

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outstanding on such date, plus (i) any and all accrued but unpaid interest and
fees thereon, (ii) all costs, expenses and indemnities then due and owing, and
(iii) other Obligations then due and owing under this Agreement or any other
Loan Document.

2.3 Interest Rates: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in clause (b) below, the Term Loan shall
bear interest on the outstanding principal amount thereof at a rate per annum
equal to the Applicable Interest Rate.

(b) Default Rate. If any amount hereunder is not paid when due (after giving
effect to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, then such amount shall thereafter bear interest at an
interest rate per annum equal to the Applicable Interest Rate plus 2% per annum,
from the date of such non-payment until such amount is paid in full (the
“Default Rate”). Default Rate interest shall be payable in cash on the
applicable Payment Date (unless sooner requested by a Lender by notice to
Borrower, in which case Default Rate interest shall be payable upon demand).

(c) Payment. Interest shall be due and payable, in arrears, in cash, commencing
on the first day of the first calendar quarter occurring after the Closing Date
and the Maturity Date (each such date, a “Payment Date”) at any time that
Obligations are outstanding.

(d) Computation. All interest chargeable under the Loan Documents shall be
computed on the basis of a 360-day year for the actual number of days elapsed.

(e) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Each of the Borrowers and the Lenders, in executing and delivering
this Agreement, intend legally to agree upon the rate or rates of interest and
manner of payment stated within it; provided, however, that, anything contained
herein to the contrary notwithstanding, if said rate or rates of interest or
manner of payment exceeds the maximum allowable under Applicable Law, then, ipso
facto, as of the date of this Agreement, the Borrowers are and shall be liable
only for the payment of such maximum as allowed by law, and payment received
from the Borrowers in excess of such legal maximum, whenever received, shall be
applied to reduce the principal balance of the Obligations to the extent of such
excess.

2.4 Representations and Warranties of Lender. Each Lender hereby represents and
warrants to the Borrowers that on and as of the Closing Date (or the date it
becomes a Lender hereunder) (i) it is a “qualified purchaser” (within the
meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder) and a “qualified institutional buyer” (within the
meaning of Rule 144A under the Securities Act).

 

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2.5 Concerning Joint and Several Liability of the Borrowers.

(a) Each of the Borrowers is accepting joint and several liability with respect
to the Obligations in consideration of the financial accommodation to be
provided by the Lenders under this Agreement and the other Loan Documents, for
the mutual benefit, directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of each of the Borrowers to accept joint and
several liability for the obligations of each of them, regardless of which
Borrower actually receives the benefit of the Term Loan or the amount of such
Term Loan or the manner in which the Lenders account for such Term Loan on their
books and records. Each Borrower’s obligations with respect to the Term Loan
made to it, and each Borrower’s obligations arising as a result of the joint and
several liability of such Borrower hereunder shall be separate and distinct
obligations, but all such obligations shall be primary obligations of each
Borrower.

(b) Each Borrower’s obligations arising as a result of the joint and several
liability of such Borrower hereunder shall, to the fullest extent permitted by
law, be unconditional irrespective of (i) the validity or enforceability or
subordination of such Obligations of the other Borrower, (ii) the absence of any
attempt to collect such Obligations from the other Borrower, any other
guarantor, or any other security therefor, or the absence of any other action to
enforce the same, (iii) the waiver, consent, extension, forbearance or granting
of any indulgence by the Lenders with respect to such Obligations of the other
Borrower, or any part thereof, or any other agreement now or hereafter executed
by the other Borrower and delivered to the Lenders, (iv) the failure by the
Lenders to take any steps to perfect and maintain their security interest in, or
to preserve its rights to, any security or collateral for such Obligations of
the other Borrower or (v) any other circumstances which might constitute a legal
or equitable discharge or defense of a guarantor or of the other Borrower (other
than the occurrence of the Maturity Date). With respect to each Borrower’s
obligations arising as a result of the joint and several liability of such
Borrower hereunder such Borrower waives, until the Maturity Date, any right to
enforce any right of subrogation or any remedy which any Lenders now has or may
hereafter have against such Borrower, any endorser or any guarantor of all or
any part of such Obligations, and any benefit of, and any right to participate
in, any security or collateral given to any Lender to secure payment of such
Obligations or any other liability of the Borrowers to the Lenders.

(c) Upon the occurrence and during the continuation of any Event of Default, the
Lenders may proceed directly and at once, without notice, against any Borrower
to collect and recover the full amount, or any portion of the Obligations,
without first proceeding against the other Borrower or any other Person, or
against any security or collateral for such Obligations. Each Borrower consents
and agrees that the Lenders shall be under no obligation to marshal any assets
in favor of any Borrower or against or in payment of any or all of such
Obligations.

 

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3. CONDITIONS; TERM OF AGREEMENT.

3.1 Conditions Precedent to Effectiveness. The effectiveness of this Agreement
is subject to the satisfaction of each of the following conditions precedent:

(a) AUSA shall have received counterparts of this Agreement duly executed by
each Borrower;

(b) AUSA shall have received the Collateral Agreement, executed by each Loan
Party party thereto, in form and substance satisfactory to AUSA, and all other
related instruments, documents, certificates and agreements executed or
delivered pursuant thereto (including pledged collateral, with undated
irrevocable transfer powers executed in blank)4;

(c) AUSA shall have received (i) a certificate from an Authorized Person of each
Loan Party (A) attesting to the resolutions of such Person’s Board of Directors
authorizing the execution, delivery, and performance of this Agreement, the
other Loan Documents, in each instance to the extent such Person shall be party
thereto and (B) attesting to the incumbency and signatures of the Authorized
Persons of such Person authorized to execute the same and (ii) a solvency
certificate from the chief financial officer of ARI reasonably satisfactory to
AUSA;

(d) [AUSA shall have received copies of the Governing Documents of each Loan
Party and such other Persons as shall be designated prior to the Closing Date by
the Lenders, in each instance certified by an Authorized Person]5;

(e) AUSA shall have received, with respect to each Loan Party, a certificate of
good standing from the Secretary of State of the state of organization of such
Loan Party certified within thirty (30) days of the Closing Date;

(f) AUSA shall have received an opinion of counsel to each Loan Party, as of the
Closing Date, in form and substance reasonably satisfactory to AUSA in its sole
option;

(g) the Specified Representations and the Acquisition Agreement Representations
shall be true and correct in all material respects on the Closing Date;

(h) AUSA shall have received all amounts due and payable under any Loan Document
on or prior to the Closing Date, including all fees required to be paid under
the Fee Letter and all Lender Expenses (including legal fees and expenses of
respective counsel to the Lenders) for which invoices (in the case of expenses)
have been presented at least two (2) Business Days prior to the Closing Date
(which amounts may be netted by AUSA from the proceeds of the Term Loan);

(i) the Lenders shall have received all documentation and other information
requested by the Lenders under applicable “know your customer” and anti-money
laundering rules and regulations, including the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act (USA PATRIOT Act) Act of 2001 (the “PATRIOT Act”), as reasonably
requested in writing at least ten (10) Business Days prior to the Closing Date;

 

4  Notwithstanding anything else in this Agreement, ARI shall pledge 100% of the
Stock of ACREFI Operating, LLC on the Closing Date.

5  Subject to review of an satisfaction with, the Governing Documents of the
Loan Parties.

 

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(j) AUSA shall have received the results of recent Uniform Commercial Code Lien,
judgment and tax Lien searches in each relevant jurisdiction with respect to
each of the Loan Parties;

(k) the Loan Parties shall have completed (or, substantially concurrently with
the credit extension hereunder will complete) the Acquisition in accordance with
the terms of the Acquisition Agreement, but without giving effect to any
amendments, waivers or consents by the Borrowers that are materially adverse to
the interests of the Lenders without the prior written consent of the Lenders;

(l) Since January 1, 2015, no Company Material Adverse Effect (as defined in the
Acquisition Agreement) shall have occurred that would excuse the Borrowers from
their obligations to consummate the Acquisition under the Acquisition Agreement;
and

(m) AUSA shall have received a copy of the Athene Purchase Agreement executed by
the parties thereto and such agreement shall not have been terminated on or
prior to the Closing Date; provided, however, that if the Buyer Representative
has terminated the Athene Purchase Agreement pursuant to Section 10.1(b)(i) of
the Athene Purchase Agreement this condition shall still be deemed to be
satisfied.

3.2 Term. This Agreement shall continue in full force and effect for a term
commencing on the Closing Date until all amounts owing the Lenders hereunder and
under any related documents have been paid in full.

3.3 Effect of Termination. On the Maturity Date, all Obligations immediately
shall become due and payable without notice or demand. The occurrence of
Maturity Date, however, shall not relieve or discharge the Borrowers or their
Subsidiaries of their duties, Obligations or covenants hereunder or under any
other Loan Documents.

 

4. REPRESENTATIONS AND WARRANTIES.

In order to induce the Lenders to enter into this Agreement, each Borrower makes
the following representations and warranties to the Lenders, which shall be
true, correct, and complete, in all material respects, as of the Closing Date,
and such representations and warranties shall survive the execution and delivery
of this Agreement:

4.1 No Encumbrances. Each Borrower and its Subsidiaries have good and
indefeasible title to, or a valid leasehold interest in, its personal property
assets and good and marketable title to, or a valid leasehold interest in, its
Real Property, in each case, free and clear of Liens except for Permitted Liens.

4.2 [Reserved].

 

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4.3 State of Organization; Location of Chief Executive Office; Organizational
Identification Number.

(a) The names and jurisdictions of organization of each Borrower and its
Subsidiaries are set forth on Schedule 4.3(a).

(b) The chief executive office of each Loan Party is located at the address
indicated on Schedule 4.3(b).

(c) The organizational identification numbers and federal employer
identification numbers, if any, of each Loan Party are identified on Schedule
4.3(c).

4.4 Due Organization and Qualification; Power and Authority; Subsidiaries.

(a) Each Loan Party is (i) duly organized and validly existing and in good
standing under the laws of the jurisdiction of its organization and (ii)
qualified to do business in any state where it is transacting its business (as
may be necessary by the Applicable Laws of such state), except for clause (ii)
where the failure to do so would not reasonably be expected to result in a
Material Adverse Change.

(b) Each Borrower and its Subsidiaries has all requisite power and authority to
(i) own or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party.

(c) Set forth on Schedule 4.4 is a complete and accurate list of each Borrower’s
direct and indirect Subsidiaries, showing: (i) the jurisdiction of their
organization, (ii) the number of shares of each class of common and preferred
Stock authorized for each of such Subsidiaries, and any certificates evidencing
such shares, and (iii) the number and the percentage of the outstanding shares
of each such class owned directly or indirectly by Loan Parties. Except as set
forth on Schedule 4.4, all of the outstanding capital Stock of each such
Subsidiary has been validly issued and is fully paid and non-assessable.

(d) Except as set forth on Schedule 4.4, there are no subscriptions, options,
warrants, or calls relating to any shares of capital Stock of any Subsidiary,
whether direct or indirect, of any Borrower, including any right of conversion
or exchange under any outstanding security or other instrument. No such
Subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its capital Stock or any security
convertible into or exchangeable for any such capital Stock.

4.5 Due Authorization; No Conflict.

(a) The execution, delivery, and performance by the Loan Parties of this
Agreement and the other Loan Documents to which the Loan Parties are a party
have been duly authorized by all necessary action on the part of such Person.

 

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(b) The execution, delivery, and performance by the Loan Parties of this
Agreement and the other Loan Documents do not and will not (i) violate (A) any
provision of federal, state, provincial, foreign or local law or regulation
applicable to any Loan Party, (B) the Governing Documents of any such Person, or
(C) any order, judgment, or decree of any court or other Governmental Authority
binding on any such Person, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation of any Borrower or any Subsidiary thereof, (iii)
result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of any Borrower or any Subsidiary
thereof, other than Permitted Liens, or (iv) require any approval of any Loan
Party’s interestholders or any approval or consent of any Person under any
material contractual obligation of any such Person, other than consents or
approvals that have been obtained and that are still in force and effect.

(c) The execution, delivery, and performance by each Loan Party of this
Agreement and the other Loan Documents to which such Person is a party do not
and will not require any registration with, consent, or approval of, or notice
to, or other action with or by, any Governmental Authority or other Person,
other than consents or approvals that have been obtained and that are still in
force and effect.

(d) This Agreement has been, and the other Loan Documents to which each Loan
Party is a party and all other documents contemplated hereby and thereby, when
executed and delivered by such Person will have been duly, executed and
delivered by such Person. This Agreement and the other Loan Documents to which
each Loan Party is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by such Person will be the legally valid
and binding obligations of such Person, enforceable against such Person in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors’ rights generally.

(e) After giving effect to the Term Loans hereunder, no Default or Event of
Default will have occurred or be continuing.

4.6 Litigation. Other than those matters disclosed on Schedule 4.6, there are no
actions, suits, or proceedings pending and served or, to the best knowledge of
the Loan Parties, threatened against any Borrower or its Subsidiaries that would
reasonably be expected to result in a Material Adverse Change.

4.7 No Material Adverse Change. All financial statements relating to each
Borrower and each Subsidiary that have been delivered by such Borrower to the
Lenders have been prepared in accordance with GAAP (subject, in the case of
unaudited financial statements to year-end audit adjustments) and present fairly
in all material respects, such Person’s respective financial condition as of the
date thereof and results of operations for the period then ended. There has not
been a Material Adverse Change with respect to the Loan Parties since the date
of the latest financial statements submitted to the Lenders on or before the
Closing Date.

 

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4.8 Solvency. After giving effect to the Term Loan and the Transactions, the
Loan Parties, when taken as a whole on a consolidated basis, are Solvent.

4.9 Employee Benefits; ERISA Plan Assets. Except as would not be reasonably
expected to result in a Material Adverse Change, (a) no Borrower, any
Subsidiaries of such Borrower, or any of their ERISA Affiliates, maintains or
contributes to any Benefit Plan and (b) no Borrower is (i) an “employee benefit
plan” within the meaning of Section 3(3) of ERISA subject to Title I of ERISA,
(ii) a “plan” within the meaning of Section 4975 of the IRC to which Section
4975 of the IRC applies or (iii) an entity deemed to hold “plan assets” within
the meaning of 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA, of
any such employee benefit plan or plan.

4.10 Environmental Condition. (a) None of the properties or assets of any
Borrower or any of its Subsidiaries has ever been used by any of the foregoing
Persons or, to such Borrower’s knowledge, by previous owners or operators in the
disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials, where such use, production, storage, handling, treatment,
release or transport was in violation, in any material respect, of any
applicable Environmental Law, (b) to each Borrower’s knowledge, no properties or
assets of such Borrower or any of its Subsidiaries has ever been designated or
identified in any manner pursuant to any environmental protection statute as a
Hazardous Materials disposal site, (c) no Borrower or any of its Subsidiaries
has received notice that a Lien arising under any Environmental Law has attached
to any revenues or to any Real Property owned or operated by any of the
foregoing Persons, and (d) no Borrower or any of its Subsidiaries has received a
summons, citation, notice, or directive from the United States Environmental
Protection Agency, any other federal or state governmental agency or any Person
concerning any action or omission by any of the foregoing Persons resulting in
any violation of Environmental Law or alleging liability in connection with the
releasing or disposing of Hazardous Materials into the environment, in each case
for (a) through (d) above that would reasonably be expected to result in a
Material Adverse Change.

4.11 Brokerage Fees. None of the Loan Parties have utilized the services of any
broker or finder in connection with the Borrowers’ obtaining financing from the
Lenders under this Agreement and no brokerage commission, finder’s fee or
similar commission is payable by any of the Loan Parties or their Subsidiaries
in connection herewith. Each Borrower agrees to indemnify the Lenders and hold
them harmless from any claims for any such fees or commissions from any Persons.

4.12 Intellectual Property. Each Loan Party owns or has the valid right to use
all of the trademarks, service marks, trade names, copyrights, patents, trade
secrets, know-how, confidential information, domain names, rights in databases,
rights in software and any other intellectual property rights, and all
registrations and applications therefor, throughout the world (all of the
foregoing, collectively, “Intellectual Property”) that are necessary for the
operation of its respective business, substantially as currently conducted,
except, in each case, where the failure to have any such rights, either
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Change. The conduct of the business of each Loan Party as
currently conducted does not infringe upon, misappropriate or violate any
Intellectual Property of any other Person, and, to the knowledge of the Loan
Parties, each Loan Party’s

 

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Intellectual Property is not being infringed, misappropriated or violated by any
other Person, except, in each case, for such infringements and violations which,
either individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Change. There are no claims, actions, suits or
proceedings pending or, to the knowledge of the Loan Parties, threatened
alleging that any Loan Party infringes, misappropriates or violates any
Intellectual Property of any other Person, which, either individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Change.

4.13 [Reserved].

4.14 Complete Disclosure. All factual information (taken as a whole) furnished
by or on behalf of any of Loan Party in writing to any Lender (including all
information contained in the Schedules hereto or in the other Loan Documents or
otherwise filed with any Governmental Authority and publicly available) for
purposes of or in connection with this Agreement, the other Loan Documents, or
any transaction contemplated herein or therein is true and accurate, in all
material respects, on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided.

4.15 [Reserved].

4.16 PATRIOT Act; Anticorruption.

(a) To the extent applicable, each Borrower and its Subsidiaries is in
compliance, in all material respects, with the (i) Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, and (ii) the
PATRIOT Act.

(b) No part of the proceeds of the loans made hereunder will be used, directly
or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the FCPA or
any other applicable anti-bribery or anticorruption law or regulation
(collectively with the FCPA, the “Anticorruption Laws”). No Borrower or its
Subsidiaries has violated or is in violation of the Anticorruption Laws. No
director or officer of a Borrower or its Subsidiaries is a director, officer, or
employee of a Governmental Authority, public international organization (e.g.,
The World Bank), political party, or state-owned or controlled enterprise or is
a candidate for a political office. Each Borrower and its Subsidiaries have
implemented and maintain policies, procedures, and internal controls reasonably
designed to ensure compliance with applicable Anticorruption Laws.

4.17 Sanctions. No Borrower or any of its Subsidiaries, and to the knowledge of
the Loan Parties, none of their respective Affiliates, are in violation of any
Sanctions Laws in any material respect. No Borrower or any of its Subsidiaries,
nor, to the knowledge of the Loan

 

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Parties, any of their Affiliates, (a) is a Sanctioned Person, (b) has more than
10% of its assets invested in Sanctioned Persons or located in Sanctioned
Countries, or (c) derives more than 10% of its revenues from investments in, or
transactions with, Sanctioned Persons or Sanctioned Countries. No proceeds of
the Term Loan hereunder will be used to directly or, to the knowledge of any
Borrower, indirectly fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned
Country, or in any other manner that would result in a violation of Sanctions
Laws by any Person.

4.18 Investment Company. No Loan Party is an “investment company” as defined in,
or is required to be registered under, the Investment Company Act of 1940, as
amended.

4.19 Insurance. Each Borrower and its Subsidiaries will maintain insurance in
such amounts and covering such risks and liabilities as are customary for
companies of a similar size engaged in similar businesses in similar locations
(it being understood that as of the Closing Date the Borrowers and their
Subsidiaries have no employees, physical operations or facilities and have
insurance only to cover director & officer liabilities, which the Lenders
acknowledge based on such facts, is sufficient insurance coverage).

4.20 Margin Stock. Neither Loan Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin stock” as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
“Margin Stock”). Neither Loan Party owns any Margin Stock, and none of the
proceeds of the Term Loan will be used, directly or indirectly, for the purpose
of purchasing or carrying any Margin Stock, for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry any
Margin Stock or for any other purpose which might cause the Term Loan to be
considered a “purpose credit” within the meaning of Regulation T, U or X of the
Federal Reserve Board.

4.21 Taxes. All material tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Borrower and its Subsidiaries have been filed with the appropriate Governmental
Authority (and all such returns, reports and statements accurately reflect in
all material respects all liabilities of such Persons for the periods covered
thereby) and all taxes required to have been paid by any Borrower and its
Subsidiaries have been paid prior to the date on which any fine, penalty,
interest or late charge may be added thereto for nonpayment thereof (or any such
fine, penalty, interest, late charge or loss has been paid), excluding taxes or
other amounts that are (i) subject to a Permitted Protest or (ii) in the
aggregate would not reasonably be expected to result in a Material Adverse
Change. As of the Closing Date and except as set forth on Schedule 4.21, there
is no action, suit, proceeding, investigation, audit or claim now pending or
threatened in writing by any Governmental Authority regarding any taxes relating
to any such Person, which, either individually or in the aggregate, would
reasonably be expected to cause a Material Adverse Change.

4.22 Collateral Matters. The Collateral Agreement, upon execution and delivery
thereof by the Loan Parties thereto, will create in favor of the Lenders, a
valid and enforceable security interest in the Collateral, and when the Pledged
Equity Interests constituting certified

 

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securities (as defined in the Uniform Commercial Code) are delivered to the
Lenders, together with instruments of transfer duly endorsed in blank, the
security interest created under the Collateral Agreement will constitute under
the Uniform Commercial Code (to the extent a Lien may be perfected thereunder) a
fully perfected security interest in all right, title and interest of the
pledgors thereunder in such Pledged Equity Interests, prior and superior in
right to any other Person, other than Permitted Liens arising by operation of
law and having priority over the Liens of the Lenders on the Pledged Equity
Interests.

4.23 REIT Status. Beginning with its taxable year ending December 31, 2009,
(a) ARI has been organized and operated in conformity with the requirements for
qualification and taxation as a REIT under the IRC, (b) ARI’s actual method of
operation through the date hereof has enabled it to meet, and its proposed
method of operation will enable it to continue to meet, the requirements for
qualification and taxation as a REIT under the IRC, and (c) ARI has not revoked
its election to be taxed as a REIT and such election has not been terminated.
The shares of common stock of ARI are listed on the New York Stock Exchange.

 

5. AFFIRMATIVE COVENANTS.

Each Borrower covenants and agrees that, until payment in full, in cash of the
Obligations, each Borrower shall:

5.1 Financial Statements, Reports, Certificates. Deliver, or cause to be
delivered, to each Lender as soon as available,

(a) but in any event within forty-five (45) days after the end of each quarter
during each year, (i) an unaudited consolidated balance sheet, income statement
and statement of cash flow of ARI and its Subsidiaries’ operations during such
period and the year-to-date period ending thereon, in each case setting forth in
comparative form the figures for the corresponding periods in the prior year and
(ii) a certificate certifying that the financial statements fairly present, in
all material respects, the consolidated financial condition and results of
operations (and cash flows, to the extent provided) of ARI and its Subsidiaries
as of the dates and for the periods specified in accordance with GAAP, subject
to normal year-end audit adjustments and the absence of footnotes,

(b) but in any event within ninety (90) days after the end of ARI’s fiscal year,
commencing with the fiscal year ending December 31, 2015, consolidated financial
statements of ARI for each such fiscal year, audited (in the case of
consolidated financial statements) by independent certified public accountants
reasonably acceptable to each of the Lenders and certified, without any
qualifications (including any (A) “going concern” or like qualification or
exception or (B) qualification or exception as to the scope of such audit), by
such accountants to have been prepared in accordance with GAAP (such audited
financial statements to include a balance sheet, income statement, and statement
of cash flow and, if prepared, such accountants’ letter to management),

(c) if and when filed or distributed, as applicable, by ARI and its
Subsidiaries,

(i) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current
reports, and

(ii) any other filings made by ARI or its Subsidiaries with the SEC,

 

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(d) promptly, but in any event within five (5) Business Days after any Borrower
has knowledge of any event or condition that constitutes a Default or an Event
of Default, notice thereof and a statement of the curative action that such
Person proposes to take with respect thereto,

(e) promptly after the commencement thereof, but in any event within five (5)
Business Days after the service of process with respect thereto on any Borrower,
or any of such Borrower’s Subsidiaries, notice of all actions, suits, or
proceedings brought by or against such Borrower, or any of such Borrower’s
Subsidiaries (i) with respect to any Loan Document or the transactions
contemplated thereby or (ii) which, if determined adversely to Borrower or such
Subsidiary, would reasonably be expected to result in a Material Adverse Change,

(f) promptly upon the occurrence of any event which would reasonably be expected
to have a Material Adverse Change, notice thereof, and

(g) upon the request of any Lender, any other information reasonably requested
relating to the financial condition of the Borrowers or their Subsidiaries and
the guarantees and the Collateral, including with respect to those required
hereunder.

In addition, each Borrower agrees that no Subsidiary of such Borrower will have
a fiscal year different from that of ARI; provided, however, that a Subsidiary
acquired by ARI or its Subsidiaries may have a different fiscal year than ARI so
long as the fiscal year of such Subsidiary is changed to that of ARI prior to
December 31 of the calendar year of such Subsidiary’s acquisition. Each Borrower
also agrees to cooperate with each Lender to allow such Lender to consult with
its independent certified public accountants if such Lender reasonably requests
the right to do so and that, in such connection, its independent certified
public accountants are authorized to communicate with each Lender and to release
to each Lender whatever financial information concerning the Borrowers or their
Subsidiaries that such Lender reasonably may request. Each Borrower waives the
right to assert a confidential relationship, if any, it may have with any
accounting firm or service bureau in connection with any information requested
by a Lender pursuant to or in accordance with this Agreement, and agrees that
each Lender may contact directly any such accounting firm or service bureau in
order to obtain such information.

Information required to be delivered pursuant to this Section 5.1 shall be
deemed to have been delivered if such information, or one or more annual or
quarterly reports containing such information, shall be available on the website
of the SEC at http://www.sec.gov or on the website of ARI. Information required
to be delivered pursuant to this Section 5.1 may also be delivered by electronic
communications pursuant to procedures approved by AUSA.

5.2 Maintenance of Properties. Maintain and preserve, and cause each Subsidiary
thereof to maintain and preserve, all of its material properties which are
necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear and tear excepted.

 

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5.3 Taxes. Cause all tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by the Borrowers and
their Subsidiaries to be filed, and all assessments and taxes, whether real,
personal, or otherwise, known by the Loan Parties to be due or payable by, or
imposed, levied, or assessed against any Borrower, its Subsidiaries, or any of
their respective assets to be paid in full, before delinquency or before the
expiration of any extension period (or if not known by Loan Parties prior to
such time or period, then within thirty (30) days of the Loan Parties becoming
aware of such tax or assessment), except (i) to the extent the failure to so
file such returns or extensions or pay such assessments or taxes does not
constitute a Material Adverse Change, or (ii) to the extent that the validity of
such assessment or tax shall be the subject of a Permitted Protest.

5.4 Insurance. Maintain, and cause each Subsidiary thereof to maintain,
insurance covering such risks as ordinarily are insured against by other Persons
engaged in the same or similar businesses (it being understood that as of the
Closing Date the Borrowers and their Subsidiaries have no employees, physical
operations or facilities and have insurance only to cover director & officer
liabilities, which the Lenders acknowledge based on such facts, is sufficient
insurance coverage). All such policies of insurance shall be maintained with
financially sound and reputable carriers in such amounts as are adequate and
customary for companies of the same or similar size engaged in the same or
similar business and in the same or similar location.

5.5 Compliance with Laws. Comply, and cause each Subsidiary thereof to comply,
with the requirements of all Applicable Laws, rules, regulations, and orders of
any Governmental Authority, other than laws, rules, regulations, and orders the
non-compliance with which, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Change.

5.6 [Reserved].

5.7 Existence. At all times preserve and keep in full force and effect, and
cause each Subsidiary to preserve and keep in full force and effect, (a) its
valid existence and good standing under the laws of its jurisdiction of
organization and (b) all rights, privileges, permits, licenses and franchises
necessary or desirable in the normal conduct of its business, except in the case
of the foregoing clause (b), to the extent that failure to do so would not
reasonably be expected to have a Material Adverse Change.

5.8 Books and Records. Maintain (a) proper books of record and account, in which
full, true and correct entries in all material respects in accordance with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of each Borrower and its Subsidiaries; and (b)
such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
each Borrower or its Subsidiaries. The Borrowers shall permit any
representatives designated by the Lenders upon two (2) Business Days’ advance
notice, during normal business hours, and not more than once during any fiscal
year of the Borrowers (unless an Event of Default exists) to visit and inspect
the financial records and the property of the Borrowers and their Subsidiaries
and to make extracts from and copies of such financial records, and permit any
representatives designated by the Lenders to discuss the affairs, finances,

 

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accounts and condition of the Borrowers and their Subsidiaries with the
management and advisors thereof (provided that an Authorized Person shall be
given notice and an opportunity to participate during such discussion with
advisors). Notwithstanding anything to the contrary in this Section 5.8, no
Borrower or any Subsidiary will be required to disclose or permit the inspection
or discussion of, any document, information or other matter (i) in respect of
which disclosure to any Lender (or their respective representatives) is
prohibited by law or any binding agreement not entered into in contemplation of
avoiding such inspection and disclosure rights, (ii) that is subject to attorney
client or similar privilege or constitutes attorney work product or (iii) in
respect of which the Borrowers or any Subsidiary owes confidentiality
obligations to any third party not entered into in contemplation avoiding such
inspection and disclosure; provided that in the event that the Borrowers or any
Subsidiary does not provide any information requested in connection with an
examination or a discussion permitted under this Section 5.8 in reliance on the
preceding clause (ii) or (iii) due to confidentiality or waiver concerns, such
Person shall provide notice to the relevant Lender that such information is
being withheld and shall use its commercially reasonable efforts to communicate
the applicable information in a way that would not violate the applicable
obligation or risk waiver of such privilege.

5.9 Environmental. (a) Keep any property of the Borrowers, their Subsidiaries
and their businesses free of any Environmental Liens (other than Permitted
Liens) or post bonds or other financial assurances sufficient to satisfy the
obligations or liability evidenced by such Environmental Liens, (b) comply, and
cause each Subsidiary thereof to comply, in all material respects, with
Environmental Laws and provide to each Lender documentation of such compliance
which such Lender reasonably requests, (c) take any Remedial Action required to
respond to any Release or presence of or exposure to Hazardous Materials,
(d) respond to any Environmental Action against a Borrower or any Subsidiary
thereof and discharge any material obligations it may have to any Governmental
Authority or third person thereunder, and (e) promptly, but in any event within
five (5) days after its receipt thereof, provide each Lender with written notice
of any of the following: (i) notice that an Environmental Lien has been filed
against any property of a Borrower or Subsidiary or relating to their business,
(ii) commencement of any Environmental Action or notice that an Environmental
Action will be filed against a Borrower or Subsidiary, and (iii) notice of an
investigation, violation, citation, or administrative order pursuant to
Environmental Law, discovery of a Release or presence of or exposure to
Hazardous Materials, or a requirement for Remedial Action, which in any case of
(a) through (e) above, reasonably would be expected to result in a Material
Adverse Change.

5.10 Obligations Relating to Athene Purchase Agreement. If (i) the Buyer
Representative has terminated the Athene Purchase Agreement pursuant to Section
10.1(b)(i) of the Athene Purchase Agreement or (ii) ARI is not able to
consummate the sale of the Athene-Acquired Assets due to circumstances outside
of ARI’s control (including as a result of an Injunction (as defined in the
Athene Purchase Agreement) (it being understood and agreed that the termination
of any financing of the type permitted under clauses (a), (b), (f), (g) and (i)
of the definition of Permitted Indebtedness is within ARI’s control) which
prevents, prohibits or makes illegal the consummation of the sale of the
Athene-Acquired Assets, then, without limiting Section 2.2(d) in any respect,
ARI shall use its commercially reasonable efforts (without any obligation to
sell assets, issue Indebtedness or equity or reduce dividends or operating
expenses) to repay the Term Loan as soon as commercially reasonable (and, in any
event, prior to the Maturity Date).

 

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5.11 Maintenance of REIT Status. ARI shall (a) maintain its status as a REIT,
(b) not revoke its election to be taxed as a REIT or cause or allow such
election to be terminated, and (c) not engage in any “prohibited transaction” as
defined for purposes of Section 857(b)(6) of the IRC that would reasonably be
expected to have a Material Adverse Effect. ARI shall continue to list its
common stock for trading on a U.S. national or international securities
exchange.

5.12 Certain Regulatory Matters.

(a) The Borrowers and their Subsidiaries shall not violate any applicable
Anticorruption Law in any material respect and shall implement and maintain
policies, procedures, and internal controls reasonably designed to ensure
compliance with applicable Anticorruption Laws. No part of the proceeds of the
Term Loan will be used, directly or, to the knowledge of any Borrower,
indirectly, for any payments in violation of the Anticorruption Laws.

(b) The Borrowers and their Subsidiaries shall not violate any applicable
Sanctions Law in any material respect and shall implement and maintain policies,
procedures, and internal controls reasonably designed to ensure compliance with
applicable Sanctions Laws. No proceeds of the Term Loan will be used to directly
or, to the knowledge of any Borrower, indirectly fund any operations in, finance
any investments or activities in, or make any payments to, a Sanctioned Person
or a Sanctioned Country, or in any other manner that would result in a violation
of Sanctions Laws by any Person.

5.13 Further Assurances.

(a) The Borrowers and each other Loan Party will execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing statements),
that may be required under any applicable law, or that the Lenders may
reasonably request, to ensure that the Obligations of the Borrowers and each
other Loan Party under the Loan Documents are secured by a first priority
perfected Lien in favor of the Lenders (subject, in the case of Pledged Equity
Interests and the proceeds thereof, solely to Permitted Liens arising by
operation of law and which have priority over the Liens of the Lenders only as a
result of operation of law, and in the case of other Collateral, Permitted
Liens) on the Collateral.

(b) If any Subsidiary is formed or acquired after the Closing Date, the Stock of
any Subsidiary no longer constitutes Excluded Stock or any Subsidiary no longer
constitutes an Excluded Subsidiary, the Borrowers will within 45 days after the
end of the fiscal quarter in which such formation, acquisition or other event or
circumstance shall occur (or such longer period as the Lenders may agree to in
writing), notify the Lenders thereof and cause such Subsidiary to join the
Collateral Agreement and/or cause the Stock of such Subsidiary to be pledged to
the Lenders.

 

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6. NEGATIVE COVENANTS.

Each Borrower covenants and agrees that, until payment in full in cash of the
Obligations, such Borrower shall not:

6.1 Indebtedness. Create, incur, assume or suffer to exist, or permit any
Subsidiary thereof to create, incur, assume or suffer to exist, any
Indebtedness, except for Permitted Indebtedness.

6.2 Liens. Create, incur, assume or suffer to exist, or permit any Subsidiary
thereof to create, incur, assume or suffer to exist, any Lien on or with respect
to any of its assets of any kind, whether now owned or hereafter acquired, or
any income or profits therefrom, except for Permitted Liens.

6.3 Disposal of Assets. Sell, transfer, lease or otherwise dispose of
(collectively, a “Disposition”), or permit any Subsidiary thereof to Dispose of,
any assets or properties of any Borrower or any of their Subsidiaries that, with
respect to any transaction or series of transactions, have an aggregate book
value exceeding 10% of the consolidated assets of ARI and its Subsidiaries as of
the end of the most recent fiscal year, except in connection with:

(a) the sale of the Athene-Acquired Assets to (i) Athene Annuity & Life
Assurance Company, Athene Annuity and Life Company or their Affiliates or any
designee of the Buyer Representative or (ii) if Athene Annuity & Life Assurance
Company or Athene Annuity and Life Company shall be in default of their purchase
obligations under the Athene Purchase Agreement or otherwise decline to purchase
the Athene-Acquired Assets to any other Person,

(b) the incurrence of Indebtedness permitted pursuant to clauses (d), (f), (g)
and (i) of the definition of Permitted Indebtedness,

(c) Dispositions of assets or properties of the Borrowers or their Subsidiaries
to the extent that such asset or property is Disposed of for fair market value
and the proceeds of such Disposition are promptly applied to the purchase price
of similar or replacement assets constituting Permitted Investments (including
cash and Cash Equivalents), and

(d) any transaction permitted by Section 6.4 or Section 6.9.

Notwithstanding the foregoing, in no event shall any Loan Party Dispose of any
Pledged Equity Interests other than in a transaction permitted by Section 6.4
(except pursuant to clause (viii) thereof).

6.4 Restrictions on Fundamental Changes. Take, or permit any Subsidiary to take,
any of the following actions:

(a) Enter into any merger, consolidation or amalgamation.

 

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(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).

(c) Convey, sell, lease, license, assign, transfer, or otherwise dispose of, in
one transaction or a series of transactions, all or substantially all of its
assets.

(d) Amend or modify, or permit the amendment or modification of, its Governing
Documents in a manner adverse to the Lenders in any material respect.

Notwithstanding the foregoing, (i) AcquisitionCo shall be permitted to merge
with and into AMTG, with AMTG as the surviving entity (ii) AMTG shall be
permitted to merge with and into ARI, with ARI as the surviving entity, (iii)
any Subsidiary of a Borrower shall be permitted to merge, consolidate or
amalgamate with and into any Borrower (it being understood and agreed that in
any such event the Borrower will be the surviving Person), (iv) any Subsidiary
of a Borrower shall be permitted to merge, consolidate or amalgamate with and
into another Subsidiary of a Borrower (provided that no such merger,
consolidation or amalgamation shall involve a Guarantor unless such Guarantor is
the surviving Person), (v) any Subsidiary of a Borrower that does not own any
assets can be liquidated, wound up or dissolved, (vi) any Subsidiary of a
Borrower may liquidate, wind up or dissolve if the Borrowers determine in good
faith that such liquidation, winding up or dissolution is in the best interest
of the Borrowers and is not materially disadvantageous to the Lenders and, in
the case of liquidation, winding up or dissolution of a Loan Party, its assets
and properties are transferred only to a Loan Party, (vii) any Subsidiary of a
Borrower may Dispose of its assets to a Borrower or another Subsidiary of a
Borrower (provided that Dispositions by a Loan Party shall be made only to
another Loan Party), (viii) the Borrowers and their Subsidiaries may Dispose of
all or substantially all of their assets in connection with the incurrence of
Indebtedness permitted pursuant to clauses (d), (f), (g) and (i) of the
definition of Permitted Indebtedness, (ix) the Disposition of the assets that
were held by AMTG and/or its Subsidiaries prior to the Acquisition (including
pursuant to the Athene Purchase Agreement, or otherwise) shall be permitted and
be excluded from the calculation of “all or substantially all” assets of the
Borrower or any of its Subsidiaries and (x) the Borrowers and their Subsidiaries
shall be permitted to restructure the ownership structure of, and/or create a
new holding company (which shall be a direct or indirect Subsidiary of ARI) for,
the Stock of ACREFI TRS II, Ltd., if reasonably deemed necessary by the
Borrowers in connection with tax planning and/or regulatory compliance.

6.5 Change Name. Change, or permit any other Loan Party to change, its name,
state of organization or organizational identity; provided, however, that any
Loan Party may change its name upon at least ten (10) days’ prior written notice
to each Lender of such change (or such shorter period as agreed by the Lenders).

6.6 Change Nature of Business. Engage, or permit any Subsidiary thereof to
engage, in any material line of business other than the line of business engaged
in as of the Closing Date and business lines reasonably related or ancillary
thereto.

6.7 Employee Benefits; ERISA Plan Assets. Except as would not be reasonably
expected to result in material liability to a Borrower, (a) establish, maintain
or contribute to, or permit any of its ERISA Affiliates to establish, maintain
or contribute to, any Benefit Plan and

 

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(b) permit any Borrower to become (i) an “employee benefit plan” within the
meaning of Section 3(3) of ERISA subject to Title I of ERISA, (ii) a “plan”
within the meaning of Section 4975 of the Code to which Section 4975 of the IRC
applies or (iii) an entity deemed to hold “plan assets” within the meaning of 29
C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA, of any such employee
benefit plan or plan.

6.8 Amendment to Permitted Indebtedness; Restrictive Agreements.

(a) Permit any Subsidiary thereof to incur any Permitted Indebtedness to the
extent such Permitted Indebtedness contains, or amend any Permitted Indebtedness
existing as of the date hereof to implement (or otherwise permit any Subsidiary
of a Borrower to enter into, incur or permit to exist any agreement or other
arrangement that contains), restrictions on dividends, distributions,
redemptions, retirement, repurchase or similar payments on account of the Stock
of any Subsidiary of ARI except restrictions on Subsidiaries of ARI pursuant to
Permitted Indebtedness (i) that are, taken as a whole, in the good faith
judgment of the Borrowers, no more restrictive with respect to the Borrowers or
any Subsidiary than those contained in this Agreement or (ii) constituting
market terms for such financings as of the date thereof in the commercially
reasonable judgment of the Borrowers; provided, that such restrictions shall
allow such payments to be made not less often than monthly using available cash
(determined in customary manner for such financings) in the absence of any
default thereunder.

(b) No Loan Party shall, nor shall a Loan Party permit any of its Subsidiaries
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 of ARI to pay dividends or make any other distributions that could
reasonably be expected to cause ARI to fail to maintain its status as a REIT.

(c) Enter into, incur or permit to exist, or permit any Subsidiary thereof to
enter into, incur or permit to exist, any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of any Loan Party
to create, incur or permit to exist any Lien upon the Collateral to secure the
Obligations.

Notwithstanding the foregoing, (i) clauses (a) through (c) shall not apply to
(A) restrictions and conditions imposed by law or by this Agreement or any other
Loan Document, (B) restrictions and conditions existing on the date hereof
identified on Schedule 6.8 and (C) customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary or any assets of a
Borrower or any Subsidiary, in each case pending such sale; provided that such
restrictions and conditions apply only to such Subsidiary or the assets that are
to be sold and, in each case, such sale is permitted hereunder and (ii) clause
(c) of the foregoing shall not apply to (A) restrictions and conditions imposed
by any agreement relating to secured Indebtedness permitted by clauses (c), (d),
(f), (g), (i) and (j) of the definition of Permitted Indebtedness so long as
such restriction applies solely to the Subsidiary that is the obligor of such
Permitted Indebtedness and (B) customary provisions in leases, licenses and
other agreements restricting the assignment thereof.

 

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6.9 Restricted Payments. Directly or indirectly declare or make, or permit any
of its Subsidiaries to declare or make, any Restricted Payment or incur any
obligation to do so; provided, however, that the Borrowers and their
Subsidiaries may declare and make the following Restricted Payments so long as
no Default or Event of Default would result therefrom:

(a) ARI may declare or make cash distributions to its shareholders during the
period of four consecutive fiscal quarters most recently ending in an aggregate
amount not to exceed the amount required to be distributed for ARI to maintain
its status as a REIT and avoid U.S. federal income and excise taxes;

(b) ARI may make cash distributions to its shareholders of capital gains
resulting from gains from certain asset sales to the extent necessary to avoid
payment of taxes on such asset sales imposed under Sections 857(b)(3) and 4981
of the IRC;

(c) a Subsidiary may make cash distributions to holders of equity interests
issued by such Subsidiary so long as, in the case of non-wholly owned
Subsidiaries, such distributions are made ratably according to the holders’
respective holdings of the type of equity interest in respect of which such
distributions are being made;

(d) Subsidiaries may declare or make Restricted Payments to the Borrowers;

(e) ARI may declare and pay regularly scheduled cash dividends with respect to
its Stock consistent with existing dividend policies as disclosed in its report
filed with the SEC on Form 10-K for the fiscal year ended December 31, 2014, or
otherwise consistent with past practice.

Notwithstanding the foregoing, if a Default or Event of Default exists, ARI may
declare or make cash distributions to its shareholders during any fiscal year in
an aggregate amount not to exceed the minimum amount necessary for ARI to
maintain its status as a REIT.

6.10 Accounting Methods. Modify or change its fiscal year or its method of
accounting.

6.11 Investments. Directly or indirectly, make or acquire, or permit any
Subsidiary thereof to make or acquire, any Investment or incur any liabilities
(including contingent obligations) for or in connection with any Investment,
except for Permitted Investments; provided, that the Borrowers and their
Subsidiaries may make Investments in the Borrowers and any direct and indirect
Subsidiaries of the Borrowers.

6.12 Transactions with Affiliates. Directly or indirectly enter into or permit
to exist, or permit any Subsidiary thereof to directly or indirectly enter into
or permit to exist, any transaction of any kind with any Affiliate of the
Borrowers that is not a Subsidiary other than (a) transactions disclosed in
Schedule 6.12 or transactions of a similar nature to those transactions with
Affiliates described in ARI’s annual, quarterly or periodic filings with the SEC
prior to the Closing Date, (b) the Transactions or (c) transactions that are not
materially less favorable to the Borrowers or their Subsidiaries, as applicable,
as determined by the Borrowers in good faith, than would be obtained in an arm’s
length transaction with a non-Affiliate.

 

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6.13 Use of Proceeds. Use the proceeds of the Term Loan for any purpose other
than (a) to finance the Acquisition and (b) to pay the Transaction Expenses.

6.14 Amendments or Waivers and Prepayments with respect to Certain
Indebtedness. No Borrower shall, nor shall it permit any of its Subsidiaries to,
(a) amend the provisions of any Indebtedness in a manner that is materially
adverse to such Person or the Lenders or (b) make any payment or prepayment of
principal of, premium, if any, or interest on, or redeem, purchase, retire,
defease (including in substance or legal defeasance), establish a sinking fund
or similar payment with respect to, the 5.50% Convertible Senior Notes of ARI
due 2019, other than the payment of regularly scheduled, non-accelerated
payments in respect of such Permitted Indebtedness in accordance with the terms
of, and only to the extent required by, and subject to any subordination
provisions contained in, the indenture, loan or other agreement pursuant to
which such Permitted Indebtedness was issued; provided that the Borrowers and
their Subsidiaries may pay, prepay, redeem, purchase, retire, defease, establish
a sinking fund or similar payment for such Permitted Indebtedness with the
proceeds of sales of Stock of, or contributions to the capital of, ARI or
Permitted Indebtedness of the type described by clause (n) of the definition of
Permitted Indebtedness.

 

7. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:

(a) If any Loan Party fails to pay when due and payable, or when declared due
and payable in accordance with the terms hereof, all or any portion of (i) the
principal of the Term Loan when due in accordance with the terms hereof, or (ii)
any interest on the Term Loan (including any interest which, but for the
provisions of the Bankruptcy Code, would have accrued on such amounts), fees and
charges due any Lender, reimbursement of Lender Expenses, or other amounts
constituting Obligations, within five (5) Business Days after any such interest
or amount becomes due in accordance with the terms hereof or under any other
Loan Document;

(b) If any Loan Party fails to (i) perform, keep, or observe any covenant or
other provision contained in Sections 5.1(d), 5.7 (as to existence only), or
Section 6 hereof or (ii) perform, keep, or observe any covenant or other
provision contained in any Section of this Agreement (other than a Section that
is expressly dealt with elsewhere in Section 7(a) or this clause (ii)), or the
other Loan Documents, and such failure continues for a period of thirty (30)
days after the date on which any Loan Party had knowledge of such failure;

(c) If any material portion of the assets of the Loan Parties and their
Subsidiaries, taken as a whole, is attached, seized, subjected to a writ or
distress warrant, levied upon, comes into the possession of any third Person
(except solely in connection with Permitted Indebtedness permitted pursuant to
clauses (d), (f), (g) and (i) of the definition of Permitted Indebtedness held
by such third Person when no default, termination event or similar condition or
event with respect to such Loan Party or Subsidiary has occurred that has
resulted in the liquidation of, the acceleration of obligations under or early
termination of all obligations of such Loan Party or Subsidiary under the
documentation governing such Permitted Indebtedness);

 

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(d) If (i) an Insolvency Proceeding is commenced by any Borrower or any of such
Borrower’s Subsidiaries, or (ii) if any Borrower or any of such Borrower’s
Subsidiaries shall be generally not paying its debts as such debts become due or
shall admit in writing its inability to pay its debts generally;

(e) If an Insolvency Proceeding is commenced against any Borrower or any of such
Borrower’s Subsidiaries, and any of the following events occur: (i) such
Borrower or any of Borrower’s Subsidiaries consents to the institution of such
Insolvency Proceeding against it, (ii) the petition commencing the Insolvency
Proceeding is not timely controverted, (iii) the petition commencing the
Insolvency Proceeding is not dismissed within sixty (60) calendar days of the
date of the filing thereof, (iv) an interim trustee is appointed to take
possession of all or any substantial portion of the properties or assets of, or
to operate all or any substantial portion of the business of, such Borrower’s or
any of such Borrower’s Subsidiaries’, or (v) an order for relief shall have been
entered therein;

(f) [Reserved];

(g) [Reserved];

(h) If one or more judgments or other claims involving an aggregate amount
greater than $7,500,000 against any Borrower or any of such Borrower’s
Subsidiaries shall remain undischarged for a period of sixty (60) consecutive
days during which execution shall not be effectively stayed, and any action
shall be legally taken by a judgment creditor to attach or levy upon any assets
of any Borrower or any of such Borrower’s Subsidiaries to enforce any such
judgment and such action is not stayed within sixty (60) days;

(i) If there is a default, amortization, termination or similar event with
respect to any agreement to which a Borrower or any of its Subsidiaries is a
party, the termination or acceleration of which is reasonably likely to either
result in a Material Adverse Change or result in liability in an amount in
excess of $7,500,000, and such default, amortization, termination or similar
event with respect to such other agreement (1) occurs at the final maturity of
the obligations thereunder, or (2) results in an acceleration of the maturity of
the Borrower’s or any of its Subsidiaries’ obligations thereunder;

(j) [Reserved];

(k) Any representation or warranty made or deemed made to a Lender by or on
behalf of any Loan Party in or pursuant to this Agreement or any other Loan
Document or any amendment or modification hereof or thereof, or any waiver
hereunder or thereunder, 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, or any
waiver hereunder or

 

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thereunder, shall prove to have been incorrect in any material respect (or, in
the case of any such representation or warranty under this Agreement or any
other Loan Document already qualified by materiality, such representation or
warranty shall prove to have been incorrect) when made or deemed made;

(l) If (i) the obligation of any Loan Party under the guaranty provisions of the
Collateral Agreement are terminated by operation of law and, not replaced by a
guaranty from a Person with creditworthiness acceptable to each Lender or (ii)
any Loan Party shall default in respect of any covenant contained in the
Collateral Agreement or there shall otherwise be a breach or default in respect
of any obligation or agreement contained in the Collateral Agreement and such
breach or default continues for thirty (30) days;

(m) any Lien purported to be created by the Collateral Agreement shall cease to
be, or shall be asserted in writing by any Loan Party not to be, a valid,
perfected Lien having the priority contemplated thereby (except as otherwise
expressly provided in this Agreement or the Collateral Agreement); or

(n) If any provision of any Loan Document shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested by any Borrower, or any Subsidiaries of a Borrower, or a proceeding
shall be commenced by any Borrower or any of its Subsidiaries, or by any
Governmental Authority having jurisdiction over any Borrower or its Subsidiaries
seeking to establish the invalidity or unenforceability thereof, or any
Borrower, or any of its Subsidiaries shall deny that any Borrower, or any of its
Subsidiaries has any liability or obligation purported to be created under any
Loan Document.

 

8. THE LENDERS’ RIGHTS AND REMEDIES.

8.1 Acceleration. Upon the occurrence and during the continuation of an Event of
Default, the Required Lenders may (by written notice to the Borrowers) declare
the Obligations, whether evidenced by this Agreement or by any of the other Loan
Documents, immediately due and payable, whereupon the same shall become and be
immediately due and payable and the Borrowers shall be obligated to repay all of
such Obligations in full, without presentment, demand, protest, or further
notice or other requirements of any kind, all of which are hereby expressly
waived by the Borrowers. The foregoing to the contrary notwithstanding, upon the
occurrence of any Event of Default described in clause (d) or clause (e) of
Section 7, without any notice to Loan Parties or any other Person or any act by
the Lenders, the Obligations then outstanding, together with all accrued and
unpaid interest thereon and all fees and all other amounts due under this
Agreement and the other Loan Documents shall automatically and immediately
become due and payable, without presentment, demand, protest, or notice of any
kind, all of which are expressly waived by Loan Parties.

8.2 Other Remedies. If any Event of Default has occurred and is continuing, and
irrespective of whether the Obligations have become or have been declared
immediately due and payable under Section 8.1, each Lender may proceed to
protect and enforce the rights of such Lender by an action at law, suit in
equity or other appropriate proceeding, whether for the

 

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specific performance of any agreement contained herein or in any other Loan
Document, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.

8.3 Remedies Cumulative. The rights and remedies of the Lenders under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lenders shall have all other rights and remedies not
inconsistent herewith as provided by law or in equity. No exercise by the
Lenders of one right or remedy shall be deemed an election, and no waiver by the
Lenders of any Event of Default shall be deemed a continuing waiver. No delay by
the Lenders shall constitute a waiver, election, or acquiescence by it.

 

9. TAXES AND EXPENSES.

If Loan Parties fail to pay any monies (whether taxes, assessments, insurance
premiums, or, in the case of leased properties or assets, rents or other amounts
payable under such leases) due to third Persons, or fails to make any deposits
or furnish any required proof of payment or deposit, all as required under the
terms of this Agreement, then, any Lender, with notice to each of the other
Lenders and without prior notice to Loan Parties, may do any or all of the
following: (a) make payment of the same or any part thereof, or (b) in the case
of the failure to comply with Section 5.4 hereof, obtain and maintain insurance
policies of the type described in Section 5.4 and take any action with respect
to such policies as such Lender deems prudent. Any such amounts paid by a Lender
shall constitute Lender Expenses and any such payments shall not constitute an
agreement by the Lenders to make similar payments in the future or a waiver by
any Lender of any Event of Default under this Agreement. A Lender need not
inquire as to, or contest the validity of, any such expense, tax, or Lien and
the receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.

 

10. WAIVERS; INDEMNIFICATION.

10.1 Demand; Protest; etc. Loan Parties waive demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lenders on which Loan Parties may in any way be liable.

10.2 Indemnification. Loan Parties shall pay, indemnify, defend, and hold the
Lender-Related Persons (each, an “Indemnified Person”) harmless (to the fullest
extent permitted by law) from and against any and all liabilities, obligations,
losses, penalties, claims, demands, suits, actions, judgments, investigations,
proceedings, and damages, and all attorneys’ fees and disbursements and other
fees, costs and expenses of any kind or nature whatsoever which may at any time
be imposed upon, incurred by or asserted against such Indemnified Person in any
way in connection therewith or in connection with the enforcement of this
indemnification (as and when they are incurred and irrespective of whether suit
is brought), at any time asserted against, imposed upon, or incurred by any of
them (a) in connection with, as a result of, related to or arising under or out
of the execution, delivery, enforcement, performance, or administration
(including any restructuring or workout with respect hereto) of this Agreement,
any of the other Loan Documents, the use of the proceeds of the credit provided
hereunder or the monitoring of Loan Parties’ compliance with the terms of the
Loan Documents, (b) with respect to any actual

 

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or prospective claim, investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, the use of the proceeds of the credit
provided hereunder, the transactions contemplated hereby or thereby (in such
Indemnified Person’s role as a Lender or a director, officer, employee, partner,
agent or other representative of a Lender, its affiliates or controlling
persons) or the monitoring of Loan Parties’ compliance with the terms of the
Loan Documents (irrespective of whether any Indemnified Person is a party
thereto and regardless of whether such matter is initiated by a third party or
by any Borrower or any of its Subsidiaries Affiliates or shareholders), or any
act, omission, event, or circumstance in any manner related thereto, whether
based on contract, tort or any other theory (including any investigation of,
preparation for, or defense of any pending or threatened claim, investigation,
litigation or proceeding) or (c) with respect to any Environmental Action, any
actual or alleged presence or release of or exposure to Hazardous Materials, any
Remedial Action, any Environmental Lien, or any Environmental Liabilities and
Costs, in each case to the extent related in any way to any Loan Party or any of
their Subsidiaries, their properties or businesses, this Agreement, any of the
other Loan Documents, or the transactions contemplated hereby or thereby or the
monitoring of Loan Parties’ compliance with the terms of the Loan Documents (all
the foregoing, collectively, the “Indemnified Liabilities”). This provision
shall survive the termination of this Agreement and the repayment of the
Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which any
Borrower was required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by the Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON; provided, however, that no Borrower shall have any obligation to
any Indemnified Person under this Section 10.2 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines in a
non-appealable judgment to have resulted from the bad faith, gross negligence or
willful misconduct of such Indemnified Person. This Section 10.2 shall not apply
with respect to taxes, other than taxes that represent liabilities, obligations,
losses, penalties, claims, etc. arising from a non-tax claim.

10.3 Expenses.

(a) the Borrowers shall reimburse the Lenders for all Lender Expenses within
thirty (30) day following demand therefore by a Lender.

(b) Borrower shall pay the Lenders such fees, in the amounts and on the dates,
set forth in the Fee Letter.

(c) This provision shall survive the termination of this Agreement and the
repayment of the Obligations.

10.4 Waiver. To the extent permitted by applicable law, the Loan Parties shall
not assert, and hereby waive, any claim against any Indemnified Person on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Loan Document or

 

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any agreement or instrument contemplated hereby or thereby, any Term Loan or the
use of the proceeds thereof. In no event shall any Indemnified Person be liable
on any theory of liability for any special, indirect, consequential or punitive
damages (including without limitation lost profits) even if such Person has been
advised of the possibility of such damages and regardless of the form of action.

 

11. NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by Loan
Parties or any Lender to any other relating to this Agreement or any other Loan
Document shall be in writing and shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as Loan Parties or
any Lender, as applicable, may designate to each other in accordance herewith),
or facsimile to Loan Parties or any Lender, as the case may be, at its address
set forth below:

 

If to ARI:    Apollo Commercial Real Estate Finance, Inc.    c/o Apollo Global
Management    9 W 57th Street    New York, NY 10019   

Attn: Stuart A. Rothstein

Tel: (212) 822-0722

   Fax: (646) 219-3826    Email: srothstein@apollolp.com If to AUSA:    Athene
USA Corporation    c/o Athene Asset Management, L.P.    2121 Rosecrans Ave.,
Suite 5300    El Segundo, CA 90245    Attention: James Belardi    Telephone:
310-698-4481    Facsimile: 310-698-4492    Email: jbelardi@athene.com    With a
copy to:    Athene USA Corporation    c/o Athene Asset Management, L.P.    2121
Rosecrans Ave., Suite 5300    El Segundo, CA 90245    Attention: Legal
Department    Telephone: 310-698-4481    Facsimile: 310-698-4492    Email:
legal@athene.com

If to any other Lender, to its address set forth in the applicable Assignment
and Acceptance.

 

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Any Loan Party or any Lender may change the address at which it is to receive
notices hereunder, by notice in writing in the foregoing manner given to each
other party. All notices or demands sent in accordance with this Section 11
shall be deemed received on the earlier of the date of actual receipt or three
(3) Business Days after the deposit thereof in the mail (as specified in the
first paragraph of this Section above) and shall be as effective if sent by
telefacsimile or other electronic transmission as notice or demand sent by any
other method.

 

12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

(b) EACH OF THE PARTIES HERETO AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK, STATE OF NEW YORK,
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE
BROUGHT, AT A LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE A LENDER
ELECTS TO BRING SUCH ACTION OR WHERE SUCH PROPERTY MAY BE FOUND. EACH LOAN PARTY
AND EACH LENDER WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
12(b).

(c) EACH LOAN PARTY AND EACH LENDER, TO THE FULL EXTENT NOW OR HEREAFTER
PERMITTED BY APPLICABLE LAW, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH OF THE LOAN PARTIES AND THE LENDERS REPRESENTS THAT IT
HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

 

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13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1 Assignments and Participations.

(a) At any time or from time to time, any Lender may assign and delegate to one
or more assignees (each an “Assignee”) all, or any ratable part of all, of the
Obligations and the other rights and obligations of such Lender, in a minimum
amount of $5,000,000, with the prior written consent of ARI (such consent not to
be unreasonably withheld, conditioned or delayed); provided, that no consent of
ARI shall be required for an assignment to an Affiliate of the Lender or solely
among Lenders; provided, however, that the Borrowers and any other Lender may
continue to deal solely and directly with such assigning Lender in connection
with the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses, and related
information with respect to the Assignee, have been given to the Borrowers and
each other Lender by such assigning Lender and the Assignee, and (ii) such
assigning Lender and its Assignee have delivered to the Borrowers and each other
Lender an Assignment and Acceptance. No Loan Party or any Subsidiary of a Loan
Party may at any time be an Assignee or otherwise have the rights and
obligations of a Lender under the Loan Documents.

(b) From and after the date that the assigning Lender (with a copy to Loan
Parties and each other Lender) has received an executed Assignment and
Acceptance, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assigning Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section 10.2 hereof) and be released from any
future obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall effect
a novation between Loan Parties and the Assignee; provided, however, that
nothing contained herein shall release any assigning Lender from obligations
that survive the termination of this Agreement, including such assigning
Lender’s obligations under Section 16.7 of this Agreement.

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (1) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(2) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Loan Parties or the
performance or observance by Loan Parties of any of its obligations under

 

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this Agreement or any other Loan Document furnished pursuant hereto, (3) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(4) such Assignee will, independently and without reliance upon such assigning
Lender or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement, and (5) such Assignee agrees
that it will perform all of the obligations which by the terms of this Agreement
are required to be performed by it as a Lender.

(d) Immediately upon receipt by the Loan Parties and each Lender of the fully
executed Assignment and Acceptance, this Agreement shall be deemed to be amended
to the extent, but only to the extent, necessary to reflect the addition of the
Assignee. The Borrowers shall maintain a register for the recordation of the
names and addresses of each Lender, and the principal amounts of (and stated
interest on) the Term Loans and other Obligations owing to such Lender pursuant
to the terms hereof from time to time (the “Register”). The Borrowers and each
Lender shall treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrowers and each Lender,
at any reasonable time and from time to time upon reasonable prior notice.

(e) Any Lender may at any time, sell to one or more commercial banks, financial
institutions, or other Persons (a “Participant”) participating interests in its
Obligations and the other rights and interests of that Lender (the “Originating
Lender”) hereunder and under the other Loan Documents; provided, however, that
(i) the Originating Lender shall remain a “Lender” for all purposes of this
Agreement and the other Loan Documents and the Participant receiving the
participating interest in the Obligations and the other rights and interests of
the Originating Lender hereunder shall not constitute a “Lender” hereunder or
under the other Loan Documents and the Originating Lender’s obligations under
this Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Loan Parties
and the Lenders shall continue to deal solely and directly with the Originating
Lender in connection with the Originating Lender’s rights and obligations under
this Agreement and the other Loan Documents, (iv) no Lender shall transfer or
grant any participating interest under which the Participant has the right to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment to, or
consent or waiver with respect to this Agreement or of any other Loan Document
would (A) extend the final maturity date of the Obligations hereunder in which
such Participant is participating, (B) reduce the interest rate applicable to
the Obligations hereunder in which such Participant is participating, (C)
release all or substantially all of (1) the Collateral or (2) the value of the
guarantees of the Obligations, in each case, supporting the Obligations
hereunder in which such Participant is participating (except to the extent
expressly provided herein or in any of the Loan Documents), (D) postpone the
payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or

 

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prepayments or premiums, (v) all amounts payable by Loan Parties hereunder shall
be determined as if such Lender had not sold such participation, except that, if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement and (v) each Participant shall
have agreed to be bound by the provisions of Section 13.3 as if it were a
Lender. The rights of any Participant only shall be derivative through the
Originating Lender with whom such Participant participates and no Participant
shall have any rights under this Agreement or the other Loan Documents or any
direct rights as to Loan Parties, the other Lenders or otherwise in respect of
the Obligations. No Participant shall have the right to participate directly in
the making of decisions by the Lenders among themselves.

(f) In connection with any such assignment or participation or proposed
assignment or participation, a Lender may, subject to the provisions of Section
16.7, disclose all documents and information which it now or hereafter may have
obtained in connection with this facility and relating to Loan Parties and their
respective Affiliates and businesses.

(g) 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 without limitation any 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.

(h) Any Assignee or Participant on the date it becomes a Lender or Participant
hereunder shall certify in the applicable Assignment and Acceptance,
participation agreement or other similar document that it is, or meets the
criteria for being, both a “qualified purchaser” (within the meaning of the
Investment Company Act of 1940 and the rules and regulations thereunder) and a
“qualified institutional buyer” (within the meaning of Rule 144A under the
Securities Act). Any failure to include such a certification in an Assignment
and Acceptance, participation agreement or other applicable document with
respect to the Assignee’s or Participant’s qualified purchaser and qualified
institutional buyer status shall render such Assignment and Acceptance,
participation agreement or other similar document void ab initio and of no force
or effect for any purpose.

(i) Each Lender that sells a participation shall, acting solely for this purpose
as a non-fiduciary agent of the Borrowers, maintain a register on which it
enters the name and address of each Participant and the principal amounts (and
stated interest) of each Participant’s interest in the Loans or other
Obligations (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

 

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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 United States Treasury Regulations. The entries in the
Participant Register shall be conclusive absent manifest error, and such Lender
shall treat each Person whose name is recorded in the Participant Register as
the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.

13.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that no Loan Party may assign this Agreement or any rights or duties hereunder
without the Lenders’ prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release the Loan Parties from its Obligations. A Lender may assign this
Agreement and the other Loan Documents and its rights and duties hereunder and
thereunder pursuant to Section 13.1 hereof and, except as expressly required
pursuant to Section 13.1 hereof, no consent or approval by Loan Parties is
required in connection with any such assignment.

 

14. AMENDMENTS; WAIVERS.

14.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by any Loan Party there from, shall be effective unless the same shall
be in writing and signed by the Required Lenders and the Borrowers and then any
such waiver or consent shall be effective, but only in the specific instance and
for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all of the
Lenders affected thereby and the Borrowers, do any of the following:

(a) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due to
the Lenders hereunder or under any other Loan Document,

(b) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable to
the Lenders hereunder or under any other Loan Document,

(c) change the Pro Rata Share that is required to take any action hereunder,

(d) amend or modify this Section or any provision of the Agreement providing for
consent or other action by all Lenders,

(e) change the definition of “Required Lenders” or “Pro Rata Share”,

(f) release any Borrower from any obligation for the payment of money to the
Lenders or release all or substantially all of the Collateral or the value of
the guarantees of the Obligations; or

(g) amend any of the provisions of Section 15.

 

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The foregoing notwithstanding, (i) any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lenders
among themselves, and that does not affect the rights or obligations of the
Borrowers, shall not require consent by or the agreement of the Borrowers and
(ii) each Lender may agree with the Borrowers to any amendment, modification,
waiver or consent with respect to any provision of this Agreement or any other
Loan Document that does not adversely affect the rights or obligations of any
other Lender hereunder or any other Loan Document.

14.2 No Waivers; Cumulative Remedies. No failure by any Lender to exercise any
right, remedy, or option under this Agreement or any other Loan Document, or
delay by any Lender in exercising the same, will operate as a waiver thereof. No
waiver by any Lender will be effective unless it is in writing, and then only to
the extent specifically stated. No waiver by any Lender on any occasion shall
affect or diminish each Lender’s rights thereafter to require strict performance
by Loan Party of any provision of this Agreement. Each Lender’s rights under
this Agreement and the other Loan Documents will be cumulative and not exclusive
of any other right or remedy that any Lender may have.

 

15. THE LENDERS.

15.1 Lender in Individual Capacity. Any Lender and its respective Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Loan Parties and any
Borrower’s Subsidiaries and other Affiliates and any other Person party to any
Loan Documents as though such Lender were not a Lender hereunder without notice
to or consent of the other Lenders. The other Lenders acknowledge that, pursuant
to such activities, such Lender and its respective Affiliates may receive
information regarding Loan Parties and any other Person party to any Loan
Documents that is subject to confidentiality obligations in favor of Loan
Parties or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them.

15.2 Withholding Taxes; Increased Costs.

(a) All payments made by or on account of any Obligation of any Borrower
hereunder or under any note or other Loan Document will be made without setoff,
counterclaim, or other defense. In addition, all such payments will be made free
and clear of, and without deduction or withholding for, any present or future
Taxes, and in the event any deduction or withholding of Taxes is required, each
Borrower shall comply with the requirements of this paragraph. “Taxes” shall
mean, any taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any Governmental Authority with
respect to such payments (but excluding any tax imposed by any Governmental
Authority measured by or based on the net

 

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income or net profits of any Lender or as a result of a present or former
connection between a Lender and the Governmental Authority imposing such tax,
any tax imposed under FATCA, and any tax imposed pursuant to a law in effect on
the day such Lender becomes a party to this Agreement) and all interest,
penalties or similar liabilities with respect thereto. If any Taxes are so
levied or imposed, Borrower agrees to pay the full amount of such Taxes and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement, any note, or Loan Document, including any amount paid
pursuant to this Section 15.2(a) after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein. The
Borrowers will furnish to each Lender as promptly as reasonably practicable
after the date the payment of any Tax is due pursuant to Applicable Law
certified copies of tax receipts evidencing such payment by Loan Parties, as
applicable. Notwithstanding anything to the contrary herein or in any Loan
Document, Borrower shall not be required to indemnify, pay additional amounts,
gross-up or otherwise compensate any Lender, participant, or any other Person
with an interest in the Loan Documents as a result of any Tax imposed as a
result of such Person’s failure to provide any form or certification described
in Section 15.2(b) such Person is legally able to provide.

(b) Each Lender (and any Person that becomes a Lender, participant or otherwise
acquires an interest in any Loan Document after the date hereof) 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 or any other
Loan Party at the time or times reasonably requested by Borrower or on the date
such Person becomes a Lender, participant or otherwise acquires an interest in
any Loan Document, such properly completed and executed documentation reasonably
requested by the Borrowers or any other Loan Party as will permit such payments
to be made without withholding or at a reduced rate of withholding to the extent
permitted by law. Without limiting the generality of the foregoing, each Lender
agrees with and in favor of the Loan Parties, to deliver to the Borrowers
whichever of the following forms the applicable Lender is legally entitled to
provide and is applicable:

(i) if such Lender claims an exemption from United States withholding tax
pursuant to its portfolio interest exception, (A) a statement of such Lender,
signed under penalty of perjury, that it is not a (I) a “bank” as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of either Borrower
(within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled
foreign corporation related to either Borrower within the meaning of Section
864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form W-8BEN
or W-8BEN-E, as appropriate, before receiving its first payment under this
Agreement and at any other time reasonably requested by any Loan Party;

(ii) if such Lender claims an exemption from, or a reduction of, withholding tax
under a United States tax treaty, properly completed and executed IRS Form
W-8BEN or W-8BEN-E, as appropriate, before receiving its first payment under
this Agreement and at any other time reasonably requested by any Loan Party;

 

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(iii) if such Lender claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected with a
United States trade or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before receiving its first payment under this
Agreement and at any other time reasonably requested by any Loan Party; or;

(iv) such other form or forms, including IRS Form W-9, as may be required under
the IRC or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding or backup withholding tax before
receiving its first payment under this Agreement and at any other time
reasonably requested by any Loan Party.

Each Lender agrees promptly to notify the Loan Parties of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction and shall provide updated forms to the extent it is legally entitled
to do so if previously provided forms expire or become inaccurate.

(c) If a Lender claims an exemption from withholding tax in a jurisdiction other
than the United States, such Lender agrees with and in favor of the Loan
Parties, to deliver to Borrower any such form or forms, as may be required under
the laws of such jurisdiction as a condition to exemption from, or reduction of,
foreign withholding or backup withholding tax before receiving its first payment
under this Agreement and at any other time reasonably requested by any Loan
Party.

Each Lender agrees promptly to notify the Loan Parties of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.

(d) If any Lender claims exemption from, or reduction of, withholding tax and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of Loan Parties to such Lender, such Lender
agrees to notify the Loan Parties of the percentage amount in which it is no
longer the beneficial owner of Obligations of Loan Parties to such Lender. To
the extent of such percentage amount, the Loan Parties will treat such Lender’s
documentation provided pursuant to Sections 15.2(b) or 15.2(c) as no longer
valid. With respect to such percentage amount, Lender may provide new
documentation, pursuant to Sections 15.2(b) or 15.2(c), if applicable.

(e) If any Lender is entitled to a reduction in the applicable withholding tax,
Borrower may withhold from any interest payment to such Lender an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by Section 15.2(b) or
Section 15.2(c) are not delivered to Borrower, then Borrower may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.

 

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(f) Each Lender shall deliver to Loan Parties at the time or times prescribed by
law and at such time or times reasonably requested by Loan Parties any
documentation prescribed by applicable law under FATCA (including as prescribed
by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation
reasonably requested by Loan Parties as may be necessary for Loan Parties to
comply with their obligations under FATCA and to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this subsection
(f), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

(g) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any taxes as to which it has been indemnified
pursuant to this Section 15.2 (including by the payment of additional amounts
pursuant to Section 15.2(a)), 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.

(h) If the introduction of or any change in, after the Closing Date, any
applicable law increases a Lender’s costs or reduces its income for the Term
Loans, or subjects a Lender to any tax, levy, impost, duty, fee, assessment or
other similar charge (other than any Taxes or any tax excluded from the
definition of Taxes or resulting from the failure to provide any form or
certification described in Section 15.2(b) such Person is legally able to
provide) on such Lender’s loans, loan principal, letters of credit, commitments,
or other obligations, or its deposits, reserves, other liabilities or capital
attributable thereto, which increases the cost to such Lender of maintaining its
Loans, then the Borrowers shall upon demand by such Lender promptly pay to such
Lender the increase in cost or reduction in income or additional expense;
provided that all requests, rules, guidelines or directives issued or
promulgated under, in connection with or pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act or Basel III shall be deemed to be a change
in applicable law, regardless of the date enacted, adopted or issued.

 

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15.3 Restrictions on Actions by Lenders; Sharing of Payments.

(a) Each of the Lenders and the Borrowers agree that a Lender may, to the extent
it is lawfully entitled to do so, set off against the Obligations, any amounts
owing by such Lender to any Borrower or any deposit accounts of any Borrower now
or hereafter maintained with such Lender.

(b) If, at any time or times any Lender shall receive by payment, foreclosure,
setoff, or otherwise, any payments with respect to the Obligations, except for
any such proceeds or payments received by such Lender from any Borrower pursuant
to the terms of this Agreement, such Lender promptly shall purchase, without
recourse or warranty, an undivided interest and participation in the Obligations
owed to the other Lenders so that such excess payment received shall be applied
ratably as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

15.4 Payments to the Lenders. All payments to be made by the Borrowers to the
Lenders shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each Lender may designate for
itself by written notice to the Borrowers. Concurrently with each such payment,
the Borrowers shall identify whether such payment (or any portion thereof)
represents principal, premium, fees, or interest of the Obligations.

15.5 Several Obligations; No Liability. Nothing contained herein shall confer
upon any Lender any interest in, or subject any Lender to any liability for, or
in respect of, the business, assets, profits, losses, or liabilities of any
other Lender. Each Lender shall be solely responsible for notifying its
Participants of any matters relating to the Loan Documents to the extent any
such notice may be required, and no Lender shall have any obligation, duty, or
liability to any Participant of any other Lender. No Lender shall have any
liability for the acts of any other Lender. No Lender shall be responsible to
any Loan Party or any other Person for any failure by any other Lender to
fulfill its obligations to make credit available hereunder nor to take any other
action on its behalf hereunder or in connection with the financing contemplated
herein.

 

16. GENERAL PROVISIONS.

16.1 Effectiveness. This Agreement shall be binding and deemed effective when
executed by each of Loan Parties and each Lender whose signature is provided for
on the signature pages hereof.

16.2 Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.

 

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16.3 Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed against the Lenders or the Borrowers, whether under
any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.

16.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision. This agreement
is for the benefit of the parties hereto and there shall be no third party
beneficiaries.

16.5 Counterparts; Electronic Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile, “.pdf file” or other electronic method of transmission shall be
equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
telefacsimile, “.pdf file” or other electronic method of transmission also shall
deliver an original executed counterpart of this Agreement but the failure to
deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement. The foregoing shall apply
to each other Loan Document mutatis mutandis.

16.6 Revival and Reinstatement of Obligations. If the incurrence or payment of
the Obligations by Loan Parties or the transfer to a Lender of any property
should for any reason subsequently be declared to be void or voidable under any
state or federal law relating to creditors’ rights, including provisions of the
Bankruptcy Code relating to fraudulent conveyances, preferences, or other
voidable or recoverable payments of money or transfers of property
(collectively, a “Voidable Transfer”), and if a Lender is required to repay or
restore, in whole or in part, any such Voidable Transfer, or elects to do so
upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that a Lender is required or elects to repay or
restore, and as to all costs, expenses, and attorneys fees of any Lender related
thereto, the liability of Loan Parties automatically shall be revived,
reinstated, and restored and shall exist as though such Voidable Transfer had
never been made.

16.7 Confidentiality. Lenders each individually (and not jointly or jointly and
severally) agree that material, non-public information regarding Loan Parties,
their operations, assets, and existing and contemplated business plans shall be
treated by the Lenders in a confidential manner, and shall not be disclosed by
the Lenders to Persons who are not parties to this Agreement or used for any
purpose other than as contemplated by this Agreement, except: (a) to attorneys
for and other advisors, accountants, auditors, and consultants to any Lender for
use by them for a purpose as contemplated by this Agreement, (b) to Subsidiaries
and Affiliates of any Lender, provided that any such Subsidiary or Affiliate
shall be advised of the confidential nature of such information and instructed
to keep it confidential, (c) as may be required by statute, decision, or
judicial or administrative order, rule, or regulation or by subpoena or similar
legal process, (d) as may be agreed to in advance by the Borrowers, or the
Borrowers’ Subsidiaries, (e) as requested or required by any Governmental
Authority or any regulatory or

 

54

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self-regulatory authority or examiner (including the National Association of
Insurance Commissioners or other similar organization), (f) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by a Lender), (g) in connection with any
assignment, prospective assignment, sale, prospective sale, participation or
prospective participations, or pledge or prospective pledge of any Lender’s
interest under this Agreement, provided that any such assignee, prospective
assignee, purchaser, prospective purchaser, participant, prospective
participant, pledgee, or prospective pledgee shall have agreed in writing to
receive such information hereunder subject to the terms of this Section, (h) in
connection with any litigation or other adversary proceeding involving parties
hereto which such litigation or adversary proceeding involves claims related to
the rights or duties of such parties under this Agreement or the other Loan
Documents, and (i) in connection with the exercise of any remedies hereunder or
under any other Loan Document or any action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder to the extent reasonably necessary in connection with such
enforcement. The provisions of this Section 16.7 shall survive for 2 years after
the payment in full of the Obligations. Notwithstanding the foregoing, on or
after the Closing Date, each Lender may, at its own expense, issue news releases
and publish “tombstone” advertisements and other announcements relating to this
transaction in newspapers, trade journals and other appropriate media.
Notwithstanding anything to the contrary in this Agreement, any Lender may
disclose any information hereunder subject to the terms of this Section 16.7 for
the purposes of fulfilling its ordinary course regulatory obligations not
otherwise specifically related to the Acquisition or this Agreement, including
to any banking or insurance regulatory agency, without providing prior notice to
the Borrower.

16.8 Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

16.9 USA PATRIOT Act Notice. Each Lender (for itself and not on behalf of any
other party) hereby notifies the Borrowers that, pursuant to the requirements of
the PATRIOT Act, such Lender is required to obtain, verify and record
information that identifies each Borrower, which information includes the name
and address of such Borrower and other information that will allow such Lender
to identify such Borrower in accordance with the PATRIOT Act.

16.10 Recourse Against Certain Parties. No recourse under or with respect to any
obligation, covenant or agreement (including, without limitation, the payment of
any fees or any other obligations) of any Loan Party as contained in this
Agreement or any other agreement, instrument or document entered into by any
Loan Party pursuant hereto or in connection herewith shall be had against any
administrator or investment manager of such Loan Party or any incorporator,
member, partner, officer, employee, trustee, beneficial owner or director of
such Loan Party or of any such administrator or investment manager, as such, by
the enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute or otherwise, it being expressly agreed and understood
that the agreements of each Loan Party contained in this Agreement and all of
the other agreements, instruments and documents entered into by such Loan Party
pursuant hereto or in connection herewith are, in each case, solely the
respective

 

55

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corporate obligations of such Loan Party, and that no personal liability
whatsoever shall attach to or be incurred by any administrator or investment
manager of such Loan Party or any incorporator, member, partner, officer,
employee, trustee, beneficial owner or director of such Loan Party or of any
such administrator or investment manager, as such, or any of them, under or by
reason of any of the obligations, covenants or agreements of such Loan Party
contained in this Agreement or in any other such instruments, documents or
agreements, or which are implied therefrom, and that any and all personal
liability of each and every such administrator or investment manager of each
Loan Party and each incorporator, member, partner, officer, employee, trustee,
beneficial owner or director of such Loan Party or of any such administrator or
investment manager, or any of them, for breaches by any Loan Party of any such
obligations, covenants or agreements, which liability may arise either at common
law or at equity, by statute or constitution, or otherwise, is hereby expressly
waived as a condition of and in consideration for the execution of this
Agreement. The provisions of this Section 16.10 shall survive the termination of
this Agreement.

[Signature pages to follow.]

 

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

 

BORROWERS: APOLLO COMMERCIAL REAL ESTATE FINANCE, INC. By:  

 

Name:   Title:   ARROW MERGER SUB, INC. By:  

 

Name:   Title:  

 

[SIGNATURE PAGE TO LOAN AGREEMENT]

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LENDER: ATHENE USA CORPORATION BY:   ATHENE ASSET MANAGEMENT, L.P., its
investment manager By:  

 

Name:   Title:  

 

[SIGNATURE PAGE TO LOAN AGREEMENT]

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

Exhibit A-1

[Form of Assignment and Acceptance]

ASSIGNMENT AND ACCEPTANCE AGREEMENT

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered
into as of                      between                      (“Assignor”) and
                     (“Assignee”). Reference is made to the Loan Agreement,
dated as of [●], 2016 (which, as the same has been and may from time to time be
amended, modified, supplemented, renewed, extended or restated, is hereinafter
called the “Loan Agreement”), by and among ATHENE USA CORPORATION, an Iowa
corporation (the “Lender”), ARROW MERGER SUB, INC., a Maryland corporation
(“AcquisitionCo”) and APOLLO COMMERCIAL REAL ESTATE FINANCE, INC., a Maryland
corporation (“ARI” and together with AcquisitionCo, the “Borrowers”, and each a,
“Borrower”). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Loan Agreement.

1. In accordance with the terms and conditions of Section 13 of the Loan
Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
the Assignor’s rights and obligations under the Loan Documents as of the date
hereof with respect to the Obligations owing to the Assignor, all to the extent
specified on Annex I.

2. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim and (ii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment Agreement and to consummate the transactions contemplated hereby;
(b) makes no representation or warranty and assumes no responsibility with
respect to (i) any statements, representations or warranties made in or in
connection with the Loan Documents or (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of their respective obligations under the Loan Documents or
any other instrument or document furnished pursuant thereto, and (d) represents
and warrants that the amount set forth as the Purchase Price on Annex I
represents the amount owed by Borrower to Assignor with respect to Assignor’s
share of the Term Loans assigned hereunder, as reflected on Assignor’s books and
records.

3. The Assignee (a) confirms that it has received copies of the Loan Agreement
and the other Loan Documents, together with copies of the financial statements
referred to therein and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment Agreement; (b) agrees that it will, independently and without
reliance upon Assignor, or any other Lender, based upon such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under the Loan Documents;
(c) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan

 

EXHIBIT A-1

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

Documents are required to be performed by it as a Lender; (d) attaches the forms
prescribed in the Loan Agreement with respect to taxes, including certifying as
to the Assignee’s status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the Assignee
under the Loan Agreement or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty and (e) represents and warrants to Borrower that on and as
of the date hereof it is a “qualified purchaser” (within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder) and a “qualified institutional buyer” (within the meaning of
Rule 144A under the Securities Act).

4. Following the execution of this Assignment Agreement by the Assignor and
Assignee, the Assignor will deliver this Assignment Agreement to the other
Lenders and the Loan Parties. The effective date of this Assignment (the
“Settlement Date”) shall be the latest to occur of (a) the date of the execution
and delivery hereof by the Assignor and the Assignee, and (b) the date specified
in Annex I.

5. Upon receipt by the other Lenders and the Loan Parties of this Assignment
Agreement, as of the Settlement Date (a) the Assignee shall be a party to the
Loan Agreement and, to the extent of the interest assigned pursuant to this
Assignment Agreement, have the rights and obligations of a Lender thereunder and
under the other Loan Documents, and (b) the Assignor shall, to the extent of the
interest assigned pursuant to this Assignment Agreement, relinquish its rights
and be released from its obligations under the Loan Agreement and the other Loan
Documents, provided, however, that nothing contained herein shall release any
assigning Lender from obligations that survive the termination of this
Agreement, including such assigning Lender’s obligations under Section 15 and
Section 16.7 of the Loan Agreement.

6. On the Settlement Date, Assignee shall pay to Assignor the Purchase Price (as
set forth in Annex I). From and after the Settlement Date, Borrower shall make
all payments that are due and payable to the holder of the interest assigned
hereunder (including payments of principal, interest, fees and other amounts) to
Assignor for amounts which have accrued up to but excluding the Settlement Date
and to Assignee for amounts which have accrued from and after the Settlement
Date. On the Settlement Date, Assignor shall pay to Assignee an amount equal to
the portion of any interest, fee, or any other charge that was paid to Assignor
prior to the Settlement Date on account of the interest assigned hereunder and
that are due and payable to Assignee with respect thereto, to the extent that
such interest, fee or other charge relates to the period of time from and after
the Settlement Date and has not been taken into account in determining the
Purchase Price.

7. This Assignment Agreement may be executed in counterparts and by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the
same instrument. This Assignment Agreement may be executed and delivered by
facsimile or other electronic transmission all with the same force and effect as
if the same were a fully executed and delivered original manual counterpart.

 

EXHIBIT A-1

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

8. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

EXHIBIT A-1

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

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and
Annex I hereto to be executed by their respective officers thereunto duly
authorized, as of the first date above written.

 

[NAME OF ASSIGNOR] as Assignor By:  

 

Name:   Title:   [NAME OF ASSIGNEE] as Assignee By:  

 

Name:   Title:  

CONSENTED:

 

APOLLO COMMERCIAL REAL ESTATE FINANCE, INC. By:  

 

Name:   Title:  

 

EXHIBIT A-1

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

ANNEX FOR ASSIGNMENT AND ACCEPTANCE

ANNEX I

 

1.    Borrowers:    2.    Name and Date of Loan Agreement:      

The Loan Agreement, dated as of [●], 2016 (which, as the same has been and may
from time to time be amended, modified, supplemented, renewed, extended or
restated, is hereinafter called the “Loan Agreement”), by and among ATHENE USA
CORPORATION, an Iowa corporation (the “Lender”), ARROW MERGER SUB, INC., a
Maryland corporation (“AcquisitionCo”) and APOLLO COMMERCIAL REAL ESTATE
FINANCE, INC. (“ARI” and together with AcquisitionCo, the “Borrowers”, and each
a, “Borrower”).

3.    Date of Assignment Agreement:    4.    Assigned Amount of Term Loan   
$     5.    Settlement Date:    6.    Notice and Payment Instructions, etc.   

 

Assignee:     Assignor:

 

   

 

 

   

 

 

   

 

 

   

 

 

7.    Agreed and Accepted:

 

[ASSIGNOR]     [ASSIGNEE] By:  

 

    By:  

 

Name:  

 

    Name:  

 

Title:  

 

    Title:  

 

 

EXHIBIT A-1

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Schedule 1.1

Excluded Subsidiaries

ARM II SPE, LLC

ARWL 2013-1 Trust

ARWL 2013-1 REO Trust

ARWL 2014-1 Trust

Apollo Residential Mortgage Securities, LLC

ACREFI II TRS, LTD.

ACREFI Insurance Services, LLC

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Schedule 4.3(a)

States of Organization

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Schedule 4.3(b)

Chief Executive Offices

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

Schedule 4.3(c)

Organizational Identification Numbers and

Federal Employer Identification Numbers

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

Schedule 4.4

Capitalization of Borrower’s Subsidiaries

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Schedule 4.6

Litigation

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Schedule 4.21

Taxes

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

Schedule 6.1

Permitted Indebtedness

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

Schedule 6.2

Permitted Liens

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

Schedule 6.8

Existing Restrictions

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Schedule 6.11

Permitted Investments

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Schedule 6.12

Transactions with Affiliates

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EXHIBIT B

Project Apple

Conditions Precedent

The availability and initial funding of the Term Loan Facility shall be subject
to the satisfaction (or waiver) of solely the following conditions (subject to
the Certain Funds Provision). Capitalized terms used but not otherwise defined
herein have the meanings assigned to such terms in the Commitment Letter to
which this Exhibit B is attached or on Exhibit A attached thereto.

 

1. Each Loan Party shall have executed and delivered the Loan Documents to which
it is a party and the Lender shall have received all other related instruments,
documents, certificates and agreements executed or delivered pursuant thereto,
including:

 

  (a) customary closing certificates, borrowing notices and legal opinions; and

 

  (b) a certificate of the chief financial officer (or other officer with
reasonably equivalent responsibilities) of ARI in the form attached as Annex I
hereto, certifying that ARI and the other Loan Parties, on a consolidated basis,
after giving effect to the Transactions, are solvent.

 

2. The Specified Acquisition Agreement Representations shall be true and correct
in all material respects to the extent required by the Certain Funds Provision
and the Specified Representations shall be true and correct in all material
respects (except in the case of any Specified Representation which expressly
relates to a given date or period, such representation and warranty shall be
true and correct in all material respects as of the respective date or for the
respective period, as the case may be); provided, that to the extent that any of
the Specified Representations are qualified by or subject to a “material adverse
effect”, “material adverse change” or similar term or qualification, the
definition thereof shall be the definition of “Material Adverse Effect” (as
defined below) for purposes of any such representations and warranties made or
deemed made on, or as of, the Closing Date (or any date prior thereto).

 

3. The Loan Parties shall have completed (or, substantially concurrently with
the credit extension hereunder will complete) the Acquisition in accordance with
the terms of the Acquisition Agreement, but without giving effect to any
amendments, waivers, supplements or other modifications or consents by the
Borrowers that are materially adverse to the interests of the Lender without the
prior written consent of the Lender.

 

4. Since January 1, 2015, no Company Material Adverse Effect shall have occurred
that would excuse the Borrowers from their obligations to consummate the
Acquisition under the Acquisition Agreement. “Company Material Adverse Effect”
shall have the meaning ascribed thereto in the Acquisition Agreement.

 

5. The Lender shall have received a copy of the Athene Purchase Agreement
executed by the Loan Parties party thereto and such agreement shall not have
been terminated on or prior to the Closing Date; provided, however, that if the
Buyer Representative (as defined in the Athene Purchase Agreement) has
terminated the Athene Purchase Agreement pursuant to Section 10.1(b)(i) of the
Athene Purchase Agreement, this condition shall still be deemed to be satisfied.

 

Conditions

Exhibit B – Page 1

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6. All documents and instruments necessary to grant the Lender a perfected
security interest (subject to liens permitted under the relevant Loan Documents)
in the collateral under the Term Loan Facility shall have been delivered
(including pledged collateral, with undated irrevocable transfer powers executed
in blank).

 

7. The Lender shall have received payment from the Borrowers of (i) all amounts
due and payable under any Loan Document on or prior to the Closing Date,
including all fees required to be paid under the Fee Letter and (ii) all
expenses required to be paid pursuant to the Commitment Letter (which amounts
may be offset against the proceeds of the Term Loan Facility) for which (in the
case of expenses) invoices have been presented at least two business days prior
to the Closing Date.

 

8. The Lender shall have received all documentation and other information
requested by the Lender under applicable “know your customer” and anti-money
laundering rules and regulations, including the Patriot Act, as reasonably
requested in writing at least ten business days prior to the Closing Date.

 

Conditions

Exhibit B – Page 2

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Annex I to Exhibit B

Form of Solvency Certificate

[●][●], 2016

This Solvency Certificate is being executed and delivered pursuant to that
certain Loan Agreement, dated as of [●] [●], 2016, by and among Apollo
Commercial Real Estate Finance, Inc. (“ARI”), Arrow Merger Sub, Inc. and Athene
USA Corporation (the “Credit Agreement”; the terms defined therein being used
herein as therein defined).

I,                     , the Chief Financial Officer of ARI, in such capacity
and not in an individual capacity, hereby certify as follows:

 

1. I am generally familiar with the businesses and assets of ARI and its
Subsidiaries, taken as a whole, and am duly authorized to execute this Solvency
Certificate on behalf of ARI pursuant to the Credit Agreement; and

 

2. As of the date hereof and after giving effect to the Transactions, that
(a) the fair value of the property of ARI and the other Loan Parties is greater
than the total amount of liabilities, including contingent, subordinated,
unmatured and unliquidated liabilities, of ARI and the other Loan Parties, taken
as a whole on a consolidated basis, (b) the present fair salable value of the
assets of ARI and the other Loan Parties is not less than the amount that will
be required to pay the probable liability of ARI and the other Loan Parties,
taken as a whole on a consolidated basis, on their debts as they become absolute
and matured, (c) ARI and the other Loan Parties, taken as a whole on a
consolidated basis, have not incurred, do not intend to incur, and do not
believe that they will incur debts or liabilities (subordinated, contingent or
otherwise) beyond their ability to pay such debts and liabilities as they become
due (whether at maturity or otherwise), (d) ARI and the other Loan Parties,
taken as a whole on a consolidated basis, will not have unreasonably small
capital with which to conduct their business operations as contemplated to be
conducted and (e) ARI and the other Loan Parties, taken as a whole on a
consolidated basis, are not “insolvent” as such term is defined under any
applicable laws relating to fraudulent transfers and conveyances, or any
bankruptcy, insolvency, or similar laws in any jurisdiction where they are
organized. For the purposes hereof, the amount of any contingent or unliquidated
liabilities at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, I have executed this Solvency Certificate on the date first
written above.

 

By:  

 

Name:   [●] Title:   Chief Financial Officer